Equitable AI for Inclusive Finance

This guide and accompanying brief provide a practical tool to help impact investors understand the use of AI among their investee companies and account for potential gender biases.

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AUTHORS

Alex Rizzi, Lucciana Alvarez Ruiz

Topics

Artificial intelligence (AI) enables innovations in digital finance that can boost efficiency, cut costs, and expand consumer reach. AI provides scalable ways to determine the creditworthiness of individuals and businesses that historically lacked identification, collateral, and credit history. And by automating processes, AI can enable higher volumes of low-value transactions that make harder-to-reach segments more viable customers. However, while AI presents tremendous opportunities, deploying AI also comes with significant risks – one being inequitable outcomes for marginalized consumers, especially women. When applied at scale, the harms caused by AI counter the financial inclusion goals of many impact investors and their portfolio companies. While impact investors are well positioned to take a proactive role in supporting companies in building and deploying equitable AI systems in inclusive finance services, they often do not have the tools required to assess and evaluate the fairness of algorithms. Recognizing this gap, the Center for Financial Inclusion (CFI) developed a practical guide for impact investors to help them identify harmful AI gender bias.

The Investing in Equitable AI for Inclusive Finance: A Risk Management Guide for Impact Investors gives an overview of the use cases of AI in inclusive finance and some of the drivers of harmful AI bias towards women. It also presents a snapshot of the state of practice in bias identification and mitigation and then provides a user-friendly checklist with an actionable set of questions to help impact investors understand the use of AI among their investee companies.

The accompanying brief, Prompts for Equitable Artificial Intelligence in Inclusive Finance: Strengthening the Industry Conversation, presents some of the key challenges with building accountability and transparency for AI in inclusive finance and discusses how CFI’s new guide can help raise awareness around the risks and costs of gender bias in AI. The brief also offers opportunities to strengthen the industry conversation on equitable AI, including advancing research, supporting consumer advocacy and journalism, and operationalizing data rights for consumers.

This work is the result of USAID’s Equitable AI Challenge. Implemented by DAI’s Digital Frontiers, the challenge aimed to identify innovative approaches to address artificial intelligence inequitable outcomes. The Equitable AI Challenge asked for proposals that critically consider holistic and creative approaches to identify and address gender biases in AI systems within global development contexts. This work is the result of CFI’s winning proposal. Special thanks to USAID for translating the guide into Spanish.

Authors

Alex Rizzi

Former Senior Research Director, Consumer Data Opportunities and Risks

During her time at CFI from 2012-2024, Alex was an advocate for consumer protection and evidence-based inclusive finance practices.

She managed the responsible data practices research portfolio at CFI which focuses on opportunities and risks for low-income consumers from data-driven financial services. Previously, she was a senior director for CFI’s Smart Campaign initiative, where she managed consumer-protection learning agendas and helped launch the Client Protection Certification Program. She has participated in multiple industry working groups on responsible finance, including an advisory group to GSMA’s mobile money certification program and the Microfinance Center’s social performance fund steering committee.

Alex is a graduate of Princeton University and holds a master’s degree from Georgetown’s foreign service school, as well as a certificate in digital money from the Digital Frontiers Institute and The Fletcher School at Tufts University.

Lucciana Alvarez Ruiz

Senior Research Manager

With over ten years of experience in research, Lucciana Alvarez Ruiz plays a leading role in projects across CFI’s portfolio by providing project management, research design, and quantitative analysis. She joined the CFI as a Research Manager in February 2021 and focuses on micro and small enterprises, climate finance, AI, and women’s financial inclusion.

Lucciana graduated from Harvard Kennedy School of Government with a master’s in public administration in international development. Additionally, Lucciana holds a bachelor’s degree in economics from the Pontificia Universidad Católica del Perú and master’s studies in economics from the same university.

Before joining the CFI, Lucciana worked as a consultant at the Inter-American Development Bank in Washington DC and Peru for over four years, researching and managing loans and operations in Latin American countries. She also worked for the United Nations Development Programme, the Bloomberg Harvard City Leadership Initiative, the Social Policy Data Visualization Lab of Harvard Kennedy School, and other think tanks.

She has experience designing and managing projects, supervising the implementation of surveys, analyzing data using STATA and RStudio language programs, writing academic papers, and visualizing data. She is fluent in English and Spanish and intermediate in Portuguese.