FWB’s president Tahira Raza
First Women Bank’s pioneering charter is visible immediately on entering its head office in suburban Karachi.
All the staff Euromoney can see, from the front desk to executives (save some burly security guards), are female. Visiting customers, also mostly women, are swiftly attended by female tellers. Under a mantra of ‘Empowering ambition, empowering the nation together,’ the bank’s staff seem true believers.
The atmosphere is of diligent industry, with bosses in billowing saris rushing between booths to consult colleagues. As for the chaiwalas who make the obligatory sweet tea for the offices, they are men.
“We are mandated to do things for women,” FWB’s president, Tahira Raza, tells Euromoney. “That is our point.”
FWB has 420 core banking employees, 290 of whom are women. Some 68% of its 100,000 account holders are women.
“We exist for corporate social responsibility,” Raza says. “We are the embodiment of it, our very action. Except we don’t call it CSR.”
But FWB is no recent incarnation inspired by modern social trends of the #MeToo era. Rather, the bank is approaching its 30th birthday, having been conceived by the Muslim world’s first elected female leader, the late Benazir Bhutto.
FWB had its beginnings in 1989 during Bhutto’s first premiership. She was a symbol of the normalization of women in Pakistani society and in her first budget she pledged PRs100 million ($5 million) to establishing a women’s bank.
The Pakistan government provided 10% percent of FWB’s initial funding, with the then five public-sector commercial banks – Habib Bank, Allied Bank, Muslim Commercial Bank, United Bank and National Bank of Pakistan (NBP) – directed to finance the rest.
Raza was one of FWB’s foundation staffers. She started her career with Muslim Commercial Bank (MCB), which also provided FWB’s first chief executive, Akram Khatoon. There was a call for experienced female staff to work at FWB, and Khatoon asked Raza to join her from MCB.
“I so much wanted to join FWB,” Raza remembers. “At the time, whenever a woman had a success, people would always wonder if you had been favoured by a man. So I wanted to work for an organization where my talent and my contribution was recognized, rather than some man supporting it. Akram Khatoon gave us a lot of encouragement.”
Raza joined FWB as an assistant vice-president. She set up the bank’s credit department.
“It was scary because I had not worked at that level; but it was also very exciting, a great opportunity,” she says.
The aim was to engage poor village women lacking collateral, what today would be described as financial inclusion.
The bank was an immediate success aníd quickly profitable too, attracting international media attention for having a near perfect lending book, with non-performing loans at virtually zero.
Raza says she was destined to be a banker and that FWB is dear to her heart. Raised by Partition-era Punjabi parents in Pashto-speaking Peshawar, Raza graduated in 1974 with a degree in statistics, English and geography from Peshawar University.
She began her career as a geography teacher in Peshawar but says she found it monotonous. She hunted around for a new calling and found banking. At the time, women in banking were virtually unknown in Pakistan.
“It was said that this was not an appropriate domain for women,” Raza remembers. “As a girl, there was a lot of pressure to get married, have children.”
Undeterred, in 1975 she applied to big banks for an internship. Zulfikar Ali Bhutto was Pakistan’s president at the time and there was a national atmosphere of progressiveness, Raza recalls. For the first time, Pakistani banks began to consider females for traineeships.
Raza was hired by MCB and began her first job in banking at its branch in Peshawar as an entry-level officer, handling cheques and settling daily ledgers.
“I loved it from the beginning,” she recalls. But she also remembers quickly learning to push herself along because of what she describes as an “entrenched management patriarchy”.
She says it did not occur to her male superiors that women might also want to advance, to take on responsibility and learn banking.
“We had to take the initiative,” she says. “Unless you spoke up, people would not stand by you.”
There was another shock for Raza in her first year. Commencement salaries were the same for bank trainees, but she says that as careers advance in Pakistan, so does the gender pay gap. She had been told she had been doing well, “even better than my male peers”.
I had to work thrice harder than a man would’ve had to work to reach this position of running a bank. And I reached it 20 years later- Tahira Raza
But that performance was not reflected in a pay rise. She inquired of her line manager, who said that male employees got their increments because they were their family’s breadwinners. She was told that, as a woman, she must be working for only her “pocket money”.
“I asked him if pay was awarded on the size of the family,” Raza recalls. “And he was so upset. But so was I!”
