IFC Report Highlights Sri Lanka's Leadership in Gender Diversity in Banking

The report, titled Women's Advancement in Banking in Emerging South Asian Countries, seeks to optimize opportunities for women to advance to senior roles in the banking industry across South Asia.

A new International Finance Corporation (IFC) report reveals that Sri Lanka leads its regional counterparts in recruiting women at the entry-level in the banking sector, with women comprising 46 percent of new recruits. The report, part of the Women in Work program—a partnership between IFC and the Australian government—also highlights Sri Lanka's leadership in board-level gender diversity, with women holding 27 percent of board positions. This compares favorably with 20 percent in Nepal and 14 percent in Bangladesh.

The report, titled Women's Advancement in Banking in Emerging South Asian Countries, seeks to optimize opportunities for women to advance to senior roles in the banking industry across South Asia. It is one of the first multi-country studies of its kind in the region, focusing on private-sector commercial banks in Bangladesh, Nepal, and Sri Lanka, where women make up 30 percent of the banking workforce compared to the global average of 52 percent.

Research conducted across seven leading private commercial banks in Sri Lanka, representing 41 percent of the market share, provides insights into Sri Lanka's banking sector. Despite nearing parity in hiring women and leading in the workforce share, women's career progression in Sri Lanka does not align with their aspirations or match the progression rates for men. Women's representation drops from 40 percent at entry-level to 27 percent in middle management and further to 20 percent in senior management roles.

Imad N. Fakhoury, IFC's Regional Director for South Asia, emphasized the importance of investing in women leaders for sustainable growth and economic recovery. He noted that addressing the challenges faced by female bankers requires comprehensive and collective action rather than isolated interventions. Fakhoury called for targeted efforts to tackle barriers related to policy, process, or culture to create an inclusive banking sector and drive economic growth.

The report highlights barriers such as unfair evaluations, sociocultural constraints, and non-conducive work environments that limit women's growth prospects in Sri Lanka's banking industry. Although banks and policymakers have taken steps to improve women's participation and career progression, stronger leadership commitment is essential for creating inclusive workplaces. The report also reveals skepticism among many employees, including senior leaders and more than 50 percent of middle managers, about the importance of female leadership for business competitiveness.

Previous research indicates that commercial banks with at least 15 percent of women in senior management roles can achieve up to 33 percent higher return on equity. There is a growing body of evidence linking increased women's representation in organizations to better performance on business metrics.

HE Paul Stephens, Australian High Commissioner for Sri Lanka, emphasized the importance of the report's data-based findings for improving long-term policies that enable both women and men to achieve their potential. Stephens noted that the findings show that increased women's representation in senior management roles delivers higher returns and stronger business outcomes.

The report recommends several targeted efforts to bolster women's participation and advancement in commercial banking in Sri Lanka. These include establishing organizational commitment and accountability for gender diversity, creating equitable and safe workplaces, and developing supportive ecosystems, networks, and professional development opportunities. The findings and recommendations aim to guide industry actors—C-suite leaders in commercial banks, policymakers, industry bodies, and investors—towards increasing women's representation in leadership in the banking industry.