Banking rights

Wednesday, 23 September 2015 00:00 - - {{hitsCtrl.values.hits}}

THOUSANDS of Sri Lankans working in Qatar will have their salaries paid to their bank accounts under a new program undertaken jointly between the two countries. This also has the additional benefit of increasing financial inclusivity of women and enabling them to have access to financial tools to enjoy more economic freedom.

About 52% of Sri Lanka’s population is female. Many of the sectors that are critical for economic growth such as apparel, tea and remittances rely heavily on women. Access to credit can open up economic opportunities for women, and bank accounts can be a gateway to the use of additional financial services. However, women entrepreneurs and employers face significantly greater challenges than men in gaining access to financial services.

The Global Findex 2014, a comprehensive database measuring how people save, borrow and manage risk in 148 countries, reveals that women are less likely than men to have formal bank accounts. In developing economies women are 20% less likely than men to have an account at a formal financial institution and 17% less likely to have borrowed formally in the past year. This situation is mirrored in Sri Lanka where only 34% of the formal workforce is composed of women and therefore their financial inclusion is also severely limited.

Even if they can gain access to a loan, women often lack access to other financial services, such as savings, digital payment methods and insurance. Restrictions on opening a bank account restrict women’s access to accounts. Lack of financial education can also limit women from gaining access to and benefitting from financial services. In addition, many women may have access to financial services in name only, a case often seen in Sri Lanka.

Leasing is another important tool that many women in Sri Lanka do not have access to. Increased and independent mobility is crucial to financial strength and vice versa but there are many instances when leases for vehicles such as three-wheelers are obtained by men but the same opportunity is not afforded to women. Men have also been known to put a woman’s name on the lease but deny her access to driving the vehicle.

Lack of access to formal financial services also push women to informal agreements such as ‘seettu’ or borrow at oppressively high interest rates from alternative sources. This could result in high levels of indebtedness worsened by a lack of financial knowledge. Therefore, it is imperative to increase access to finance at all institutions across the board. The opening of a bank exclusively catering to women should not give license to others to roll back their initiatives, nor can it be the end all of Government measures to promote equality.

The Government and private sector must also commit to reducing gender-based barriers in the business environment. Creating business opportunities for institutions and in the private sector to improve working conditions for female employees, market segmentation and the inclusion of women in community relationships are all crucial steps in financially strengthening women.

Supporting business skills and financial capability training for women as well as building the business case for equal economic opportunities for men and women should be a significant focus of all stakeholders.