Securities and Exchange Commission of Pakistan (SECP) has introduced a new policy framework: the Women’s Equality in Finance Policy (WEFP). This initiative aims to significantly improve women’s access to financial resources in Pakistan.
WEFP primarily targets Non-Bank Microfinance Institutions (NBMFIs). It recognizes the challenges faced by women entrepreneurs and proposes solutions to empower them financially. The policy also emphasizes increasing the number of women employed at all levels within NBMFIs, promoting better decision-making and governance in the microfinance sector.
SECP acknowledges limited access to finance as a major hurdle for NBMFIs. Data shows that the overall growth in the gross loan portfolio for female borrowers has lagged behind that of male borrowers between 2018 and 2023. Additionally, the proportion of women’s GLP has declined. This highlights the need for innovative solutions.
WEFP complements existing initiatives like the State Bank of Pakistan’s Banking on Equality policy and the Women Entrepreneurship Policy being developed by SMEDA. This collaborative approach aims to create a comprehensive ecosystem that supports women’s financial inclusion.
SECP data paints a concerning picture. While the number of microfinance women borrowers has increased moderately (17%) since 2018, the overall female borrower proportion has shrunk. This indicates a growing gender gap in loan access.
Despite the challenges, NBMFIs remain the primary source of formal credit for women in Pakistan, serving over 2.4 million women borrowers. However, estimates suggest NBMFIs capture only a fraction of the potential women’s market.
The average loan size offered by Microfinance Banks (MFBs) to women is significantly higher compared to NBMFIs. This, coupled with the low percentage of women employed in leadership roles within NBMFIs, exposes existing gender gaps within the sector.
WEFP aims to tackle these issues through a multi-pronged approach. This includes establishing a special fund to support innovation and capacity building in institutions serving women clients. Additionally, the policy proposes increased gender-sensitive training and setting targets for female employee participation within NBMFIs.
SECP’s WEFP signifies a significant step forward in promoting financial inclusion for women in Pakistan. By addressing funding limitations, fostering gender-inclusive practices within NBMFIs, and collaborating with other stakeholders, this policy has the potential to empower women entrepreneurs and unlock their economic potential.
