The moral imperative that women should have bank accounts and be active participants of the financial system is enough to justify the case for the central bank’s latest initiative for increasing female finclusion. There need not be any other reason to justify this cause. Indeed, even if higher female finclusion isn’t a great business case for banks and financial institutions or even if it does not contribute to macroeconomic growth and development, the realities of 21st century make female finclusion a moral imperative on its own. This maxim should be the guiding lens for the central bank’s latest Banking on Equality initiative, failing which the short-term nature of cost-benefit lens will enforce compromise yet again, as has been the case for decades.
In her presentation at the launch of consultative dialogue for the central bank’s policy initiative earlier this week, SBP’s Deputy Governor Sima Kamil pointed out a host of things-to-do to make Banking on Equality work.
She rightly flagged the need for banks to start hiring more women; the need to have gender lens to product lines of banks and other financial institutions (FI) where stay-at-home-moms, female students, female salaries workers and female entrepreneurs should be targeted; and she also highlighted the importance for banks to ensure that all touch points undergo gender sensitive training. Here might one add, a stringent anti-harassment policy would go a long way to meeting SBP’s goals.
Central to all these measures, as Sima stressed, is need to collect gender disaggregated data on quarterly basis. This is critical both for tracking progress and target setting. One could not agree more with Sima on this. However, there is equally a need to gather data outside of banks and FIs. Some of these have been discussed earlier in BR Research’s National Women’s Business Agenda (published 28 Nov 2017).
Most items discussed in the piece on National Women’s Business Agenda are outside the SBP’s mandate, such as improving gender sensitive information basis of various government surveys. But there is one survey the central bank ought to consider, especially considering its National Financial Literacy Program for Youth. And that is an annual financial literacy survey that reads the pulse of financial literacy across various functional areas of earnings, consumption, saving, investing, borrowing, insurance, risks and uncertainty. These need to be assessed across age groups, marital status, education levels, ethnicities (native or first language) and regions across the country.
The SBP need not be solely responsible for this exercise but can be in the lead since among various types of FIs, banks are the biggest and most important players, and they have most presence in the country.
Lastly, whilst SBP governor Reza Baqir was right when he said that the central bank has to remain within its perimeter and cannot take the lead in areas outside its mandate such as laws, labour regulations, social norms and the like, he would do well to task his economic policy review team to shed light on how these laws and regulations are impingements to growth in financial inclusion.
Given its sensitive position, the central bank need not bash federal and provincial governments. But even simply flagging these constraints along with cross country comparative analysis in their State of Pakistan’s Economy report to the parliament won’t entirely be outside section 9A(2) of the SBP Act – unless of course the governor and his core team don’t believe that institutions – broadly conceived as rules of game – has any place in economics.