Is It OK for Women in Banking To Have Personal Lives? by Katherine Burger

November 29, 2010

There was a very interesting article in the New York Times on Wednesday, Nov. 10, about Ruth Porat, a long-time Morgan Stanley executive who ran the investment bank’s financial institutions group and was recently named to be the company’s chief financial officer — a role that has proved to be the downfall of several other high-profile Wall Street women, most famously Erin Callan, who was CFO of Lehman Brothers at the time of its collapse.

Porat comes across in the article as a very smart, very organized and focused and extremely determined individual with a good track record who not only has often been in the right place at the right time, but who also has overcome tremendous challenges, both professional and personal — including two bouts with cancer. Porat declined to be interviewed by the Times, but many other people who she has worked with over the years were willing to go on the record about her capabilities and performance.

Which brings me to the quote in the article that left me reeling. As head of Morgan Stanley’s financial institutions group, one of the companies Porat helped take public was the private equity firm Blackstone Group. Here’s how Blackstone’s president described her performance:

Tony James, president of Blackstone, said Ms. Porat was available at all hours to handle issues. “She never makes you feel like you are disturbing her personal life; I don’t even know if she has one.”

Wow — my head is still spinning from this blunt comment. I am still trying to figure out if this is supposed to be a compliment, or an indirect criticism. Does it imply that he expected to get pushback from Porat because of her family and her health issues? Has he resented working with other women because somehow their personal lives got in the way? Has Porat worried about sacrificing her professional standing because of family commitments — or vice versa? Does she ignore her children in favor of her clients? Does she “do it all” because she has no choice? Does she have to “suck it up” because of the scrutiny women in high positions in financial services get (especially when they encounter problems)?

It’s probably some combination of “all of the above.” One way or the other, it’s a shocking and very sobering reminder of how tough the business world is right now — and how much tougher it can be for women, even in 2010.

Source: Bank Systems Technology website (2010)

Microfinance: Empowering Women, or Micro-Effective? by Nicole Kurokawa

November 16, 2010

Nicole Kurokawa is director of research analysis at the Winston Group, a strategy and message design firm. She is also a senior fellow at the Independent Women’s Forum and blogs for the Washington Examiner.

Without question, microfinance has become the feel-good charity movement du jour.  The underlying premise that individuals can lift themselves out of poverty with the proper resources appeals to the philanthropically minded across the political spectrum – from conservatives (entrepreneurship!) to liberal (poverty reduction!)

Because participants in microfinance programs do not have access to the formal banking sector, they also lack access to the capital necessary to start a business or otherwise improve their lot in life.  According to theSouth Asian Microfinance Network, over 60 percent of the adult population — approximately 1 billion people — do not use or are excluded from financial services for reasons including lack of identification or collateral, physical distance from lenders, and relatively low returns on investment.  The average loan is $195 USD, and the average saving balance amounts to $39 USD.  Microfinance loans serve approximately 20 million of the world’s poorest people – and 74 percent of these are women.


Broadly referring to the provision of small loans and banking services to under-served populations, microfinance has been around informally for centuries in the form of cooperatives, family members, and neighbors.  In the 1970s, Mohammad Yunus formalized this process through his Bangladesh-based Grameen Bank and won the 2006 Nobel Peace Prize for “efforts to create economic and social development from below.”

Microfinance has been promoted as a powerful tool to empower women because of the link between gender and poverty.  The U.N. State of World Population 2008 report states that three-fifths of the world’s billion poorest people are women and girls, and the U.N. Development Program has estimated that women own just one percent of the world’s wealth.  Accordingly, microfinance services tailored to assist the poor end up benefiting women.

Women’s microfinance programs have been particularly successful in Asia. Over 8 million, or 97 percent of Grameen Bank’s borrowers, are women — numbers that are echoed elsewhere.  A 2006 World Bank report“Microfinance in South Asia” asserts that “even in a socially conservative country such as Afghanistan, microfinance activity has focused on women, thereby according them more explicit recognition as economic agents, while in India, the SHG movement has become the basis for programs promoting empowerment and overall improvement of the status of women in society.”

Access to capital offers women the resources to make their own choices, which, in turn, makes them less dependent on family members or lenders. Women can start or expand businesses, improve their homes, or seek an education with small loans; the wealth earned from these endeavors brings increased status, mobility, and opportunity.  The microfinance organization Kiva states on its website, “Empirical evidence shows that, among the poor, those participating in microfinance programs who had access to financial services were able to improve their well-being-both at the individual and household level-much more than those who did not have access to financial services.”

