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Women’s financial inclusion in Pakistan

Salis Malik

Even after traversing in the 21th century, there has always been a large unabridged gender gap when it comes to financial inclusion in Pakistan. One glance at the banking sector and this falls exactly into place–only about 11 percent of the overall employees in Pakistan are women. In Pakistan, women have always been impelled to ascent an unsurmountable zenith when it comes to the access and use of financial services within the nation.

To make things more aggravated, its next to impossible to find any woman in a bank with a higher position or post such as female chief executives. With such a huge disparity when it comes to female representation in the finance sector, how could women in this country find any financial inclusion to begin with. Without the presence of a strong voice for women, how can women find a foothold to help them leverage financial services and products. It is not surprising to see Pakistan as the third lowest ranked country in this year’s Gender Gap Index report by the World Economic Report. It sheds light on how the government should work on this and bring about highly effective financial inclusion policies that can alleviate Pakistani women from being a vulnerable group to a financially independent group.

The State Bank of Pakistan did make a redeeming step for the financial inclusion for women by introducing a draft knows as the ‘banking on Equality policy’ back in December 2020. This policy was aimed at promoting gender diversity in financial institutions, providing women ease for doing business, delivery of women-only services and setting up an official forum which helped to induct women. On paper this might seem like an amazing prospect but its actual effectiveness is still up for debate. Yes, the policy does seem very effective for abridging the gender gap but its not as if this policy does not have its own chinks in its armour.

The higher authority’s reluctance to view the whole situation through the gender lens is quite frustrating. Authorities forget that they should be compiling data for female demographics taking into account the entire nation. Instead, they keep on publishing figures that only encompass a small percentage of women. This lack of data available is what actually dulls the effectiveness of this policy. However, it won’t do justice to the SPB if we completely ignore their many initiatives. It is true that the SPB has taken charge in supporting by providing refinancing schemes and these policies can help a surfeit of budding female entrepreneurs who have always been blockaded by social norms and gender biased financial policies.

However, despite the SPB’s backing, there still seems to be a huge divide when it comes to financial inclusion based on gender. One glance at a few financial institutions in Punjab and we will be appalled by the statistics: only around 27% of the deposit accounts were owned by women and only a measly 24 % of the current accounts were female owned. The same could be said about the female ownership of loan accounts and long-term loan accounts which only accounted for 6% and 5% respectively. These statistics only down to around 9% of women aged between 18 and 64 that actually own some sort of a bank account.

These numbers point out to a plethora of factors that increase the financial exclusion of women by manifolds. These factors include women’s limited mobility, lack of access to many IT services and extremely low literacy rates in many parts of the country. Couple these with the stringent and stereotypical thinking that women are only good when they take care of the house. This type of mindset exudes from millions of households around the nation which has a lasting and adverse psychological effect on these women. These stereotypes often break a woman’s spirit leaving her secluded in the confines of their houses and not thinking about their financial rights.

One way the government can improve the financial inclusion for women is through digitalisation. This can actually shorten the gender gap by allowing women with small businesses flourish through the usage of logistic services or any mobile based financial solution that could help and deliver their products and services to customers and help them flourish as entrepreneurs. With around 90% of people having access to 3G and around 80% of all Pakistanis having access to 4G, women who do use mobiles, computers or internet will have a higher chance of being financially included. According to recent studies, education increases the financial inclusion by 2.4 times but a proper and reliable internet increases this inclusion by 3.3 times. This quite frankly highlights how improvements and policies within digitalization can greatly help women to become more financially independent.

In this regard, digital financial services need to increased and specifically have to be designed for women with mobility constraints. Furthermore, over the counter payments should be easily accessible for women in unison with ‘mobile wallet’ services. In a developing country such as ours, women have always been a vulnerable group confined within the walls of stereotypes and misogyny and inflicted with a plethora of barriers underpinned by social norms and greater exclusion and we all hope the incumbent government tries its best to change this trend for good.