Unraveling financial exclusion during the COVID-19 pandemic: A gender perspective in Latin American countries

Abstract

The COVID-19 pandemic has affected mainly the most vulnerable population in developing countries. This research focuses on financial inclusion, with an emphasis on digital financing among men and women in Latin American countries. The analysis combines a qualitative and quantitative perspective. We first perform a comprehensive literature review of financial inclusion in developing countries, with a focus on gender gap, pre- and post-COVID. An extensive sample of Latin American countries is then studied in detail through the World Bank Global Findex Questionnaire. A series of questions is identified in relation to financial inclusion, such as financial and mobile account ownership and their use for bill payments, or debit and credit card ownership, and the differences in terms of gender are analyzed statistically. This analysis is complemented by an econometric modelization to identify the significance and strength of the variables that determine financial inclusion. Among our main results, we highlight the positive post-COVID evolution of financial inclusion for both genders. However, this positive influence is much stronger for men than for women. Before COVID, women scored slightly higher on all financial inclusion indicators under consideration for the whole of Latin America. However, this balance is markedly reversed post-COVID. Our results thus reinforce previous findings on the economic, social, and financial repercussions suffered by women in developing countries from COVID-19. We also formulate tentative suggestions for policy makers to reinforce the financial education and inclusion of women.