Tuesday 9th January 2018
GBA recently welcomed our first member in Bangladesh, BRAC Bank. A private commercial bank focused on serving small and medium enterprises, BRAC has a strong commitment to achieving sustainable growth through responsible business practices. In this interview, Mehruba Reza, Senior Assistant Vice President and Senior Product Manager of the Women Banking Segment; Shajed Al Haque, Senior Manager of Business Analysis; and Lamiya Bushra, Head of Recruitment and Relationship, spoke with the Global Banking Alliance for Women about the role the bank plays in supporting women employees and women customers.
GBA: Let’s start with what you are doing for women staff at the bank, as I believe that was the genesis of your proposition for women customers – is that right?
Lamiya: Yes – our women’s program is called TARA. It started as an internal proposition first more than a year before the full program launch.
The creation of TARA Women’s network at the bank was primarily in response to the fact that there is low representation of women in top management. While we have more than 1,000 women employees across the bank, if you look at the percent of female representation in leadership – from branch managers up to the senior level – it’s just 6 percent. Fifty percent of all our employees work in the field sales force, and our female staff are generally at our headquarters in the back office or in branch customer service, business service, operations, call centers, procurement and HR.
The second reason we focused on the internal piece first was to create a supportive work environment for women – i.e., to stop any kind of harassment and gender insensitivity in the workplace. We realized we needed to do something about this to make BRAC Bank a more female-friendly workplace and improve retention. It was these two issues that led to the creation of TARA.
The external piece catering to customers was launched in May 2017. It is the first holistic, 360-degree proposition for women in Bangladesh, covering Retail and SME customers with not only financial but also non-financial services.
GBA: How did you approach gender diversity and inclusion?
Lamiya: We used a diversity framework that is centered on three areas: hiring, promotion and retention. To get more women to apply we knew we had to brand ourselves as a female-friendly bank. We began actively recruiting more women from the market, working with universities to recruit female graduates, who now make up 50 percent of the students.
For the promotion piece, we defined clear career paths and set up training and mentoring programs to help our female staff move up the ladder. We also conducted gender sensitivity trainings for our line managers on how to work with women.
For retention, we improved workplace facilities and revamped policies to make them more women-friendly. We renovated our daycare center, increased the number of female restrooms, began a pick-up and drop-off service for women and optimized our capacity to offer working hour flexibility.
To better understand how we can improve retention, we now conduct employee research. We analyze exit interviews to understand why they are leaving, and look at industry benchmarking to improve D&I efforts. We try to dig deep to understand the drivers and try to resolve any existing issues.
GBA: How did you address the harassment issue?
Lamiya: We introduced a zero tolerance policy for workplace harassment and we made sure there are channels open for women to raise their voices if there are any issues. In fact, a stern action was taken against one very senior manager because of harassment issues. This sent an important message to male colleagues that we were serious about D&I and equal opportunity at the workplace. We have also implemented an awareness program on gender diversity and sexual harassment, and enabled open communication between men and women to develop mutual understanding and respect of their roles within the bank. We sent out posters with “dos and don’ts” to every branch, and our CEO reinforces the message of zero tolerance at town halls and employee engagement meetings. All of this has led to a positive change in behavior from male employees.
GBA: These kinds of efforts are laudable, but they can be expensive.
Lamiya: Some are, some are not. The day care center, in particular, was not as large an investment. It was already there – we only had to upgrade it. But the behavioral change piece, training for all employees, that was a significant investment.
GBA: I believe after the internal piece, you started looking at implementing an external program for the Women’s Market?
Mehruba: In December 2016 we started planning to have a separate proposition for women customers. Bangladesh is changing, and today most women work and support their families. They have a significant earning capacity. So we decided as a bank that we could offer a sustainable proposition that encouraged women to bank rather than keeping their earnings at home.
We checked our internal data and found that we already had more than 200,000 deposit accounts for women. They were 40 percent of our retail deposit clients, maintaining quite a healthy balance in the accounts. But for loan customers, only 6 percent were women. We researched this and found out that although the portfolio size was small, their repayment history was very good – they had lower NPLs than men. So it seemed that women were more responsible when taking a loan facility from a bank.
Taking all this into account, we made a decision that this was a strong business proposition that would also increase women’s financial inclusion in Bangladesh.
GBA: What did your market research tell you about women’s needs?
Mehruba: We surveyed our existing women clients and found that women want four primary things: a financing partner, value for their money, a trusted companion and a long-term relationship. Our CVP was built out from that.
Our objectives for TARA are first to make it a viable business generating platform, to differentiate ourselves with our value proposition, to make banking easier for women and to become the partner that can help women in Bangladesh realize their potential. A lot of women are working now, but they still have the mentality that they cannot manage finances and banking. We want to show them that they can have their own savings plan with us – they can be the main person in the family that supports it.
GBA: What products and services are you offering under TARA?
Mehruba: We have a 360-degree proposition that includes deposit products, retail consumer loans, SME loan products, credit cards, capacity development, networking opportunities, a help line, special discounts and rewards for TARA clients, and a special TARA counter in each branch.
GBA: Can you tell me more about the products?
Mehruba: We have a savings account for women customers called TARA Triple Benefit Savings. It offers the highest interest rate of all bank accounts at BRAC Bank. It comes with a free debit card for the first year, with a lowered annual fee for women after the first year. It also offers 2 percent monthly cash back on grocery purchases as a reward. In Bangladesh women usually do the shopping for the household anyway, so this encourages them to use their TARA debit card for those purchases.
We also have a monthly deposit premium savings scheme, TARA Flexi DPS, that you don’t need much to open. It gives the highest rate of return of any other monthly savings scheme in the bank, and it is exclusive to our women customers. It offers a direct debit from another account into the deposit savings account, with the amount based on what you want to have saved over 1 year, 2 years or 3 years.
