The Financial Alliance for Women recently welcomed the National Development Bank PLC – Sri Lanka as a member. Founded in 1979 as a development finance institution, NDB attained commercial banking status in 2005 and is engaged in universal banking services, including retail, SME and corporate banking, micro financing, bancassurance, and Islamic banking, while also preserving its development financing roots. In this interview, Mr. Dimantha Seneviratne, Group Chief Executive Officer, spoke with the Alliance about financial inclusion of women in Sri Lanka, the bank’s strategy for supporting women in the country and their decision to join the Alliance.
Financial Alliance for Women: For the benefit of our global readership, can you share NDB’s market position in Sri Lankaand overall strategic vision for the organization?
Dimantha Seneviratne: NDB is a fully fledged commercial bank, offering the full spectrum of banking services. NDB is the fourth-largest private sector commercial bank in the country. We serve a customer base of over 500,000 with a market share of 4.1 percent. The bank is also the parent company for a group of subsidiaries that are engaged in capital market services such as investment banking, wealth management, stock broking and private equity management, making it the largest financial services conglomerate in Sri Lanka. Our vision is to be the driving force for a financially empowered Sri Lanka, while also being a digitally powered bank.
Alliance: With over 32 banks, 3 microfinance institutions and 43 additional financial services companies in the country, how does NDB differentiate itself in a crowded banking market? Is the women’s segment a part of this differentiation strategy?
DS:Most certainly, yes. Our commitment to empowering female customers is a definite differentiator. NDB offers a research-backed, market-tested bundled proposition for women, encompassing both financial and non-financial support that is quite distinct from the women-centric products offered by other banking institutions: NDB Araliya.
Another key differentiating factor is the excellence in our customer service. With banking products being highly homogeneous, there is little scope for differentiation there. As such, we heavily focus on offering our customers a truly rewarding experience at NDB, in line with our credo: “We Go Beyond.”
The gamut of convenient digital solutions fortifying our product portfolio is another differentiator, alongside the full spectrum of banking and capital market solutions available to our customers as Sri Lanka’s largest financial services conglomerate. From individuals to budding SMEs or top-notch corporates, all have access to these solutions under the single brand name of NDB.
Alliance: How are you segmenting the Women’s Market?
DS: For our Women’s Market proposition we have identified three segments: home-makers, salaried employees and women in business (i.e. entrepreneurs).
Alliance: What is your financial services and non-financial services value proposition for each segment?
DS: NDB Araliya is the bank’s dedicated offering to the female segment. The financial value proposition comprises Araliya business loans, current accounts, savings accounts and credit card facilities. Araliya current account holders are eligible for Araliya business loans and overdraft facilities, with the offering augmented by digital banking capabilities. The Araliya Savings Account provides multiple benefits to the account holder, including free life insurance coverage, free hospital coverage for the account holder and their immediate family, free periodic medical checkups, a gift voucher for account holder’s 21stbirthday, and a free Children’s Savings Account at the birth of a child. It also encourages the account holder to save, with an interest bonus provided for meeting the monthly savings commitment. The Araliya Credit Card provides women-centric benefits above and beyond benefits offered to the general Credit Card holders.
Beyond Araliya, our general products and services also provide solutions to specific challenges and gaps faced by women. For example our Gold-backed loan, available to the general customer base, addresses the collateral challenge faced by women. Various credit lines funded by different external agencies also offer benefits like special interest rates for women, and in certain instances grants.
In terms of non-financial assistance, the bank conducts training/knowledge-sharing forums that are highly relevant to the goals and barriers we have identified for each segment, including, for example, financial management for home-makers and salaried women, and industry-specific business training for women entrepreneurs. We also offer advisory services to female customers on bookkeeping, business registration, taxation, etc., through a third-party partner.
We plan to launch many more exciting initiatives in the near future.
Alliance: Focusing specifically on Very Small Enterprises, which tend to fall in between the SMEs that commercial banks normally serve and micro-enterprises that MFIs address, how is NDB innovating to provide solutions to this segment – and specifically to women?
DS: The Araliya Business Loan target market consists of the upper layer of the microfinance segment and the lower layer of the small segment, as per the bank’s definition. This product offers three types of loans: for financing of goods/ inventory purchasing and capital expenditure, administrative and operational expenses, as well as for business opportunities and expansion.
The unique feature for this loan bundle is that female business owners can avail of the loan facility based on personal collateral guarantees – along with a mortgage on the fixed asset being financed, for capital expenditure loans. This addresses the challenge that women business owners generally face in providing immovable property as collateral.
