Economic gender inequality could cost the global economy $28 trillion by 2025 in a world where 1.3 billion women have no access to basic financial services. Yet, 80% of new self-employed people between 2008–2011 were women.

In many cultures, women are not expected be financially independent, and husbands are allowed to constrain their wives’ mobility in at least 17 economies. In developing countries in 2014, 59% of men reported holding a bank account, while just 50% of women did so. 20% of women are less likely to have access to a bank account in emerging markets than their male counterparts, and 36% less likely to have a mobile money account of any sort.

Women face harsh realities of gender inequality everyday. It is such a pressing socio-economic issue that more than 55 countries have committed to the financial inclusion of women. More than 30 have launched or developed a national strategy.

Women drive local and national economies as entrepreneurs, employees and consumers. Countries with equal access to employment and education for women benefit from lower rates of child mortality. Women’s financial inclusion could lead to economic growth of approximately $28 trillion by 2025, research claims.

Banks and insurance companies, however, have been hesitant to do business with women and, in many cultures, products and marketing is directed at men.

Access to Technology

Women, considered “higher risk” clients by traditional financial institutions, have lower levels of digital literacy in the developing world, and can on average be 14 percent less likely to own a mobile phone than men and 23 percent less likely to have internet access.

In rural areas, women often lack access to technology like mobile phones, which are often owned and controlled by men. Digital platforms and mobile technology might be accessible in nearby cities, but this requires a woman to travel to access a service, which, for many women, is dangerous and even forbidden.

Many communities give men priority access to the web over women. More than 50% of men in New Delhi and Manila believed they could control women’s online activities. Nearly two-thirds believed that women should not be allowed to access the internet in public.

A World Wide Web Foundation report found that women in the developing world — such as urban communities in Africa, Latin America and Asia — are 50% less likely to have internet access than men.

Access to Capital

Access to capital for women to start or grow their businesses is not easy to come by in emerging and frontier markets, either. Women start their businesses with 1/3 of the capital than men. Women entrepreneurs in emerging markets often do not have a bank account, let alone a credit history.

Natalia Rigol of Harvard University found that women entrepreneurs were often forced to divert their own businesses funds to businesses run by men in their households. Due to requirements such as handing over collateral like property titles to access loans, many women do not seek loans out of fear of losing family property.

There are approximately 8-to-10 million formal women-owned small or medium-sized enterprises in emerging markets. The average growth rate of such women’s enterprises, however, is significantly lower than the average growth rate for SMEs run by men.

Remittances

Women are well-represented among highly-skilled migrants, comprising 48 percent of all migrants today. The International Organization of Migration (IOM) postulates female migrants send about the same total amount as their male counterparts back home. Further, women send a higher proportion of their income while generally earning less. Women receive two-thirds of remittances from both men and women.

Blockchain as Solution

24 countries are investing in distributed ledger technology (DLT) based on blockchain. There have been 2,500 blockchain-related patents filed in three years. 90-plus corporations take part in blockchain consortia and 80 percent of banks are expected to start distributed ledger technology projects by 2017. Upwards of $5 billion has been invested over the past three years, and 90 central banks have examined DLT.

Blockchain’s enhanced privacy in digital identity could ease the process by which financial institutions reissue identity documents in the case of loss or theft. “Citizens lacking appropriate access to the financial system would gain a higher independence and better chances for welfare by creation of digital identity on blockchain,” according to a World Bank report. “The solution can be built with the purpose of integration with external systems in order to diminish the fraud and error possibilities in the delivery of benefits for the financially excluded.”

Blockchain, which store transactions in automatically shared and tamperproof databases, allows payments and remittance to happen near-instantaneously. Time and cost efficiencies could support large and small transactions alike. Simplifying procedure and drastically reducing the need for clearing houses, blockchain allows banks to know their records are accurate.

Smart contracts, cross-chain functionality, as well as multiple asset and multiple party transactions could help to bring the unbanked into global capital markets and value transfers. Blockchain, by cutting financial institution operational costs, can reach customers “at the edge of wireless and not just bank accounts,” as the World Bank writes.

By removing overhead and drastically lowering administrative costs, blockchain technology makes financial services affordable for lower income individuals, and less expensive for financial institutions to bank such individuals.

With legal documents possibly going onto the blockchain, they could never be lost, stolen or altered without consent — a relief to individuals living under corrupt governments. Access to insurance would allow female entrepreneurs to engage in businesses while taking on less risk. Blockchain technology enables mobile money and can also be used as a platform for other financial services like credit, insurance, and savings.

Access to banking services would allow women to transfer money easily and in a secure fashion. Holding cash makes women a target for thieves and robbers. The blockchain, by allowing women to hold wealth in digital form, minimizes their risk.

