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Women loan clients are far better than men, says the CEO of U Microfinance Bank

“From my experience, I can tell you that female loan clients are much better off in terms of repayment than males,” Kabeer Naqvi, President and CEO of U Microfinance Bank Limited revealed in an exclusive interview.

“A few years ago, I was shocked to see a clause in the loan application form that ordered married women to ask their husbands for approval to get the loan. In addition, women received only about half the loan amount for the same cash flow compared to male applicants. We have fixed it,” informed Naqvi.

He said this while replying to a question regarding the abysmal figures of financial inclusion of women in Pakistan. “There are many social hoops and barriers that we need to overcome to bring more women into the financial inclusion space,” said Kabeer, talking about banking products and services for women.

Kabeer further informed that many women in Pakistan were not even allowed to hold a phone. Some others may only use a cell phone for a few hours a day, he added.

“My team and I travel about 6,000 to 7,000 kilometers each quarter to go out into the community and get a real perspective. We noticed that once we leave the big cities like Karachi, Islamabad and Lahore, things change dramatically.

“Telephone networks are patchy, feature phones are becoming more ubiquitous and road networks are increasingly crumbling. We see a gradual increase in lack of opportunity, malnutrition, social injustice and countless other issues that have a direct impact on people’s financial inclusion as we move forward,” he reveals.

Kabeer said microfinance banks – by design, definition and mission – were at the forefront of managing financial exclusion and the social and financial inclusion of people.

Naqvi said that if we do not act now, the current youth bulge will become a huge hurdle in 10-15 years.

“We are sitting on a youth wave, with 65% of Pakistanis below the age of 34. And when you see that 26.6 million children are out of school and we are not able to provide them with education or training, the youth will become a huge obstacle in more than a decade.”

At Microfinance Bank, he said, he is involved in promoting financial literacy in Pakistan. “When we go to remote communities and set up our branches there, we also hire locally and we have a big task of turning non-bankers into bankers.”

“Through the training and education we provide, they become cashiers, CSOs, branch managers and we even have cases where they become business heads as well. This model helps us contribute to the promotion of financial literacy directly through communities.”

Kabeer Naqvi talked about the potential of the local microfinance industry and said that it is huge, the current loan size is PKR 300 billion and 8.5 million loans in the market.

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