Women’s place is often at end of credit queue

Press, 25 October 1982, Page 10

Women’s place is often at end of credit queue

KARREN BEANLAND

considers the good and bad news in a

report on women’s access to credit, prepared by the Society for Research on Women in New Zealand.

Women must be the main agents for improving their access to credit. They must make clear that they expect to receive equal . treatment.

This is the strongest message to come from the report on women and access to credit and finance in New Zealand, which was recently released bv the Human

Rights Commission. The report concludes that there are still many problems for women when they are applying for credit and finance. It paints a "gloomy picture,” which has changed little since the Consumer Institute did a study of women and lending finance in May, 1976. “One of the worst aspects of the 'bad news’ is the very paternalistic approach that is taken where women and finance were concerned. Firms often assume they know better what women can or cannot do as far as money is conerned, what family future plans'" are likely to be and how much financial autonomy married women will have," it says.,

The report notes, however, that not all the news is bad.

Attitudes are changing slowly. The women who did not find problems in obtaining credit tended to be those who were articulate, confident, knowledgeable, who could , present themselves well and who could be assertive if necessary. The 31-page .report was prepared by the Society for Research on Women on behalf'.of the Human Rights Commission. The researchers interviewed representatives from 105 companies involved in credit and finance and examined 72 case histories from women. The • results showed that although there was no explicit discrimination in the majority of cases, there are structural factors which

make it harder for women to obtain credit and finance. Many women may not have had investments while they were raising children. They find themselves in a

less favourable position than those who have had long investment records. Women are often at a disadvantage because they have not tried to obtain

credit before — possibly because they have always paid cash for "their purchases — so do not have a credit record. Although credit-worthiness is the main criterion for gaining credit, the study found that when the demand for funds is greater than the

supply an “informal rationing system” comes into operation and the likelihood of prejudice increases. The study did have some good news for women, however. It notes that attitudes in some quarters have changed. Advertising and forms, with some exceptions are generally non-sexist. In some areas, such as the insurancemarket, there is a recognition that women have been neglected and a bid is being made to attract women customers. Insurance companies are becoming a good source of finance for single women, the report says.

“A number of credit managers said that when they did have dealings with women, they had found them to be competent financial managers, who had done their homework well and knew what they were talking about,” it says.

In two-thirds of the 33 case studies on applications for mortgage finance the women related positive . experience,

the report says. “These women all stressed the importance of being well prepared, having a bank history or some kind of savings record, and salarv and

assets. Three of these women said how different their experiences were now compared with the sorts of experiences they had in the 1970’5.”

Some banks encouraged both partners to contribute to mortgage repayments and joint home ownership. Two finance companies stressed that they considered solo mothers to be a good risk because they were on a constant fixed income. One insurance company commented that de facto relationships were so common that it could not afford to be conservative about them. Under the “bad news" section, the report notes that some things have not changed. “When times are hard, insidious discriminatory policies are activated." The study found that particular groups such as the young and solo mothers, are treated differently. A separated woman told the researchers that after years of operating a joint account, she andjier husband opened separate accounts when they parted. When both overdrew their accounts, the bank agreed to 1 carry the SSOO overdraft of the husband. but “bounced" the wife’s cheques.

Another woman, who bought out her husband's share of their home when they divorced, found her insurance company insisting that her former husband act as a guarantor. Both married and single women also found problems. The report says that banks tend to favour families rather than single women. One single woman’s application for finance was turned

dowm by her bank, even though she had a home ownership account.

Another, who was told that single women were low priority, was told her 10-year banking history was insufficient. Yet both were granted high interest bridging finance by the banks.

“Married women appear to have just as many problems in being recognised as financially independent autonomous beings who know what they are doing,” the report savs.

"Generally the assumption was made that all married women could have children and thus be out of the work force — a contention not borne out by current statistics in the first instance, and secondly, not recognising that married women (or couples) can take such eventualities into consideration when planning their finances." The study found that the greatest number of problems arose with store credit, where the majority of people dealt with are women.

Women complained that they could only open an account if they obtained their husbands' signatures. Others were refused credit because that did not have a credit record — possibly because they had always paid cash in the past. The study also found cases where women were refused credit because their husbands had a bad credit rating. In one case a woman was refused credit because of the record of her former husband, W’hom she had not seen for two years.

The report finishes by giving some guidelines for women on seeking credit. It suggests that women should establish a credit record, maintain a financial profile even if they are out of the paid workforce for a time, and should go to the top if they are not satisfied with the treatment they receive.

Paternalistic attitudes are changing slowly