Pakistani women face huge challenges and obstacles to advancement and equality. The United Nations Development Programme consistently ranks Pakistan near the bottom of its worldwide Gender Empowerment Measure.
Last year, the World Economic Forum rated Pakistan 143rd of 144 countries on its Economic Participation and Opportunity index, with only war-torn Syria behind it.
Pakistan’s female literacy rate is measured at around 45%, compared with 70% for men. According to Pakistan’s Federal Bureau of Statistics, the proportion of women working in the non-domestic workforce is around 25%.
Raza takes heart from the meritorious rise of women like Sima Kamil, who became chief executive of private-sector bank UBL last year, and Shamshad Akhtar, a former governor of the central State Bank of Pakistan.
“Women in these positions are few. There is an imbalance,” she says. “But it means we are closer to breaking the glass ceiling, otherwise women are not visible. There is a still a lot of work to be done for women here. It’s the mindset that takes a long time to change.
“We have set certain goals; [such as] seats in the [parliamentary] assembly and in the corporate arena, but these affirmative actions need qualified women not just tokens.
“I had to work thrice harder than a man would’ve had to work to reach this position of running a bank. And I reached it 20 years later. I would’ve done it earlier if I was a man.”
Raza says female education is paramount but says conservative Islam plays a part in keeping women subjugated.
“Some of the scholars are definitely broadminded,” she says, “but unfortunately the majority of them are very conservative. They do not want to see things independently. In religion, they want to follow the same principle whether it has been justifiably applied on somebody or not.
“Some of the people feel more comfort in staying in the same environment and want to see everything in the same fashion, whereas it’s evolutionary,” adds Raza. “The basic feeling of justice is missing. The religious leaders have to work on it. There are certain things that make them believe that women are inferior. The religion has been so misinterpreted.
“I don’t like the word empowerment because to me that looks like the man is giving me the power. I have a right to that power and you [men] are depriving me of that,” she says.
Raza says FWB has not always lived up to high ideals during its 30 years of operating. The bank wobbled through the mid 1990s after it was hit heavily by a rogue currency trader. And the 2000s have been tough too, as it strayed from its women-only charter.
Pressured to compete with much bigger banks, FWB suffered successive losses of PRs222 million in 2013 and PRs666 million in 2014 when, given the role of trouble shooter, Raza rejoined the bank after 13 years at NBP. FWB’s last profit was an unremarkable PRs4 million in 2016. It lost PRs116 million last year.
The bank is clearly struggling, and there is talk of it closing. The five commercial banks that initially supported FWB at Bhutto’s command in 1989 have progressively offloaded their stakes in the bank, leaving a modest 18% between them. The government now holds 82%.
FWB gets capital favours from the state. Citing “the overwhelming support of the ministry of finance,” FWB admits the central bank “has given special relaxation to meet the minimum capital requirements net of losses of PRs3 billion,” instead of the PRs10 billion required of other commercial banks.
So is FWB on state life support? Will it survive?
Raza is circumspect about her bank’s prospects.
“I’m not too happy with the bank,” she says. “It does need capital.”
She says the bank is starved of technology and resources: “We are competing with the giants in this market on the same terms. It’s very difficult.
“We are struggling,” she admits. “But we will not let it fail. It is only because of the conviction of our women that it has been here the last 30 years.
“Women in general are responsible. They don’t want to fail.”
Women’s banks around the world
While FWB and Bangladesh’s older Grameen have inspired latter-day imitators elsewhere in the world, banks run by and for women are nothing new. In pre-war China, a bank dedicated to women operated in Tianjin for five years during the 1920s, pre-dating the opening in Shanghai in 1924 of the Women’s Commercial and Savings Bank. That bank financed a generation of Chinese female entrepreneurs and operated for 31 years before being nationalized in the years immediately after Mao Zedong’s communist revolution in 1949.
Also in the 1920s, San Francisco’s Bank of Italy (today subsumed into Bank of America) opened the Women’s Banking Department as a bank-within-a-bank that catered to female customers. Around the same time, in Ohio, the Women’s Federal Savings Bank opened in Cleveland, with claims to be the US’ first female-focused savings and loan institution. It would eventually be absorbed in 1993 by Cleveland-based Charter One Financial, which became part of the Royal Bank of Scotland until RBS’s exit in 2015.
