Banks in Sri Lanka are keen to lay their hands on women's savings. But they are a long way from learning gender sensitivity. In the meantime, pawnshops and moneylenders rule.
The advertisement glitters. Ornate gold necklaces, heavily engraved gold bangles and gold sovereigns – eight grams of pure 22-karat gold – dance across the television screen.
But this is no advertisement for jewellery dealers. This is how the Bank of Ceylon, Sri Lanka's leading state-owned bank, sets out to tap the savings of middle – and low-income women. Since the mid-nineties, the bank has led the financial sector in trying to attract women to banks – by offering gold rewards.
Today, even banks that grew out of micro-credit enterprises engage in copycat golden carrot schemes. "Sri Lankan women consider gold as an investment – this is why we use the gold rewards to induce them to come in to the formal banking sector and open savings accounts in our banks," says Bank of Ceylon's general manager and professional banker, Sarath Silva.
"This way, they will save money – plus get their gold."
Traditionally, Sri Lankan women have preferred the yellow metal as a saving 'for a rainy day'. Gold jewellery can be turned into liquid cash practically over the counter at pawnshops, banks and even the neighbourhood moneylender. Normally around 80 per cent of the jewellery value is given to the customer and annual interest rates can vary between 25 per cent at banks to over 120 per cent at loan sharks.
"Tradition and culture look benignly at women saving gold. If she were to walk up to a bank and open an account, it may bring up uncomfortable questions about whose name should the account bear. It would seem as a challenge to male authority of her husband or father," says development worker Kusala Wettesinghe, who specialises in gender issues.
Poor urban women and those in rural agricultural areas have long shied away from taking advantage of the formal banking sector. Wendy Olsen, a lecturer in socio-economic research at the University of Manchester, UK, points out some reasons for this exclusion:
"In male dominated societies, particularly in south Asia, men traditionally handle cash and investible funds, even when the funds arise from women's economic activity."
Olsen, who has studied the case of Sri Lanka, observes that for the poor and vulnerable, having a bank account can "create choices that can counteract a person's social exclusion – that is part of what having a secure livelihood is about."
A decade of advertising by banks may have increased account holding among women. But banks have merely scratched the surface. The Central Bank of Sri Lanka estimates that the total bank savings of Rs 425 billion ($4.5b) can be increased by at least Rs 100 billion if more women were to open bank accounts.
All women face barriers to formal banking, but poor women suffer from particularly formidable obstacles, including low levels of literacy, and the inability to comprehend banking jargon or provide acceptable collaterals for loans.
Visaka Hidellage, Sri Lanka Director of the non-governmental Intermediate Technology Development Group (ITDG), points to the practical difficulties facing women: "In our experience, it is very difficult for a poor woman to walk into a fancy looking commercial bank to get a loan."
"The women lack confidence and the banks lack the patience to deal with their ignorance," he says.
"The very process of going to a bank in town, neglecting maybe a whole morning's or day's work is not a happy choice," Wettesinghe adds.
Sri Lanka's male dominance is not as pervasive as neighbouring India's and her women have notched up some of the highest development indicators in south Asia. Still, many women let men take decisions regarding money. On the ground, even the village moneylender can be out of reach for women – moneylenders traditionally demand deeds to property as collateral for loans and women rarely have access to such deeds, even when the property is in their name.
In lieu of a formal bank account, therefore, women prefer informal sources of saving and lending that afford them more flexibility. In addition to gold, Sri Lankan women have adopted an informal group savings method called seetu, where each contributes to a common fund that is then given to one member each month.
"Women resist patriarchal control of money and seetu is part of the ongoing resistance to financial exclusion," says Olsen. "Many women of different ages and ethnic groups use seetu to keep control over lumps of money."
"I have only gone to the People's Bank [a state-owned bank] once," says Paramavel Sumana, a 55-year-old domestic servant in the capital Colombo. "That was to pawn my daughter's jewellery when she was having a baby two years ago. We are still paying interest annually but have not been able to raise enough to redeem the pawned items."
Where formal banks are failing in showing sensitivity to gender issues, many micro-credit enterprises have succeeded. Micro-credit – small loan schemes to encourage entrepreneurship – also depends on an informal group structure to guarantee loans, keep track of each other's savings capacities and ensure repayments.
"We have always emphasised women," says Emil Anthony of a micro-credit enterprise called the Sarvodaya Economic Enterprise Development Services Limited (SEEDS). "Sixty-five per cent of our credit facilities are granted to women and we find the repayment rate much better than among male entrepreneurs."
Experts say micro-credit is weaning many women away from unproductive activity like jewellery pawning and from moneylenders. While bridging the gap between commercial banks and informal savings, micro-credit may also present the short-term solution to the problem of the gender gap in the banking sector.
Many formal banks, in a bid to attract women, offer pawning facilities. Some rural banks have even begun to design loan schemes that accept jewellery as collateral in order to draw more women to their doorstep. Of course, access to banking alone will not end poverty. What it can do is enhance women's options, says Olsen. "Use of modern banks is for some a way to offset or reduce the dependence upon a single private moneylender."