However, microfinance’s impact on women may have a dark side.  Professors Susan F. Feiner and Drucilla K. Barker have highlighted the problems with driving vulnerable populations into domestic work, which often has long hours, low pay, and possibly hazardous conditions.  Proponents argue that this exploitation is rare, and that microfinance work allows provides women with increased standards of living increase and expanded opportunities to escape situations of oppression and victimization.

Another controversy surrounds the relatively high interest rates used in microfinance.  Lending institutions assert that they must charge borrowers above-market rates to offset the added time, distance, and effort needed to maintain these loans, but critics have expressed concern that high rates keep the poor in poverty in perpetuity and would like to see caps implemented.  Microfinance proponents argue that such rates are lower than those seen from lenders and may, in fact, be needed, because diverse conditions and low margins mean many organizations lose money for years before breaking even. Many larger institutions have lowered rates over time due to competition.  But, if they are forced to keep rates low from the beginning, the effect may end up decreasing the availability of services overall.  As the Cato Institute’s Swaminathan Aiyar points out, “Retained profits are vital for MFI expansion, but will disappear with caps, which will also bankrupt small, new MFIs.  Caps will discourage MFIs from entering remote areas most in need.  A cap will benefit the haves (who already receive microcredit) at the expense of have-nots.”


Microfinance is not the silver bullet to ending poverty but can be extremely effective for improving the lives of a few.  Used in conjunction with property rights reform and expanded education, microfinance can help make significant inroads in the war on global poverty.

A wide variety of lenders have sprung up to serve the needs of a diverse borrowing population — ranging from small non-profits through to for-profit banks and corporations.  These varied models have different pressures — be it financial viability, or appeal to a donor community — which have led to deeply differentiated standards of lending and repayment.  Microfinance programs have historically been premised on loans, but the wave of the future for organizations may lie in diversifying into additional areas like savings accounts, money transfers, and insurance products.  Both the private and the public sector need to emphasize accountability and transparency.  In addition, to ensure long-term growth of the microfinance sector, a stable regulatory environment that protects consumers must be created while still encouraging innovation and competition.

Across the continent, the penetration rate remains quite low and is unevenly distributed across the region.  Data from the South Asian Microfinance Network indicates that microfinance penetration rates among the poor range from 1.8 percent in Pakistan to 34.9 percent in Bangladesh.  Clearly, growth potential remains high.   A lingering concern with the practice as a whole is that microfinance may improve conditions for some, but does nothing to change the structural causes of poverty or underlying gender discrimination.  Further study is needed of communities that have benefited from microfinance in order to determine if there are long-term effects on poverty reduction.

Source: Microfinance Africa website (2010)

Gender Equality and the MDGs: What are the Missing Dimensions?

November 16, 2010

World leaders met in New York in September 2010 to review progress towards
the Millennium Development Goals (MDGs), It was an opportunity to
reorient and re-energise global efforts to meet these important targets. While
there has been significant progress in some areas, ongoing gender inequality
continues to hamper momentum on all the goals, not just MDG 3. Furthermore,
there is growing recognition that MDG 3 is too narrow and fails to capture the full
range of gender inequalities, and there has also been a failure to adequately
recognise the gender dimensions in several of the other MDG targets.

This paper, published by OECD, explores the relationship between discriminatory social institutions and the MDG targets by looking specifically at three MDGs, focusing on the missing dimensions of each.

Click here to download the full report.

Source: OECD website (2010)

Venture capital – the final frontier by Liz Bolshaw

November 4, 2010

by Liz Bolshaw

Kiran Mazumdar Shaw is one of India’s most inspiring entrepreneurs having built a global half billion-dollar biotech business – Biocon – that started life in a small garage. She had found an individual investor to help her bootstrap her business (with traveller cheques), but when it came to gaining funds to grow the company, no banker or fund would back her because she was a woman.

This story made me look at more recent figures for venture capital, and the truth is rather shocking. According to a recent Ernst & Young/VentureOne survey, less than 2.5 per cent of the €3.5bn ($5bn) invested annually by venture funds into Europe goes to start-ups led by a female chief executive.

In Paris, Dunya Bouhacene, chief executive of Women Equity for Growth, a non-profit organisation, has announced three funds each focusing on women-led businesses. Working with Bryan Garnier & Co, a European investment bank that specialises in growth companies – and already in advanced talks with potential investment partners – the funds will be raised through two campaigns each year.

