Recent data shows that Ethiopia is struggling with a widening gender gap in financial inclusion which poses a challenge to foster growth and equity. Despite significant strides toward financial inclusion, women continue to face substantial barriers to equal participation and advancement in the financial sector.
In 2016, the government of Ethiopia had developed the National Financial Inclusion Strategy (NFIS), whose implementation period ended in 2020. The strategy was again updated for 2021–2025 by setting ambitious targets.
Since closing this gender gap is a key priority to National Bank of Ethiopia (NBE), it has recently launched the Network of Ethiopia’s Women in Finance (NEWFin) which is said to transform the landscape of the Ethiopian financial industry by empowering women to ascend to leadership roles, thereby driving gender equality and economic growth.
This pioneering initiative that is designed to bridge the gender gap in leadership within Ethiopia’s financial sector and foster women’s financial inclusion, envisions a financial industry that empowers women, enabling them to thrive as leaders, and actively promotes gender equality.
Its mission is centered on dismantling the barriers that impede women’s progress within the financial sector, cultivating a nurturing environment that propels their advancement.
At the launching ceremony, NBE Governor Mamo Mihretu stated that the initiative would help to address the issue of access to finance, and contribute to women’s economic empowerment nationwide.
“NEWFin is a commitment to transforming the financial sector which truly empowers women and enables them to thrive as leaders and drive gender equality.”
He indicated that the initiative seeks to address the barriers of women in career, progression and representation in leadership roles through targeted actions, skill training, networking, mentorship programs and advocacy for gender inclusive policy.
“The underrepresentation of women in the financial sector both in the demand, and supply sides, is not merely a matter of equity but it is a matter of efficiency, sustainability, sound policy and public confidence.”
On the demand side, addressing the gender gap in account ownership, and access to capital can bring tangible results to both financial institutions and to the wider economy.
Researches consistently show that organizations with diverse leadership outperform their peers with reputability, innovation and risk management, he said. In Ethiopia, women currently hold 11 to 15 of senior management positions across financial institutions which hinder collective growth.
Moreover, the social structure including the working environment makes it also difficult for women to balance work and life. So, many of them are forced to choose one of the others, he stressed.
In response, the second national financial inclusion strategy is gender intentional which not only mainstreams action and achieving gender equality in financial services but also includes a dedicated action program with seven priority actions and initiatives aimed at enhancing women’s access to finance.
He further highlighted the launching and implementation of the first financial inclusion strategy marked a historical milestone which helped double financial inclusion levels. In 2014, 22 percent of the population had an account, this increased to an estimated 45 percent in 2020 and more than 50 percent in 2022.
However, one of the areas where the first strategy did not make progress was in women’s financial inclusion. Thus, the second strategy noted the widening gap between men and women in financial inclusion.
“The mission of closing the gender gap in the financial sector is a defining and key priority for NBE. Thus, we are dedicated to fostering an environment where women’s voices are heard as well as shaping the future of Ethiopia in the financial sector,” he underscored.
The establishment of NEWFin is a direct response to these challenges, aimed at supporting women’s full participation and advancement within this vital industry.
“NEWFin is dedicated to providing avenues for achieving work-life balance, challenging societal norms, and fostering mentorship and coaching connections, ensuring that women have the support and opportunities needed to succeed.”
Upholding the core values of equality, empowerment, collaboration, integrity, growth, and leadership, it advocates for equal opportunities for all, fostering a collaborative and inclusive environment that welcomes diverse perspectives and experiences.
This foundation of principles guides NEWFin in its commitment to championing the cause of women in the financial industry, aiming for a future where gender parity is not just an aspiration but a reality, he emphasized.
ZamZam Bank CEO Melika Bedri noted that NEWFin is a big initiative taken by the NBE which not only targets addressing the gender gap of women but also promotes inclusive policies in all terms.
Melika, also appointed as the Chairperson of the Board of Directors of NEWfin, further indicated that NEWFin is a transformative platform fostering a supportive community that promotes professional development and advocates for gender equality within the financial sector.
Its strategic framework is built upon six pillars, Advancement and Career Development, Advocacy and Community Engagement, Networking and Collaboration, Growth and Sustainability, Partnership, and Visibility and Branding.
World Bank Group, Head of Africa, Gender Innovation Lab (GIL), Michael O’sullivan on his part highlighted that WBG’s data has shown a growing financial inclusion in Ethiopia in the last several years.
The WBG has been working with the National Bank of Ethiopia team and other pertinent actors to help accelerate this process.
“Letting more women to have a seat at the table when it comes to making decisions around the financial sector, is critical.”
He further stressed that the initiative is vital to expand and deepen the network of women leaders within management positions across financial institutions.
Apart from recruiting members, establishing a secretariat, and implementing its strategic plan, the initiative includes networking forums, workshops, mentorship programs, and advocacy initiatives aimed at promoting gender diversity and inclusion within the financial sector.
By increasing the visibility and influence of women in finance, NEWFin contributes to the overall growth and success of female professionals in the industry and accelerates women’s economic empowerment in Ethiopia, as to her.
Besides the aforementioned initiatives and strategy, the National Bank of Ethiopia has also been implementing various programs to transform the Ethiopian financial industry through empowering women.
Regarding this issue, NBE’s Bank Supervision Director Firezer Ayalew stated that NBE has carried out knowledge based assessment in collaboration with development partners in order to identify and address the challenge with regard to financial inclusion.
Subsequent to the assessment that NBE undertook, a women’s intervention framework has been developed and it is expected to be implemented at national and state level, according to him.
Besides ensuring that the financial system is inclusive as well as stable, the second national financial inclusion strategy, which has been implemented by NBE, aspires to bring about significant change in scaling up what has been gained in the first strategy as well as enhance its sustainability.
Firezer further stated that a target has been set in terms of enhancing the representation of women in the leadership position in financial institutions. “Without ensuring this, it would be difficult to unlock the potential of women, create jobs, and realize economic growth,” he added.
In this regard, the role of the government and NBE is to make sure that women are adequately and fairly represented in those positions in the financial industry.
Underlining the need to have adequate representation of women in leadership roles, he stressed that NBE encourages financial institutions to include the issue of gender, adopt different systems as well as revisit their business model.
BY BETELHEM BEDLU
THE ETHIOPIAN HERALD THURSDAY 4 APRIL 2024
