ISLAMABAD: Mobilink Bank has financed green energy products worth Rs 1.7 billion under its climate finance portfolio to boost the sustainability of micro, small, and medium businesses, mainly working in the country’s agriculture sector.
In an exclusive talk with Business Recorder, the bank’s Chief Operating Officer, Haaris Chaudhry said gender-inclusive and equitable climate finance is critical for fostering sustainable growth and development in Pakistan.
He stated that Pakistan’s microfinance banking sector, although quite nascent compared to its commercial counterpart, is working to transform the country’s economic growth by fostering inclusivity, particularly women’s participation in the formal economy.
The microfinance industry currently serves more than 110 million customers nationwide, which is more than 50 percent larger than that of commercial banks.
According to Haaris Chaudhary, the financial inclusion of women has been a game changer for economic growth. Women have historically stayed off the grid of Pakistan’s banking sector as they lacked any say in economic decisions or ownership of economic resources. By sensitizing and incentivizing communities and softening loan conditions, the microfinance sector has broken the lingering inertia in women’s participation.
“Pakistan offers great potential for the growth of microfinance,” Haaris Chaudhry said.
“Currently; around 50% of Pakistan’s eligible adult population lacks access to finance and doesn’t have a bank account. What is more concerning is the gender disparity, presently standing at a staggering 80% for women.”
Haaris Chaudhary attributes this disparity to deeply entrenched cultural barriers that impede Women’s participation, both physical and virtual.
“It is financially impossible for banks to have a physical branch in every town and village– a gap that we bridge with digital technology. Almost every bank has a digital portfolio with which it extends banking services, however, unfortunately, a large number of women still do not own a smartphone and hence stay off the grid.”
Pakistan has 89 percent teledensity and the 3G/4G access stands at around 50 percent, however, the number of women mobile broadband users is disproportionately low, especially across remote rural regions.
As per the COO, success stories have been an effective source of motivation and force against social taboos. There are courageous first-movers who inspire others in their communities to access finance.
Digital technology is bringing crucial banking services to women barred by cultural barriers, enabling them to diversify their household income and contribute to the overall economy.
“Financial inclusion of women is a major priority area for us,” MMBL COO, Haaris Chaudhry said.
“We worked tirelessly to motivate women to access finance, start their small businesses, and transform their destinies. We have a flagship programme called ‘Women Inspirational Network (WIN)’ that works with communities and upskill and reskill women entrepreneurs to help them successfully maneuver their businesses. We are further incentivizing women to open accounts with us by providing free insurance and telehealth facilities,” he added.
Mobilink Bank has a loan portfolio worth PKR 56 billion out of which PKR 30 billion are allocated for women borrowers. Individual loans of up to PKR 350 thousand and enterprise loans worth up to PKR 3 million have been issued to 70 thousand women borrowers so far. While the stats emphasize the bank’s leading role in driving financial inclusion, duly recognized by the State Bank of Pakistan (SBP) by placing it at the top of its industry-wide “Banking on Equality” Index, Haaris Chaudhary believes his team cannot afford to be content yet.
“We intend to maximize our women loan portfolio and jack up the number of women account holders to accelerate economic growth. Women make only 25% of our total bank account holders, which is a grim reminder of the persisting gap in access,” Haaris Chaudhry informed.
He stated that the bank is fastidious in ensuring equity in access and, therefore has taken individual as well as collaborative measures to foster financial inclusion. The bank conducts digital and financial literacy trainings for women borrowers and entrepreneurs, with 15000 people, the majority women, recently trained across the merged districts of Khyber Pakhtunkhwa. Another
collaborative project with the United Nations is in the offing. The training modules have been made available on Mobilink Bank’s ‘Dost’ app for women who cannot attend these sessions physically.
“The bank’s support to the MSMEs owned and run by women is ongoing,” Haaris Chaudhary said,
“Through a pilot with Daraz, we are providing an e-commerce platform to 300 women entrepreneurs to sell their products and generate income. We will continue to explore opportunities for the growth of their businesses,” he maintained.
Haaris Chaudhry firmly believes gender inclusivity and climate finance go hand in hand. His bank has expanded its climate finance portfolio to pivot agri-related MSMEs to green energy because a large number of women borrowers are associated with agro-business.
The majority of climate financing has gone into the installation of solar power water pumps, which has proved to be a game-changing investment for MSMEs operating in remote rural regions, where electricity supply is patchy, and costs unaffordable. He expressed his intention to expand these products to semi-urban regions to enhance business productivity, he added.
Copyright Business Recorder, 2023
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