AS the old adage goes, the proof of the pudding is in the eating. How far the new State Bank initiative — ‘Banking on Equality: Reducing the Gender Gap in Financial Inclusion’ — will help remove the barriers to women’s access to banking and financial services, only time will tell. Yet the first of its kind mainstreaming effort for the financial sector, which introduces a gender lens in our banking practices, is creditable. The policy aims to boost the number of active women-transaction bank accounts from the existing 14.5m to around 20m by 2023 and increase female participation in the workforce of financial institutions from 13pc to 20pc by 2024. In the given circumstances, the targets seem ambitious. But these are achievable with a little bit of push from the central bank and increased use of technology.

Improved gender diversity in financial institutions, creation of women desks at bank branches to facilitate female clients and the development of women-centric products and services as envisaged in the policy should largely take care of supply-side barriers. The collection of gender-disaggregated data and institutionalisation of a policy forum on gender at the State Bank can push banks to meet policy targets. The recent extension of the facility to open bank accounts digitally to resident Pakistanis should help boost the financial inclusion of women. It is not clear if these initiatives have done away with any condition for the ‘validation’ of a male family member for an adult woman to become part of the banking system. If it hasn’t, it should be dismantled immediately.

Currently, women are disproportionately under-served by the country’s banking system. Reports show that women can be forced to move towards informal means to meet their borrowing and savings needs. A State Bank survey showed only 5pc women savers used formal channels in 2015 and the Pakistan Microfinance Review 2019 put the total number of female borrowers at just 3.8m. Little wonder then that the World Bank in a 2018 report strongly underscored the importance of always keeping women at the centre of financial inclusion since their access to a secure and private means of savings and financing is closely linked to their social empowerment and enables them to contribute positively to economic growth, and creates opportunities for them. Thus, President Arif Alvi was spot on when he said that opening bank accounts for women was just one way of financial inclusion. It would open up avenues for them to access credit, payments, insurance and other financial services at an affordable price. Bridging the gender gap in financial inclusion will be challenging since the causes go beyond access to services and are rooted in social values and norms. Nonetheless, the shift from gender-blind and gender-neutral practices to women-specific efforts envisaged by the new State Bank policy should go a long way in empowering them economically.

Published in Dawn, September 20th, 2021

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