'Banks marginalise women'

HARARE - Reserve Bank of Zimbabwe governor John Mangudya has warned the country’s banking sector against marginalising women from financial services products.

In his mid-term policy statement on Thursday, the central bank chief said statistics recently collected from the financial services sector revealed that lending to women constituted less than 10 percent of total banking sector loans and advances which stood at $3,7 billion as at June 30, 2016.

“It is, therefore, critical for women to have access to the full range of financial products and services, including credit, savings and micro-insurance which are essential to fully develop their productive assets to facilitate graduation of their income-generating activities from survival level into viable businesses,” he said.

This comes as limited access to financial services, cultural norms and gender bias, and inadequate legislative and regulatory framework have been identified as contributing towards delayed realisation of economic development.

Yet, financial inclusion of women has social benefits as supported by research which shows that women use their earned income and savings more productively, channelling a large share to children’s nutrition, education, health and overall well-being.

In that regard, Mangudya ordered all banking institutions to submit to the apex bank by the end of this year their 2017 targets for lending and other financial products and services targeted at women, including accompanying capacity building activities such as tailored financial literacy or other training programmes.

“Banks should also capitalise on available funding from regional and international funders targeting women,” he said.

The latest development comes at a time when a recent Global Financial Inclusion Report (Global Findex, 2014) — a comprehensive database measuring how people use financial services products across 148 countries revealed that women in developing economies are 20 percent less likely than men to have an account at a formal financial institution and 17 percent less likely to have borrowed formally in the past year.

In Africa, which still has the highest percentage of the world’s unbanked; the gender gap persists among the 23 percent of adults with access to formal financial institutions.

Throughout Africa, there is a wide variance in access to banking services ranging from a mere seven percent in central Africa to 42 percent in southern Africa.

The marginalisation and exclusion of women is undeniable and impossible to ignore, on virtually every financial services measure, be it access to banking and credit facilities or with regards to consumer education, women are more economically excluded than men.

In addition, to statistical and general gender bias in the market, cultural norms and practices, as well as regulatory and legislative environments also contribute to the pervasive exclusion of women.

Considering  financial services and the disadvantage of women, a study found that in nine countries in Sub-Saharan Africa, the gender gap in financial services is explained by differences in education, income, employment and statuses as the household head.

Formal employment statistics show a general gender bias against women. There is statistically low penetration of women in the formal workforce at 40 percent, despite women being the majority of the population. This pattern places women in Africa at a particular disadvantage.

In an effort to address these challenges, Zimbabwe has for the past five years trying to establish a women’s bank but progress has been stalled due to lack capital.

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