Alliance:Per the 2017 Global Findex data, Sri Lanka’s rate of women’s inclusion in the formal financial system is high, especially compared to regional averages. However, the report says that more than one-quarter of women had not made a deposit or withdrawal from their accounts in the previous year. What do you think are the main reasons for this inactivity, and how has the bank addressed this issue?
DS: The statistics are a clear reflection that Sri Lanka’s gap is more in “underbanked” as opposed to “unbanked.” One main reason for this would be the urban to rural composition of the Sri Lankan population, which is approximately 20:80. The financial needs of the rural population are often served by non-bank financial institutions, and if they do open an account with a bank, they often make their regular transactions from the non-banking institutions due to behavioral and cultural attributes.
The banking sector places little or no recognition on asset classes such as cash, livestock, agricultural equipment, self-built housing and workshops, which are mostly possessed by unbanked groups. The non-bank financial institutions, however, accept these and many more, making such institutions much more attractive for the rural communities.
Our dedicated financial inclusion efforts and micro financing initiatives are making considerable headway in improving financial services for the unbanked as well as the underbanked population of the country. NDB’s savings philosophy, “Ithuru Karana Maga” – which translates to “Path to Save” – is an endeavor to inculcate the habit of saving. We also conduct awareness sessions targeting micro, SME and retail segments on the importance of saving and transacting with banks.
Alliance: What is the role of NDB’s digital banking services in addressing account inactivity as well as getting more people – and women, in particular – into the system?
DS: Our digital solutions are notable for the convenience they offer customers as well as their capabilities in boosting financial inclusion. Our branchless banking proposition, “Bank2U,” is the most resounding example, enabling banking for customers who may not be able to travel far from home to transact at a branch. By creating digital banking stations through trishaw drivers, small scale vendors, etc., we are including more female customers, in particular, in the formal banking stream. They are transacting with the bank regularly, and most of them are also building their savings. Bank2U services are currently offered in over 80 localities in the country. We also have over 50 banking kiosks called Cash Recycle Machines installed across the country, in both remote and populous locations.
Financial inclusion and promoting greater banking activity are two key objectives of NDB’s digital banking strategy.
Alliance: NDB is the first Sri Lankan organization to be EDGE certified for workplace gender equality. Can you tell us about what led you to get that certification and the value it has brought to the organization?
DS: NDB has been committed to gender equality since its inception. We always had an equitable mix of males and females in our workforce, and 40 percent of our senior management is female. We have always maintained a work environment that has treated men and women on equal grounds, may they be on recruitment, training, promotions, pay or any other aspect. Against such a backdrop, it made perfect sense for the bank to obtain the EDGE Certification, the benefits of which have been many.
Firstly, the certification offered us a benchmark so that we can clearly measure the progress of what we are doing. The results also enabled us to refine our processes and procedures so that we can improve more efficiently. Furthermore, the certification process created awareness and enthusiasm within our staff about our strength in providing a workplace of equal opportunity to all genders. The certification has also provided a reputation boost for the bank among all our stakeholders.
Alliance:What’s your vision for getting more women into leadership positions?
DS: I think there is a need for strong commitment from organizations and CEOs to remove barriers preventing women from moving into leadership roles. These could be self-limiting barriers, those found within a particular organizational atmosphere or within the culture at large.
Women themselves may lack the confidence to take greater leadership roles, despite having the necessary talent and competencies. Organizations need to offer career development and leadership training programs to support women to step up to new challenges.
Within organizations, a strong culture should be instilled and promoted where leadership is seen as a gender-neutral space. Systems and processes should be in place to ensure equality in recruitment, promotions, training and development, pay, etc. Furthermore, wherever possible, employers should take added measures to support women with family commitments, which can be a major hindrance to women’s advancement into leadership positions. Creche facilities, flexible working hours, the option to work from home, etc., are some examples.
The economic benefits of women in work and leadership have been proven many times. As such, costs entailed in some of these support measures could well be recovered by the enhanced contribution an empowered female leader makes to an organization.
Alliance: How did you first hear about the Financial Alliance for Womenand why did you decide to join?
DS: NDB has been interested in the Alliance since 2017, when it was known as the GBA. We partnered with IFC on the bank’s strategy in 2017 – a part of which was obtaining the EDGE Certification with their professional support. IFC introduced us to GBA, and since then we have found the Alliance’s engagements to be quite fruitful.