Banco Pichincha: Building inclusion by empowering women entrepreneurs
Banco Pichincha has been a member of the Financial Alliance for Women since 2014, and it's been recognized for its inclusive leadership and investment in women and women-led businesses globally. Part of the Bank's value proposition is to serve women microentrepreneurs and entrepreneurs by including the financial needs, preferences, and specific behaviors of women in its business models.
Banco Pichincha is Ecuador’s largest private sector bank by capitalization and number of depositors. Founded in 1906, the Bank has a 27% market share, with approximately 4.5 million clients, a portfolio of over $10.5 billion, and deposits of $7.6 billion. It has offices in all of Ecuador’s provinces, as well as Spain, Colombia, Peru, Panama, and the US.
The Bank provides a range of products and services to meet the needs of the different client segments it serves, including retail, microfinance, SMEs, enterprise and corporations. All of its activities are built around a commitment to society, shareholders, the environment, and gender equity.
Banco Pichincha has been a noteworthy vessel of empowerment and growth for Ecuadorian VSMEs (very, small and medium enterprises) through its non-financial offerings. Aside from offering the necessary tools to manage their finances and expand their businesses, Banco Pichincha offers VSMEs business value through VSME-focused educational resources such as events, programs, and courses.
The Bank’s ‘Mejor Pyme’ program, for instance, provides its SME clients with free access to practical training on SMEs’ best practices, as well as a space for the cross-selling of products, thereby improving market linkages and enhancing Ecuador’s business structure as well as its SME segment.
In addition to its support of VSMEs, Banco Pichincha has received international recognition for its commitment to women’s economic empowerment. The Bank was the first Ecuadorian lender to subscribe to the UN Women’s Empowerment Principle, which aims to get the private sector involved in efforts to achieve gender equality.
Moreover, the institution boasts noteworthy initiatives focused on fostering the economic advancement of women. Banco Pichincha has been a member of the Financial Alliance for Women since 2014, and it's been recognized for its inclusive leadership and investment in women and women-led businesses globally. Part of the Bank's value proposition is to serve women microentrepreneurs and entrepreneurs by including the financial needs, preferences, and specific behaviors of women in its business models.
Gender economic disparity in Ecuador
In light of its commitment to the advancement of women, Banco Pichincha sees a society-wide need to foster the narrowing of the gender financial gap. Evidence points to a sizeable gender disparity across Ecuador in terms of financial inclusion. While 60% of Ecuadorian men have access to a bank account, it is estimated that only 43% of Ecuadorian women do. In addition, it is estimated that Ecuadorian men have more than twice as much credit access as their female peers.
Despite such an unfavorable scenario, Ecuador has achieved significant strides toward narrowing the gender financial gap in recent years. Although the participation of women in the management of firms in Ecuador remains low in comparison to their male peers, studies suggest that Ecuadorian women are more likely than men to own a small business. In addition to that, Ecuador registers very high levels of entrepreneurship.
According to recent research, as many as 31.9% of Ecuadorian women are entrepreneurs, thus Ecuador has the third lowest gender entrepreneurial gap in Latin America and one of the largest shares of women entrepreneurs in the world. In contrast to that, women-led businesses are also subject to Ecuador’s gender financial gap. According to studies from IFC and McKinsey Enterprise Finance Gap Database, nearly 37% of formal SMEs are owned by women, of which 71% are unserved or underserved by financial institutions. This credit gap for formal women-owned SMEs in Ecuador is estimated at US$3 billion per year.
Despite such credit access discrepancies, the importance of women-led VSMEs in Ecuador’s economy and society, nonetheless, is unquestionable. Their high levels of market participation are drivers of innovation and job generation, as well as support for the needs of other women across Ecuador.
Given such a panorama, Banco Pichincha has identified a market opportunity, not only because of the global growth trend of the VSME segment and the Bank’s genuine interest in generating inclusion and closing gaps, but also because they have seen particular conditions in this target group such as higher levels of permanence in the institution, better payment behaviors, lower levels of delinquency and a greater focus on savings, which make this market a business opportunity.
