A perspective on gender inequality by our CEO Yasmina Francke
Gender inequality is still prevalent in many communities across the globe. Women and girls continue to share a disproportionate burden of poverty, hunger, inequality and violence, while gender imbalance persists within a vicious cycle of pain and indignity. Although several international laws have been passed and many policy measures have been adopted, gender equality remains one of the most pressing social, economic and political issues affecting modern society.
A MULTI-FACETED APPROACH
Identified by the United Nations as the Sustainable Development Goals (SDGs), women’s equality and empowerment are among the 17 SDGs that seek to end all forms of discrimination against women and girls everywhere. Gender equality encompasses women’s rights to access economic resources, financial services, justice, ownership and control over property, inheritance, natural resources, and more importantly, to get equitable pay and representation at the boardroom table. However, these goals would fail to reach any far without considering the complex and multifarious nature of a gender-equal world.
Professor Naila Kabeer from the London School of Economics Department of Gender Studies defines women empowerment as: “A process by which women gain the ability to make and enact strategic life choices. Critically, women are the agents of the change process”. Prof Kabeer contends that to be truly empowered, women must have the rights and freedom to make choices and decisions for themselves, their families, communities and environment.
Engaging women and girls in sustainable development requires a change in attitudes and behaviours towards women and girls. Societal changes are required to challenge deeply rooted norms and expectations about power and privilege, and to create an enabling environment for gender-based activism to find expression.
IT STARTS WITH FINANCIAL INCLUSION
According to Leora Klapper, Lead Economist at the World Bank and Founder of the Global Findex database, achieving any UN SDGs – poverty eradication, gender equality and quality education - begins with having a financially inclusive world.
Financial inclusion is a critical component of social inclusion and represents a fundamental global development agenda. In this regard, women’s access to financial services rightfully ranks as one of the leading sustainable development targets, forcing many countries, including Islamic countries, to adopt financial inclusion strategies.
Islamic finance can contribute meaningfully to the global reform agenda defined in SDG-5 concerning women empowerment. By its inherent nature, Islamic finance principles are rooted in social justice, inclusion, and sharing of resources to achieve prosperity and social well-being for all. The risk-sharing instruments of Islamic finance, such as musharakah and murabaha, and its social redistributive mechanisms like zakat, sadaqa and waqf, can undoubtedly bring positive and sustainable changes.
As Islamic banking and finance become increasingly widespread in the Middle East, Southeast Asia and North Africa, there are significant differences in financial inclusion and integration of women across these countries.
Whilst Malaysian and Indonesian women are making significant strides in Islamic finance, women in the Middle East have only started to see the tides changing. The situation in the Northern regions of Africa, India, Pakistan and Bangladesh is not different. It is clear that women’s access to Islamic finance varies depending on geographic spread. Islamic finance’s urbanisation also poses a challenge for its effectiveness as a valuable tool to achieve the SDGs. Rural communities, suffering significantly more from mainstream economic exclusion and deprivation, are further denied the offering that has the potential to take care of their needs.
Whilst the growth in FinTech can serve as a bridge to overcome this challenge, digital adoption across the globe is still slow and has spurred only recently because of the COVID-19 induced lockdown and social distancing. Digital finance has the potential to transform the economic prospects of women because of its ability to address a number of the daily restriction women from various backgrounds and cultures face – the limitation on free movement, the demands of family life and even resistance to engage face-to-face with males in financial institutions. However, it is not without risks. Hacking, identity theft and aggressive marketing are but some of its ills.
Along with the generally low public awareness levels on financial and technological literacy, this consumer base’s vulnerability is further compounded.
REPRESENTATION OR QUOTAS FOR FEMALE LEADERS
In September 2020, Reuters reported that women are sorely underrepresented in financial services, focusing on the Gulf Arab region. Some may challenge this point with the growing list of women in senior positions ranging from CEOs of leading banks to presidents of FinTech companies and chief advisers to the Islamic banks. Change is undoubtedly on the horizon, but there is caution against the achievement of quotas on leadership boards and advisory councils, if it serves purely as tokenism and a scorecard accelerator.
In other research done by the Boston Consulting Group, it is reported that women are generally offered ‘dumbed down’ products when, in reality, they want the same products as offered to men. Women want their products and investment options developed in a way that acknowledges their diversity and reflects their values and preferences, such as higher female life expectancy, interruptions in careers due to family planning so on and so forth.
As long as financial services fail to embrace these differences and do not strive to be truly inclusive and accessible, female leadership participation will remain a lost opportunity, and the industry will continue to under-serve women.
ISLAMIC FINANCE SERVING THE NEEDS OF WOMEN
Islamic finance can be one of the most powerful, liberating and enabling tools to drive women empowerment. At this critical juncture when Islamic finance is coming into its own, it must seek to balance supply-side factors with consideration for the specific demand from its various stakeholders, with a particular focus on the unique needs of women, from those in rural communities to the one urbanised and to the ones challenging the glass ceiling.
Differentiating its services with exclusive offers has already attracted many women - both Muslim and non-Muslim - and is setting Islamic finance apart to reflect the sensitivity towards cultural and religious dynamics.
If Islamic finance continues on this trajectory, it will be well placed to provide access to financial services to businesses and communities in a sustainable way. Doing so will assist in achieving SDG-5 and also many other SDGs where women, in their role as mothers, teachers, caregivers and nurturers, can play a pivotal role for sustainable development in the true sense of the word.
FINANCIAL INCLUSION IS A CRITICAL COMPONENT OF SOCIAL INCLUSION AND REPRESENTS A FUNDAMENTAL GLOBAL DEVELOPMENT AGENDA - IN THIS REGARD, WOMEN’S ACCESS TO FINANCIAL SERVICES RIGHTFULLY RANKS AS ONE OF THE LEADING SUSTAINABLE DEVELOPMENT TARGETS