“The first fund will be small – €5m-€15m – and look to invest about €1m in each opportunity. We are already targeting some companies with established revenues and in profit, and expect to make our first investment within a few months,” says Bouhacene.

Women Equity for Growth has also launched a research venture, because as Bouhacene explains, “there is not much analysis of women-led growth companies – there’s a lot on why we don’t grow successful companies, not on why we do”.

The WEG funds are not the first European venture funds focused on female entrepreneurs. London-based StarGate Capital established its first Trapezia fund in 2006 to provide a dedicated initiative that would tap in to “the greatest growth market there is: women”, says co-founder Gita Patel. She believes there is a need for focused funds like Trapezia: “The market is inefficient, because women are simply not on the radar.”

Source: Financial Times website (2010)

What If Lehman Brothers had been Lehman Sisters? – by Rosabeth Moss Kanter

November 2, 2010

Who robbed the banks?

Go to the movies and find out. A powerful new Hollywood documentary, Inside Job, tells the story of the biggest bank robbery of all time. The film depicts the blow to the global economy (and to people’s livelihoods) precipitated by the sub-prime mortgage crisis, the fall of Lehman Brothers, and the failures of big banks. Written by Charles Fergusonand narrated by Matt DamonInside Job is as gripping as a George Clooney-Las Vegas heist flick — but real, and the stolen money was ours. This robbery was pulled off by banking and insurance insiders who walked away with billions of dollars.

Complex new financial packages with a taint of gambling and a tinge of a Ponzi scheme, the film says, were sold by bankers with the support of ratings agencies, government policy-makers, regulators, and academic economists — many of whom had overlapping ties and moved among sectors. Several economists interviewed on camera stumble over their words when confronted with their own inaccurate but influential predictions based on weak empirical data and clear conflicts of interest. Those conflicts were sometimes obfuscated or undisclosed — e.g., being paid by those being reported on

Others say “I told you so” in retrospect, some with more credibility than others. A credible voice is that of former New York Attorney General and Governor Eliot Spitzer, who zealously prosecuted Wall Street. Throwing in some sex and conspiracy theories, Inside Job puts the Spitzer prostitute scandal in perspective. The film interviews a Wall Street Madame who asserts that patronizing prostitutes is common practice within the highest ranks of the financial world. Spitzer’s persecution emerges as revenge for his attacks on Wall Street. Spitzer was clearly wrong. But why were top bankers not dragged into the same mud?

Did anyone suspect that a massive house of cards would fall with the House of Lehman? And did anyone act on it? Insider after crony insider is shown resisting preventative action or strong remedies. But in stark contrast, Christine Lagarde, finance minister of France, who was called byNewsweek in 2007 a “French powerhouse with an American sensibility,” led European responses to the crisis, including tighter regulation of the banking system.

In short, a woman stands out as the only real hero in Inside Job. This is noteworthy because there is a growing global movement to ensure that there are larger numbers of women in top positions in the economy. This includes quotas to require more women on corporate boards in Norway, in public offices in Rwanda, and with management positions in large German companies. That movement leads me to a question.

What if Lehman Brothers had been Lehman Sisters?

Around the same time that I saw Inside Job, the gender gap, not the financial crisis, was thetheme of a World Economic Forum/Harvard Kennedy School conference. At the event, experts presented research data implying that women are more trustworthy, risk averse, and altruistic, at least in the sense of negotiating more effectively for other people than for themselves. A preliminary study by Canadian researchers at the University of British Columbia business school offered an unproven but provocative hypothesis that high testosterone levels (men of a certain age) are associated with more aggressive decisions that throw caution to the winds. A National Council for Research on Women report showed that investment management, a field at the heart of the financial crisis, has one of the lowest, and most stubbornly persistent, percentages of women of any major U.S. industry.

Thus, an equation was born in my mind:

more women = less self-interested greed = less imprudent risk = more solid asset values = healthier balance sheets.

Would closing the gender gap to increase the number of women financial leaders improve financial institutions and prevent further damage to the global financial system?

I am cautious about this idea, because good stereotypes of women can be just as confining and inaccurate as bad stereotypes. And of course, increasing numbers of women won’t by itself change institutions; theoretical economics, deregulation, and undoubtedly pure greed were major villains in Inside Job. But getting more women on the inside with greater power and influence could be a useful step. When elites become more diverse, certain crony strangle-hoods are loosened.

