Sunday 13th October 2013
NAS: If we are talking about Jordan at large, the access to finance provided to women is still weak, there is no special attention given to women, with the exception of microfinance or donor funded initiatives. Microfinance institutions do not target growth oriented women entrepreneurs as they only lend up to a certain amount. The same is true of finance given by donor programs. However, approximately 25% of enterprises are women led in Jordan (Source: IFC) and there is an estimated financing gap of approximately $585 million for those same businesses. According to an IFC-McKinsey survey, 45% of women MSMEs are unserved or underserved by banks, and only 5% of women MSMEs are well served by banks. There are also no banks in Jordan targeting women or communicating specifically to women. So there is a big gap and a big opportunity.
GBA: What products or services does Bank Al Etihad deliver or plan to deliver to its women clients?
NAS: In our current offer, there is nothing to target women specifically. We offer everything to men and women, all our services, we have no discrimination against women, our internal processes and procedures deal with any application that comes from a woman-owned SME or a female individual, totally the same as we do from men. But they have not yet been tailor made to be specific to women. Our bank is interested in targeting women-owned SMEs, and the women’s market in general. It is a higher income level than microfinance.
GBA: Speaking of women owned businesses, how would you describe Jordan’s women’s rates of entrepreneurship? What barriers to women face in growing their business? Are there sectors where women are more concentrated that you intend to target?
NAS: We do believe that there are many reasons that make access to finance for women more difficult than men. To start with, not all institutions necessarily treat them equally. Then, women inherit much less than men, which means they own less land and real estate. Worldwide, and in our cultural context even more, the dual responsibility of doing a job and taking on the household burden and childcare, leaves women with less time for their businesses, for them to network, to grow their businesses. Men get more casual exposure that makes them more savvy; they get to know much more what is going on, in business, in investment. Also it’s only recently that there has been a focus on entrepreneurship in Jordan in general. The ecosystem for SMEs is weak.
For cultural reasons, most women who are employed choose to work in government, in financial institutions and in education rather than have their own business. However, what is very encouraging is that women business owners are in some high value sub-sectors including the medical industry-medical supply companies, laboratories, testing centers-in the IT sector in increasing amounts especially among younger women; in education-most of the pre-schools are owned by women. We also have a lot of women in event planning, wedding planning, advertising, public relations agencies and in beauty. So we see a mix of high value as well as traditional sub-sectors in which women do very well also.
GBA: Given that they are in good sub-sectors, why is there a supply gap in access to finance?
NAS: While there are a good number of women business owners, we need more of them and so must work to increase that. On the other hand, of those that are economically active, you see they have less collateral and lower levels of financial education-so those factors impede accessing loans. Then they are less networked in general, to other business people and to suppliers..
GBA: Where do they get their start-up capital?
NAS: Sometimes it is cash that they inherited, or it is from their husbands. You also see that they are more conservative, they do not leverage it or borrow against it.
GBA: You mentioned that you intend that your Women’s Market program will focus on women in business as well as women consumers. Why?
NAS: We see a big opportunity with professional women and women who are not engaged in paid work. They tend to have the same issues as women business owners in terms of having less financial literacy and having fewer networks than men. We believe we can build a strong business proposition to support them.
GBA: We know that female participation rates in the labor force are low in Jordan, though Jordan is by no means the lowest in the region. Can you tell us a little bit about the issues women face in the workforce and what Bank Al Etihad in particular, is doing in this area?
NAS: Although the percent of women educated in Jordan is quite high, and they are very capable and smart, when you go to the job market, the household responsibilities remain large. Most companies do not give flexible work hours or do not allow working remotely. There are some regulations that require organizations that have more than a certain number of women employees to provide day care, but that is not implemented. At Bank Al Etihad, I really believe we are very gender sensitive. To start with we have 725 employees and if you look at the total number you will see that 40 percent or more are women. If you exclude the security guards, drivers and some of the cleaning staff, you will see that it becomes 50%. We are very transparent; you have a very equal chance. Our employee bylaws give women equal opportunity. We are proud to have benefits that are gender sensitive. For example our medical insurance is given to women so that they can extend it to their families, as opposed to other companies who only allow men to give the benefits to their families. Likewise, in Jordan we have something called the family allowance. The family allowance is a bonus that heads of households get to support their family. Bank al Etihad gives that allowance to female employees whereas most companies in Jordan only give it to male employees. We are very careful not to discriminate. This commitment is a substantial financial outlay but we do this proudly. If you look at the top, I am a woman, as is the Deputy CEO. We have several women on the senior management team and we have many women branch managers. So the depth is there. Unfortunately we only have one woman out of 11 members of the board and I hope that that will increase.
GBA: What percent of your customers are women?
NAS: It is about 10%. We want to increase that of course.
GBA: What is Bank Al Etihad’s market position?
NAS: We are the seventh largest commercial bank in Jordan in terms of asset size ($2.66 billion), customer deposits ($1.47 billion), and net loans ($1.28 billion). Traditionally we have been a corporate bank and we have a very big edge in corporate banking. And then five years ago, we engaged McKinsey and we decided to get into retail. In certain segments, that matched the profile of our strengths and weakness. We changed our core banking system, rebranded, built a branch network, expanded our products, and deepened our product development capability. We built out the SME, and are spinning that off as a separate business unit in 2014 taking small business banking out of retail and medium business banking out of corporate.
GBA: What specifically are your hopes for your new membership in the Alliance?
NAS: We really feel that there is a lot to learn. We already have gotten some great contacts and we attended the Summit in Istanbul which was extremely helpful. We plan to go on the Study tour to Westpac in November and then to BLC Bank’s study tour in March next year. Seeing things first hand will be really helpful. We hope to lay the ground this year and next so that we can help others. You learn a lot and then implement locally, and then you can innovate and share it back. The women’s market is one that will grow drastically. Jordan is a young population. More than 70 percent are below 40 years of age. Young women are becoming very educated and the younger generation is really becoming economically active, so as a bank we will be poised to grow with them.
—As told to the Global Banking Alliance for Women
Bank Al Etihad At a Glance