Gender and Access to Finance what is access to finance? 5

Box 9: The Global Banking Alliance (GBA) For Women

GBA is a consortium of financial institutions that have successfully leveraged the women's market for profit. GBA members collaborate on identifying and sharing global best practices in the delivery of financial services to women.

GBA’s Mission: is to accelerate the growth of women in business and creation of wealth while generating superior business outcomes for member financial institutions.

GBA’s Vision:

• Identify and share best practices

• Source and collaborate on relevant woman's market research, studies and cases Create forums for industry and thought leaders

• Share collective knowledge

Members: Both ‘Full members’, which are financial institutions (FIs) that are committed to developing a women's market strategy for their organization and ‘Affiliates’, which are non FIs, centers of influence, and individuals with expertise in delivering to the women's market (e.g. associations, NGOs, Government entities) Some examples:

Access Bank, Nigeria; Bank of America;  Bank of Ireland;  Bank of Scotland;  Commercial International Bank - CIB, Egypt,  dFCU,  Exim Bank,  FNB; Federation of Woman Entrepreneurs Associations of Nepal; Intesa SanPaolo, NBS Bank, Nordea Bank Danmark,  Opportunity International,  RBC Centura,  RBC Royal Bank,  Standard Chartered ,  Trapezia,  UPS,WDB Group, Westpac Bank, Women’World Banking

 

Source: GBA, 2009

Such sex-disaggregated data underscore women’s need for products beyond micro ‘group’ loans. They also correct the largely held perception that women’s better repayment rates are driven only by ‘joint liability, fear of social sanction or because they “more risk averse in their choice of investment project than men.”¹³⁴

Government’s role in tracking sex-disaggregated data

The importance of tracking sex disaggregated data and setting achievable targets was recently also demonstrated by a central bank and government led initiative in India. Reserve Bank of India (RBI) directed public sector banks to disaggregate and report percent of credit to women within their total lending.¹³⁵ This followed Indian government’s action plan that aimed at increasing women’s access to finance from their current low level of 2.36 percent in 2001 to 5 percent of aggregate net bank credit. Banks achieved this target in 2005. The aggregate net bank credit to women has further increased to 6.2% in 2008.¹³⁶ To achieve the target Indian public sector banks have also designed special products for women (Table 3). Though the full impact of the policy requires further exploration, this is an important first step.¹³⁷

Table 3: Loans offered by Public Sector Banks to Women in India

Dena Bank’s special schemes for women owned MSMEs: incentives include 5 percent interest rate concession; no processing fee, easy payment options and no penalty. The loan amount is up to Rs. 500,000

State Bank of India: Stree Sakthi Package A special loan to women owned start-ups with concessions in promoters’ margin and rate of interest. No collateral for loans up to Rs. 5 00,000.

Bank of India: Priyadarshini Loan for women’s small, village and cottage industries start ups. The loan covers the payment for machinery. There is one percent cut in the interest rate for loans above Rs 200,000.

Union Bank of India: Viklang MahilaVikas Yojana Special scheme for physically challenged women for starting their own vocations. The product includes vocational training as well as financial assistance (grant) of Rs. 25,000 to start a new vocation.

Central Bank of India: Cent Kalyani Aimed at women entrepreneurs and women professionals.

Oriental Bank of Commerce : Orient Mahila Vikas Yojana A special scheme for woman entrepreneurs. The loan amount is between Rs 2 00,000 and 10, 00,000 with a two percent concession in interest rate. Loans above Rs. 10,00,000 are also offered at one percent concession. Enterprises consisting of all units managed by women or that have 51 % woman entrepreneurs’ share are eligible for this loan. In case of term loans, the repayment period is up to seven years with a maximum grace period of twelve months depending on the nature of the activity.

United Nations Commission on Trade and Development (UNCTAD) has made similar recommendations to governments and policy makers for tracking sex-disaggregated data including on access to finance (Box 10). These recommendations are also in line with the Strategic Objective A3 of the Beijing Declaration and Platform for Action in terms of which governments were urged to provide women with access to savings and credit mechanisms and institutions (UN 1996) as well as the recommendations of UN’s committee on building inclusive financial sector, 2006.

BOX 10: UN Recommendations for Gender Mainstreaming and data collection
A. Recommendations at the national level

• 
  Governments are urged to review and adapt laws and commercial regulations to enhance women’s access to ownership and use of economic resources.
  
• 
  Governments are urged to collect gender-disaggregated statistics on entrepreneurship and ICT in order to better evaluate the gender impact of their policies.
  
• 
  To ensure that domestic financial institutions reach the underserved segment of
  

women entrepreneurs, Governments should:

(i) Encourage commercial banks to report the composition of their loan portfolios by gender of client;

(ii) Support innovative financial incentives for women entrepreneurs, such as

special credit lines; and

(iii) Promote linkages between lenders and business development service providers to support women entrepreneurs.

B. Recommendations to the international community

• 
  Relevant international organizations should promote training programs for bank management and staff in order to sensitize them to the needs of women entrepreneurs and the potential benefits of reaching this underserved market.
  
• 
  Relevant international organizations are urged to collect gender-disaggregated
  

statistics in their field of specialization.

• 
  The international community is encouraged to support efforts made at the national level in the development of necessary infrastructure to provide rapid, equitable and affordable access to the Internet and ICT for women.
  

C. Recommendations to UNCTAD

• 
  Mainstream gender in all areas of work, as appropriate. In doing so, a focal
  

point on gender should be identified in each division of UNCTAD, with the

responsibility to integrate the gender dimension in all substantive areas of the

division, without prejudice to the work of the overall coordination of the focal

point on women designated by the Secretary-General;

• 
  Review its capacity-building programs, particularly EMPRETEC and MED 2000, so that they are gender-sensitive and can effectively provide training and advice to improve women entrepreneurs’ access to finance, e-finance and ecommerce;
  

Source: Trade and Development Board, Commission on Enterprise, Business Facilitation and Development, Sixth session, 2001, Agreed Recommendations, UNCTAD 2002