We know that equal access to quality financial products and services is essential to inclusive economic growth and poverty reduction for all countries. Given this, increasing women’s financial inclusion is important as women disproportionately experience poverty, unequal divisions of labor and a lack of control over economic resources.
Let's first talk about the linkage between women and finance in our country, in low income houses women are decision-makers for spending and savings in most low-income households. They are thus more committed and disciplined savers than men. In fact in the southern parts of India, women make most of the financial decisions and run small businesses! It has also come into study that women’s engagement with financial institutions and their ability to access participation in work and credit from such institutions can increase their social capital. Not only that, providing low-income women with effective and affordable financial tools to save and borrow money, make and receive payments, and manage risk is critical to both women’s empowerment and poverty reduction. Established that lets look at demand, supply and legal barriers that hamper the financial inclusion of women:
Illustrative to the above idea, there are still some valid loopholes and sexism that exist in the current government policies. For instance, The Microcredit Revolution, a scheme that focuses on providing small loans to women for them to start their own business. However, the problem with such a project is that more often these women do not have the entrepreneurial skills to start a successful business and they fail and fall into debt traps. More so, these loans are increasingly commercialized which makes it difficult for the women to avail these opportunities.. Another example could be The Girl Effect, an idea that states, “invest in a girl and she will do the rest ideology”. Major problems with such a vague concept is that it takes attention away from more substantive drivers of poverty like debt tax evasion, labor exploitation, financial crisis and solely divert it to the sexist cultural norms. It is the women and girls who bear the responsibility of lifting themselves and their family out of poverty. Not only this but the whole notion of Global Care Chains, the practice of richer households relying on poor households (mostly women) for care labor, and the poor households relying on women for care labor too makes it stereotypical for women to thrive. Even though it provides a source of income, it integrates the idea that only women should work in care labor and project it the same way even if they are not paid. As a result, it hoards a source of employment for male workers.
Having said that, it becomes even more important to escalate the idea of women’s financial inclusion using the apt measures and policies. This can be achieved by guaranteeing data privacy and customer protection to ensure quality and safe digital products are offered to women. We can advance to the collection and analysis of sex-disaggregated data to provide better statistical inference. The entry access, usage costs and barriers to financial services can be reduced for women. Financial institutions can contribute by increasing the presence of women in leadership positions, allowing alternative sources of collateral and promoting new ways of building credit records. Finally, the least we all can do is support the creation of women’s business associations and networks.
India has succeeded in reducing the gender gap in financial inclusion by 14 percentage points in three years (2014-17). However, digging deeper into the data tells us a less encouraging story—the accounts of more than half of the women who have access to formal financial services are dormant. It is important to realize that a woman's access to financial services extends to her family, community and society which makes it even more important to extend the idea of women’s financial inclusion to the youth!
-Vrinda Rajoria