President - First Women Bank Ltd. (FWBL)

EVOLVE: What are the major developments that have taken place in First Women Bank Limited since you assumed the role of President in 2014? 

Tahira Raza: Since I had the advantage of being a pioneer in FWBL and re-joined after almost 11 years, my first agenda was to bring in a strong compliance culture & commercial focus in the bank. Compliance for the sake of compliance fails to bring economic and commercial advantage. Cost of noncompliance is generally not measured. My first priority was to ensure compliance to regulatory and internal policy and procedures in letter and spirit. The main objective of any commercial organization is to make money, for the simple reason that if an organization itself is not financially strong and stable, it cannot serve its purpose. So in order to make it a viable commercial entity at par with other competitors in the market, we took certain key steps:

1. Controlled costs and brought in broader financial discipline (brought down admin costs from 6% PA on YoY to 3 % PA).
2. Defined clear KPIs with heightened focus on business development.
3. Developed Vision Mission and value of the Bank and made it a living document.
4. Improved governance and management through introduction of MIS and hiring on key positions purely on technical competencies /merit
5. Strengthened technology by enhancing the capacity of the existing software with professional management.
6. Developing strategic alliances to create synergies.
7. Focus on need based product development/ capacity building of the organization i.e. training of staff and strengthening the manual procedures and technological platforms.

I am pleased to share that recently Euro money also recognized the role of First Women Bank and awarded FWBL “The Best Bank Award for CSR for the year 2017”. Euro money believes that CSR is embodied in the very purpose of setting up First Women Bank ltd. The fact that it survived for almost 30 years with this tough agenda, limited resources while facing tough competition from large and established local and foreign banks.  

EVOLVE: Please enlighten us about the products of First Women Bank Limited (FWBL)?

Tahira Raza: Being a commercial bank it is utmost important for FWBL to be a sustainable financial institution hence it has taken a strategic shift from its slogan of by women and for women, to a bank manned by competent individuals with a 50% women / men ratio to avail the benefit of diversity. It has also opened up its market to men as well. However, its products, development focuses especially on women business needs. It ensures that:

• The Product is easily accessible by women,
• Products helps in Improve women participation in labor force such as day care centers
• Improve women asset ownership
• That all products & services are delivered in a responsible manner so as to positively impact the environment and socio economic wellbeing of the community at large.
• We are offering a wide variety of products which include PMYBL, SME loan, Business Loan for Women, Credit Guarantee Scheme, and Nikhar Loan – the product which is specially designed to encourage and empower the professionals and also the transgender associated with the beauty industry by offering hassle free financing on easy terms.
• Besides loan products it has made online services available through its ATMs, such as online fund transfer, payment of utility bills, school fees etc.
• To keep our customers informed SMS Alert service is also introduced to keep them updated on every transaction that is routed through their account.

On the saving side we have introduced Smart Account and Zindagi Asaan Account, the product which we developed in light of the SBP guidelines for financial inclusion. We are also offering Bancassurance with the arrangement of State Life Insurance Corporation of Pakistan. 

We recently introduced our first Debit Card “Paypak”. Internet Banking and Mastercard are other products in the pipeline.

EVOLVE: What role is FWBL playing in the economic development of the country?

Tahira Raza: The mission of the bank is to promote economic prosperity and self-reliance in women by transforming their role from passive participants to active partners in the economic development of the country. Ever since its inception FWBL has had to meet two targets; the social development of women and the Bank’s commercial interests by being economically and commercially viable. This dual responsibility makes FWBL different from other banks that are only commercially focused. 

However, I would like to dispel the misconception about FWBL that it’s primarily set up to lend to improve women’s access to credit alone. It is set up to focus on providing a full spectrum of banking services to women that includes savings, trade related facilities, money transfer etc. Therefore assuming that all women must enter into business and become entrepreneurs is not correct, just like all men cannot venture into business. I must say that despite all difficulties and against all odds, FWBL has managed to carve a niche for itself.

EVOLVE: What makes First Women Bank Limited stand out?

Tahira Raza: I would like to term First Women Bank Limited (FWBL) a unique entity because of its charter which is, “Undertaking the conduct of all forms of business of Banking Company in a manner designed to meet the special needs of women and to encourage and assist them in promotion and running of trade and industry and practice of profession.” FWBL is the only Bank in Pakistan that has a mandate to cater to financial and business needs of women and provide special services to access credit for enterprise development. The FWBL Vision and Mission statements reaffirm this commitment.

FWBL is being regulated like any other commercial banks, which puts extra burden on Bank, as like any business it is set up for profits. There is no funding stream committed for FWBL to perform development activities. Therefore, it has to operate on a purely commercial basis and generates its resources from the same market on competitive terms. The bank continues to look for better and more efficient ways to operate, safeguard customer information, and provide flawless service to our customers. It is important to understand that we cannot meet diverse expectations from the cross section of society but our approach is to take small steps that lead to women empowerment and improve their access to financial services. Technology is a game changer and we are fully cognizant of the fact that steps in this direction can bring in phenomenal progress. To confront this challenge and avail the opportunity, the Bank needs to invest in technology and capacity building of human resources. Capital inadequacy is the main hurdle in this regard. It is imperative to use technology for lending small loans and mobilizing small savings where achieving financial sustainability requires a large number of customers and products. Besides technology quality of Human resources, its training and retraining is another challenge to capture this market.

