Tuesday 27th April 2021
As Ecuador’s fifth-largest bank in terms of customers, Banco Solidario has led the way in serving previously unserved and underseved populations. This month, we’re delighted to welcome the bank to the Alliance. We spoke to CEO Fidel Durán about the bank’s already impressive inclusion of women as both customers and employees and its strategic vision for developing a tailored value proposition for women.
Alliance: Could you tell us about Banco Solidario’s market presence in Ecuador and its overall strategic vision for our global readers?
Fidel Durán: Over 27 years ago, Banco Solidario became the first private bank in Ecuador to offer financial products and services to sectors that were unserved by traditional banks —particularly micro-entrepreneurs. At the same time, Unibanco was financing low-income populations who previously lacked access to banking services. After 15 years of operating independently, both banks merged to become the country’s largest bank focused on microfinance. Today, Banco Solidario is the 11th largest bank in Ecuador in terms of assets, but we are 5th in terms of customer base, which reflects our vision of reaching customers with lower financing needs than those in traditional sectors.
Our work and our decisions are guided by clear principles: We believe in people not for what they have but for who they are. And when the small ones grow, a great future will rise. We apply these in our day-to-day.
Alliance: With over 20 banks in the country, how does Banco Solidario stand out in the market? Is the Women’s Market part of its positioning strategy?
FD: Part of our mission from the outset has been to simultaneously generate financial and social returns. Up until last year, we were the only bank in Ecuador to obtain, in addition to a financial rating, a social performance rating.
Banco Solidario is the first and largest bank specializing in microfinance, and we were pioneers in Ecuador in serving sectors not covered by the traditional banking system.
Our corporate vision of promoting greater inclusion and diversity in our portfolio is one of the strategies and tools that give allow us to stay true to our origins and to strengthen our leadership.
Over 54 percent of our customers are women, but we believe we can achieve even better results with female customers by developing a specific strategy with targeted actions.
Alliance: What kind of barriers do female entrepreneurs face in Ecuador when trying to access financial services?
FD: Financial exclusion can be linked to exclusion in other areas, such as education, employment, wages, etc.
Legal regulations can be an important barrier. For example, when a woman that obtains a loan is required to sign it with her spouse, a variable that we have been able to control for to promote greater financial inclusion, eliminating the requirement for amounts that are less than USD 10,000.
But the biggest limitation in Ecuador are the interest rate caps. All studies indicate that this generates greater exclusion, and those who are left out tend to be in the smallest segments, which tend to have more women.
On the supply side, institutions lack knowledge on how to better approach this market — and not just in terms of products. It has to do with how we relate to women, what our processes are like, and what kind of messages we send to them. I also believe that lack of capacity to gender-disaggregate data is another barrier to overcome.
Alliance: In which segment in the Women’s Market do you see a greater level of exclusion in Ecuador? How is Banco Solidario innovating to provide solutions to this segment?
FD: I think that there are two segments that face the greatest exclusion in Ecuador: very small businesses, which are continously changing and are still informal, and the bottom of the pyramid, which is mostly made up of women.
Due to interest rate constraints, we decided to address the bottom of the pyramid first. We leveraged new technology to make the underwriting and evaluation processes more cost-effective.
We developed an app, for example, that practically allows our advisors to approve credit directly in the field. Advisors provide basic financial information using rating models based on sociodemographic or behavioral variables, which then allows us to make decisions faster.
The bank has put a lot of work into digitization and, to my knowledge, we are the only bank in Ecuador legally authorized to issue electronic signatures. In fact, thirty percent of our monthly credit renewals are now done virtually. This helps provide more access to women who aren’t able to travel to sign documents.
Alliance: Collecting sex-disaggregated data is critical to establishing a baseline and monitoring a women-centered strategy. Have you already started to disaggregate your data by sex?
FD: We have gender-disaggregated data confirming many of the trends that are already universally known. Our portfolio of at-risk female customers is 3.7 percent, for instance, which is lower than our portfolio of at-risk male customers (4 percent), and yet the average loan amounts are still slightly lower for women than for men.
There is still much to do to support women – access to finance also generates access to various services to formalize as well as gives women autonomy and empowerment.
Alliance: As for female representation among Banco Solidario’s employees, how does the bank’s internal diversity look?
FD: We analyze labor force statistics on gender equity among our employees. Overall, 61 percent of the bank’s employees are women and 39 percent are men. We even have more women than men in the commercial area; more than 60 percent of our credit advisors are women. In senior management, about 45 percent are women and 55 percent are men.
We do still have a challenges in our Board of Directors, where we only have one female, but this is something we hope to improve in the future.
A very interesting statistic included in our reports is that women’s salaries, except in senior management, are 3-percent higher than men’s. This is basically because women are earning more in commissions.
Alliance: You recently joined our All-Stars Academy, which we held online for the first time. How did the Academy help you develop your women-centered business model and strategy?
FD: Three representatives from the bank attended the Academy, and our participation in the program helped us to establish the ideas and processes needed to effectively integrate gender diversity into the bank. Being able to hear the experiences of other institutions was very valuable. We hope that other staff members will be able to participate in the upcoming Academy in Spanish.
Alliance: How did you first hear about Financial Alliance for Women, and why did you decide to join?
FD: We’re always interested in participating in groups where we can share experiences and learn from others. We are, for instance, members of the Global Alliance of Banking on Values.
We knew our colleagues from Banco Pichincha were involved in The Financial Alliance for Women, and they told us wonderful things about the program, so we decided to join. If we want to do something, we must do it well.
We are a nimble organization that adjusts quickly to what’s happening, and that’s a needed priority in this fast-changing world. We are very happy to be a part of the Alliance.