The Women’s Development Bank, proposed by the National Democratic Congress (NDC) , aims to provide low-interest loans and tailored financial services to women-owned and women-led businesses. A sight already positioned and run by a state institution known as MASLOC.
But unfortunately, the CEO of that institution as at 2016-17 committed so much crime, that she was later convicted by the court in absentia. Now, the rebranding of such in 2025 to meet the needs of Ghanaian women financially should pass through an eye of a needle stating the previous as an advice. Unfortunately, as of March 13, 2025, the bank has not yet been introduced, but its potential impacts can be assessed based on current economic data and similar initiatives. Dissecting this issue, I’m forced to ask pertinent questions like, 1.
How much is the Bank of Ghana asking to be the limit threshold one can raise to institute a bank? 2. In what capacity or form should the director or board be like? 3. If the initial capital isn’t adequate, can the government veto it into being? 4. If it can’t be a bank, can we regard it as a savings and loans company? 5. Who are those going to run the bank and advise on policy and programme? 6. Is the bank going to be used as a decoy or a means to an end? We extend this below as we explore its likely positive and negative effects, supported by facts and statistics.
Pros….
The bank is expected to significantly improve financial inclusion for women, who currently face barriers such as lack of collateral and low financial literacy. With 63% of women having formal financial accounts in 2021, compared to a growing gender gap of 11%, the bank could help bridge this divide (Global Findex Database 2021). It may also empower women economically, potentially creating jobs, as 77% of women are in vulnerable employment compared to 58% of men, often in the informal sector (World Bank 2023).
Additionally, it could reduce gender inequality by enhancing economic opportunities, especially for rural women who are more likely to be multidimensionally poor. An unexpected benefit might be its potential to attract international funding, positioning Ghana as a leader in gender-responsive financing. Whether from the Bretonwood institutions such as the World Bank or the IMF, situated openly to fuel gender equality discussions and find itself at the helm of all gender related affairs in the world, might interestingly provide adequate funding for the running of this bank.
Cons...
However, challenges include financial sustainability, with initial funding of US$20 million potentially insufficient for long-term operations. There’s also a risk of corruption or mismanagement, common in new institutions, and concerns about reaching women in remote areas. Dependency on government funding could pose sustainability issues if economic conditions change, highlighting the need for strategies to ensure self-sufficiency. It may also be prone to partisan coloration in the disbursement of funds or resources, which would further tend to divide the women’s front of the country, thereby calling for its immediate demise.
Let’s analyze this initial submission:
The NDC, led by John Dramani Mahama, has pledged to establish the Women’s Development Bank within 120 days of assuming power, with an initial seed funding of US$20 million (NDC to set up women-focused lender with US$20m). The bank is intended to address the financial challenges faced by women entrepreneurs, particularly in accessing capital, and to support sectors like agriculture, trade, manufacturing, and technology (#SONA2025: Ghana Women’s Development Bank to be established in 120 days – Mahama). This initiative aligns with global efforts to close the gender financing gap, estimated at $42 billion for women in Africa (AFAWA (Affirmative Finance Action for Women in Africa)).
The Positive:
Enhanced Financial Inclusion for Women:
Women in Ghana face significant barriers to financial access, including lack of collateral, low financial literacy, and socio-cultural norms. According to the 2017 Findex, only 54% of women have formal financial accounts, with an 8 percentage point gender difference compared to men (How Ghana’s New Digital Finance Policy Can Drive Women’s Inclusion). By 2021, this figure improved to 63%, but the gender gap widened to 11%, highlighting the need for targeted interventions (Collecting, Analyzing and Reporting Gender-Centric Data for Women’s Financial Inclusion in Ghana). The bank’s focus should be on low-interest loans and flexible terms, which potentially could increase women’s participation in the formal financial system, reducing this gap. This aligns with global trends where mobile money initiatives, like M-Pesa in Kenya, have lifted 2% of households out of poverty, with greater impact on women (Suri and Jack 2016).
