Bank for women

Financial inclusion and awareness are at an all time high. With the rise of start-up culture in Pakistan, a plethora of micro-finance and fintech companies are hoping to bring the magic of digital banking to Pakistan’s 200 million people. However, despite all this, at least 82% of women in Pakistan are unbanked, i.e. without a bank account, leaving them without basic financial services and putting their social rights at risk.

Being unbanked does not mean that women do not have the potential to contribute to the market; we’ve seen South Asian women save and spend in their own way. We grew up watching our grandmothers lock family jewels in their lockers or pile wads of cash under mattresses. However, despite the protestations of some older generations that the old-fashioned ways of financing suited them as women, the fact is that the unbanked population is undoubtedly at a huge disadvantage compared to the banked population, especially now. that increasingly, a bank account or digital financial presence is required to access modern facilities. Moreover, while the transmission of gold jewelry was indeed a treasured family tradition, it only allowed women to control their possessions at the time of rites of passage, notably when a woman married or when her daughter did. Research shows that when a woman opens a bank account, she accumulates savings, spends more on children’s education and invests in business opportunities. Having an account can offer women greater privacy, security, and control over their finances.

Pakistan has come a long way in financial inclusion, not just for women. The State Bank of Pakistan oversaw the creation of a regulatory framework for microfinance banks, the expansion and modernization of online credit bureaus, and adopted a series of measures aimed at enhancing payment security and efficiency, including the establishment of the Pakistan Interbank Settlement System and the development of interoperable interbank card payment platforms. In addition, with the encouragement of the Financial Action Task Force (FATF), Parliament passed several additions to Know Your Customer (KYC) requirements and anti-money laundering regulations. There are more microfinance and non-banking financial companies (NBFCs) than ever before, with many NBFCs specifically designed to provide financial services to women, especially disadvantaged women. With more awareness and resources than ever, why does the gender gap still exist in finance?

From a legal point of view, the establishment of a favorable legal and regulatory environment clearly appears to be one of the most critical foundations of full financial inclusion, and parliament should naturally address the issue. urgent legal reforms that will determine and facilitate the development of an ecosystem of quality financial products and remove institutional barriers for women. However, when you look at it more concretely, there seems to be one huge factor that contributes the most to such a gender disparity: the mobile phone. Those familiar with the micro-finance and fin-tech industry know that partnerships between financial institutions and telecommunications are the future of banking – globally, purchases are already made via touch of the mobile screen on a barcode – and this seems to be the case for Pakistan too in the near future. Therein lies the problem – in a culture where cellphones are seen as the gateway to diversifying connections and discovering a world outside the home, it seems inevitable that these magical devices will be denied to women. Already, a key concern repeated by religious and conservative organizations has been the provision of cell phones, especially to women, with many echoing the fact that the internet and social media have “ruined” women by allowing them to access opportunities outside the home, or worse, allowing them to interact with ‘na-mehram’ men. The latest findings show that only 26% of women surveyed said they own a mobile phone; in contrast, the proportion was almost three times higher for male respondents. Similarly, in the case of having a SIM card, the gender gap reached 47%.

The results are in front of us: the male population with a mobile money account registered in their name stands at 17%, while only 2% of the women surveyed have a mobile money account. Even with more micro-finance support for women, as long as women do not own mobile phones, the likelihood of money flowing directly to them, and not under the control of male family members, is low. The loss is not just for gender equality or for women – the country is suffering by depriving half of its population of the financial industry. There is a $500 million market opportunity in Pakistan that can be tapped by attracting women into banking. Therefore, while the State Bank’s National Financial Inclusion Strategy shows impressive figures for market growth in new businesses and institutions, these will remain mere numbers as long as connectivity and digital inclusion, at a micro level, will not be improved. . Government figures should think twice before decrying cell phones and in particular the use of these devices by women, as such statements contribute to the social taboo that prevents women from accessing these key avenues to independence. financial.

Michael J. Birnbaum