Financial inclusion and integration of women


Mao Zedong proclaimed that “women hold half the sky”, but he forgot to recognize that we still live in a man’s world.

Empowering women through access to finance, employment, education and health has enormous potential to reverse the destiny of women. Years of research support women’s contribution to the economy, including the impact on long-term growth, productivity and well-being, sustainability and value creation in countries, communities and businesses . Following the adoption of the SDG agenda, women’s empowerment is enhanced by all of the interrelated goals. This requires a comprehensive strategy because our challenge is multidimensional and interdependent in nature.

The World Economic Forum (WEF) ranked Pakistan third from the bottom of its 2021 Gender Gap Index report. For the “Political Empowerment” sub-indicator, Pakistan was ranked 98th; for the three others – level of education, participation and economic opportunities, and health and survival – it was ranked respectively 144, 152 and 153. To this alarming state of affairs is added the Covid-19 pandemic, which has reversed the progress in poverty and deepened inequalities – both of which have a disproportionate impact on women.

The WEF ranking clearly demonstrates the need for Pakistan not only to make significant investments in women, but to embark on inclusive social, economic and financial policies that can help increase women’s participation in the workforce. work supported by access to education, health and employment. and ensure significant development benefits.

While we cannot claim that financial inclusion is a panacea and an answer to all problems, it is, however, an incredibly powerful lever – both in tangible and intangible ways – that can help women find pathways. multifaceted towards empowerment. In the area of ​​financial inclusion, a number of positive steps have already been taken.

First, as a country, our commitment to strengthening financial inclusion began over a decade ago. Sequentially, the main financial inclusion framework was introduced in 2009, followed by the 2015 National Financial Inclusion Strategy (SNIF). A combination of policies was deployed: microfinance institutions were approved as banks to serve the micro client, offering holistic financial intermediation services ranging from deposit and credit to insurance services; loans at the top have helped the sector to grow and mature; the capacity of the risk management framework was supported by credit enhancement facilities; branchless banking and mobile banking have laid the foundations for technological partnerships; regulatory and supervisory improvements have been adopted; NADRA’s national identification system successfully targeted G2G and G2P payments; and the credit bureaus have all played their part. Today, the microfinance industry has over seven million active borrowers, over 50 percent of whom are women.

Second, an improved SNIF, rolled out in 2019, now aims to expand the reach of financial services to 20 million women with the support of digital transaction accounts by 2023. In December 2020, the State Bank of Pakistan (SBP) reports that around 15 million women operated mobile money accounts – more than 50% year-on-year growth as the pandemic catalyzed online transactions, though we need to keep an eye out for persistence of this growth.

Third, the SBP’s Focus on Equality policy published in December 2020 is a welcome step, recognizing supply and demand constraints while calling for the promotion of gender diversity at institutional access points. funding, providing women-centered products and services, collecting sex-disaggregated data and setting goals and promoting gender champions and a policy forum. Gender mainstreaming and ensuring coordinated and accountable action, targeting and marketing as well as financial education would be essential for deeper penetration.

Fourth, the development of financial infrastructure and regulation must be the top priority of the SBP and Karandaaz. Karandaaz is supporting SBP’s efforts with a $ 16 million grant from the Bill & Melinda Gates Foundation to help launch the Raast micropayment gateway system that will support rapid settlement of transactions.

Fifth, a range of women entrepreneur programs have taken off and the SBP is supporting them with a refinancing facility. Karandaaz has been leading her Women Ventures program since 2017. These tailored initiatives have evolved a viable and vibrant community of women entrepreneurs, operating in a wide range of sectors, including food processing, fashion, technology and software, and lifestyle industry, to name just one. little.

As we move forward, we must ensure that digitalization does not strengthen the gender gap and widen the divide, but aims to improve women’s cellular connectivity and ownership. At the same time, the government should provide an enabling environment for financial market players as they prepare to strengthen the empowerment of women. The incidence of poverty, inequalities and disparities in access to finance at the provincial level are pronounced. Data shows that 67% of women operating mobile money accounts are in Punjab, with the share increasing by 3 percentage points in 2020. Sindh and Khyber Pakhtunkhwa – accounting for 22% and 10% of the pie respectively – saw a contraction of their respective shares in 2020. Balochistan, Azad Kashmir and Gilgit-Baltistan together constitute a meager three percent of these female accounts.

In conclusion, the severity of the exclusion of women from economic and financial markets and their predominance in the informal sectors makes achieving financial inclusion a complex task. So far, there have been more supply-side actions. However, the industry will evolve and mature faster if the demand from women seeking funding is strong. Turning the unbankable into bankable customers requires effective coordination between central and provincial governments, community mobilization, the shift from unconditional to conditional cash transfers, credit enhancement, and better risk management.

Finally, gender-sensitive recovery strategies will be essential to make up for lost time in 2020 due to the pandemic. As the Managing Director and Head of the Center for the New Economy and Society told WEF: “We have an unprecedented opportunity to build more resilient and gender-equal economies by investing in inclusive workplaces, by creating more equitable systems of care, by advancing women. access leadership positions, apply a gender perspective to requalification and redeployment, and mainstream gender in the future of work ”and, I would add, in the future of our world.

The writer is the president of Karandaaz.

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