World leaders are to pledge to shape the technological revolution sweeping through Africa by acting to lift the threat of 400 million predominantly rural women being excluded from digital financial services. 

G7 finance ministers meeting in France are to endorse a paper from the Gates Foundation saying there is a serious risk that digital technology and mobile banking will bypass millions of women in Africa, leaving them disempowered for a generation. 

The initiative, requiring $255m (£205m) in initial funding and regulatory action across Africa,is designed to prevent “the inequalities of the past being insinuated into the future” as cultural and market barriers lead to women being excluded from mobile banking, e-commerce and smartphone technology. 

A mobile money revolution in sub-Saharan Africa is under way in which the number of people with an account doubled to 21% in 2017. 

Yet in sub-Saharan Africa women are 13% less likely to own a mobile phone and 41% less likely to use mobile internet than men. 

Speaking to the Guardian before addressing finance ministers on Thursday, Melinda Gates, co-founder of the world’s largest private charitable organisation, argued that the G7 should not see digital inclusion as a small step but comparable with its past efforts to address malaria or debt. 

“Digital financial services is not a lever we had 15 years ago.  We have it now.  Yet the mobile phone operators are going to pick off the low-hanging fruit, the middle class,” she said. “ They are not going to go the extra mile to help the poor or women.  We are already seeing these gaps that are going to set back women’s empowerment. 

“We know from good research that when a woman has her own digital financial bank account, she often moves from the informal farming sector to the formal entrepreneurial sector.  When they have assets in their hands, women often invest differently from their husbands.  They invest in health and their kids’ education.  When women are empowered, economies are lifted out of poverty. 

“Yet too many women are stuck in the era of the moneylender and the forced chicken sale.” 

The Gates Foundation argues that as the technology revolution is only just taking root in Africa, the opportunity still exists to shape a modern financial system from its foundations to include and empower everyone. 

“The old financial system was built to exclude.  It excluded the poor, whose transactions were too small to matter.  It excluded the rural, who lived too far away from bank branches.  It excluded women, whose husbands were supposed to make the decisions,” Gates wrote in the paper to the G7. “ It is very hard to retrofit an exclusive system to be inclusive.” 

Barriers that need addressing include the extent of mobile phone coverage, the inter-operability of technology, proof of identity, regulation and laws that exclude women. 

Bruno Le Maire, the French finance minister and host of the G7, said all these reforms needed backing. “ Giving women access to a bank account is key to faster growth in the poorest countries.  Our theme at the G7 is addressing inequalities, and this helps,” he said. 

Although by the end of 2018 nearly 250 million Africans subscribe to the mobile internet, more than three-quarters – 750 million – were still offline, including more than 400 million people for whom there is no mobile broadband. 

The differences across Africa, revealed in the report, are striking.  In Kenya, 80% of women have their own bank account.  In Senegal, the number has increased sevenfold between 2011 and 2017, but still only 40% of women have access to an account.  The total cost of mobile ownership is on average 10% of monthly income, much higher than in the developed economies and prohibitive for the rural poor. 

One of the key historic barriers to financial inclusion identified in the report is the relatively primitive type of mobile banking system that only allows money to be transferred between users of the same mobile service. 

As a result, the majority of digital transactions are still peer-to-peer money transfers within the same network. 

Millions more have a bank account, but what is the impact on global poverty?  Read more

This means, the report says, “a healthcare worker who receives her wages in a closed-loop mobile money account is likely to withdraw funds in cash – often travelling long distances and incurring fees – to buy food for her family, pay her bills, and send money to her son who lives in a neighbouring country”. 

The report also suggests difficulties need to be overcome to ensure secure proof of identification, an issue the UK chancellor, Philip Hammond, will highlight at the G7 by offering £15m to help fund a World Bank initiative on secure ID systems. 

Nearly 45% of women in low-income countries, not just in Africa, lack a formal ID.  The World Bank puts the figure for Africa at 500 million people.  India’s controversial efforts to introduce a national ID system, subject to court challenge over privacy, demonstrate the challenges ahead. 

Cultural or religious resistance to women’s financial independence is a further barrier, the report says.  In Cameroon, Chad, Gabon and Niger formal regulations exist that prevent women from opening a bank account in the same way as men. 

“All countries have reasons culturally or historically to hold women back,” Gates said. “ It takes forward-thinking people at the top and at the grassroots to lead change.” 

The Gates team believes the digital revolution is not so advanced in Africa that the emerging inequalities are irreversible.  Nearly half of people in sub-Saharan Africa who are paid a salary receive their wages in cash, and less than a third pay utility bills through an account. 

The potential future scale of the transformation is startling.  The consultants McKinsey estimate that by 2025 digital financial services could allow 1.6 billion people worldwide to enter the formal economy and could add $3.7tn to the annual GDP of emerging markets. 

Digital financial inclusion could create nearly 95m new jobs and provide up to $2.1tn in loans for individuals to start businesses.