Commercial banks and Women Development bank are not the same

The concept of Women Development bank is not new globally.

It has been established in countries such as India to internationally support women entrepreneurs to create and sustain enterprises and to deal with poverty.

It has been established that generally, Micro Small and Medium-sized Enterprises (MSMEs) established and managed by women have the chance of survival to grow and provide jobs.

As part of growing the participation of women in enterprise and scaling up the contribution to economic growth and increase job creation opportunities to tackle the security laden unemployment, the promise by John Mahama and Jane Opoku Agyemang to establish a Women Development bank is timely and perhaps thoughtful.

A Women Development bank is an intentional strategy to economically empower women in the country to get access to long term credits at either zero interest or lower interest rates than commercial banks.

Development banks in general are different from commercial banks. The latter grants mostly short-term loans with high interest rates putting burden on recipients. This creates great interest burden and difficulty for the growth of business.

The best way to reduce poverty drastically is through the provision of development credits to women entrepreneurs.

Normally, since Women Development bank is a special class of development bank, it normally receives seed money from international development and financial institutions, domestic government, foreign governments, foundations and NGOs.

There are people who are concerned about the zero interest or low interest charge by indicating concern about the survival of the bank. We have even seen some on lending development facilities in agriculture and other sectors through the normal commercial banks.

In such a case, the interest rates are very low. So, the setup and operation of a development bank is different from that of a commercial bank. The zero interest loan portfolios of the development bank will attract interest from Islamic Development bank.

Some people also say why women? Is it not discriminatory? We have been dealing with women empowerment, equality and inclusion in leadership for a longtime. This was to give a boost with Beijing 1995.

Truth be told, we still have a long way to support our women to fight poverty and enhance their entrepreneurial opportunities. We do all these for ourselves.

When a woman is able to develop an enterprise, she doesn’t use the benefit alone, children, husbands and other family members are the real beneficiaries.

Women Development bank creates the opportunity to increase productivity of women.

By Prof John Gatsi

Dean, UCC business school

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