GBA: Have you had any pushback from male clients for offering a higher interest rate to women?
Mehruba: On the contrary – men are becoming encouraged to save with their wives’ accounts. Even our male employees are saving with this product for their wives.
GBA: What are the details of your retail and consumer loan products?
Mehruba: We have home loans, auto loans and personal loans. With the launch of TARA we made these more accessible, offering preferential interest rates for women, a 50 percent lower processing fee and less processing time to encourage women to apply for loans in their own names. We are also including a free digital health benefit for the first year.
We also increased the incentive amount for our sales force to bring in women clients – they get 10 percent extra for women clients.
GBA: For home loans, how do you get around the fact that women are often not on the property title?
Mehruba: What we are finding is that because they can apply for a better interest rate if a woman is on the title, men are encouraged to put their wives on the title and on the loan application.
GBA: Tell us about the credit card offering.
Mehruba: All women customers of BRAC Bank/TARA are eligible for our Platinum Credit Card, which typically requires a certain minimum income. For women there is a 30 percent discount on the annual fee for life, plus discounts and privileges with our partners.
GBA: And what about your loans for women-owned SMEs?
Shajed: TARA SME loan facilities cater to all types of loans for women-owned SMEs. While other financial institutions are only offering term loans to women-owned SMEs, TARA offers term loans, overdraft, seasonal loans, revolving loans, import/export limit, commercial vehicle loans, bank guarantee, etc. – catering to all business needs.
Our unsecured loan limit is up to BDT 2.5 million (about US$30,000). However, we do not have any upper celling for the highest amount a women entrepreneur can borrow. Typically we require 2 years of operation for an SME to be eligible for a loan, but for women we reduced this to 1 year after we saw that women have the most trouble getting their first loans. Even if a woman has just started her business, we offer consulting on how to keep business accounts, how to open a current account with us, how to maintain the business, keep track of sales, etc.
Women entrepreneurs opening a current account receive a TARA business debit card with all TARA merchant discount benefits. We also provide business documentation support service through a third party agency to help women register a business, open or renew trade licenses, get the environmental clearance certificate, and any other regulatory documents required to run the business. These agents know all the documentation required and can help the customers obtain them.
GBA: How many women-owned SMEs are in your portfolio now?
Shajed: As of June 2017, we have 2,900 women SME clients in our portfolio. We define a woman-owned SME as having a woman as either full owner(s) or majority shareholder(s). This is actually the Bangladeshi Bank’s definition.
GBA: So you have the capability to disaggregate the data?
Shajed: Yes, we can disaggregate by gender for all accounts, and we also tag TARA accounts with a TARA product code.
GBA: What businesses do you most frequently see women in?
Shajed: We see many of our women customers own salons/beauty parlors, tailoring shops and clothing stores, with some small manufacturing businesses like dairy, handicrafts, etc. We are also finding that there are more second-generation female business owners whose fathers started the businesses and they are taking over.
GBA: How are you trying to grow your base of women SME customers?
Shajed: We have about 1,700 sales executives, 185 branches and 452 unit offices spread across Bangladesh, which collect leads and process loans. Our sales executives recognize the importance of women’s entrepreneurship on our nation’s development, and they take pride when a woman entrepreneur prospers in business.
GBA: What have you done in terms of training for women clients?
Mehruba: We are planning to run seven trainings across seven districts, each with about 40 women customers admitted on a first come, first served basis. We are partnering with a training institute that will provide the training, which includes topics like how to maintain a business account, financials, how to run a business, production management, how to make a business case, how to create a business report and accounting.
GBA: Can you explain a bit more about the preferential services you offer TARA clients?
Mehruba: We have a dedicated cash and service counter for women in our branches, as well as a dedicated help line number they can call with questions. High net worth clients also get specialized relationship banking.
In addition, we offer networking opportunities and capacity development workshops and events, with seats reserved for TARA customers before the wider public. As part of this initiative we also have planned for health campaigns where female customers will be given advice on health related issues, and we will have gynecologists and consultants who will give free checkups.
Finally, we have discounts with 50-plus partners for TARA members, and we have something called TARA Tuesday, which allows TARA customers to earn double reward points every Tuesday for shopping with their TARA debit card. We also have TARA branding in the branches every Tuesday, and the women staff wear TARA colored uniforms and the TARA badge.
GBA: I understand you’ve been developing a mobile application. Tell us about that.
Mehruba: The app will cover all of our TARA product and event information. It has a complete tracking system that shows our branches, ATMs and all of our tie-up partner locations. It also enables customers to apply for products through the app and notifies users if any of their documentation is about to expire. This is particularly useful for business customers because they have to track 5 or 6 documents for their businesses. This app will integrate into our BRAC digital banking app, which will be available in mid 2018.
GBA: What is the Tonic Program?
Mehruba: This is a program through Telenor Health that primarily uses an app to help women manage their health coverage. It’s a kind of insurance, with a cash benefit. Our sales force got training on how to sell this app to our women customers and how to teach the women to use its health benefits. It’s free for the first 12 months, and the benefit can be as high as 1 lakh and 10,000 taka (about US$1,300) per claim. This is currently available to our first 1,000 female loan customers, and we plan to extend the benefit depending on how the first group likes it.
GBA: Can her family also have access to the benefits?
Mehruba: The cash benefit can only be availed by the woman herself, but the other benefits her family can access. Right now, no other bank is offering health benefits with bank products.
GBA: How did you first hear about the GBA? Why did you decide to join?
Mehruba: Last year we had a meeting with IFC just after our launch of the TARA proposition, where they told us about GBA. They let us know that we could join and be the first bank from Bangladesh to be a member.