Our most recent member in MENA, Bank of Palestine, has a 25% share of the Palestinian market, and a visionary strategy for empowering women. That vision is set by Hashim Shawa, Chairman of the Board and Managing Director, who spoke with the Global Banking Alliance for Women about the bank’s decision to join the Alliance, the bank’s accomplishments thus far in supporting women and how he intends to take it forward.
GBA: What persuaded you to join the Alliance?
Hashim Shawa: We are really pleased and excited about being part of the Global Banking Alliance for Women. I was supposed to join you in Cyprus, but could not because of last minute conflicts in my schedule but it was a very useful trip for my colleagues. It is good to see what other banks are doing.
GBA: Can you tell us a little about the banking sector in Palestine?
Hashim Shawa: While there are about 17 banks operating in Palestine, which has a population of 4.5 million people, there are only 230 branches. That is one per 19,000 people, and there are many underserved communities in the rural villages and towns, where there is no bank presence at all.
So we have been concentrating on being physically present in those communities. It takes a lot of time and effort and money to travel to the nearest branch. This is more challenging for women than men because of their traditional obligations of home and children. And in our context, more men have driving licenses and cars than women. So for us, physical presence is a basic building block. In the past few yeas we have more than doubled the number of branches; we now have 53 branches and our nearest competitor has 25. We have also tripled the size of the ATM network, a lot of them located in areas away from branches. On the positive side, other banks have also followed suit.
Despite the political instability, the regulatory environment is very strong and supportive of good banking practice. The Palestine Monetary Authority is doing a very good job setting capital adequacy requirements, it has recently introduced a deposit insurance scheme and we have had a credit bureau for the last five years, where banks can easily and transparently check peoples’ credit history. This has helped to increase lending from $1.9B in 2007 to over $4B in loans currently. Deposits have increased from $4B to almost $8B. The non-performing loan rates are very low in Palestine, at 2.7%, we are the second lowest in the region after Qatar. This is partly cultural in the sense that in our towns and villages, people are very proud of their name and reputation, and would do their upmost to make sure they do not default.
GBA: Interesting that there is so much liquidity in the sector, what is driving that?
Hashim Shawa: With $4B in loans and $8B in deposits, we are the most liquid banking sector in the region, with a loan to savings ratio of 50%, so we have a long way to go to reach the regional average of 70% to 80%. Also here in Palestine, the fact that the country and the people have lived under such constraints and severe conditions, over so many years with decades of occupation and war, we are used to contingency planning. People save for a rainy day, have plan A and plan B and plan C. People in businesses are resilient, having withstood turbulence for so long but at the same time perhaps don’t borrow what they should, and end up saving more than they do in other places.
GBA: What is your market share?
Hashim Shawa: Bank Of Palestine makes up about 15% of the total market capitalization of the stock exchange. We have a 25% market share of loans and deposits.
GBA: Your strategy for women includes a strong D&I piece. Tell us about it and why it is important to your success.
Hashim Shawa: We knew that if we wanted to be the leading bank on women’s empowerment, this had to be reflected internally. Since 2007 we have increased our female representation from 15% of all employees in 2007 to over 25% in 2014, and if you strip out the security and maintenance staff then we are more like 30% female participation. That is good growth, and we have plans to reach 50% by 2020.
I don’t know whether it is by chance or proving that the formula makes sense, but these past 8 years, we have really performed well business wise. In the past 8 years I don’t think this is a coincidence, I think it proves that empowering women in the workforce pays off.
We don’t just look at the overall participation rate; we look at representation at key levels. We have an increasing number of female branch managers and last April we elected our first female board member in our last General Assembly. And we hope in the next election to have more female board members. We have also hired women at the top executive level. For example, our Chief of Credit is a woman. She is in charge of a $1.2B credit portfolio and manages one of the biggest teams in the bank. So I think that message is clear, people see this in the bank, it is reflected at the Board level, at the management level.
In terms of employee policies we did some fine-tuning to ensure equal rights for women and men in terms of pay rates, and any other discrepancies. For example, typically only male employees in Palestine get child allowance when they have children. So last year, we made sure we gave both male and female staff child allowance. If there is duplication, we give it to both. In the end, why should you give child allowance to only one.
