Banks wake up to women's wealth

AS WOMEN’S wealth increases, the fairer sex is being targeted by the banking sector as a demographic group worthy of specific products for their everyday financial needs.

Are they served well by what the banks have to offer? And are women better or worse off than their male counterparts in terms of having their personal financial requirements satisfied?

cashy takes a look...

Women’s wealth

Estimates on the value of assets in women’s hands in the Middle East vary widely, but the numbers are significant. A 2008 study from the Middle East Economic Digest forecast that Gulf women would control as much as $385 billion by the end of this year.

That correlates with a 2007 study from a branch of the World Bank which estimated that a third of women-owned business in the UAE generated over $100,000 a year, compared to 12% of American women-owned companies.

In Saudi Arabia, 93% of Arab women hold a secondary school certificate or university degree, compared to 60% of employed men, according to a study by Al Masah Capital.

Female banking grows

Although many banks in the UAE make no real distinction between products for working men and women, except some practical services such as ladies-only branches, others are significantly repackaging their offering for a female audience.

Earlier this year, Ajman Bank launched its Mahra ladies service, which gives unlimited access to ladies clubs in the UAE and free valet parking at shopping malls.

In early 2010, National Bank of Abu Dhabi (NBAD) started its Al Nada service, offering a credit card with an annual rate of just 18%, almost half that of some other banks, and discounts on lifestyle activities.

Better money management

When it comes to borrowing, women and men alike are credit-scored, with women often being offered preferential rates on the basis of their better money-handling skills.

Vikram Venkataraman, director of Salvus Strategic Advisors, says: “Women and men are assessed by banks as being credit-worthy based on the strength of the company they work for and the stability of the sector that the company operates in.

“Additionally, whilst the desire to start a family may impact negatively on a woman’s credit score, the accepted wisdom globally is that women are much better at financial planning and significantly more responsible than men when it comes to the repayment of debt.”

Business funding

Finance is available to female entrepreneurs as much as their male counterparts, but many women are failing to take advantage of this facility, according to Fatma Al Mansour, chief executive of Reem Finance, which lends to individuals and small to medium-sized companies owned by UAE nationals.

To date, no female entrepreneurs have approached Reem Finance. Mansour says: “The majority of women take mortgages to buy a new property or borrow for personal expenses, to buy luxury goods and repay credit cards.”

* Additional reporting by Jennifer Hill

Pic credirt: David Castillo Dominici/ FreeDigitalPhotos.net

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