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Good evening ladies and gentlemen. On behalf of the Abrakata Institute and the Women's Policy Action Network, it's my pleasure to welcome you all today in celebration of the International Women's Day to closing the divide through women's access to finance. Over a year ago, with the support of the Kingdom of the Netherlands, we were able to establish the Women's Policy Action Network or WPAN, which is a robust policy action group advocating for policy reforms aimed at enabling women's economic empowerment. 

During the course of its action, WPAN has mainly focused on six thematic key areas, which are labour legislations that affects women entry to retention in the workforce, gender discriminatory labour in relation to inheritance of property, taxes and tariffs that disproportionately affect women, domestic workers in the informal sector, financial inclusion and care economy. To celebrate this year's International Women's Day, we decided to explore how we can utilise financial inclusion to economically empower women. Before we formally begin our event, I would like to inform all those observing Ramadan to kindly note that the arrangements have been made for the prayer room and iftar. 

If you'd like to break your fast, please reach out to the Advocata team who will direct you there. To start off the event, I would now like to invite Mr. Murtaza Jafarji, the chairman of Advocata Institute, to welcome this gathering. Good evening, everyone. 

Welcome for our event on Women's Policy Action Network, this I believe is either the third or fourth event under this theme. Let me give you some context. Advocata was set up as an advocacy organisation about six to seven years ago, and we have now developed a think tank element to our activity. 

It was felt that there was not a sufficient voice in Sri Lanka who fought for the case for liberty and a market economy. The left side was very well established, but there was nobody putting forward a counter argument, which was the genesis of why Advocata came about. In our mission, basically, we have now developed our own research capability and policy development capability. 

The Women's Action Policy Network came about as bringing an umbrella organisation to rally all the other women activists so that we could amplify their voice. Let me give you the context of why today's forum is important for the well-being of our country. I say this that many of you are aware that Sri Lanka had to restructure its debt, because our debt was 128% of GDP. 

I say this that there is more than a 50% probability that we may have to do it again, and the next time we do it, the pain is going to be significantly more, because the first time we did it, and we have not completed it, it was a very light restructuring. Now, one measure of our indebtedness is debt to GDP, and the only way that we can overcome this predicament is to grow GDP. Now, there are two ways to grow GDP. 

One is to increase the number of people working in the economy, and the second is to increase the output per person, or what economists would call productivity. Now, women are more than 50% of the population, but if you look at labour participation of the economically active population, which is about 16 million people, the male participation is 70%, the female participation is 35%. In countries like Vietnam, which has one of the highest female labour participation, it's as high as 80%, almost equivalent to male. 

In East Asian countries, it's about 70%. In context in Sri Lanka, it's only 35%. So, one way of avoiding this predicament is to get more women into the labour force, and women have certain constraints, so not all of them may be necessarily being able to work in formal employment, and many of them will have to be in informal employment, including working for themselves, or starting new businesses. 

Now, when I have been on visits to East Asia, I find that many of their women, maybe they are staying at home, but they're economically active. So, what we need to do in this country is to get more of our women, not necessarily in formal employment, but economically active. And finance is the lifeblood of any business activity, and therefore, the connection between our general well-being as a country and the need to grow, and today's forum, there's a direct relationship why financial inclusion and access to credit is important. 

Now, in my research, there were two items I don't know whether the panellists will cover. One is that access to finance in a system which is highly reliant on collateral. So, invariably, the family property is owned by the man. 

So, when the woman goes to access credit, you have to give some collateral, and unfortunately, the woman is not the owner of the most important asset the family has, right? Maybe some more progressive families would have ownership, and let's hope the panellists can discuss this, or even the audience. I'd like to know whether, but in most cases, it's a man that has the asset. The second is the man that is in formal employment. 

So, I have been on a bank for nine years, and in their kind of lending, they are much more prepared to lend to people in formal employment because they have a visibility of income streams. But when you are working in the informal sector, you're working for yourself, it's not necessarily easy to show a payslip. So, the estimation of your ability to service debt is difficult. 

So, these are two huge issues that women will face in getting access to credit. So, I'm putting across a pain point that I have, a question that I hope these panellists will try to come up with solutions to. This is just a welcome speech, but I try to set the context. 

I believe next that there will be a video explaining about the Women's Forum, formal network, and their work. And I'm looking forward to hear the deliberations of today's activity. Thank you. 

Thank you, Mr. Murtaza. Now, let's move on to a short video brought to you by the Advocata team on the impact created over the last year through Women's Policy Action Network. Over the past year, we at the Women's Policy Action Network, or WPAN, have accomplished incredible feats and overcome numerous challenges to ensure that the case for women's economic empowerment is heard by all. 

Let's take a look back at our journey. In early 2023, the Women's Policy Action Network was launched to bring about policy reform through advocacy for the economic empowerment of women. The vision we dreamt of was to be a network run by individuals committed to women's empowerment. 

Harnessing advocacy, collating research, and identifying key problem areas that have and will impact the lives of women were a few of the targets we were working to achieve. To ensure the nuances of this environment were captured, the team undertook a mixture of research and advocacy initiatives. After rigorous research on barriers to women's involvement in the workforce, the WPAN published three policy briefs on pertinent issues. 

