The ProCredit group is made up of development-oriented commercial banks operating predominantly in Southeastern and Eastern Europe, and South America and Germany.
With a heritage dating back to 1997, and more than 73,000 business clients, the group has a distinctive impact orientation, reflected in its efforts to help micro, small and medium sized enterprises (MSMEs) navigate new challenges, such as adapting to climate and social risks.
In 2023, the group developed a gender action plan to support capacity building and alignment with best international practice. Just over 20% of the loans disbursed by the group to its MSME clients have directly supported companies with at least 50% female ownership. In addition, ProCredit is aiming for green loans to make up 25% of its total loan portfolio in the medium term, up from 20% in the 2023 financial year.
The Alliance spoke with ProCredit’s Head of Group Sustainability Katarina Zdraljevic to learn more about the group’s impact orientation and its increasing focus on supporting women’s financial inclusion.
Alliance: For the benefit of our global readership, can you please share ProCredit’s market position and business model?
ProCredit Holding AG, based in Frankfurt am Main, Germany, is the parent company of the impact-oriented ProCredit group, which consists of commercial banks for small and medium enterprises (SMEs) and the retail sector. In addition to our operational focus on Southeastern and Eastern Europe, ProCredit is also active in South America and Germany.
We support micro, small and medium-sized enterprises (MSMEs) that meet stringent environmental, social and governance (ESG) standards and have the potential to create wealth, employment and opportunities in our markets. Our business model is focused on providing financial services to innovative companies that show a high degree of formalisation and digitalisation.
Our lending activities particularly support investments in green technologies. Our commitment to gender diversity is based on the values and principles set out in our Code of Conduct and it is likewise reflected in the way we work with each other and with our clients.
Alliance: Focusing on the female economy in particular, what is ProCredit’s vision for the women’s market and what segments are you interested in designing and implementing an approach for?
ProCredit: Our goal is to target the female economy more specifically, recognising the immense opportunity it represents for the development of the countries where we operate and for the ProCredit group. Our Gender Action Plan details the steps through which we aim to increase women’s access to finance, reduce gender-based barriers in business, and create business opportunities for women-led companies. To achieve this goal, we are working on improved availability and use of sex-disaggregated data to better understand our customers´ needs and identify new market opportunities.
Our current focus within the female economy is on micro businesses and women entrepreneurs, which often require additional support due to the different social and economic barriers they face. In the future, we plan to extend this approach to women-led SMEs and women in our retail segment. Through different financial and non-financial services, this broader focus will allow us to reach a wider audience and contribute to women’s financial inclusion across different business scales.
Alliance: What kind of value propositions are you offering for women’s markets?
ProCredit: We recognise the unique challenges faced by female businesses. As a result, we have tailored a specialised value proposition for them, with the goal of supporting their growth and promoting development in our countries of operation.
We have observed that potential obstacles typically stem from societal biases and can range from limited equity, due to unbalanced inheritance laws, to limited access to networks or knowledge in their industries. In response, we have designed service packages that address these specific challenges and are customised to meet the unique requirements of women entrepreneurs. For example, we offer loans with lower or no collateral requirements, as this flexibility can be crucial for women who may not have traditional assets to pledge as collateral. Furthermore, by offering longer repayment periods, we enable women-led businesses to plan for the long term and implement their growth strategies by managing their cash flow more effectively.
Alliance: What role does digital financial services play in your financial inclusion strategy, and including women in particular?
ProCredit: In today’s economy, digitalisation has already become mainstream. Our business model recognises the transformative power of digital channels and our digital banking approach enables us to reach a broader client base. Our digital financial services offer multiple advantages, including cost-effectiveness, convenience, scalability and accessibility.
These advantages are of particular relevance to female entrepreneurs, who often must balance multiple responsibilities. Women entrepreneurs and women in rural areas can benefit immensely from the enhanced accessibility of our financial services through digital channels, as they are often unable to visit the bank branch in person. We will continue investing in our IT infrastructure and enhancing our overall retail approach, which includes micro entrepreneurs and will undoubtedly benefit the female entrepreneurial segment and further improve financial inclusion.
Alliance: Where are you at in terms of capturing sex-disaggregated data which is critical to establishing a baseline for a women’s markets program?
ProCredit: It is indeed crucial to capture sex-disaggregated data in order to understand the specific needs and behaviours of different client segments, including women. In 2023, we made a significant step forward by publishing sex-disaggregated data for our micro, small and medium-sized enterprises (MSME) client group. This marked the beginning of our gender data journey and serves as a starting point for portfolio analysis, as it provides insights into the gender composition of our client base. While progress has been made, we recognise that defining sex-disaggregated data is difficult and there is still plenty of room for improvement. I assume that this challenge persists across the industry.
Alliance: As climate action is at the top of banks’ agendas, how is the bank supporting customers to adapt and mitigate climate change? To what extent are you incorporating a gender lens in your climate initiatives?
ProCredit: Climate Action is one of our core strategies at ProCredit. Although we have worked on this topic for quite some years, in February this year, we took action towards our net-zero commitments by setting our first Science Based Targets initiative (SBTi)-confirmed targets. Furthermore, we will focus on assisting our business clients in their efforts to decarbonise, as these have the greatest impact on our scope 3 emissions. This support encompasses a range of activities, from carbon accounting and target setting to assisting business clients in accessing the financial resources they require to implement their strategies.
Earlier this year, our CO2 calculator, a tool which enables companies to measure their CO2 emissions, was launched in Bulgaria. It will provide our business clients with the information they need to make informed decisions regarding their transition to a decarbonised economy.
This is particularly pertinent for smaller and women-led companies, who often lack the resources to pursue these initiatives independently, thereby making our support even more critical. Women often encounter additional challenges, including limited collateral, which is crucial for their financial inclusion and access to decarbonisation projects financing.
Alliance: Internal gender diversity and inclusion is important to successfully targeting the women’s market. In terms of female representation at [FSP] employees, where do you stand and what have been one or two key success factors in getting to that representation?
ProCredit: Gender equality is a fundamental aspect of fostering a fair and inclusive work environment in the ProCredit group. Our commitment to diversity aligns with the values and principles outlined in our Code of Conduct, which was first implemented in 2006 and is implemented across the group. Rather than imposing quotas or targets, we prioritise individual development regardless of gender.
Notably, 62% of our total staff, 54% of middle management, and 35% of management board members are women. This can be attributed to a number of factors, including transparent recruitment practices, fixed salary structures, long-term career opportunities, equal access to training, and unwavering support in addressing unethical behaviour. Of course, none of this would have been possible without strong leadership, which undoubtedly has been the main key factor in reaching these internal milestones. We continue to refine our internal practices and initiatives, focusing especially on those that facilitate the career advancement of our female colleagues.
Alliance: Why did you decide to join the Alliance and what are you looking forward to learning from and/or sharing with the network?
ProCredit: We joined the Financial Alliance for Women on the basis of our commitment to gender equality and as part of our sustainability approach. Our Gender Action Plan is not a box-ticking exercise; it is a dynamic process of continuous improvement with the aim of making a meaningful impact. Although the path to positive change can at times appear daunting, the knowledge that we are not alone provides the motivation to persevere.
During this process, we discovered that many institutions within the alliance have already faced similar challenges and achieved remarkable results. We are particularly interested in the innovations and creative solutions that challenged the status quo. What strategies did others employ to overcome biases? What strategies led to a tangible impact? The Financial Alliance for Women brings together a diverse community of financial institutions, each with its own unique story. By actively participating, we gain access to a wealth of knowledge and expertise, and we are looking forward to the exchange of best practices and to collectively pushing boundaries.