Crony capitalism perpetuates itself because the brotherhood passes favors among brothers and rewards hired guns. Inside Job slams the ratings agencies for giving high ratings to securities that turned out to be a trash collection. But, the film points out, the agencies were paid by the purveyors of items entities they rated.

Let’s call a halt to crony capitalism in which robberies can take place from the inside. Inclusion and diversity should be as important as transparency and full disclosure as standards for the next economy.

Disclosure: I saw Inside Job at a private screening hosted by Executive Producers Christina and Jeffrey Lurie. The Luries are personal friends, and I wrote about Jeff Lurie and his Philadelphia Eagles in my book Confidence. I spoke at the Gender Gap conference. There was free popcorn at the movie.

Source: Bloomberg website (2010) – Copyright © 2010 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

Mideast banks, funds seek to tap women’s wealth – by Shaheen Pasha and Martina Fuchs

November 2, 2010

Emirati housewife Sarah Alzarouni brushed past a group of women clad in floor-length black robes, some with only their eyes showing, to enter through the frosted doors of one of Dubai Islamic Bank’s women-only branches.

Clutching a Louis Vuitton bag to match her designer head scarf, Alzarouni greeted the female tellers and bank manager with three kisses on the cheek and sat down to do business.

“I am much more comfortable working with ladies than in a mixed environment,” Alzarouni, 27, said.

“When I come here, I feel like one of them. They understand my needs and I can move freely, not having to always think where I am and whether my (scarf) has moved. As a Muslim, it is really important for me to deal with an Islamic bank. “

Many affluent Muslim women share Alzarouni’s sentiments and they are increasingly turning to Islamic banks to manage their money. These women are looking beyond basic banking services to sophisticated products to grow their wealth while complying with Islamic principals that include a ban on interest.

According to a report by Boston Consulting Group, women in the Middle East controlled 22 percent, or $500 billion (£315.6 billion), of the region’s total assets under management in 2009.

Financial institutions in the conservative Gulf Arab region, where many women are reluctant to mix with men outside their families, are tapping into the niche, with women-only bank branches and investment funds mushrooming.

Saudi Arabia, the birthplace of Islam where unrelated men and women are not allowed to mix, is leading the charge.

Women in Saudi Arabia, the world’s largest exporter of crude oil, are believed to be sitting on $11.9 billion in pure cash, according to a report by Al Masah Capital.

The kingdom’s National Commercial Bank has 46 women-only branches — up from two in 1980. Saudi Hollandi Bank plans to increase its women-only branches to 15 from its existing 11.

On the funds front, Saudi-based Al Rajhi Capital launched its Ladies Wealth Management Division earlier this year. That came on top of its Al Jawharah Ladies Fund, which targets Saudi women seeking to make diversified investments.

Cayman Islands-based Mayfair Wealth Management launched the Ameerah fund in the Middle East in 2009, offering advice on investments that are compliant with Islamic principles.

Abu Dhabi-based Al Bashayer Investments, a conventional wealth management firm geared towards women investors, is also looking to launch Islamic products to address the needs of women in the region who prefer investments that are in keeping with their religious beliefs.

Sara Mohamed, chief executive officer of Al Bashayer, said many banks that have created women-only branches have so far limited their services to retail banking accounts, credit cards or loans, rather than helping women to grow their wealth.

“We see a lot of opportunities in the middle market,” Mohamed said. “Women at senior levels who have small children and have a minimum of $250,000 or $100,000 of investible cash set aside and are looking to build their wealth.”


But experts say more needs to be done to break down the often self-imposed barriers to Gulf Arab women taking an active role in the world of investment and financial markets.

“I’m sure that much more women than we see want to be involved,” said Moza al-Otaiba, a member of Abu Dhabi’s ruling family and chief executive of Al Otaiba Holdings.

“A lot of women are not clear about investments. Women are motivated to work and all around the world we see women as bread winners. But there is a barrier they need to cross.”

Many women in the region, like Otaiba, have inherited wealth from their fathers or other family members, and women are active business owners in the Gulf.

A 2007 study from a branch of the World Bank estimated that a third of women-owned businesses in the United Arab Emirates generated over $100,000 a year, as compared to 12 percent of American women-owned companies.

Otaiba, whose business focuses on development projects within the UAE, said that women in the region are looking for products and investments within the Gulf Arab region, because they know those markets and find them accessible and safe.

