An All-Woman Bank in Afghanistan
by Kirthi Jayakumar
With the COVID-19 pandemic bringing the global economy to a difficult trough, a lot of effort is going into finding ways to recover. Interestingly, as it becomes apparent that existing structures are no longer useful, there seems to be some momentum toward the incorporation of feminist approaches. For example, Hawaii’s new Feminist Economic Recovery Plan shows tremendous promise, even as implementation is underway.
Several miles and oceans away, in Afghanistan, a similar plan is unfolding: a bank run entirely by women, for women. Located in Kabul, the bank is entirely staffed by women, from the cashier to the manager, from the tellers and advisers to the customers themselves.
This branch of the bank belongs to FINCA, which helps Afghans living in poverty access financial services to improve the quality of life for themselves and their families. Through microfinance, social enterprise, and research, FINCA is dedicated and committed to supporting women, ethnic minorities, and returning refugees. As part of its ongoing efforts to cultivate a climate of gender equality, FINCA opened a new branch for women, run by women. Operating since 2018, the endeavour aims at centring women and enhancing their independence. In a statement on their blog, FINCA said, “The opening of a women-only bank branch in Afghanistan represents a significant step toward our goal of promoting gender equality. It also affirms our commitment to catalyzing women’s economic empowerment through financial inclusion.”
The bank offers women loans against a socio-economic backdrop that has institutionally only discriminated against women and excluded them. Through small loans, these women are able to set up and run their businesses, and even meet emergency expenditures. In the two years since it has operated, FINCA’s branch shows tremendous potential not only for each individual woman it benefits, but for the larger challenges that encumber the economy with the outbreak of COVID-19. In the words of the chief executive of the bank, Ali Rawnaq as chronicled by the Telegraph, “It has rapidly become a success because staff have found women are more reliable customers.”
Enabling access, paving the way for long-term change
The bank offers women an opportunity to access their right without any discrimination. In regular banks, photographs are to be appended to a loan application, which kept many women away as taking photographs at a store was frowned upon. But FINCA’s branch allows photos to be taken by female bank officers at the bank through smart tablets. Where accessing a regular bank was difficult owing to stigma from the staff or from their own families – where interactions with other men were frowned upon by men in their houses – the presence of this bank takes away these challenges. Admittedly, this is not a solution to the root cause: but it can certainly pave the way for sustainable change if used wisely to treat and alter social dynamics around gender equality.
A second major enabler for access with this branch is the non-compulsory nature of providing collaterals for loans: as women do not conventionally own property, providing a guarantee was difficult, and loans were thus not possible to obtain. To address this, FINCA paves the way for group loans in which a group of friends can offer guarantees for each other. This model has worked exceptionally well: there are now 3,000 group loans with the bank.
In the words of the branch manager, Shakila Shewa, also chronicled by The Telegraph, “Women know the problems of women. They are more honest mostly than men. They pay their loans on time. This special branch is very beneficial for them.” She explained how the money has enabled several businesses to thrive, such as for instance, the woman who borrowed 10,000 Afghani to set up a home-woven carpet business now has a thriving practice with 12 workers.
Enabling access for women to not only receive loans but to also set up their businesses, to save and send money has heavily beneficial long-term impacts: it can lift families out of poverty, create sustainable businesses, and enhance access to public services such as education and quality healthcare. The successes of the bank speak volumes of this reality: a typical branch of a bank stands a chance to become profitable in 12 to 16 months. But the all-woman branch broke even in just nine months, along with an interesting finding that women were 50% less likely to default.
The Telegraph (link)