Opportunities for financially excluded-women will increase as mobile internet continues to penetrate underdeveloped regions and smartphone prices continue to fall. Blockchain technology like Ethereum lowers the cost of overhead on small loans, insurance, and document security with smart contracts.

Hurdles to blockchain adoption include the major changes and replacement of existing systems in financial institutions. Also, while private or permissioned blockchain and strong encryption have proven themselves over nearly a decade, cyber security concerns remain.

Blockchain Solutions In-Production

The Stripe-backed Stellar and cloud-based software provider for microfinance institutions in developing countries, Oradian, creates a payment-transfer network allowing 300,000 Nigerians, 90% of whom are women, to transfer money.

The Philippine-based Coins.ph is located in a country ranked third in the world for receiving remittances at approximately USD $30 billion each year. The blockchain startup provides Filipino users a mobile, blockchain-based platform to allow individuals to send money faster and more affordably. Coins.ph facilitates fund transfers without the need to use existing bank infrastructures.

BitPesa receives funds in the original currency and transfers it into digital currency, which is then transferred via the blockchain in near real-time to a digital wallet. The digital currency can be converted into local currency.

Unocoin provides a bitcoin wallet that allows users to exchange Indian ruples for digital currency. Unocoin’s services include store and transfer of bitcoin, as well as payment through partner merchants. Users must register for the Unocoin wallet by providing three forms of ID, as well as a PANcard (a form of ID for Indian nationals), and proof of residence.

Unocoin partnered with bitcoin company BTCJam to allow users to borrow or lend bitcoin to people in more than 180 countries. Unocoin’s partnership with Bitcoin company Purse allows Amazon gift card balances to be transferred to bitcoin and rupees.

The international mobile payments platform Regalii allows immigrants to pay their family bills anywhere in the world via SMS. WorldRemit’s online service allows people to send money to friends and family in other countries with a computer, smartphone or tablet.

Everex and the Inclusive Finance for Women & MSMEs Through Blockchain Initiative

Everex has established the “Inclusive Finance for Women & MSMEs Through Blockchain Initiative”, representing a foundation to an open-source blockchain platform dedicated to four main activities: Women’s entrepreneurship Funds, Cash Transfer Programming, Remittances and Group Savings.

Two funds will be established: “Women’s Block Funds” for women living in emerging and frontier markets. The “Seed Fund” is to encourage the execution and realization of business ideas, the second fund made entirely possible by Everex’s native digital token, “Grow Fund”, is planned for a later launch date to fill the small credit gap and grow micro-small, but established, enterprises.

Everex, as one of the stakeholder in the initiative, has helped to develop the funds through its worldwide contacts, with particular interest in women refugees from war zones, as well as its proprietary software: the Everex Capital Transfer Platform. As the heart of the funds, Cryptocash will empower women and local economies through this multi-stakeholder fund approach.

By leveraging the speed of blockchain technology, such a distributed fund could rapidly assess the financial risk of lending to individual female entrepreneurs. The screening and acceptance process could be handled by Ethereum’s peer-to-peer network and risk could be mitigated via the use of micro-donations. Multilateral organizations, public and private donors, financial institutions and individuals will comprise the blockchain-based foundation.

Conclusion

More than a billion women lack access to formal financial services, limiting their access to loans, savings and bank accounts. By decreasing the gender divide in technology, women’s economic opportunities can be expanded, benefiting the global economy.

In emerging markets, 30 percent of women use the internet to earn income, 45 percent use it to find jobs and 80 percent use it to improve their education. Greater access to technology helps women to improve their economic participation, digital citizenship, access to jobs and healthcare and more. Lowering the cost of mobile money transaction costs allows households to better manage risk and survive economic shocks. Increased incomes for poor mothers results in immediate dietary improvements for their children. The likelihood the children will be educated also increases.

The solution is financial inclusion. “We know that financial inclusion is one of the best on-ramps for a broader introduction to the formal economy and on-boarding to labor force participation and wide economic participation that we are all so eager to see women take part in,” said Mary Ellen Iskenderian, President and CEO, Women’s World Banking. “We now have really good data linking all these things together and are able to paint a very good macro picture.”

But, financial inclusion requires innovative solutions with an energetic and supportive ecosystem. Blockchain lowers costs, shortens settlement times, and can provide a user-friendly experience for internal and cross-border payments. In addition, its youthful and motivated online creation community is talented and diverse.

Blockchain technology can improve the financial inclusion of women in the economy. Blockchain is still at an early stage, to be certain, and disparate regulatory approaches will complicate blockchain adoption. Understanding the technology, its risks, benefits and the surrounding ecosystem, will be key to helping shape the innovation’s future.