Gender discriminatory land inheritance laws, labour laws, and social and digital infrastructures were key areas we identified as direct barriers to women's economic empowerment. Podcasts with key personnel were published to garner profound insight into issues faced by women. WPAN has also worked with those passionate about furthering women's empowerment by facilitating discussions on key topics.

Thank you all for joining us on this journey as a Women's Policy Action Network. For more information on the work we've done, please visit our social media pages on Facebook at Women's Policy Action Network and Instagram at WPANLK. I would like to invite Dr. Roshan Perera to set the context for the rest of the evening. 

Dr. Roshan Perera is a senior research fellow at the Adhokata Institute and also the chair of the Women's Policy Action Network. She is a former director of the Central Bank of Sri Lanka and has over 20 years of experience in formulating and implementing both monetary and fiscal policy. She is also a board member of the Union Bank PLC and Senkatekada Finance PLC. 

Over to you, Doctor. Thank you, Thaksinni, and good evening everybody. I think Muthuza has already set the context for today's event, but I will just sort of add to it in terms of providing a motivation for why we chose this as one of the areas to look at in this Women's Policy Action Network.

So while women really account for more than 50 percent of the human resources in this country, as you've heard before, they are highly underrepresented, particularly in paid economic activity and in the labour force. And with Sri Lanka facing a rapidly ageing population, together with this recent wave of migration, there is going to be huge pressure on human resources. So while empowering women makes good economic sense, it is also important for the well-being of the individual woman or individuals and households. 

So as you saw in the video, WPN has focused on many different areas of the barriers, several barriers that women face in engaging in economic activity. Today we want to focus specifically on the access to financial services and how the lack of access to appropriate financial services prevents women from actively engaging in paid economic activity. So in the research it is well recognised that financial development is important for economic growth, and there are lots of statistics to substantiate that. 

But there is also increasing evidence that greater financial inclusion is vital for reducing poverty and inequality in society. But what is financial inclusion? It is defined as the access and usage of affordable financial services, products and services. And women's access to financial services, especially digital financial services, could really hold a key to greater engagement of women in economic activity and in helping to reduce gender gaps. 

However, women face several barriers when they try to access financial services, such as higher transaction costs, and I think Muthuzaa alluded to some of those things. There are social and cultural attitudes that prevent them from being able to access financial services, and also the regulatory environment. And we will talk about these as we go along.

But what has also been found is that greater access to digital financial services can help overcome some of these barriers by reducing the transaction costs, enhancing credit by reducing information gaps, and empowering women to go into businesses, particularly on the e-commerce side. So they are really important drivers of financial inclusion. But unlocking this potential of digital financial services requires some underlying conditions that need to be fulfilled. 

Firstly, women need to be financially and digitally literate, or have greater financial and digital literacy. There needs to be a good, well-provided digital infrastructure, and also the regulatory framework that exists must create the level playing field or the enabling environment for women to be able to access this finance. So I would go as far as to say that this digital infrastructure and financial literacy should be treated as public goods, much like we have for many years treated other forms of infrastructure and even literacy, which in the normal way we look at literacy. 

And we've treated those as public goods. So I think now we need to look further and even think of digital infrastructure and financial literacy also as public goods that need to be accessible to everyone in the economy. But when we look at the disparities that exist, so if you look at the existing state of play in terms of financial inclusion, despite Sri Lanka having a very high literacy rate, so we have a literacy rate of something like 93 percent, the level of financial literacy is still very low. 

It's only 57 percent. And this too may be an overestimation, because financial knowledge may not necessarily be effectively applied to our day-to-day activities. So we might have it in theory, but may not necessarily be applying this knowledge. 

But if you look at these numbers, and these are from the World Bank's global financial database, Sri Lanka seems to be doing very well in terms of, and stands out in South Asia, particularly in terms of access to financial accounts or having a financial account, a banking account, because almost 90 percent of the population has a bank account. But again, there are some discrepancies between men and women. But in terms of the use of these accounts to carry out financial transactions, the percentages then fall off. 

There's very little actual usage of these accounts. And then transitioning from this cash economy of cash transactions to digital platforms, Sri Lanka does very poorly, particularly if you compare with our East Asian neighbourhood, Malaysia, which is a middle-income country, who has done remarkably well in transitioning from the use of cash to more digital, the use of digital financial services. So low digital literacy, so that is digital financial literacy, but the second one is also digital literacy itself. 

Low digital literacy also hinders the ability to use and navigate digital technologies. So there has been a survey conducted by the Department of Census Statistics on digital literacy. So nearly 60 percent of the population surveyed said they were digitally literate. 

Of course, the definitions are, you need to know the definition, because how they define someone who's digitally literate is if the person owns a computer, laptop, or smartphone, who can use a computer, laptop, or smartphone on his or her own. But despite this high level of digital literacy, the survey goes on to find that there are only about 40, less than 45 percent of people use these digital devices to search the internet, and only about 18 percent actually send emails using these devices. So hence, even with access to devices, many lack actually the efficient usage, the skills to actually use these for digital transactions or any kind of digital activity. 

