The COVID-19 pandemic has caught the world by surprise. Beyond the grave health repercussions, this crisis has led to unprecedented measures taken by governments and organizations that have deeply impacted the way mobility and transactions are managed. According to the AFP news agency, more than 3.9 billion people, or half of the world's population, have now been asked or ordered to stay at home by their government.
More than ever, technology is fundamental for adapting and mitigating the consequences. It is the means by which we can work from home, sell and purchase goods via e-commerce platforms and gather information. However, not everyone has access to technology, in particular women. According to GSMA, 1.2 billion women in low and middle income countries do not use mobile internet. Presently, this lack of connection further exacerbates existing social and economic inequalities.
For companies, already having digital platforms and solutions in place can be a life-saver, yet for others, this disruption poses a greater challenge but also an opportunity to reevaluate their business models and develop new tools. This is especially true for financial institutions that are considered essential business during the crisis. For this sector, the situation can be debilitating because microfinance institutions (MFIs) rely on in-person transactions, especially when serving vulnerable clients with limited connectivity.
The BBVA Microfinance Foundation (BBVAMF) was created in 2007 by BBVA to support vulnerable microentrepreneurs through a range of financial and non financial services. To date, BBVAMF has provided more than 14.1 billion dollars to over 5 million low-income entrepreneurs--60% being women--in five Latin American countries. What was once a relationship banking model with the physical presence of loan officers at the forefront of the operations, has evolved over the last several years to include a digital interface.
Today, most BBVAMF loan officers have to work from home. However, thanks to “low touch” attention channels, they are able to provide personalized services remotely. In Colombia, BBVAMF clients can check their accounts and make payments through the Banca Movil app and a virtual office. Providing digital financial products to clients maximizes not only their productivity but also their autonomy in these precarious times.
Though creating digital banking platforms can curtail mobility restrictions, the uptake of these solutions is not guaranteed if clients lack access to internet and digital literacy training. In Latin America, only 9.5% of women are using their cell phones or internet to access a bank account and just 12.5% pay bills or buy online (Global Findex 2017). Therefore, these platforms must be complemented with training and accessibility measures.
BBVAMF in Peru, together with CARE, provided a digital financial education programme, Conéctate, for more than 2.000 rural female entrepreneurs, on basic finance, budgeting, savings and products. Additionally, they have been effective in reducing women’s fears of using technology.
Beyond offering financial services to underserved women, it is also imperative they have access to markets to sell their products. Before COVID-19, BBVAMF created a marketplace app, Somos FE, to provide a buying and selling platform for women clients in Chile. In these times, it is helping many women keep their businesses afloat.
María Angélica García, an entrepreneur in Chile, taking a picture of her latest design to upload it to Somos Fe marketplace (BBVA Microfinance Foundation).
Financial institutions must make digital investments in order to mitigate future risks and threats. As EQUALS Access Coalition Partners, we must strive towards having low-cost, reliable Internet connectivity so that the most vulnerable can be better equipped and thus reducing the digital gender divide. The solutions we implement today can foreshadow how we will do business in the future. This pandemic is a wake up call to all.
Teresa Burelli is Head of International Partnerships at the BBVA Microfinance Foundation (FMBBVA). FMBBVA is an EQUALS Access Coalition partner.