Closing the digital gender gap in Latin America, essential for economic growth

The figures show a stark reality for gender inclusion in Latin America: while approximately 74% of men participate in the formal economy, only 51% of women do so, a discouraging disparity that places Latin America and the Caribbean (LAC) far behind other regions such as sub-Saharan Africa and Southeast Asia and the Pacific.

This imbalance has several causes, but a key factor is the digital divide that disproportionately affects women throughout the region.

Despite the transformative potential of technology, women are less likely than men to possess digital skills, limiting their ability to harness the benefits of technology for their economic empowerment.

“Four in ten women in the region remain disconnected from the internet, deprived of access to online services such as banking, education and healthcare.”

The impact of this digital gender gap has repercussions on several facets of women's economic lives.

From financial inclusion to educational attainment in STEM (areas of science, technology, engineering and mathematics), women have lagged behind their male counterparts.

In Brazil, just 15% of graduates in technology-related careers are women, highlighting deep-rooted gender disparities in the skills needed for the digital economy.

These disparities not only stifle individual potential but also impede overall economic growth: estimates suggest that global Gross Domestic Product could increase by $1 trillion if the women's digitalization gap were closed.

Four in ten women in the region remain disconnected from the internet, deprived of access to online services such as banking, education and healthcare. World Bank

This is even more worrying because women in Latin America show a remarkable entrepreneurial spirit.

However, despite this vitality, the opportunities presented by the digital economy have not yet reached this sector of the population in the region¹.

Rates of digital startups founded by women in LAC, for example, lag far behind those in other regions, presenting a paradox that deserves attention and action.

In a survey of women in the region, the fundamental reasons why women are not creating new digital companies include factors such as family responsibilities, the absence of professional and business networks for women and a perceived lack of opportunities in areas STEM².

With this diagnosis, it is clear that finding solutions to the digital gender gap in LAC requires concerted action between the public and private sectors to promote a more inclusive digital economy.

Governments must invest in digital infrastructure, promote STEM education for women and dismantle barriers to gender equality, especially in rural areas.

Equally, it is crucial for the private sector to innovate with online solutions, which could significantly benefit women.

An example is the facilitation of access to online financial services, as well as the use of new technologies to design specific offers that allow existing barriers to be overcome.

The emergence of digital banks like Nubank, for example, is leading the way by offering financial solutions that democratize access to banking services and improve the financial inclusion of women.

To achieve this, public actions such as the development of open financial regulation frameworks (open finance) are key.

Fintech companies are also called to play a key role.

A new IFC report with fintechs from several countries including Brazil, Colombia and Mexico, shows that these companies consider women to be more loyal customers, less risky and as valuable or more valuable than men.

The report also confirms that those who adapt their services for women have more positive long-term results.

However, it is key for companies to better understand their needs and design services that benefit them.

This is the case of the Colombian Juancho Te Presta, a business model focused on women has been developed, which takes advantage of sophisticated data analysis to offer specific credit conditions.

Recognizing women's higher loan approval rates and lower delinquent loan rates, Juancho Te Presta has tailored its products to meet the unique needs and preferences of women.

Likewise, by implementing customized algorithms and reducing credit costs, the company aims to further promote gender equality and the economic empowerment of women in different economic segments.

But it is not just about financial services, it is necessary to delve deeper into the underlying structural problems, such as the educational gap.

In this area, online education platforms can also play an important role in helping to close this gender gap: a study carried out in 2022 by Coursera found that 40% of women in Mexico who opted for online education achieved a significant improvement in their employment and entrepreneurship prospects.

Furthermore, 18% of women with an entrepreneurial background who took online classes reported having successfully launched new businesses.

These findings underscore the transformative potential of digital learning, especially for those living in disadvantaged socioeconomic backgrounds.

E-commerce platforms are also increasingly providing opportunities for women entrepreneurs to generate income.

Elo7, an online marketplace in Brazil, supports women entrepreneurs by profiling salespeople, understanding their needs and their businesses, providing them with tools to help them professionalize their sales efforts.

As International Women's Day is celebrated, global attention will once again focus on the persistent gender disparities that impede economic progress.

However, amid this scrutiny, it is essential to recognize the profound potential of digital and disruptive technologies to promote gender equality and economic empowerment, particularly in LAC, but also globally.

By wholeheartedly embracing digital innovation and fostering collaboration between the public and private sectors, we can ensure that the ongoing digital transformation of economies becomes a catalyst for the inclusion of women.

The result?

Faster and more equitable economic growth, something that Latin America and the Caribbean urgently needs.

* Vice President for Europe and Latin America and the Caribbean of the IFC.