Home Weekly Islamic Pages Islamic Banking Page 23rd October 2020

Islamic Banking Page 23rd October 2020

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Empowerment of women and development of Islamic Banking and Finance

Muhammad Arif : Chairman Centre of Advisory Services for Islamic Banking and Finance (CAIF), Former Head of FSCD SBP, Former Head of Research ArifHabib Investments and Member IFSB Task Force for development of Islamic Money Market, Former Member of Access to Justice Fund Supreme Court of Pakistan

Enhancing the skills of women, increasing investment opportunities for them through products and encouraging them to take up leadership positions are ways in which Islamic Fintech Firms can empower women in climes like Nigeria. Mrs. Wahida Mohamed the Founder of the Islamic Fintech Hub made this statement while speaking on the “Role of Women in the Islamic Fintech Ecosystem”.

According to her, women in the Islamic Banking and Finance industry have pooled immense investments and assets into the industry, Women are doing a lot of work and making changes in the industry. She noted that about 10 startups in collaboration have worked to promote gender balance and develop skills and products for women.

According to her, one of the start-ups Al Maleih, an e-learning platform with a twist, has a CSR program called Teching Up!  Which is the go-to place for girls aged 12 to 19 years old to learn and grow in 21st Century technology skills.  Teching up! Has the mission to equip the girls with confidence, skills, and professional portfolios and networks to pursue fulfilling careers in tech.

Another startup is Sunu Haliss a wholly owned-mobile based Islamic Microfinance operating from the Gambia which has a package called ‘Anisaa’ that incorporates among other things the purposeful targeting of women, consumption support and sharia-compliant microloans.

Also, Riyadha a mobile app targeting sports persons has an ‘Ameera’ package that is tailored to meet the financial needs of sportswomen from all walks of life. Ameera will incorporate access to the female team of financial advisors and the female team of career advisors/mentors.

These examples cited she believed provided a demonstration of the immense opportunities that could be created for women in the non-Interest Finance market, which the ‘Islamic Fintech Hub’ for Sub Saharan Africa plays a pivotal role.

“There is truth to the fact that women-led businesses generate more gender balance and this is what   Islamic Fintech Hub for Sub Saharan Africa, is advocating for in the region,” she said.

On what Islamic Financial Institutions can do to support women and empower them she outlined the following steps;

The Institutions should take strategic decisions focused on serving women.

There should be bundles, business & financial literacy training with mentorships and financial services and products.

Islamic Finance Institutions should provide women with add-on services and partnerships such as access to healthcare, education, social support networks etc.

The Institutions should place extra effort on helping women overcome the initial adoption hurdle for digital financial products.

Islamic Finance Institutions should invest more in women-led or women-run enterprises, financial service providers and fintechs.

These institutions also need to set Gender-specific goals and targets, tracking the progress.

There is a need for the Islamic Finance institutions to support efforts geared towards gender balance in a male-dominated industry.

Speaking on the Role Fintech Can Play in Deepening Islamic Finance in Developing Economies like Nigeria, Mrs. Mohamed made a comparison of Nigeria and Malaysia in terms of financial services.

Looking at the Information Technology infrastructure of both countries, she stated that Malaysia’s infrastructure and the 4G network are more universal and the 2019 world economic forum network readiness index ranked it as 32 out of 121 economies. For Nigeria, she said the bold liberalization measures in the ICT sector have resulted in widespread, low-cost mobile services, and the country has the most vibrant fixed-line sector and major private investments in the development of a national fibre-optic backbone.

She noted there has also been minimal fixed broadband infrastructure and connectivity in rural areas, leaving a significant number of the most marginalized segments of the population without internet access.

On the side of Government support for the digital economy and adopting the Islamic Finance regulatory architecture to develop the economy, she said Malaysia was a clear example with a central bank that is currently standardizing all Sharia contracts, with a Sharia advisory council, and also a court that is specifically for Islamic finance matters.

She believed Nigeria can do more in the area of the regulatory framework to encourage Islamic Finance and its provisions through Fintech activities.

In Pakistan to provide further impetus, the Government of Pakistan has launched its National Financial Inclusion Strategy (NFIS) in 2015, which lays out ambitious interim targets in pursuit of the goal of universal financial access. The NFIS headline target is to provide access to formal accounts to 50 percent of adult population by 2020. The strategy recognizes that achieving this target cannot be achieved without advancing the financial inclusion of women and sets the goal of reaching 25 percent of adult females with formal accounts by 2020, up from the 11.0 percent in 2015.

The business case for women’s financial inclusion can be constructed across three dimensions: social, economic, and commercial. In terms of the social impact, access to finance has been linked to the empowerment of women by creating economic opportunities for them, providing them with secure and private means of saving, and enabling them to mitigate life-cycle risks. This empowerment, in turn, creates further social impact by enhancing the welfare of their families, since women tend to spend disproportionately more on the education and health of their children. The economic rationale of investing in women’s financial inclusion rests on the untapped potential contribution women can make to a country’s economy. For example, expanding credit to women-owned businesses can help such businesses grow and create jobs, and bringing the informally held savings of women into the formal net can strengthen financial intermediation.

The highest growth in the ratio of women with a bank account was seen in Baluchistan, driven by the digitizing of government transfers, whereas most of the growth in women’s access to other formal services was concentrated in Punjab and Sind. Also, increases in the inclusion of women were higher among those living in rural areas than among those living in urban areas. Interestingly, the rate of expansion of women’s financial inclusion outpaced the rate of expansion of access for men during the 2008–15 periods.

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