Why putting women in charge of their own financial security pays dividends

How breast cancer screening became part of a business loan

CARE’s Ignite program supports women entrepreneurs looking to grow their businesses by opening up much-needed access to finance, technology and networks, and building entrepreneurship capacity and skills. We do this by working with our local partners to develop products and services which are tailored to their specific needs. Our job is to ensure that the voices of these women are heard in the boardroom, where key business decisions that impact the customer are made, typically, by men.

In Peru, we wanted to develop a tailored loan product for women entrepreneurs with our microfinance partner Financiera Confianza, who believe that investing in women is a great investment. By taking a woman-centered approach, we were able to learn about their access barriers, ideate, and test solutions with them through focus groups, interviews, pitch tests, and virtual surveys. We discovered three key things: they couldn’t get the right sized loans because they lacked credit history; they needed more repayment flexibility and shorter seasonal loans for busy periods; and they weren’t able to cover all their medical costs, especially preventative care.

Using insights from testing, and triangulating customer preferences with business parameters to check for viability and feasibility, we worked with the Financiera Confianza team to design a pilot-ready prototype called ‘Emprendiendo Mujer’ (Female Ventures). We also added a suite of non-financial services to support women entrepreneurs with mentoring, training, and networks.

…they couldn’t get the right sized loans because they lacked credit history; they needed more repayment flexibility and shorter seasonal loans for busy periods; and they weren’t able to cover all their medical costs, especially preventative care.

The end result was a loan product designed exclusively for women.  The loan requires no credit history and includes an alternative credit assessment, based on references and behavior, and does not take into account their husbands’ debt, unlike other products in the market.  Repayment is on a 45-day term to reflect the seasonality of business needs, and the loan includes cancer insurance, covering breast cancer screenings. The maximum loan amount was reduced so that women could take out an initial smaller loan, repay and move to a larger loan with a new credit history.

The product was launched in June 2021, and we continue to iterate and check-in with women on satisfaction to ensure the product remains relevant and demand-driven. The feedback we have received has been incredible. Delia Nizama, a Peruvian entrepreneur, told us: “It seems important to me that it is precisely women entrepreneurs, who are going to use this valuable tool, that they be consulted about what else we expect from it.”

We have seen unbelievable traction, with 15,000 loans disbursed in six months, and in the midst of a global pandemic.

Designing for women is simply good business

Invest in women-centered design

Enabling women to gain better access to finance could unlock $330 billion in annual global revenue, but the financial world is still dominated by men. It’s not that men can’t have empathy for women, it’s that men aren’t women. They can’t experience the barriers that women face every minute of every day. Consequently, insights about the needs and barriers of women will continue to slip through the cracks. If we want to close the gender gap, we need to create products and services that have three characteristics: they add value to women’s lives; are easy to access and use by women; and are affordable based on their financial behaviors.

How radically different would the financial world be if there were more women designing products and services with the unique needs and barriers of women in mind?

This is what we need funders and financial service providers to do:

• Design with women, not for them. Put women at the center of the design process and build solutions for their needs.
• Like our partner Financiera Confianza, invest in a serious effort to get more women-centered products and services into the world, and maybe even start assessing men and women through differentiated credit scoring mechanisms.
• Hire more women on product design teams and let women lead the design process like the Head of Financial Inclusion, Jack Burga, has done for our CARE Peru team.
• Get more women in the board room. Women in the design team are a great step but we can go further. Women need a seat at the table everywhere key financial decisions that impact the customer are getting made.
• Introduce more women-owned and led financial institutions like First Women’s Bank the first women-owned, women-led financial institution in the USA 100% designed for women, by women.

Until we see these changes happening, we will fall short of realizing women’s economic potential in our economies.

Rathi Mani-Kandt is the director of Women’s Entrepreneurship, financial inclusion specialist, and human-centered designer at CARE.
Koheun Lee is a human-centered designer at CARE

Find out more about CARE’s Ignite program, supported by the Mastercard Center for Inclusive Growth.