Commercial banks and Women's Development Bank are not the same - Prof. John Gatsi

A professor of Finance and Dean of the University of Cape Coast School of Business, John Gartchie Gatsi, has endorsed the promise by the flagbearer of the National Democratic Congress to establish a Women’s Development Bank (WDB), describing it as timely and thoughtful.

In a social media post, Professor Gatsi sought to provide education and distinction on commercial banks and women’s development banks, noting that the idea of the WDB is to promote economic growth among women.

Professor Gatsi noted that the WDB, if established by the Mahama administration in the event he wins the elections, will be a game-changer in the quest to ensure economic liberation among women and enhance productivity.

Read the full statement below:

The concept of a 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 a higher chance of survival, growth, and job creation.

As part of growing the participation of women in enterprise and scaling up their contribution to economic growth and increasing 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 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 a burden on recipients. This creates a great interest burden and difficulty for the growth of businesses.

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

Normally, since a Women Development Bank is a special class of development bank, it receives seed money from international development and financial institutions, domestic governments, foreign governments, foundations, and NGOs. There are people who are concerned about the zero interest or low interest charge, 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 cases, the interest rates are very low. So the setup and operation of a development bank are different from that of a commercial bank. The zero-interest loan portfolios of the development bank will attract interest from the Islamic Development Bank.

Some people also ask, why women? Is it not discriminatory? We have been dealing with women's empowerment, equality, and inclusion in leadership for a long time. This was given a boost by 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.

A Women Development Bank creates the opportunity to increase the productivity of women.

EK

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