Women are the secret ingredient to recovery for growth markets
By Nish Kotecha Co-Founder & ChairmanFinboot
Globalisation remains on high alert. From a global pandemic fought across national lines, to Russia’s war on Ukraine, where national priorities are being usurped by the fight for democracy. The fight is further rewriting the geopolitical landscape, throwing up new winners and losers.
China’s re-emergence as an economic superpower, driven initially by its mission to be the world’s manufacturing base, with cost-effect labour and skills is being replaced by an inward focus on the size of its domestic economy as the cost of manufacturing is no longer competitive. Economic censorship could accelerate significantly should America impose further sanctions on those who show support for Putin.
This is causing an almost overnight upheaval away from China to new frontiers, many of which are grappling with this new spotlight.
Bangladesh has been builzing for exactly this time. With a population of c.170 million (eighth largest in the world) and an economy worth more than US$300 billion, the economic forecast is for growth of between 6-7% over the next few years; rivalling China which is forecast at c.4%.
Are women driving this change?
Bangladesh has benefited from female leadership. Indeed Sheikh Hasina, Prime Minister since 2009, is the second female Prime Minister since Independence. The irony is not lost when you consider the cultural barriers that women in the workforce have to overcome.
Bangladesh has some 10 million female entrepreneurs (according to the World Bank) accounting for 20% of entrepreneurs in the country, operating across a variety of sectors, from small retail concerns to those who are changing the face of finance in Bangladesh.
One such female entrepreneur is Shabnam Wazed, a British based Bangladeshi who has built AGAM International (full disclosure, I am a Director!). AGAM, meaning advance in Bangla, is the pioneer accelerating financial institutions in growth markets by digitalising products and services to next generation customers through its Banking-as-a-Service platform.
It is powered by an innovative AI based credit scoring algorithm, which has proven to be resilient and reliable in supporting lending to the wider community. This supports a wider mission to make banking and finance available to all.
Financial services is an historically unusual path for women to choose to work in and one where they continue to be significantly underrepresented. According to Forbes Fintech Diversity Radar, of the top 1,000 leading fintechs, only 68 had a female CEO, and, on average, only 11.3% of all board members are women.
Shabnam chose fintech because “It’s a native digital sector and the next generation are natively digital. AGAM International as a growth market fintech seeks to partner with established banks and financial partners to accelerate their digital strategy. Partnering is the right model for such markets.”
In the broader tech sector, there is Sonia Bashir Founder of SBK Tech Ventures and SBK Foundation another such female catalyst driving change.
SBK Foundation provides women micro entrepreneurs in Bangladesh as an alternative source of capital, digital only, shariah compliant loans at 16% interest (vs typical rates of 30%).
SBK Foundation has combined with AGAM International to provide affordable, simple, straightforward access to credit for all. Through AGAM International’s alternative credit score, SBK can uncover micro entrepreneurs who are driven and investible from starting with the micro-entrepreneur such as the self-employed food delivery driver.
“We provide loans at half of the MFI market rate and incentivise these micro entrepreneurs to embrace digital. We invest in their companies to free them from debt and build bigger, enduring businesses. Technology helps scale and I personally encourage micro entrepreneurs to embrace technology and grow faster,” says Sonia.
“SBK companies are here to disrupt the ecosystem,” she added.
This diversification will be a critical factor in de-risking the growth for Bangladesh. Historically, the fuel for growth has been a combination of a strong export orientated Ready Made Garments (RMG) sector which makes up some 85% of total exports and remittances from the 1.2 mln+ Bangladeshi diaspora scattered around the world.
Furthermore, Bangladesh is starting to reap the benefits of a growing engagement of girls in education. According to the Economist, female literacy is now approx. 73% which has driven the share of women in paid work from 4% at independence (1971) to 35% largely in the RMG sector.
Those who are able have left Bangladesh to study abroad, returning home with a different lens. Both Sonia and Shabnam were educated abroad; Sonia, from Silicon Valley, California and Shabnam from King’s College, London and Bristol University.
If Bangladesh is to take its place as a tiger, this mindset will be key to harness as they push for higher living standards, mimicking those of the West. Here again, women can be the catalyst for change particularly in new sectors such as technology which underpins the governments Vision 2021, launched in 2008 of Digital Bangladesh.
“Women entrepreneurship is about resilience and perseverance,” says Shabnam. “In a country where there is a prescribed expectation of the role of a women, raising your head above the parapet brings additional challenges. However, Bangladesh has already set a new threshold for women leadership – our Prime Minister.”
“What got us here won’t get us there,” says Sonia. If Bangladesh is to take its place as an Asian Tiger, it needs to harness the power of women, through education and into a skilled high-value workforce that can export as well as drive domestic growth. Women driving change is not just a blueprint for Bangladesh but for any country who needs a new chapter in their development….powered by women of course.