In mid 1970s America, another raft of female-centred banks opened across the country, inspired by the emerging feminist movement. The First Women’s Bank of New York began business in Manhattan in 1974; others followed in Maryland, Colorado, Connecticut, Virginia and Washington DC. They were bolstered by amendments to the Equal Credit Opportunity Act of 1974-76, which made it unlawful for any creditor to discriminate against a prospective customer on the basis of race, skin colour, religious affiliation, nationality, marital status and gender.
Some of these US women’s banks had stellar feminist credentials; Betty Friedan, who wrote The Feminine Mystique, and pro-choice activist Carol Greitzer were among those behind New York’s First Women’s Bank.
In Los Angeles, there was a decidedly Hollywood flavour to the First Women’s Bank of California, which opened in 1976. Prominent actresses of the era, including Anne Bancroft, Jane Fonda and Farrah Fawcett, had accounts at the bank, which had an overtly feminist agenda. A key organizer was Laura Liswood, who today is secretary general of the Council of Women World Leaders, a United Nations-hosted network of more than 70 current and former female presidents and prime ministers.
But by the 1980 and 1990s, most of the West’s women’s banks had dropped their distinctive branding and were absorbed into the banking mainstream by merger and takeover. Some claimed that their mission to advance and equalize female rights in commerce had largely been achieved.
Others weren’t so confident that the mission had been accomplished. In Costa Rica, the state-owned Banco de Costa Rica opened Banco Kristal in 2015 to cater exclusively to female customers. Kristal has sought a more mainstream, middle-class clientele. With in-branch crèches and soft focus marketing toned in pastel pink, it immediately attracted criticism for reinforcing gender stereotypes. Critics flocked to social media to slate Banca Kristal’s “Barbie-themed” branches as looking more like a hairdresser’s salon than a bank.
Elsewhere, particularly in the developing world, female-oriented banks have tended to focus on microfinance. The state-owned Tanzania Women’s Bank (TWB) opened in Dar es Salaam in 2009 under the then left-leaning government of Jakaya Kikwete. But almost 10 years on, it has struggled for critical mass.
The state-owned Tanzania Women’s Bank (TWB) opened in Dar es Salaam in 2009 under Jakaya Kikwete’s government
After TWB’s years of losses and threats of receivership, Kikwete’s successor as president, John Magufuli, told TWB to get its house in order otherwise it would be shut down.
“TWB’s performance is very poor,” Kikwete said. “It is useless to have a women’s bank which exploits them… despite bearing the women logo.”
In January, Tanzania’s central bank shuttered another female-focused bank, the Covenant Bank of Tanzania, when it failed to meet statutory capital thresholds.
In neighbouring Kenya, the Women Microfinance Bank has fared better. Owned in part by its staff and customers, it opened in 2008 and was recently reported to be expanding to South Sudan and Rwanda.
In Caracas, the Banco de Desarrollo de la Mujer, or Women’s Development Bank, is another microfinancier that has struggled, affected by Venezuela’s wider economic woes. Chaired by the socialist economist, Nora Castañeda, a political ally and economic adviser of the late president Hugo Chavez, Banmujer began business in 2001 with a similar mission to FWB: “To remedy the economic and social disadvantages faced by women.”
Profits seem incidental at Banmujer. Indeed, Castañeda once said of Banmujer that: “Making a profit is not our raison d’être. It’s non-profit, but the aim is also to be non-loss.”
Up-to-date results for Banmujer are unavailable, but the bank claims to have “opened doors to thousands of women” and created up to 70,000 new jobs for Venezuelan women.
India has had small microfinanciers, like Mann Deshi Bank in Maharashtra state and the Mahila Sewa Cooperative Bank, catering to women since the 1990s. But an attempt to create a separate footprint for a national women’s bank recently failed after just four years.
In his 2013 budget, India’s then prime minister Manmohan Singh announced the launch of Bharatiya Mahila Bank or Indian Women’s Bank, to mark the 96th birthday of India’s first and only female prime minister, Indira Gandhi. More than 100 branches were opened across all Indian states, often in urban areas.
Like Costa Rica’s Banca Kristal, the Mahila Bank also attracted criticism, in part for not focusing on rural India. By 2017 the bank had been shuttered, its operations blended into the country’s biggest lender, the government-owned State Bank of India.