Women’s financial inclusion in Latin America – and low- and middle-income countries in general – continues to encounter persistent and systemic barriers. If women had equal opportunities in entrepreneurship, global GDP could increase by up to $5 trillion. Yet women consistently face higher loan rates than men, even though they are considered lower-risk borrowers. In 2024, women-led startups in Africa raised just $48 million, compared to the $2 billion raised by male-led startups. In Brazil, less than one-third of employer–business owners and only 35.3% of all business proprietors are women.

In recent years, the G20 and Women20 (W20), one of the G20’s engagement groups, have taken steps to prioritise gender equity in the global financial agenda. In 2010 the G20 created the Global Partnership for Financial Inclusion to coordinate technical cooperation in this area. In 2020, under Saudi Arabia’s presidency, the G20 released the Advancing Women’s Digital Financial Inclusion report, which highlighted relevant digital strategies. The W20 has consistently emphasised access to credit, digital inclusion and the care economy in its communiqués – as seen under Brazil’s G20 presidency during the W20 Brazil 2024. However, local solutions such as cooperatives, community banks, women-led microfinance networks and solidarity-based enterprises still lack explicit recognition in policy frameworks, limiting the reach of financial inclusion in vulnerable contexts.

Integrated solution framework

Traditional banking systems in Latin America often fail women due to rigid requirements such as formal collateral, lengthy credit histories and standardised assessments that ignore women’s unique economic realities. Emerging alternative credit systems offer transformative pathways to financial inclusion. These community-driven solutions leverage technology, social capital and innovative risk assessment to create more equitable access to credit.

Gender-intentional credit scoring represents a paradigm shift away from one-size-fits-all lending. This approach recognises that women typically have lower default rates than men – evidence shows women borrowers achieved an average income growth of 275% over five years and were 50–60% less likely to face food shortages. By incorporating gender as a factor in credit algorithms or developing separate scoring models for women and men, lenders can more accurately assess risk while expanding access. For example, AB Bank Zambia increased women’s loan share from 57% to 60% while maintaining the same risk profile by giving women additional points in their credit scores.

Alternative data systems move beyond traditional collateral requirements by using non-conventional information such as mobile phone usage patterns, utility payment histories and digital transaction behaviours. These systems are particularly powerful for women who may lack formal asset ownership but demonstrate financial responsibility through consistent small payments and digital footprints. MTN’s partnership with TransUnion in South Africa exemplifies this approach, using mobile phone data to help millions access financial services without traditional credit histories.

Digital village savings and loan associations (VSLAs) modernise the community-based financial circles that women have used for generations. These digital platforms combine the social support and local knowledge of traditional savings groups with the scalability and efficiency of technology. Research in Ghana, Malawi and Uganda shows VSLAs improve financial inclusion, household business outcomes and women’s empowerment, while members are up to 85% more likely to have emergency savings.

Psychometric assessments use personality-based questionnaires and behavioural indicators to evaluate creditworthiness beyond financial data. World Bank research demonstrates that women entrepreneurs who were offered uncollateralised loans through psychometric assessment were 30% more likely to borrow for business purposes. This shows that these assessments can significantly improve prediction accuracy for women who may lack extensive business records but possess strong interpersonal skills and community connections.

Together, these solutions create an ecosystem where women’s economic behaviours are properly valued, their social capital becomes financial capital and their path to entrepreneurship and economic empowerment is significantly accelerated through innovative credit scoring approaches.

Implementation pathway

Implementing community-driven alternative credit systems requires a coordinated, multi-stakeholder approach that bridges policy reform, technological infrastructure and capacity building. The pathway should begin with regulatory sandboxes that allow financial institutions and fintech companies to test gender-intentional credit scoring and alternative data systems under relaxed regulatory constraints. The World Bank’s Regulatory Sandboxes and Financial Inclusion report demonstrates how countries such as Mexico and Kenya have successfully used this approach to foster financial innovation while protecting consumers.

Public–private partnerships represent the crucial second phase, connecting traditional financial institutions with community organisations, cooperatives and women’s groups that already possess deep local knowledge and trust networks. The OECD’s SME and Entrepreneurship Policy in Brazil report highlights how Brazil’s National Cooperative Credit System (SNCC) provides a model where cooperative banks can integrate digital VSLAs and psychometric assessments into their existing community-based lending frameworks.

Digital infrastructure development must prioritise interoperability between mobile money platforms, credit bureaus and alternative data providers. This includes investing in digital public infrastructure that enables secure data sharing while protecting privacy rights. Privacy safeguards are particularly important for women who may face domestic or social pressures regarding financial autonomy, as outlined in the AFI’s Alternative Data for Credit Scoring special report.

Capacity-building programmes should train loan officers, cooperative leaders and community facilitators in gender-sensitive assessment techniques and digital literacy. Finally, monitoring and evaluation frameworks must track not only loan performance but also broader empowerment indicators to ensure these systems deliver transformative rather than merely transactional change. Such indicators include women’s economic decision-making authority, business growth and community leadership roles.

Expected impact and G20 relevance

Strengthening community-driven solutions for women’s financial inclusion aligns closely with the South African G20 presidency’s emphasis on people-centred, inclusive development. This orientation reflects a broader shift in the G20’s recent trajectory, also visible under the presidencies of India and Brazil, which highlighted inclusive digital transformation as cross-cutting priorities. The formal request by the World Council of Credit Unions for the G20 to recognise cooperatives as essential institutions signals a promising opening to elevate locally rooted financial models that directly engage underserved populations.

Models such as cooperatives, digital VSLAs and alternative scoring tools foster financial access, women’s autonomy and local resilience. Task Force 4 could consider advancing the recognition and scaling of such solutions by enabling policy frameworks, digital public infrastructure and capacity building. By transforming social capital into financial capital, and embedding innovation into inclusion strategies, the G20 has an opportunity to support equitable, scalable ecosystems that promote bottom-up development and accelerate progress toward the 2030 Agenda.