Another positive would be the Reduction in Gender Inequality:
Gender inequality remains a pervasive issue in Ghana, with women holding only 14.6% of parliamentary seats as of February 2024 and facing barriers in asset ownership, with only 6% of the richest people being women (Country Fact Sheet | UN Women Data Hub). The bank could enhance women’s economic power, contributing to decision-making and social equity. By providing financial support, the bank could address disparities in earnings and access to assets, where women earn less due to precarious employment and own fewer business assets, with only 22% being real estate in developing countries (World Bank Enterprise Surveys).
The third point would be an enhanced Support for Rural Women: Rural women in Ghana face unique challenges, including limited access to education, health facilities, and financial services. They are more likely to be multidimensionally poor, with higher rates of informal self-employment (To Reach Gender Equality Ghana Needs to Prioritize Social and Economic Inclusion). The bank’s flexible financial services could target over 2.3 million rural households identified in the Ghana National Household Registry (2022), potentially lifting thousands out of poverty by providing access to capital for agricultural and small-scale enterprises (Ghana National Household Registry 2022).
The Negative:
Negative Impacts
Despite its potential, the bank faces several challenges that could limit its effectiveness and sustainability.
1. Financial Sustainability Concerns:
• The initial funding of US$20 million may not suffice for operational costs, especially with low-interest loans. Ghana’s public debt-to-GDP ratio, at 72.5% in 2016, and fiscal challenges could strain resources (Finance Committee of Parliament 2017). Without a clear strategy for additional funding or private sector partnerships, the bank risks becoming a financial burden.
2. Potential for Corruption or Mismanagement:
• New institutions in developing countries often face risks of corruption or mismanagement, which could undermine the bank’s effectiveness. Proper governance structures, transparency, and accountability measures are essential to mitigate these risks, as highlighted in discussions on similar initiatives (Convert Development Bank Ghana into a Women’s Development Bank).
3. Limited Reach and Impact:
• Reaching women in remote and rural areas could be challenging, given infrastructure limitations and logistical barriers. The bank must develop strategies to ensure accessibility, such as mobile banking units, to serve marginalized women effectively (Rural women are reshaping gender norms in northern Ghana).
4. Dependency on Government Funding:
• Reliance on government funding could pose sustainability issues, especially if economic conditions change or political priorities shift. The bank should aim to become self-sustaining through revenue generation, attracting private investment, or partnering with international donors like IFC, AfDB, and UN Women, which prioritize women-focused financial programs (Convert Development Bank Ghana into a Women’s Development Bank).
5. Collateral Ride effect
A proportional amount of women do not have a stated collateral which they can put in place of the capital they seek to transact their businesses. If that happens, then the bank may be forced to process a section of its capital gains as a grant. Where the majority of women are already accustomed to this type of facility. The reason why most NGO’s direct their focus on this tangent is to empower women by giving them the facility known as grants. Unfortunately, some of these grants are deceptive since their conditionalities are impossible and Loans are expensive to
My subtle reasons recommend these;
Comparing the Women’s Development Bank to similar initiatives, such as the Development Bank Ghana supported by the World Bank, suggests that a focused mandate on women could streamline operations and attract concessional capital (Ghana - Development Finance Project). However, lessons from other African countries indicate the need for robust governance, capacity building, and outreach to ensure impact.
To state these simplified recommendations would be to the progress of it
Establishing clear governance frameworks to prevent corruption would be in the best interest of the bank.
• Developing mobile and digital platforms to reach remote areas.
• Securing partnerships with international donors to supplement funding.
• Monitoring and evaluating impact through gender-disaggregated data to adjust strategies.
• Excluding partisan faces or intentions from the administration of the bank would go a long way to enhance its credibility.
These and many should be integrated to make a whole difference in the lives of the vulnerable Ghanaian woman.
NB: “*Ghanaians must be aware of the fact that Loans are expensive and Grants are Deceptive”*
