First Women Bank: Agent of change

Naushaba Shahzad, First Women Bank: carved out an important niche

Like magpies, we like things that shine and sparkle. Perhaps that is part of the reason why our attention is drawn to fintech firms, even the really poor ones. Disruption in finance and banking is still new and, in its own way, cool.

Fair enough. But this also diverts our eyes away from the many worthy causes that make banking such an endlessly fascinating industry. We risk overlooking the lenders that are quietly getting on with doing the unfashionable work; few notice them and their work is rarely lauded.

Take First Women Bank, which opened for business 30 years ago, a few months after the first copies of this publication rolled off the presses. Still based in Karachi, it was the brainchild of Benazir Bhutto, the first woman to head a democratic government in a majority Muslim country, and who was assassinated in 2007. The bank hit the ground running, thanks to PRs100 million ($640,000) in paid-up capital, provided by the government and five lenders including Muslim Commercial Bank and Habib Bank.

From the outset, the bank’s primary aim was to “meet two targets: the social development of women, and the bank’s commercial interests by being economically and commercially viable”, FWB’s president and acting CEO Naushaba Shahzad tells Asiamoney.

“This double responsibility gives us a new challenge – and makes us different from other banks that are only commercially focused. Despite difficulties and against all odds, we have managed to carve a niche for ourselves.”

All things considered, it has built itself a pretty big and profitable niche. The bank reported net interest income of PRs527 million in the first nine months of 2018, the latest publicly available data, up 8.2% year on year, and serves around one million mostly female customers from all walks of life. Most are business owners – FWB specializes in SME lending products and incentive schemes, many of which target entrepreneurs in rural areas – but it also extends short-term loans to consumers.

Shahzad, a member of the executive committee, has been at the bank for all but five years of its existence, variously heading up its risk management, credit services and SME lending divisions. She talks stirringly about promoting female empowerment and calls FWB “not just a bank but a legacy for the women of this country, a dream of economic empowerment, self-esteem and identity”.

While FWB has done much to bring women in Pakistan into the financial mainstream, Shahzad freely admits there is still a long way to go. According to the World Bank’s latest Findex report, published in 2018, just 21% of the population has access to formal banking services, while a man is 28% more likely to be a primary account holder than a woman.

That leaves more than 100 million adults, mostly women, unbanked. The task Shahzad faces is compounded by the low rate of female literacy, which stands at 48%, against 70% for men. “Pakistani women face huge challenges and obstacles to advancement and equality,” she says.

Big banks, Shahzad admits, want to “explore new markets and to provide credit to women”, but low literacy rates make allocating time and resources to rolling out new services across such a vast and under-connected country “a risky business”. It is this un-virtuous circle, which locks too many women into financial illiteracy and domestic servitude, that makes FWB so valuable.

FWB rolled out its first online banking services in 2017, though it views digital primarily as a promotional tool, a way of selling its ideas and services to the unbanked-but-online. The bank is busy on social media but, rather bizarrely, is followed by 115,000 on Facebook and just 75 people on Twitter.

Shahzad is optimistic about the future. The male-female financial divide remains firmly in place, but she talks with resolve about “transforming the status of women from passive beneficiaries of social services to dynamic agents of change”.

And while just one in 10 commercial bankers in the country are women, that share is up from one in a hundred in 1989, when First Women Bank was launched.

“Today, women in Pakistan have made progress in various fields of life”, including politics, business and finance, she says. “Women feel more comfortable dealing with women’s bankers and I see a lot of potential for us to grow in the next 30 years.”