So that was in terms of financial digital literacy. If we look at it in terms of what we need in terms of digital infrastructure, there are several areas that we need to focus on. So the one I'll really focus on is in the ICT infrastructure and the payments interface. 

And when you look at that, what we mean by that is how affordable are these digital devices and the internet. So in Sri Lanka, we find, and the surveys have been done, that the high cost of access to the internet and mobile phones, and here we're talking particularly of smartphones, disproportionately affect low income earners because they have a large proportion of their income they spend on food or education basically and health and their essentials. So they have less discretionary incomes to spend on these other items. 

And hence, that gets sort of put aside. And this leads to a widening of this digital divide. Also the high cost, and particularly now in the recent past, the high cost of laptops or other digital devices have also exacerbated this issue in terms of access to digital devices. 

The central bank has also done some surveys and there's a national financial inclusion survey where they found that more than 80% of the population actually owned a mobile phone, but most were feature phones and not smartphones. So again, though they may have phones, again, if you don't have a smartphone, then you are not able to actually do some of the, you know, access some of the services that you need to in terms of financial services. The second part was on the internet itself. 

I mean, Sri Lanka does have a very high network coverage for most of the population, but still there are pockets of, you know, areas where there is no internet coverage. And also Sri Lanka suffers in terms of the network performance when you compare with some of our regional peers. So these areas also need to be addressed if we want to move further in terms of expanding digital services.

The next area is really looking at digital payments. So there definitely is a sort of correlation between the level of financial inclusion and the degree of informality of economic activity. And the more the usage of cash, there's a greater informal activity in the economy. 

And in Sri Lanka, we find that cash still remains an important mode of payment. And there's a recent study, a survey done by Slaskom and Dharaz on the e-commerce sector in Sri Lanka, where they highlighted that in terms of the most preferred payment method for e-commerce, it was basically cash on delivery. So then more than 70% of those who even, you know, bought things online preferred to pay by cash. 

So this is a barrier. So unless we, you know, have more digitalisation of retail payments, it would be necessary for, you know, greater financial inclusion and to reduce the use of cash. And this would not only reduce the informality of the economy, but it has other benefits in terms of things like broadening the tax base, formalising employment, etc. 

To just highlight this issue a little more, there was a recent study being conducted on the uptake of digital payments in Sri Lanka. And what they highlighted was, even though after the launch of, you know, Lanka QR codes almost three years ago, while there are about 350,000 merchants who have issued these Lanka QR codes, the total number of transactions that are actually conducted through these QR codes is about half or a little over half the number of merchants. So not even one transaction per merchant.

And so it's very low. And this is something that is going to, and this is very baffling, why there is such low usage. Hopefully now, because I think UPI has connected with the Lanka QR code, hopefully this will encourage more merchants to actually promote the digital retail payments and also encourage others, Sri Lankans also, to use these digital payments.

So the poster child really in all this is India. And their experience has, in terms of this area, they have grown in leaps and bounds. And one of the main areas is because of the strong, the digital infrastructure that has been created. 

First, in terms of their digital ID, where they have been able to, I mean, they have 1.3 billion people in the Aadhaar system. And they have, through that, basically done something like more than 10 billion e-KYCs have been done because of this Aadhaar, the digital ID that they have. And then the other one is, of course, what I just referred to, the UPI. 

It has transformed the amount of payments and the amount of transactions that go through the digital transactions because of this UPI that they have, the interoperable payment system that they have. But what I want to focus today, and this is the third part of what this whole India stack, which is what it's called, the digital infrastructure system in India, is this whole thing of data sharing services. So the next stage is really where they're going to create this sort of account aggregator network where there'll be financial data sharing. 

And it'll be like an intermediary to collect and consolidate data from financial institution providers that hold personal financial data, such as banks, and share that data with those who actually are the users, such as lending agencies. And that information will hopefully enable better lending or enable more lending to take place. And particularly, as I think Murtaza mentioned this, because women lack physical assets to access credit. 

And using this, you know, access to this non-financial digital data on the transaction history of these women, and it doesn't necessarily have to be only on banking history, but on their usage, on their payments of utility bills, insurance repayments, and things like that, they're able to build up a credit history of women, which will then be used in terms of making these informed decisions on on how to lend to these women. But this requires a collection of gender disaggregated data, so that, you know, this data can be used to customise products to meet the needs of women entrepreneurs. And even now, I mean, there's a certain amount of disaggregated data being collected, but I don't think banks and financial institutions really are looking at this data.

They too need to use this data to be able to make better business decisions. And I think now, when we're going into things like AI and you need training data, I think it's very important that this disaggregated data is made available, because otherwise it will end up in, you know, incorrect decisions being made in terms of female borrowers. Then, of course, we come to the area of the supply side, really. 

So we have this large network of regulated financial institutions who are regulated by the central bank, securities exchange commission, and insurance regulator, etc. And this has enabled, you know, quite a wide network of financial institutions across the country. And as I said earlier, I mean, that has enabled, you know, access for Sri Lankans to have accounts. 

However,

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