Financial inclusion of women in Pakistan is a ‘$500mn market opportunity’

There is a $500-million market opportunity in Pakistan that can be tapped by getting women to start banking, said experts from organisations including the World Bank and the Women’s Financial Inclusion Data Partnership (WFID) during a virtual roundtable on Thursday.

They also said there is good work being done at a government level in countries like Pakistan to financially include women but challenges remain.

According to the Women’s Financial Inclusion Data Partnership, there will be an estimated 32% gender gap in access to formal financial services by 2030 in Pakistan, while the country’s ‘estimated annual financial services product revenue potential in women’s market’ is $652 million.

This is partly because “women are paying back loans at greater rates than men and they are also great savers,” said Inez Murray, the CEO for the Financial Alliance for Women.

Anna Gincherman, partner at ConsumerCentrix (CCX), a strategy consulting firm, said “the market opportunity in places like Turkey and Bangladesh was close to $1 billion while in places like Nigeria in Pakistan it was over $500 million a year”.

“In Honduras it was almost $500 million, and in Kenya it was close to that which creates as much as 25% extra banking revenues per year.”

Meanwhile, Mayra Buvinic, an internationally recognised expert on gender and social development who serves as a Senior Fellow with Data2X, said “financial inclusion policies in both Pakistan and Nigeria as well as in Honduras have really driven a focus on women as clients.”

The panel praised the State Bank of Pakistan (SBP) for its policies in this regard.

One example of the SBP’s work is the ‘Asaan Digital Account (ADA)’ — a fully digitised solution for opening a full-service bank account from anywhere, at any time, through smartphones or computers with only a CNIC and no other documentation requirements.

Back in March, then-SBP governor Dr Reza Baqir said the service will break the barriers in financial inclusion of women by offering faster, cheaper, efficient and convenient solutions for meeting their requirements.

Financial inclusion of women: SBP unveils ‘ADA’ to break barriers

Last year the SBP launched a gender mainstreaming policy titled ‘Banking on Equality: Reducing the Gender Gap in Financial Inclusion’, which aims to reduce the gender gap in financial inclusion and improve women’s access to financial services.

While praising these efforts, panelists pointed out that there is opportunity to do more. For example, according to Buvinic, Pakistan is a very good example of giving its population digital ID cards which means it has been able to provide Covid-related social protection benefits.

“But that is an incredible opportunity to spread and have women with ID cards to be able to access bank accounts," she added.

At an international level, women make up a disproportionately large share of unbanked adults worldwide, according to data from the Global Financial Inclusion (Global Findex) database.

The data show that in developing economies women are 20% less likely than men to have an account at a formal financial institution and 17% less likely to have borrowed formally in the past year.

The report also said the gender gap in account ownership across developing economies has fallen to 6 percentage points from 9 percentage points, where it hovered for many years, but women are still 15% less likely to have a bank account than men globally.

In Pakistan, despite low overall account ownership, 84% of men and women are using their account for digital payments.

Panelists also said getting the right data to the right people is key to unlocking women’s financial empowerment. If both the public and private sector can see how much they stand to benefit from women’s financial inclusion, they would have more of a vested interest in it.

Murray said one issue is that the top brass at international banks are not giving the issue enough importance.

Her organisation conducted research back in 2014 with consultancy firm McKinsey where it interviewed 30 CEO banks and found that there is a lack of awareness that men and women are different when it comes to using financial services

It also found when the CEOs think of the female financial services market they just think of “pink products” which she said is “derogatory and simplistic”.