A reflection on the First Women Bank of Pakistan and Benazir Income-Support Programme by Deputy Executive Director Lakshmi Puri

Excellencies,

Ladies and Gentlemen,

It is a pleasure to join this distinguished panel to discuss the Pakistani experience in women’s economic empowerment and specifically on microfinance. I would like to commend the Government of Pakistan and its Permanent Mission to the United Nations for setting up the two very successful programmes we are reviewing today – the First Women Bank of Pakistan and the Benazir Income Support Programme.

I am heartened by these programmes, especially the First Women’s Bank of Pakistan. Programmes such as these should be replicated throughout the world and integrated in the broader gender equality and women’s empowerment agenda.

As you know, women’s economic empowerment is one of UN Women’s focus areas and we have learned a lot from our experience on the ground in more than 85 countries, as well as from the knowledge we have gathered from all corners of the world.

In fact, last week here at the CSW, we organized a panel discussion on the emerging issue of women’s access to productive resources. Microfinance was thoroughly discussed at this panel and there are many takeaways for us today.

Let me first underline that one of the conclusions of last week’s panel is very much in line with what we believe and advocate for at UN Women, which is that micro-credit has helped lift millions of women out of extreme poverty and allowed them to earn a decent living and provide for their families. However, micro-credit also has limitations, the first one being that these programmes are “micro” and cover relatively low amounts of resources made available to women.

It is essential to move from micro-credit to macro-finance if we want to bring about structural change in the economic and financial system to benefit women and girls. At the centre of this transformation needs to be a commitment to financial inclusion, especially for women.

Women need to have access to a whole range of financial services, including appropriate and affordable savings and credit products, payment and money transfer services, both domestic and international, as well as insurance. I was particularly pleased to hear today that this is the case for the Benazir Income Support Programme.

The success of micro-finance among women is evidence that women are not a risky investment, but capable entrepreneurs who are being prevented from reaching the next level of enterprise development by the discrimination they face in terms of access to finance and credit.

There is no doubt that the level of women’s financial exclusion is one of the clearest examples of gender inequality one can find today, especially in the developing world.

In high-income countries, only 7 per cent of adults do not have access to an account at a formal financial institution. In Africa, this is not the case for an average of 76 per cent. And in all continents women are the most disadvantaged. While in Africa, women’s financial exclusion is close to 78 per cent, it is around 75 per cent on average in Asia.

Of course, these averages mask major discrepancies between and within countries. Women’s access to financial services is conditioned by their legal, social, and economic position within the community or household.

Rural women, for example, are disadvantaged on multiple levels – they are often physically far from financial institutions and services, have lower levels of education and lower levels of income, which in turn do not generate incentives for financial institutions to reach out to them.

Strengthening the financial sector in developing countries remains therefore a central building stone in women’s economic empowerment.

There is a need to build systems and institutions that can deliver the range of financial services women need, both in the formal and informal sectors. For instance, access to credit schemes with no collateral and low interest rates, setting up guarantee funds, as well as savings and other financial services are required for the economic empowerment of women. The financial sector should provide special lending products to women.

There is a strong consensus that increased levels of financial inclusion contributes significantly to sustainable economic growth. 

I would like to highlight the special role that information and communication technologies can play in bringing about progress. Mobile banking allows for faster and more efficient financial transfer, which in turn increases the volume of trade.

It is essential to improve women’s access to technology, including radios and mobile communications, as a tool for financial inclusion. We have seen many successful initiatives around training and capacity-building to improve women’s use of ICT innovations and to provide banking and transfer services, especially for rural areas.

In Brazil, India, Kenya, the Philippines and South Africa, financial institutions have reached rural women customers at a low cost by providing their services through post offices, petrol stations and stores. 

In conclusion, I would like to look forward and particularly beyond 2015. What we have heard today shows the centrality of women’s economic empowerment, not just as essential to gender equality and women’s empowerment, but also in poverty-reduction and social protection strategies. This is why it is essential that this aspect feature prominently in a stand-alone goal on achieving gender equality, women’s rights and women’s empowerment in the post-2015 development agenda. UN Women has put forward a proposal in this direction and one of the proposed target areas is “access to capabilities and resources,” and micro-finance is an important tool.

In November 2010, in Seoul, the leaders of the G20 reiterated their strong commitment to financial inclusion. Women must be a special focus of this global effort and I commend the Government of Pakistan for taking a major step in the right direction with the two successful initiatives we have heard about today.

Thank you.