LAC regional event on resilient and inclusive corporate governance towards a gender focus – Opening remarks by AFI Executive Director Dr. Alfred Hannig

A very good day to everyone! 

I would like to thank Superintendencia de Bancos de Ecuador for their invitation to support the Regional Event on “Resilient and inclusive corporate governance towards a gender focus.” It is my sincere pleasure to also welcome AFI members from the Latin America and the Caribbean region in person, as well as through virtual connections.

Today’s event is giving us an understanding of why mainstreaming a gender perspective and taking actions in corporate governance to promote equity between men and women is important. We also want to further elaborate on how equity in access to hierarchical positions in the financial sector can promote access and usage of financial products and services in historically excluded sectors, such as women, the youth and those living with disabilities or forcibly displaced. It will be relevant to hear the regulators’ views from the region share how to devise and implement policies that increase the number of women with access to quality and affordable financial services.

Women Leadership is an important element of the Denarau Action Plan (DAP), AFI’s commitment on Gender Inclusive Finance which was endorsed by the members at our annual event in Fiji in 2016. AFI is very proud of the progress that has been made in the LAC region to ensure women’s voices are heard at the highest levels of our member institutions. The region can rightly congratulate itself on having the highest proportion of female leaders in institutions of the AFI network. Globally, women as the heads of institutions are rare, but in the AFI network we have eleven women leaders, five are in this region, and there are also more than ten deputy heads of institution. This is a great example showcased today across the region and beyond. I commend the institutions on the progress they have made so far and the initiatives they are bringing forward. Your commitment ensures that progress not only continues but accelerates so we have gender balanced representation across all levels of positions in all our institutions.

We have also seen substantial changes in women leadership in the AFI Governance over the past years. Gender balance in the AFI Board is now embedded in our organization’s Articles of Associations stipulating that one-third of board positions are designated for women leaders. As a matter of fact, women representation across the AFI Board and the six Board Committees stands at 40%!

We have also seen an increase in women’s participation and leadership in the seven thematic working groups in AFI, as well as in our capacity building activities. Since the pandemic forced us into a digital mode for the very first time, we have seen more women than men attend our courses, and we hope that women’s high participation can still be maintained as we move back toward a more hybrid approach, as we are doing now. Women staff from AFI member institutions participating in the AFI Member Needs Assessment is nowadays disproportionately higher than those of their male colleagues. The highly successful Leadership and Diversity Program for Regulators that we run in partnership with Women’s World Banking and Oxford University was oversubscribed last year and had a waiting list. It will be open for applications in December, with the course starting in February next year and we hope to see continued high levels of interest and participation from this region.

Finally, in the AFI Management Unit, the number of women both in leadership and management positions has strongly increased over the past years.

We will be hearing some excellent examples from both near and far on the progress made in women leadership. AFI is proud to be able to have members share their experiences with you.

Good governance is key for a successful and stable institution as well as for responding to the COVID-19 crisis and addressing the needs of the most vulnerable groups, such as women.

Diversity is an asset for any institution. It is important that governance in our institutions brings balanced and diverse views to the table.

According to the Gender Equality Observatory for Latin America and the Caribbean, developed by the Economic Commission for Latin America and the Caribbean (ECLAC), the 2030 Agenda for Sustainable Development currently imposes enormous challenges globally and in the region. The next nine years will require great effort to reach the targets of the 17 Sustainable Development Goals (SDGs). Gender equality and goal five is essential for meeting all other SDGs. Meeting this goal presents us all with an opportunity to recognize how far we have come to date and make further significant progress in the next few years.

Most countries in this region have gender equality plans. These are used to guide governments and work across different sectors as part of mainstreaming gender. In Ecuador, the National Council for Gender Equality is responsible for the National Agenda for Women and Gender Equality. We encourage the participants present here to make their own national and institutional gender, diversity and inclusion plans to continue to drive progress forward. Whilst we see gender equality enshrined in many constitutions in the region, we need to now see that being translated into practice on the ground where policy and regulation would remove structural barriers and ensure that equity in law becomes equity in reality.

Women, especially those working in the MSME and informal sector and those who are in the most vulnerable communities, are disproportionately affected by crisis, whether financial, health, environmental, and the COVID-19 pandemic has not been any different.

