The State Bank of Pakistan (SBP) officially joined the global initiative of Women Entrepreneurs Finance Code (WE Finance Code) in collaboration with the Asian Development Bank (ADB) and under the leadership of the World Bank on Monday. The ADB has partnered the initiative with a substantial $500 million financing programme to the government of Pakistan.
The funding is aimed at bridging the gender gap and enhancing equality, with a focus on advancing women’s financial inclusion and economic empowerment. Global financial institutions’ studies estimate that the programme may unlock a potential 30% boost in Pakistan’s GDP (gross domestic product), driven by the growth of women in the economy.
$350m loan agreement signed with ADB to boost women’s financial inclusion
As part of the initiative, some 20 banks and other financial institutions operating in Pakistan have committed to supporting the SBP-led effort. Their participation underscores a collective push to improve women’s access to finance, particularly by expanding their eligibility for bank loans and other financial services.
ADB-representative Christine Engstrom said the regional financial institution is supporting the Women Inclusive Finance Sector Development Programme in Pakistan.
“This is the $500 million programme with the government of Pakistan, which is actually designed to reduce the gender finance gap. This programme combines policy base lending and technical assistance to drive sector wise reforms and to provide access to finance to over 2 million women.”
She said women financial inclusion was no more a personal agenda. “It is a central pillar of economic development”.
“It is essential to drive exclusive growth, especially in the financial system, as millions of women remain excluded from the formal financial sector.”
She acknowledged that the SBP initiative of “banking on equality and policy framework have already begun to shift mindset in institutions, embedding gender inclusion into the DNA of the financial sector”.
Citing from studies conducted by global financial institutions including ADB and Islamic Development Bank (IDB), SBP-representative Abid Qamar said that women were empowered and gender parity in workforce could boost the overall GDP like up to $28 trillion globally.
“If we focus on only on South Asia, it can add up to to like half a trillion dollar to the economies of region. And in case of Pakistan of course by reducing this gender gap Pakistan GDP could also be boosted by almost like 30%.”
The access to banking services to underbanked and unbanked women through bank branches, ATMs, and loans also support banks to increase their revenue.
“Expanding the financial services to women may increase banking revenue up to like $650 million in Pakistan…this shows the significance of women economic empowerment,” he said.
Some 17 million women had been employed in various sectors of the economy in Pakistan out of 79 million working age women, he added.
In her recorded video message, WE Finance Secretariat’s representative Wendy Teleki said the secretariat had been working for women’s financial inclusion and their empowerment across the globe.
Financial inclusion of women in Pakistan is a ‘$500mn market opportunity’
In the past around two years, they have launched the refinance code at the World Bank, International Finance Corporation (IFC) and other leading signatory institutions and partners.
“Almost 30 countries and more than 250 financial institutions have signed the code and made commitment to the cause like policy reforms to include women in the financial sector, support SMEs (run by them) and create employment opportunities for them,” she said.
“They (women) also have opportunities to grow if we can remove barriers to growth like access to finance and policy reforms.”
The WE Finance Secretariat hopes the code in Pakistan will go beyond banks to include fintech, digital finance institutions, and showing companies and equity funds as well.
“The refinance code is helping us move forward on SGD5, which is about achieving gender equality and empowering all women and girls,” she said.
SBP Governor Jameel Ahmad said the launch event of WE Finance Code represented a strategic step towards fostering inclusive and sustainable economic growth by prioritising women’s economic participation at the heart of the national development agenda.
The case for gender equality is both moral and economic, according to Ahmad.
“No country can thrive when half of the population is under-employed and underserved. In Pakistan, women’s labor force participation is just 22% and with only 164,000 women entrepreneurs.”
Gender gaps in education, mobility, skills and access to financial services continue to hinder women’s full economic participation. It is also one of the major causes of low savings as well as low investment in Pakistan compared to many regional peers.
“SBP will collaborate with financial institutions, regulators, government agencies, private sector and academia to build an inclusive ecosystem for women entrepreneurs,” he said.
Comments
Comments are closed for this article.