SER Impulso Mujer program: the way to close the gender gap
The ‘SER Impulso Mujer’ (‘Push Women Forward Initiative’) is a financial inclusion initiative launched in 2017 by Banco Pichincha that aims to address the unequal access to financial services between men and women in Ecuador and to capitalize on the market opportunity presented by women entrepreneurs. The initiative is part of the Bank's sustainable management model which is based on three pillars of action: social and inclusive development, environmental responsibility, and sustainable finance.
The program focuses on the provision of a comprehensive financial offer that is tailored to the specific needs, preferences, and business behaviors of female-led VSMEs. It not only enables female entrepreneurs to get a loan but also to have financial and management education so they can apply their knowledge to their business. SER Impulso Mujer also features savings options that meet the client's needs and possibilities, financing options to boost business with differentiated and flexible conditions, and well-being and protection options for families and businesses.
SER Impulso Mujer’s non-financial offer features e-learning and classroom resources on various subjects including financial consultancy, methodological alignment, management skills, processes and policies, innovation, and e-commerce. The program also has a community outreach component that connects women entrepreneurs with other successful women entrepreneurs to learn from their experiences and be inspired. These resources are available to individuals, VSMEs, and microfinance groups who have a Pichincha Bank account.
Banco Pichincha has also partnered with MasterCard and other private sector players to advance the goals of its SER Impulso Mujer program. As part of this partnership, SER Impulso Mujer participants have access to the Leads Mujer INCAE Mastercard business coaching program. This program is a collaboration between MasterCard, INCAE Business School, and ConnectAmericas Women and is part of the #100KChallenge initiative. The course will help participants design a growth strategy for their company and guide them to identify areas that need to be adjusted before starting the growth process.
Very impressive results after five years
The SER Impulso Mujer has had a very significant impact on the Ecuadorian economy and on the financial outcomes of Ecuadorian women. The initiative has been successful in increasing the percentage of women in the VSMEs segment by 52% since 2018, thereby providing the means to grow their businesses to over 195,000 female entrepreneurs, and consequently providing over 380,000 women with access to financial services.
In addition to having provided thousands of women with access to the financial system and with the opportunity to learn how to grow their businesses, SER Impulso Mujer has led to a 59% growth in the Bank’s credit portfolio for women-led VSMEs from $967 million to $1.534 billion. The initiative has also led to a 53% increase in its global microcredit portfolio, as well as to an increase of 62% in its microcredit portfolio of women-led businesses, which stand for more of a half of the borrowers.
Since its inception, the program led to an increase in women’s total participation in its VSME portfolio by 78%, thereby reducing its financing gap between women and men from 43% to 10% and thus leading to a 19% increase in business portfolio holdings by women in the SME segment.
In spite of these very impressive outcomes, Banco Pichincha continues to further develop and strengthen its gender strategy to support women in business and the economy by helping women entrepreneurs to grow their businesses and access financing.
The impact of the SER Impulso Mujer has moreover led to international organizations choosing Banco Pichincha to lead the first placement of social-gender bonds in Ecuador. The Interamerican Development Bank and the International Finance Corporation teamed up with Banco Pichincha in 2022 to issue a $100 million bond, which was subscribed with a $50 million investment from IDB Invest and $50 million from IFC. The proceeds from the bond placement will be used by Banco Pichincha to further finance the growth of the portfolio of women-led VSMEs, and also to continue boosting the financial inclusion of women with loans for capital investment or working capital. For this results Banco Pichincha was named winner of the international Transformational Business Awards 2022 award from the Financial Times and IFC in the category "Finance with a gender lens".
Banco Pichincha has also been recognized with the ‘Safe Company Seal’ by Ecuador’s Chamber of Production Industries (CIP) and the GIZ, German Agency for International Cooperation. The seal is awarded to companies that demonstrate efforts to promote zero tolerance toward violence against women. Banco Pichincha achieved this recognition through its long-term initiatives to eradicate discrimination and violence against women, including the SER Impulso Mujer initiative.
The bank received awarded the ‘Impact Champion’ by the Financial Alliance for Women. This award recognizes its impact on the lives of Ecuadorian businesswomen, through the implementation of gender-sensitive financial services, including the provision of access to credit and insurance .
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