According to the results of the Financial Capabilities Survey, conducted by the CAF, there is a consistent gap in the ownership of the most used financial product in the region: the savings account. This difference favors men over women. However, the gap in Ecuador is only four percent. Around 32 percent of women are resilient to financial shocks compared to 47 percent of men. This situation has been additionally affected by the pandemic. At the same time, the digital gap between men and women is six percent, adding more disadvantages for women.

According to World Bank data, globally, women are nine percent less likely than men to have an account at a financial institution or use mobile banking services, and the gap is even wider in poorer countries. Some research indicates that digital financial services can improve women’s economic participation and thus facilitate economic development. Compared to cash, these services offer several potential benefits for women, including greater control over finances and lower transaction costs. These benefits make it easier for women to invest in businesses, gain employment and manage financial risks. According to estimates by the International Finance Corporation (IFC), women-owned small and medium-sized enterprises face a credit gap of USD1.5 trillion annually.

We can see in the AFI network that technology is a driver for GIF. The new business models and transformational solutions produce enhanced customer value, convenience and experience. As a result, we witness emerging best practices of regulators increasingly turning their attention to reinforcing responsible lending, and enhancing their market conduct regulatory frameworks to address risks of technology. We believe that appropriate and effective policy responses in financial consumer protection, as they are also envisioned by Ecuadorian authorities, are key in maintaining high levels of financial inclusion and ensuring financial stability. 

The SB has recently issued two publications on “Inclusión financiera y desarrollo. Situación actual, retos y desafíos de la banca” publicada en pandemia, in July 2020, and, in September 2021 “Protección al Consumidor de Servicios Financieros. De la Teoría a la Praxis.”.

Tonight, we will also witness the official announcement of the Maya Commitments of the SB which will pave the way for the implementation of the above-mentioned policies and regulations.

Coming back to the point that women leadership can have a positive impact on the decision-making and success of organizations, we at AFI are certain that it can also make a difference in GIF. Indeed, countries where women hold leadership positions in   financial regulating institutions have shown a high performance on GIF. Examples are countries such as Rwanda, Zambia, Zimbabwe, Nigeria, as well as Mexico, Costa Rica, Honduras, among others,

We feel that it is safe to conclude that gender diversity in leadership positions, institutional and corporate governance can have a positive impact on the realization of SDGs, ensure that we leave no one behind and succeed in mitigating effects of climate change.

As mentioned earlier, the AFI membership adopted in 2016 the ten-point Denarau Action Plan which identifies practical policy measures members can take to increase the number of women with access to quality and affordable financial services within their own jurisdiction and increase institutional diversity and women’s leadership. The ten points in the Denarau Action Plan guides us in practical policy actions and engagements to close the gender gap not only in financial inclusion but also in women’s leadership.

Since the DAP was adopted, we have seen a significant increase in the number of members adopting sex-disaggregated data frameworks with 20 members in the network now collecting and using SDD to help guide them in their policy decisions. We have seen an increase not only in the number of members who have an NFIS, but also those who are updating their NFIS or developing their first NFIS with gender considerations and targets. These include Honduras, Peru and will soon be joined by Suriname.

We have seen an increase in the number of members making Maya Declaration targets to increase women’s financial inclusion and using national level surveys. We have also seen the gender gaps in Costa Rica, Honduras, Mexico and El Salvador decreasing. The DAP is also supporting members in understanding and recognizing the importance of women’s leadership. The DAP has enabled much progress to date but there is still much more to achieve if we are to close the gender gap and leave no one behind.

Women alone cannot accomplish this. Male leadership is equally important to achieve gender equity and engaging male leaders to publicly support it is essential. This is a matter of diversity and diversity is an asset. Let us work together to make use of all opportunities.

In closing, allow me to thank the SB, participants, and partners who have decided to focus on these thematic areas which ask for urgent interventions from policymakers, especially as post-pandemic solutions. We encourage participants to get actively involved in the sessions and bring forward their women focused solutions and policy support needs. We must effectively respond to COVID-19 pandemic in a gender sensitive way. Lastly, we need to ensure that the strong collaboration that we have here today, between the public and private sector, is strengthened going forward.

On this note, I wish to thank you all once again for your participation and will leave you to take forward your deliberations and wish you a fruitful discussion.