GBA: For the Women’s Market, you have done a lot already and have great plans. Can you elaborate for us?
Hashim Shawa: We look at two layers-what we are doing for our female customers-and what we are doing at the community level. At the customer level, we have been very busy ensuring that we target women in a holistic way. We have looked at Best Practices, done our own research and made sure that our products and services are just as acceptable to women as they are to men. Regarding the micro and small business segments, we recently engaged the IFC to help us. We will offer access to non-financial services such as training, consulting, networking, to enhance business skills and generally advance their business.
On the savings side, legally there were issues that have to be addressed with the Palestinian government. Under the current law, the father is the legal guardian of children and for you to open an account for the child, the father has to sign all the legal paperwork. Although we are working to change this policy at a country level, in the meantime we have made internal changes all within the law that allow a mother to open an account and create a sub-account for her children. She can therefore save independently from her husband, their father, even without the husband knowing. Those funds can be transferred to the children’s own account when they turn eighteen. We ruffled hardly any feathers by doing this, we are not breaking any law, but while doing it we are actually getting people to question the archaic laws.
We have been doing a lot of focus groups, hundreds of women in the West Bank and Gaza and that has been very rewarding for us: better understanding their needs and better tailoring their solutions to their needs. Very often banks can get carried away with their own internal bureaucracy and I think it’s very important to have on-going dialog with the clients, to keep the finger on the pulse and to know what their aspirations are. That has really earned us a lot of credibility and respect in the community.
You can’t imagine, just a simple invitation to women for coffee/tea/snacks, where we can have an honest and open debate. This shows them that the bank is with them; together we want to make a developmental impact and make a difference in building the country. We all face the much greater threat of occupation and living in this environment, but you get them together and ask them what the bank can do to make their lives better. If you look too much at the macro problems, it is not tangible. But if you focus on the daily issues-how can I help you set up your business, to save, to take care of your financial transactions? For that, we also partner with a lot of local and international NGOs and MFIs that work on female empowerment. We respect their work, and provide complementary services.
GBA: You mention your strategy to have a developmental impact in the country. How does your work with the community support that?
Hashim Shawa: For example, last year we did a huge campaign on breast cancer, trying to break down taboos and increase awareness and got hundreds of women screened. We advertised through our branches and on our ATMS, on billboards, through our staff wearing T-shirts, all encouraging women to come for screening. This resonated highly with both woman and men. In this world, when it comes to breast cancer and cancer in general, people buckle down and think its taboo. We want to break down those taboos, when you do that you unlock potential and reduce cost and risk.
Another example is that we sponsor the Business Women Forum, sponsoring women entrepreneurs to go overseas and meet other entrepreneurs and potential investors. These women are like ambassadors for Palestine. We can show that we have strong businesswomen and perhaps counteract some of the negative images of Palestine. It is also important to set role models. For example, we started sponsoring a young woman three years ago – Noor Daoud– who only ever wanted to play with cars instead of dolls. Her mother encouraged her, now she is a racecar driver. We helped her buy a car, buy sports tires and supe-up her car, and she has been winning championships, one of the first women in the Middle East to do this. It’s stories like this that I wanted to share with you to demonstrate how deep the bank has gone into making sure we not only talk about gender and the strategy for women’s empowerment but we actually do it.
GBA: What specifically are your hopes for your new membership in the Alliance?
Hashim Shawa: I think just being part of that community is only a good thing, if we can be exposed to some great stories that you can share with us. And that may be if we can one day have an opportunity to also talk about some of our stories. I think real stories and success stories are the best way to advocate and to demonstrate. To get recognition and to both lead and follow. So I think your forum is a key platform to exchange those stories. So for that, I thank you and look forward to participating more with you and your organization.
-As told to the Global Banking Alliance for Women
| Bank of Palestine
AT A GLANCE
(as of December 2013)
Value of deposits: US$ 1.7B
Value of loans: US$ 1.1B
# Of full service branches: 53
# Of employees: 1,212
Percent of employees that are women: 25
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