Industry experts say more women need to participate in the Islamic banking industry at senior levels to help grow products that appeal to a female clientele. But while the finance industry remains a boys club around the world, the glass ceiling is lower in the Middle East.

“The mindset of management and old school guys is that women are only there temporarily and then they leave,” Nida Raza, director of capital markets at Unicorn Investment Bank, said.

“That feeling is exaggerated here in the Gulf. Women just aren’t put into higher roles in Islamic finance here.”

In addition to wealth management, Raza said venture capital funds that invest in women-only businesses, Islamic pension funds and education funds for children would be particularly attractive to women in the Gulf.

Hari Bhambra, senior partner at compliance and client advisory firm Praesidium, said Islamic trust funds would be particularly appealing to women in the region, empowering them to provide for the welfare of their children.

“I think it’s going to take a while but, as we’re seeing more women get into conventional finance, it will naturally transfer to Islamic finance,” Bhambra said.

More investment options would certainly appeal to clients like Alzarouni, who hopes to start her own business and invest in financial products for her three daughters, aged 6, 5 and 10 months.

“I’m thinking of just opening accounts for them right now but maybe in the future, I can help them open a business as well,” Alzarouni said. “Maybe they’ll be future financial managers. Who knows?”

Source: Reuters website (2010)

Financial News 100 Influential Women 2010

November 1, 2010

This year’s list reflects the industry’s continued focus on regulation, the increasing importance of corporate governance and scrutiny by pension funds as asset owners, as well as the hard work that has gone into restructuring companies in the wake of the financial crisis.


Over the past three months, Financial News has canvassed the market and put together a longlist of more than 250 nominees. All candidates had to be based in the Europe, Middle East and Africa region and working in FN’s areas of coverage: investment banking, asset management, hedge funds, private equity, wealth management, pensions, financial regulation, exchanges, trading and market infrastructure, or support services to these sectors.

Nominees were then assessed on their influence and leadership over their company and market sector, as well as their performance over the past year and achievements so far in their career. The list was then whittled down to the final 100 by Financial News’s editorial panel. The list is not ranked.

Source: efinancialnews (2010)

This Banker Knows What Women Want: Money – by Joanne Cleaver

November 1, 2010

Banks have money and the rest of us pay to get at it. That’s pretty much the business model. What could possibly be different for women?

Nothing, and everything, in the experience of Larke Riemer, national head of women’s markets for WestPac Banking Corp., the biggest bank in Australia and one of the largest in the world. She chairs theGlobal Banking Alliance for Women, which is backed by theInternational Finance Corporation. The GBAW aims to be the resource that equips mainline banks to effectively serve women and women business owners.

WestPac‘s CEO is Gail Kelly and it has three women on its board of directors, so it’s already doing a lot right. Its commitment to advancing women is core to its marketing efforts as well as its leadership pipeline. Twelve years ago, explains Riemer, the bank woke up to the fact that “the female economy is one of the most influential economies we could be involved in. “  Reams of research revealed a few universals: regardless of income or nationality, women are pressed for time, as they handle domestic, family and work responsibilities. They know they need to get to know other women in the same career strata, but that’s usually an afterthought. And women think holistically about how they influence business growth and their personal finances.

Riemer designed a three-tiered outreach to build long-term relationships with women.
- For executive women, WestPac sponsors small group events that let them meet other similarly situated women.

- For women business owners, professionals and rising managers, WestPac sponsors seminars that translate career and business growth goals to lifelong economic independence.  One key tactic: financial education that shows participants how their current balance sheets support their next steps – or not.

- And to reach all women in the bank’s far-flung markets, WestPac established The Ruby Connection, a freestanding website that hosts events, seminars and reference material.

All of this is interlaced with internal networking. Helping women customers connect with eachother, introduced through the bank’s staff, has fostered innumerable referrals and dramatically increased customer loyalty, says Riemer. This sustained effort pays off. Last year, the women’s marketing programs contributed $2.5 billion AUS to WestPac’s bottom line.

American banks can adopt WestPac’s winning tactics – but they’ll work only if they’re in it for the long haul, Riemer warns. Here are her top-line recommendations.

- Ask women customers what you’re doing right and what you’re doing wrong. Fix what is wrong.

-Always include information and education.

- Make sure that staff are trained to work well with women.

“Women take longer to make that decision and sometimes people will get frustrated with that,” says Riemer. “But they’ll come to you on reputation, and they’ll be loyal.”


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