This is one point that has been brought up time and time again – there is no chance of there being real economic growth without financial inclusion for women. For the longest time, women in Pakistan have borne the double burden of both working and taking care of the home. They have run small businesses, joined the workforce, and gone through all kinds of hurdles to earn money for themselves and their families.
Despite this, their access to financial institutions that could better their lives and make their efforts to earn more fruitful has been time and again denied in different ways. Let us make this clear – in all possible ways financial inclusion for women must not only be guaranteed but actively encouraged, because without them entering the network of financial institutions our overall economic growth will lag behind. So if not for the sake of equality, we must do it for the sake of the economy.
The data on Pakistani women’s rising economic power is staggering. The female labour force participation rate rose from under 16% in 1998 to a peak of 25% in 2015 before declining slightly once again to 22.8% by 2018. That means there are millions of women who are currently working who might not have been, had labour force participation rates for women stayed the same.
The total number of women in Pakistan’s labour force – earning a wage outside the home – rose from just 8.2 million women in 1998 to an estimated 23.7 million by 2020, according to Profit’s analysis of data from the Pakistan Bureau of Statistics. That represents an average increase of 4.9% per year compared to an average of just a 2.4% per year increase in the total population. In short, the growth in the number of women entering the labour force is more than twice as high as the total rate of population increase.
However, the many women that are outside the fold of traditional financial institutions or the formal job market do not have access to financial services such as loans, credit and to make transactions, but it is also essential to save money and build assets, which can in turn help them move out of poverty.
The lack of financial inclusion and literacy in Pakistan has led to many barriers for economic development – and this is prevalent . Take Daraz for instance. The online eCommerce behemoth recently started a campaign for seller acquisition of females, and the barrier without any surprises was that women’s financial inclusion was so less that even if they became sellers on Daraz, they did not have banking accounts to carry out digital financial transactions which keeps them from becoming a participating member of the economy. From Daraz’s numbers, around 60-70% of the women that signed up on Daraz to sell online and grow their businesses, did not have a bank account.
In recent numbers from the State Bank of Pakistan (SBP), only 21.3% of adult Pakistanis own a transaction bank account, out of which only 7% belong to women. That’s a terrible statistic given that women constitute about half of Pakistan’s population.
To promote discussion on women’s financial independence and inclusion, Daraz recently organised a panel discussion with two of Daraz’s important partners: Visa, the world’s second largest payment scheme, and Habib Bank Limited (HBL), Pakistan’s largest bank. The crux of the discourse was how to promote financial inclusion for women to help increase economic growth.
The issue on hand
Moderated by Pireh Shafiq from Daraz, the panel discussion between Syed Zeeshan, director digital payments at Daraz, Essam El Daly, the Head of Merchant Sales & Acquiring – North Africa, Levant and Pakistan at Visa, and Shazia Gul, Program Manager-Women Market Program & NRP Proposition at HBL. The talk discussed the partnership between HBL and Visa to promote financial inclusion for women, and went on to expand on the hurdles in providing women with access to financial services and why it is an issue that needs to be addressed with such urgency.
The most important part of all of the statistics that were mentioned earlier is that without women being an effective part of financial infrastructure, there is a lot of business that platforms like Daraz and the economy on a larger scale are losing out on. As part of the larger south Asian digital ecosystem and the emerging Pakistani market, Daraz held the panel because they felt financial literacy has been low which has resulted in many gaps. With women making up nearly half the population and barely over 5% of the overall bank accounts, the situation is a particularly dire one.
“The thought came to us that since Visa and HBL are old partners of ours, we could put our heads together and discuss just what it is that we can do to make equitable financial inclusion for women a reality,” says Zeeshan as the panel discussion begins. “We have already been working on making payments easier and promoting online payments both on the supply and consumer side in general, but we have very quickly realised that a concentrated effort targeted towards the female population must also be made. Essentially, we want to focus on the untapped female demographic.”
The panel was largely in agreement with Zeeshan, adding their experiences and discussing the importance of female financial inclusion. Visa’s Essam El Daly believed that it was crucial to bring women into the fold of formal financial systems, especially since in a country like Pakistan so many women had the potential to join the Small-to-Medium-Enterprises (SMEs) category. “We believe SMEs are the backbone of the economy. The main growth happening in developing countries and markets are happening in SMEs. Providing capacity building and driving growth is important, and as you can see the stats speak for themselves” said Daly. “These very alarming numbers are what makes this so important. For us, at least for our region, we have the Visa foundation to support women and see them grow their income. We share best practices and have many initiatives that help the women and as a result also help the economy of developing markets.”
Similarly, HBL’s representative on the panel said that the goal of improving financial inclusion for women was important not just for Pakistan in general, but globally and particularly in the region. “As a leading financial institution, HBL has been at the forefront of promoting financial development in Pakistan. We believe strongly in financial inclusion and increasing it everywhere. Women are a major and very important segment that has been ignored and not brought into the fold,” says Shazia. “The goal of financial inclusion is such a basic building block in poverty alleviation and other basic developmental goals, and until we address it women will be the ones to face the worst of it. That is why we have created projects like Nisa which address the need of more women to have inclusion and to be on the forefronts. Women in Pakistan are marginalised in access to finance. It is alarming and that’s why we are launching these programmes.”
Bringing a change in culture
However, the goal of bringing women into the fold is not just one of encouragement, it is about proactively making sure that women that have been deprived of these rights and opportunities are sought out and we do our part. “There are a lot of barriers. Pakistan is a patriarchal society and we are not at a point in time where it can fly,” explains Shazia.
“The economy has evolved beyond patriarchy. Independence for women owned businesses and working women means we need to have this dealt with as soon as possible. We have a lack of education along with a lack of tools. More women need to be encouraged to go to banks. They need to be encouraged to have ownership of assets and have their own bank accounts. These are such basic things but our culture often does not make space for it. This must become culturally common.”
Visa’s Daly was in agreement, saying that women constitute a major chunk of the socioeconomic milieu and the lack of awareness must be addressed and it is the job of companies like Daraz, Visa, and HBL that owe something to these women to reach out to them and make them aware of what they have at their disposal. “Financial inclusion is crucial at this point to also provide non-financial tools for business like advice and tips so they eventually come to these institutions knowing their rights and what they can get from these institutions,” he explains.
“And it is not simply about doing a few awareness campaigns. It is not a matter of just doing capacity building and product development through awareness, it needs to be a tangible end-to-end solution and if we combine resources the impact will be much much higher,” he said.
To this end, the panel discussion seemed to indicate that HBL, Visa, and Daraz were on their way to launch a joint project about financial inclusion for women which was aimed initially at spreading awareness. “We are at a common crossroads here,” said Zeeshan from Daraz. “Through our platform women can reach out to millions of people from home. However, the ability to do this must happen with education and awareness and all of us together can put our heads together and get these women to be a part of the financial system. This is a compelling story and it has the power to change lives.”
