Letter from Inez: October 2013

Sunday 13th October 2013

GBA Newsletter

Two years after the onset of the Arab Spring and notwithstanding the complex and sometimes contradictory economic and political changes, the time is ripe for banks in the MENA region to support and build their female customer base. At the GBA, we have seen strong growth from the region in our membership this year with National Bank of Abu Dhabi (UAE), National Commercial Bank (Saudi Arabia) and most recently Bank Al Etihad (Jordan) who are profiled in this issue. These banks join flagship BLC Bank, Lebanon, whose excellent Women’s Market program offers a model for others in this region and beyond.

While MENA has the lowest female participation rate in the labor market in the world there are some positive trends. For instance, the GEM 2012 Report found that for every women entrepreneur in the region, six other women want to start a business: three times the global average. Attitudes are changing and great inroads have been made in closing the gender gap in education, with women now entering tertiary levels at a higher rate than men. This is producing a significant number of women in well-paid professions, which translates not only into an increase of high-earning professional women as a great segment for banks to target but also into women starting their own businesses in high value sub-sectors such as medical diagnostics and business services of all kinds.

And yet most banks are not seeing this opportunity. According to a Vital Voices/IFC survey of women business owners across 8 economies in the region, over 50 percent of respondents used private sources, such as personal savings, and family and friends to fund their capital needs. And although 80 percent of the women surveyed had personal checking accounts, just 18 percent reported having a commercial bank loan. Indeed 41 percent said they had encountered difficulties in accessing finance citing high interest rates, lack of collateral and complicated processes as the top challenges.

GBA member BLC Bank Lebanon, has understood this gap and offers their women customers a holistic solution through its Women Empowerment Initiative. This is the first program of its kind in the MENA region and targets women of all segments offering finance, advisory services, education, and networking opportunities. Launched in 2011, BLC Bank’s Women’s Market Program has shown extraordinary results, with a year-on-year portfolio growth of 15 percent and an ROA of over 12 percent for small businesses owned by women. The program could not be a success if they had not, simultaneously, undertaken the challenging cultural changes required to support it. A cornerstone of this was the bank committing to the UN Women Empowerment Principals in 2011. The results are clear: 49 percent of staff are now women, and the bank continues to track a range of interesting indicators, including the percent of women and men employees with graduate degrees, a leading indicator for salary parity.

All told, BLC Bank is making, on a daily basis, the business case for targeting women, and is truly a benchmark of best practice in the region. With that in mind, BLC Bank will be hosting a Study Tour in March of 2014 for GBA members interested in learning more about their program.

Building on this year’s growth in MENA, the GBA expects to double its membership in the region in 2014 for a total of 8 banks. As we continue to diversify our membership base, I am equally proud to share that we are also diversifying our funding sources. Westpac has set a new milestone for the GBA, becoming the first member bank to financially support the Alliance as a Sponsor.

Both BLC Bank and Westpac are examples of what it means to be a GBA member. They demonstrate strong results on the ground, and they share the knowledge so that others can succeed. It is this generosity that enables our Alliance and makes it such a pleasure to lead.

Inez Murray, Chief Executive Officer

Global Banking Alliance for Women