GENDER PARITY IN FINANCIAL INCLUSION IN INDIA - Shivanshi Garg

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It must be very well known to you all that in India, house helps generally prefer to take payment in cash. And even if asked to get their salary transferred into their bank account, they provide their husband’s or son’s bank account because they are the ones who use and operate smartphones and have payment apps in their family.

This anecdote clearly shows the gender divide prevalent in financial choices and behavior. And it will not at all be surprising for you to hear that the relevant statistics tell a similar story. As per a recent survey, only 77% of women in India have access to formal financial services while the rest of 23% don’t. And out of that 77% who have access, only 35% are non-dormant on their respective accounts. The remaining 42% of accounts are dormant i.e., they have had no transaction in the last year.

Reasons:

The first and foremost reason for this gender disparity is the low female labor force participation rate. This rate is under 20% and has fallen to almost 16% post-Covid-19 pandemic since more women had to give up their jobs as compared to of men due to the pandemic. Additionally, the difference is stark when we talk about the adoption of digital financial products like debit cards, credit cards, payment wallets, etc. As per an AIDIS survey, 20% of rural women have reported having debit or credit cards, compared to 64% of men while the disparity in urban areas in card ownership stands at 17%. The other major reason for the disparity in financial inclusion is on the account of the gender gap in mobile ownership and internet usage. In India, the ownership of mobile phones by women is 20% less than that of men, and the usage of mobile internet is 50% less. Additionally, certain cultural norms also restrict any women from using formal financial services. They sometimes do not have complete autonomy in using their phones. A lack of awareness and the absence of any push, from either the provider, opinion leaders, or progressive men in the family means that women lack any intrinsic “motivation” to take up formal financial services.

Solution:

A transformative approach to gender can create a financial services space for the women who remain financially excluded. A four-pronged approach can be used to bridge this gap in order to achieve financial inclusion -Making women work efficiently, Design gender-sensitive products, building a network of female banking correspondents, and publishing gender-disaggregated data on financial inclusion.

We need to look for ways to enhance economic activities for women, which would allow them to take financial decisions for themselves and their families. In this context, the government can play a huge role — by providing better physical infrastructure, by providing financial education to women, and by enabling women to gain greater control over resources.

Designing better products for women requires a client-centered approach, where providers start by identifying and understanding how women use and interact with money, financial products, and technology. Design elements like vernacular communication and voice and video enablers can reduce friction for women in their use of digital financial products.

As per surveys and findings, women users are more comfortable when they transact at outlets run by female agents. An approachable and gender-sensitive agent could act as the much-needed support system to build the required financial and digital capacity of women users. These are largely considered approachable by women customers, who would be willing to entrust them with sensitive financial information.

Lastly, the periodic publication of gender-sliced data on various parameters of financial inclusion can help in tracking the gender divide and also make a clear case for gender-sensitive products.

Conclusion:

It can be concluded that though the gender gap in financial inclusion was reduced by 14 percentage points in three years between 2014 and 2017, India still has a long way to go to further reduce this gender gap. Only a combined effort of all the stakeholders involved will lead to the desired results. All the suggestions mentioned above must be implemented to remove the disparity present in the country.

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