WASHINGTON: Only eight per cent women in Pakistan borrow money from banks, compared to 51pc in Brazil, according to a survey ‘Women in Finance: A Case for Closing Gaps’ conducted by the International Monetary Fund (IMF).

“Our new study finds that greater inclusion of women as users, providers, and regulators of financial services would have benefits beyond addressing gender inequality,” says IMF while encouraging discussion on women’s participation in economic activities on its blog.

“Narrowing the gender gap would foster greater stability in the banking system and enhance economic growth. It could also contribute to more effective monetary and fiscal policy.” The survey conducted earlier this year shows that women on average accounted for just 40pc of bank’s depositors and borrowers in 2016.

The survey highlights large variations across regions and countries but notes that “women are underrepresented at all levels of the global financial system, from depositors and borrowers to bank board members and regulators.”

Increasing women’s access to and use of financial services can have both economic and societal benefits, says IMF. For example, in Kenya, women merchants with a basic bank account invested more in their businesses.

Economic growth increases if women have greater access to financial services as “more inclusive financial systems in turn can magnify the effectiveness of fiscal and monetary policies by broadening financial markets and the tax base”, argues IMF.

The paper determined that women accounted for less than 2pc of financial institutions’ chief executive officers and less than 20pc of executive board members. The proportion of women on the boards of banking-supervision agencies was also low—just 17pc on average in 2015.

Sub-Saharan African countries had the highest shares of female banking executives, while Latin America and the Caribbean had the lowest. Advanced economies were in the middle.

IMF surveyors found that the gender gap in leadership does make a difference when it comes to bank stability. Banks with higher shares of women board members had higher capital buffers, a lower proportion of nonperforming loans, and greater resistance to stress.

The report posits four reasons why more women on bank and supervisory boards contribute to financial stability; women may be better risk managers than men, discriminatory hiring practices may mean that women who do make it to the top are better qualified or more experienced than their male counterparts.

Published in Dawn, September 23rd, 2018