The financial inclusion movement must redefine success. Mere access is insufficient if it results in customer harm. Experts warn that “financial abuse”—controlling or restricting a person’s economic resources—is an unintended negative outcome of digital finance. It is recognised as a form of domestic violence.
“People facing domestic violence are 99% of the time… facing a form of financial abuse as well because it's a coercive tactic,” said Bobbi Gray, associate vice president for programs at the Washington, DC-based Grameen Foundation.
Forms of abuse include financial exploitation, coercive control, and modern “financial sabotage”, such as using digital payment reference fields to send threats, according to speakers at the Inclusive Finance conference held in Luxembourg this week.
International research
Participants stress that financial abuse occurs in every country to some degree, but most research comes from developing nations, where the problem is attracting more attention.
Research in West Africa found low quantitative reporting of abuse (below 14%), but more than 80% of women qualitatively agreed that conflicts about money could lead to mistreatment in their communities.
Canada leads reform
This systemic crisis has been identified as a “national crisis” in Canada. Statistically, 96% of women who experience domestic violence in Canada also face “economic abuse”, noted Meseret Haileyesus, CEO of the Canadian Center for Women Empowerment.
She pointed out that financial systems were previously unequipped to recognise and respond to such abuse, increasing both fraud losses and reputational risk.
Her advocacy led to a federal commitment to implement a voluntary code of conduct for financial service providers (FSPs). The code sets out mandatory staff training, consumer protection principles and “safe banking measures”.
The business case
Financial institutions must strategically redesign services, argued Sally Yacoub, an independent Montreal-based gender and financial inclusion expert-consultant working with the Global Gender Smart Fund (GGSF) and other organisations.
“Access without control is not actual inclusion,” she said.
Yacoub advocated for “safety by design” principles, insisting that addressing abuse is both a business imperative and a “retention engine”. Mitigating risk safeguards investments and lowers the risk of default. FSPs can implement low-cost solutions, such as providing discreet statements or safer notification options.
African operational fixes
Ecobank, a pan-African bank holding company operating in 32 African markets, reported a 30% increase in the average loan size in one country after 18 months of participation in the Ellevate non-financial support programme for women entrepreneurs and business leaders.
Vera-Marie Ayitey-Smith, a Lomé, Togo-based Ecobank group manager, described how stipends paid to women collecting shea butter (a fat extracted from the African shea tree’s nuts for use as a moisturiser and in cooking), were immediately appropriated by male relatives. Ecobank responded by creating what she termed an “Express Account” for confidential digital transfers using feature phones.
“The ease with which you can open the accounts, and the fact that your account number is basically your phone number, makes it accessible to women who would otherwise be excluded,” said Ayitey-Smith.
Playbook for action
Gray introduced the Grameen Playbook, which advises FSPs on four key actions. Institutions must support their own employees, given that “one in three women globally” faces gender-based violence.
They must tighten confidentiality and privacy practices, training staff on clear protocols for intervention. FSPs should raise awareness about financial abuse through educational sessions, branch posters and client communications.
Dealing with “coerced debt”, Gray argued, requires conducting research with survivors of domestic violence and integrating those insights into product design, risk management and collections practices.