Financial access is very low in Pakistan, and more so for women. That is visible in the State Bank of Pakistans recently-released financial access indicators.
The SBPs Development Finance (DF) group supervises bank lending in four priority areas: microfinance, agriculture, SME finance, and housing finance. As per the figures available on December 31, 2013, women were just 13 percent of the 2.6 million borrowers in these four areas. Their borrowings were proportionally even lower: their loans were worth 5 percent of overall Rs606billion Gross Loan Portfolio (GLP).
But there is a glimmer of hope. Females are better covered by Micro Finance Banks (MFBs). Women make up 26 percent of total micro finance borrowers (0.97 million). They are using 19 percent of the overall micro finance GLP of Rs28.3billion. In fact, about 78 percent of all female borrowers in the DF group are being served by the MFBs.
Situation is also better on the saving front. Of the 2.7 depositors having Rs30billion with the MFBs, women make up 32 percent of the depositors and provide 22 percent of the deposit value. Had the SBP figures included the micro finance institutions business, the micro finance sectors overall coverage of female borrowers and depositors would be even more.
Branchless banking is also featured in the SBP study. It shows that eight BB providers with 125,000 agents had performed 192 million transactions of Rs802 billion in CY13. Females held 38 percent of the 3.4 million mobile-wallets opened through the BB channel as of year-end.
It must be noted that due to high GLPs of SME (Rs270 billion) and agricultural credit (Rs255 billion)--as they are largely handled by the commercial banks--these two categories collectively provided nearly two-third of the Rs28billion female loans. But within these two categories, female representation is very low (see illustrations).
Clearly, there is a contrast here. MFBs have a different approach to banking, where they do not shy away from going to the bottom of the pyramid. They especially engage females, who are said to have better loan repayment histories.
As for the commercial banks, they may not be entirely at fault for low credit to females. Its their collateral-based conventional banking model that probably explains the low ratio. As per the latest Pakistan Demographic and Health Survey (2012-13), only 11 percent of ever-married women (married at least once in their lives; 15-49 years) own a house, and only 4 percent have land ownership. Only 11 percent of households are headed by women.
So, it seems that micro finance and branchless banking--which offer greater convenience and coverage compared to conventional banks--will be at the forefront of female financial mainstreaming. Statistics are definitely low currently, but they do inspire confidence for a more inclusive financial system in the future.
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