When women’s wealth is stuck in bank accounts

Economists explain the downside of holding too much cash

An estimated SR60 billion owned by Saudi women remains unused in banks due to their reluctance or inability to seize viable investment opportunities.

An estimated SR60 billion owned by Saudi women remains unused in banks due to their reluctance or inability to seize viable investment opportunities.

According to a recent World Bank report, the volume of deposits by Saudi women in local bank accounts is estimated at SR60 billion.

Several economic experts underlined the need for investing this wealth, benefiting them in the best possible ways, Al-Madinah daily reported.

Talaat Hafez, secretary-general of the Media and Banking Awareness Committee of Saudi Banks, said there are exaggerations in the World Bank report about women’s deposits in banks.

He said that there are no frozen assets for any male or female customers at the banks.

He said: “It is the customer who has to decide what to do with the money in their accounts. They have the final word whether to deposit them in any investment projects or other ventures and banks have nothing to do with it.

“There are some customers who want to put their deposits in their current accounts while some others want to keep a part of their wealth in current accounts and the rest either in saving accounts or depositing them in mutual funds.”

Reacting to reports about frozen bank assets of women, Fadl Al-Buainain, another economic expert, said the economy depends basically on circulation of wealth in a way helping to realize real development.

He said: “This wealth is supposed to be the means for development and hence, money remaining in banks won’t be helpful.

“Banks normally give loans only to a limited section of traders. Similarly, this wealth would not go to develop small or medium projects through banks because of their keenness in the clients’ financial capability and solvency.”
According to Al-Buainain, keeping assets at banks would be harmful economically.

“The value of this money would be decreased with the passage of time due to inflationary trends. In other words, the purchasing value of the money would be diminished and this will be a loss for the women customers.”

Al-Buainain noted that women keep their money at banks mainly because of their failure to find better ways to invest it in the local market.

Their investments are confined only to the stock market or the real estate sector, he claimed, adding that the government is not taking any initiative to create investment opportunities to utilize these frozen funds.

There are also several other impediments for women for making direct investments in development projects, he said.

Similarly, the existing rules and regulations are not conducive for women to make investments in the market and there should be amendments in the regulations to promote women’s investments, he claimed.

Al-Buainain suggested that a part of this wealth should be invested in Islamic bonds and securities.

Some women are not ready to make investments in the fields that involve high risk and great scope for profit and, instead, prefer more safety and less profit, he said.

Al-Buainain urged the Saudi Arabian General Investment Authority (SAGIA) to play a greater role in proper utilization of these funds by guiding women to invest in specialized and viable projects.

Muhammad Al-Qahtani, professor of economics at King Faisal University, said around 30 percent of current accounts in Saudi local banks belonged to women and this accounted for a total of around SR70 billion.

He said: “There should be operational programs for women to utilize their wealth in the best possible manner.

“Women’s wealth can be utilized in projects like establishing educational institutions or firms for stitching of dresses or beauty parlors and such other projects.”

He called for setting up women’s investment committees at all chambers of commerce and industry across the Kingdom.

Saad Al-Hashim, an employee at the health sector, said women wanted to make their investments in projects that were safe and yielded attractive returns.

She said: “We all know that women’s investments encounter several obstacles and these force them to invest their money mainly in real estate projects because they are comparatively safer.

“A large number of women incurred huge losses due to their investments in stock markets a few years ago.”

She called for opening consultancy offices for women to advise them on how to invest their money in the proper manner.

“The chambers have to play a crucial role in this regard.”

Amir Al-Dawood, a consultant psychologist, said unlike men, women in general are not ready to spend money on business and other projects because of their fears of incurring losses.

This is the major reason why women’s wealth are stuck most often in their bank accounts.

He called for conducting awareness programs and orientation courses for women to change this mindset and come forward to make investments irrespective of the concerns over incurring losses.

“There should be special programs to strengthen their perspective toward investment and shed fears of losses,” he added.

 

 

 

 

 



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