EVOLVE: What have been the most pressing needs or challenges for FWBL?

Tahira Raza: The most pressing or first and foremost challenge was to meet the MCR as it was related to Bank’s existence, which has been reset by the State Bank of Pakistan. Now the Bank is required to maintain paid-up capital (net of losses) of Rs.3 billion and Capital Adequacy Ratio (CAR) of 18% at all times.

Although reducing MCR from Rs.10 billion to Rs.3 billion is not the solution it only helps address regulatory noncompliance issues. The other big challenge is its structure that is compatible to meet its dual objectives. If an organization itself is not financially stable, it cannot serve its purpose. Another challenge is the high nonperforming loans portfolio which continues to cannibalize the efforts to grow its business.

EVOLVE: There are many underserved urban and rural areas. How is your bank planning to address that void? Would you like to share your 2018 expansion plan?

Tahira Raza: It is true that in rural areas brick and mortar marketing strategy still plays a key role. However, deployment of technology has helped in overcoming the limited number of branches. FWBL is also working with telecommunication companies and Fintech to achieve financial inclusion. One of the major achievements is collaboration between FWBL and Aurat Foundation to achieve greater financial inclusion of women. Having said that the void is so big and expecting FWBL with a meager capital of 3 Billion and current urban based footprint is unfair. Nevertheless FWBL will keep on endeavoring to outreach women by building its strength in technology.

EVOLVE: How do you see the banking sector growing 10 years from now?

Tahira Raza: As said earlier we all will witness a sea change in the way the banking environment will change due to mass scale digitalization primarily in financial services. The global financial inclusion target is 50% of the world population by 2020 which is only 2 years from now. Based on this you can well imagine the number of customers that the banking industry would be catering to. With this kind of population there will be a vast range of products including payment services, insurance etc. besides traditional saving and loan products, and the cross sell of these products will further increase the volumes. Hence the growth appears to be unimaginably high. The traditional concepts of localized banks, domestic, international will now be global and technology will enable this change. The product and services costs will become nominal and it would be the game of scale to achieve financial viability.  We shall have to unlearn and speedily learn use of the technology tools to be able to keep abreast with this fast changing environment. Those who lag behind it will become very difficult for them to catch up.

EVOLVE:  How do you see the banking sector responding to the expected increase in demand for credit from the private sector?

Tahira Raza: Simple mathematics can explain this scenario. When in business you buy low and sell high to cover the cost of doing business and keeping a reasonable reward for the services for the investors/ shareholders. Currently in Pakistan and a number of other developing countries Governments borrow from banks to cover up their deficit and pay a return that is based on sovereign risk status which is minimal. Most of the banks' lending is currently in this category. Cost of compliance and investment in technology, cyber security and training is continuously increasing and soon the banks with this skewed portfolio distribution will become unviable unless they introduce other financial and non-financial fee based services and meet the credit needs of the private sector.

Also in order to deliver better performance, banks need to regulate the changing macroeconomic environment in their business models to capitalize the emerging opportunities arising from, generally, growth in the economy and, particularly, from the China Pakistan Economic Corridor (CPEC).

EVOLVE:  Identify three priority areas for women?

Tahira Raza: To be economically strong every individual on the globe irrespective of gender, physical and mental capacity must be able to exercise their choices to basic necessities which empower them to take control over their lives such as:

• Education
• Own and manage financial assets
• Health
• Trainings
• Infrastructure facilities that enable them to conduct their day to day life. 

The unfortunate and the sad part is that women who are almost 50% of the global population are by and large unable to access these basic services as a matter of human rights. We can say that it is by design to be able to exercise control or could be implicit due to implementation of the design being followed since ages. After this big segment we come to transgender, people with special needs. Since women are in majority it is imperative that conscious efforts are made to provide them equality or may be liberal to start with an opportunity to address this long & deep entrenched bias against them.

Facilities state of Empowerment is the crux. Women should be empowered in all spheres of life, especially economically. We need to strengthen women so that they can stand on their own feet, fight for their rights and know how to move on in their lives.

Three critical areas that I believe must be addressed on priority include:

1. Interventions to change mindset that enables society to provide women the opportunities to exercise their choices to education/health/ profession/ marriage etc. Role of the media is critical in this regard.
2. Provide incentive and resources and make it legally compulsory for girl children to go to school.
3. Improve the environment that enables women to take up economic activity such as day care centers and facilitate men to be able to share the household responsibilities.
4. Improve asset ownership by allowing parents to give them equal share in their lifetime rather than letting inheritance law come into force.

EVOLVE: Any message you want to convey to women of Pakistan?

Tahira Raza: Believe in yourself. Only you know what is best for you. Sincerely and honestly work towards achieving your goals all barriers are surmountable it just requires persistent effort. My message for men is to be just this world is for both and don’t think that you have the power which you are surrendering in favor of women. You have unduly assumed power to control women which should be revisited on the basic principles of justice.