CEGA Announces Digital Credit and Women’s Economic Empowerment Grants

Marisa Mckasson
Oct 3, 2019 · 5 min read

CEGA’s Digital Credit Observatory (DCO) announces funding for six new and ongoing evaluations that look at women’s economic empowerment in relation to digital financial services in Sub-Saharan Africa and Asia.

While the market for digital financial products, including digital credit, continues to explode in Sub-Saharan Africa, significant barriers to women’s financial inclusion and economic empowerment persist. Women face socio-economic hurdles — including cultural norms, discriminatory legislation, intra-household dynamics, and inequities in educational attainment and employment — as well as gaps in mobile phone access and digital literacy.

A woman accesses M-PESA mobile money in Kenya. Credit: Alexandra Wall

If designed properly, digital financial services could potentially improve women’s agency and welfare through increased security, accessibility, convenience, privacy, and other pathways. Appropriate design, standards, and regulations could help protect women from the unintended negative impacts of digital credit. Yet our understanding of how the digital financial ecosystem affects women remains vague at best.

The newest round of DCO research funding, totaling just under $300k, aims to drive new evidence on the specific mechanisms by which women are economically empowered — or disempowered — and the potential of digital credit to promote equitable financial access for women. The six new and ongoing studies are described below.

Impacts of Digital Credit on Women’s Financial Access and Empowerment

“Differential Effects of Digital Credit by Gender: An Experiment with Airtel Malawi” (Robinson, Brailovskaya, Dupas)

Credit: Eilin Francis

Credit scoring models that determine access to digital credit in Malawi rely on mobile money usage data, and the gender gap in account usage translates to lower credit limits and therefore reduced access to digital credit for women. Jonathan Robinson (UC Santa Cruz), Valentina Brailovskaya (IDInsight), and Pascaline Dupas (Stanford) continue to work with Airtel Malawi, the largest telco in Malawi, to extend an ongoing DCO-funded evaluation. Additional DCO funding will allow them to carefully investigate the factors that contribute to women’s limited access to and use of the Kutchova digital consumer credit product.

“Understanding the Barriers to Agricultural Credit for Women Farmers” (Kremer, Singh, Ward)

Berber Kramer (IFPRI), Vardika Singh (IFPRI), and Patrick Ward (Duke Kunshan University) partner with Dvara Trust and the Government of Odisha to understand the constraints women face in accessing picture-based credit (PBC). To make lending decisions, the PBC model uses estimates of a farmer’s expected revenue, calculated from geo-referenced smartphone pictures showing land area, varieties under cultivation, and crop health. They also study whether or not PBC can empower women through increased access to credit, or if other interventions are needed to enhance women’s access and benefits.

“Take-Up and Impact of Digital Repayment in Microfinance” (Finan, Ferris, Cohen)

Fred Finan (UC Berkeley), Denise Ferris (BRAC Uganda), and Isabelle Cohen (UC Berkeley) partner with BRAC Uganda to study women’s economic empowerment in an ongoing evaluation funded by the BRAC-CEGA Learning Cooperative. The study focuses on what affects the take-up of mobile money repayment when it is offered, but also how digital payments may influence repayment rates, attendance at group meetings, late payments, and default rates. DCO funding will allow the researchers to explore specific women’s economic empowerment outcomes for the approximately twelve thousand participating female borrowers in Central Uganda.

“The Impacts of Liquidity Loans to Mobile Money Agents on Women Agents’ Empowerment, and Their Business and Transaction Behavior” (Toth)

Financial management of digital financial services agent networks could affect not only the agents themselves as small business owners, but also the extent to which digital financial services benefit end-users. Russell Toth (University of Sydney) partners with Yoma Bank and Wave Money, the largest mobile money provider in Myanmar, to investigate the impacts of digital “Smart Credit Business” loans issued to mobile money agents. The research team utilizes a regression discontinuity design to understand whether these loans empower female agents, 80% of whom are female, in their businesses, households, and communities.

Algorithms to Promote Women’s Financial Access and Welfare

“Impact Credit Scoring for Women’s Empowerment” (Blumenstock, Bjorkegren, Mauro)

Credit: Stars Foundation

Digital credit typically relies on algorithm-based decision-making, instead of loan officer protocol and discretion, to automatically lend to those whose data predicts they would be credit-worthy borrowers. Joshua Blumenstock (UC Berkeley), Daniel Bjorkegren (Brown), and Jacqueline Mauro (UC Berkeley) evaluate the impacts of a digital credit product on women clients based on (i) traditional indicators of economic welfare such as women’s employment and business activity, as well as (ii) measures of women’s empowerment such as decision-making authority and control over household finances. They will investigate how algorithmic credit scoring could be re-optimized to increase the benefit to women, while considering any related improvements or trade-offs for lender profits.

“Gender Discrimination in the Digital Credit Era” (Sheth, Manian)

While there is evidence that algorithms can be used to help avoid human prejudice in decisions prone to biases, improving the predictive accuracy of automated decision-making using available data could replicate or exacerbate underlying inequalities. Ketki Sheth (UC Merced) and Shanthi Manian (Washington State University) continue their work with the Entrepreneurship Development Center in Ethiopia to expand an evaluation funded by CEGA’s EASST program. They use a business plan competition selecting entrepreneurs to win startup grants to study gender discrimination. This DCO funding will allow them to test the performance of gender-aware algorithmic lending decisions in addition to the decisions made by gender-blinded loan officers to understand the efficiency and equity of different decision-making processes.

CEGA’s Digital Credit Observatory (DCO) was established in 2016, with support from the Bill & Melinda Gates Foundation, to develop a coordinated portfolio of rigorous research on the impacts — both positive and negative — of digital credit products in emerging markets, and the effectiveness of related consumer protection measures.


Marisa Mckasson

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The CEGA blog is a platform for discussing key issues related to poverty alleviation and global development.

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