State Bank unveils policy on gender equality in financial inclusion

KARACHI: The State Bank of Pakistan (SBP) on Monday unveiled a draft of the policy to ensure women’s equal access to financial services as it said women largely lag behind men in terms of financial inclusion and contribution to economic activity.

The SBP said almost 93 percent of adult women in Pakistan do not have a formal financial account. Citing the World Bank’s data, the central bank said 21 percent of adults in Pakistan have a formal financial account as of 2017, increasing from 13 percent in 2014. However, adult women’s formal financial account ownership has increased from 4.8 percent in 2014 to 7 percent in 2017 while men’s account ownership has increased from 21 percent in 2014 to 34.6 percent in 2017.

The proposed policy identifies five key pillars under which actions are targeted towards improving institutional diversity, product diversification and development capability, customer acquisition and facilitation approaches towards women segments, collection of gender disaggregated data, and prioritising gender focus in SBP’s policies.

The policy recommendations will be applicable on SBP’s regulated entities, including commercial banks, Islamic banks, microfinance banks, development finance institutions and electronic money institutions. Furthermore, Securities and Exchange Commission of Pakistan is expected to adopt a similar, yet customised, gender policy for the non-banking financial sector, the SBP said in the policy document.

The SBP said currently only 13 percent of the staff of banks and 1 percent of branchless banking agents are women. “Financial institutions shall be asked to develop policies to improve gender diversity and ensure minimum 20 percent female participation in the work force by 2023,” said the SBP.

The SBP said the financial institutions need to create a specialised department within 6 months of issuance of this policy. They may also collaborate with the incubation centers in providing awareness and marketing about their digital financial products and services.

“Within 6 months of its creation, the specialised women financial services department shall develop products for women that are well researched and backed by demand side insights.” The State Bank said women’s financial inclusion cannot be improved without understanding their needs with careful attention.

“However, women customers especially entrepreneurs, feel intimidated to visit a bank branch and are not facilitated effectively. Therefore, to enable banks to improve facilitation of women customers and entrepreneurs, women champions shall be deployed at all customer touch points,” it said.

“The women champions must have undergone gender sensitivity training, and should be well versed with the bank’s products and government and SBP’s schemes for women entrepreneurs. The resources should be deployed at-least at 75 percent of all touch points within a period of three years of policy launch.”

The SBP said the absence of data and targets can dilute FI’s focus on the gender in finance, and impede development of informed policies and associated actions for closing the gender gap. “Therefore, under the policy, all institutions under SBP’s ambit will be instructed to collect and report gender disaggregated data related to gender disaggregated outreach of products and services, to SBP. “

The State Bank said it will set up a policy forum on gender and finance to discuss opportunities and challenges in women’s financial inclusion, internalise gender mainstreaming within organisations, and review the existing legal and policy framework for identification of bottlenecks in women’s financial inclusion.