INP-WealthPk
SBP’s New Initiative to Ensure Women’s Financial Inclusion
February 24, 2022
By Iqra Waheed
ISLAMABAD, Feb. 24 (INP-WealthPK): The State Bank of Pakistan has launched the Banking on Equality initiative to help eliminate gender gap in financial inclusion by making the financial sector women-friendly.
The initiative sees increasing the ratio of women in financial sector up to 20% and enhancing the branchless women agents up to 10%. Under the central bank’s instructions, 75% of the banks have to place “women champions” at their branches. They are also to conduct special training for eliminating the implied gender biases against women staffers, and to enhance women-centric products and services. Banks can now extend financing for women entrepreneurship for up to Rs20 million, according to WealthPK.
Under the programme, disaggregated data on gender will be collected and a Gender Policy Forum will be set up at the SBP.
Women make up about half of Pakistan’s population, and their financial independence and access to financial services are important for sustainable development.
According to McKinsey Global Institute’s research, promoting women's equality could add $12 trillion to the global GDP by 2025.
Though women's control on wealth is increasing, still hindrances exist in the way of achieving gender equality in developing economies such as Pakistan.
Women currently account for 38.8% of the worldwide labour force, but Pakistan’s labour force participation of women is 20.6%, reported WealthPK.
“Despite efforts to improve women’s financial inclusion, the overall discrepancy is broadening. In Pakistan, only 29% of adult women own bank accounts as per the January 2020 data, while men own 90% of accounts, which represents that the gender gap is increasing,” according to SBP Deputy Governor Sima Kamil.
Mobile phone possession is the main indicator for adoption of digital financial services and penetration. However, only 26% of women own a cell phone, while male phone possession is three times higher. Likewise, gender disparity in SIM card ownership is 47%. This impacts the ownership of mobile money accounts negatively as the percentage of men’s mobile money account is 17% compared to only 2% of women.
About 81% of adult men use bank accounts as against only 29% of adult women. This means women are deprived of the possession and safety of their money. Only 21 million of the bank accounts belonged to women out of 82 million bank accounts in Pakistan in December 2022, reported WealthPK.
Currently, women make up only 13% of the total bank staff at the head offices and branches. While only 1% women agents are in the branchless banking; unique women’s bank accounts are 21 million; 23% borrowers of microfinance banks are women and only 9% of SME financing borrowers are women. This shows a wide gender gap in digital inclusion.
Source: financial inclusion insight survey
Women empowerment and economic growth Giving women increasing access to financial services is a sure recipe for sustainable development and inclusive growth. It is to mention here that in Kenya, women, who own bank accounts, invest more money in enterprises. While women owners of saving accounts mostly invest in education, which also leads to development. “It is globally recognised that the financial inclusion of women is a powerful tool for alleviating poverty of households. By adding the women to financial inclusion poverty can be reduced more easily,” according to Inez Murray, CEO of New York-based Financial Alliance for Women. The Banking on Equality initiative of the SBP will help increase access to financial services, thus contributing to economic growth. By providing access to banking, women, who are out of labour force due to credit issues, will also enter the labour force. It will help improve incomes of households, which will lead to an increase in consumption of goods and services, hence raising people’s living standards.
