Financial inclusion, the key to women’s empowerment in India


Financial literacy can empower women to develop a financial identity even with their household savings, and help them get access to formal credit for gainful occupation, giving them economic freedom and power.

A recent report by the United Nations titled, 'Turning Promises into Action: Gender Equality in the 2030 Agenda for Sustainable Development', said that achievement of Sustainable Development Goals (SDGs) could be difficult without gender equality and women's empowerment. In fact, development in any sphere would be incomplete without equitable participation and contribution of women.

It is indeed difficult to fathom an equal world without empowering women with equal social and economic opportunities. I believe empowerment is a holistic concept that requires targeted interventions across multiple action areas. However, including women in the financial mainstream and making them financially literate are among the most important action areas.

Under the Pradhan Mantri Jan Dhan Yojana (PMJDY), India is working on comprehensive financial inclusion of all the households in the country. Of the 31.48 crore beneficiaries banked as on April 18, 2018, more than half (16.62 crore) are women. According to the World Bank's Global Findex Database 2017, in developing economies female account owners are, on average, five percentage points more likely than male account owners to have an inactive account. In India, however, this gender gap is about twice as large, says the report, adding that 54 percent of women with an account made no deposit or withdrawal in a year as compared to 43 percent of men.

India needs to sustain this momentum to transform into a completely financially inclusive economy. Otherwise, despite being linked to bank accounts, the rural and the excluded population will not be able to avail full advantage of financial inclusion. Building and enhancing financial literacy of the population, especially women, is imperative to sustain financial inclusion while ensuring women’s empowerment.

There are varied reasons for low financial inclusion and literacy among women. A majority of the women in India, especially in rural areas, are homemakers, which is a full-time job with no payment. Lower participation in workforce and wide gender pay gap are other constraints. As per the National Sample Survey 2011-2012, the Workforce Participation Rate at an all-India level is 25.51 percent for females as against 53.26 percent for males. The survey also found that irrespective of education level and residence (rural/urban), the average per day wage/salary earned by a female is less than that earned by a male.

This results in weak economic and decision-making power for them within the household. Usually, women in the rural areas do not possess any assets other than gold. Land and other assets are hardly bought in their name. Absence of assets leaves women with fewer opportunities to avail institutional credit.

This huge lacuna, however, also provides an opportunity to change the narrative. For this, women need to be educated on the importance of institutional savings, avenues of subsidiary income and ways to avail institutional credit for micro activities. Financial literacy can empower women to develop a financial identity even with their small and micro household savings, and help them to get access to formal credit for gainful occupation giving them economic freedom and power. Financial literacy can motivate women generating sustainable income through micro activities to wholeheartedly use financial systems and institutions and slowly create a ground for their graduation to higher income opportunities.

Embedding financial literacy in programmes where women have significant representation could be a good starting point. For instance, the Self Help Group-Bank Linkage Programme (SHG-BLP) programme, which is the largest microfinance programme in the world in terms of client base and outreach, provides SHGs access to institutional lending. More than 86 percent of the groups under this programme comprise exclusively of women.

We also need to innovate and use technology to deepen financial literacy amongst women. Physical distance from the financial literacy contact centres and trainers and the socio-cultural contexts are major impediments in extending financial literacy to women. Therefore, there is a need to use interfaces that allow women to access financial literacy easily, conveniently and without disturbing their contexts. India has witnessed revolutionary penetration of mobile phones even in the hinterlands. We need to ensure that every woman who owns a mobile phone or has access to one is able to use it for educating themselves and managing their own finances. India will truly become Digital India when every woman has access to mobile devices and is able to use these channels for their own empowerment and gaining economic freedom.


(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)



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