Financial Inclusion to Atleast One Woman in our Network – A Pledge this Woman’s Day

How Would you like to celebrate this Women’s Day?

Before you attend a cake cutting ceremony in your office take a moment on how blessed are you because –

Nearly one of every three women in the world — or 1.1 billion — is excluded from the formal financial system

If stats are hard to believe, go down your memory lane to those young days, and as you traverse through your sweet home, you might recollect your mother/grandmother pulling out a box to add to more savings in her kitchen.

Why is it so hard for females to enter the financial system?

In our post today let’s give that thought, listen to people who are taking initiatives in bridging the gap and in the end a pledge to bring at least one woman from our circle into the financial system.

Would you?

We might be hearing the term” Women Empowerment” so often than what could stop females to be the part of the financial system? Let’s look at some of the reasons –

• Social or Cultural Taboo restricting women to socialize

  Many remote/rural areas still find it hard for women to venture out without a male counterpart. In such cases going to a bank or taking services through Agent Banking gets harder, as they are out of reach.

• Women Not the Earning Members

  Whoever is reading this would know, at least one urban woman who took a break due to maternity or a rural woman who has given her life to household chores. When you not an earning member, you somehow tend to exclude yourself from Banking Systems officially. You might be expressive enough about your investment choices or savings but may not get into the hassle of availing banking services.

• Mindset of Females

  Surprisingly, many of the earning female members [rural+urban] do not like to expose themselves to banking. They might have a bank account but would be operated by their spouse/fathers. Many of the females like being in that idle state and have little or no knowledge about banking services or even how to operate an ATM.

• Restricted/No Access to Technology

  Although we are pressing #DigitalIndia, it is a big surprise that only one out of five women have access to the phone. And another report by WSJ says that it would be very hard for women to have access to the phone. With restrictions comes the hardship of availing the banking services!

The situation is not that bad, in fact, many Women Individuals like Bindu Ananth and Chetna Gala Sinha are leading the movement and creating a social impact on bringing our fellow mothers/sisters and daughters into the financial system.

Mann Deshi Bank

Mann Deshi Mahilla Sahkari Bank, one of its kind in India is a microfinance bank that is run by and for rural women. Founded by Chetna Gala Sinha in 1997, the bank aims to financially empower the women, thereby giving a solid foundation to the future generation. The cooperative bank offers services like –

1. Savings
2. Pensions
3. Loans
4. Insurance
5. They also have Business School for rural woman opened up in 2006, and more than 70,000 women have graduated and are now the “Entrepreneurs.”
6. They have a Toll-free helpline number that helps women to resolve license issues and other legal matters.

IFMR Holdings

Bindu Ananth, Chair of IFMR Trust that aims financial inclusion to every individual in India. To achieve these goals the IFMR Trust has made four key investments –

1. IFMR Rural Finance (full-service financial institutions for remote rural India),
2. IFMR Capital (guarantee company for high-quality MFIs),
3. IFMR Mezzanine (subordinated debt provider for emerging MFIs)
4. IFMR Ventures (debt access for rural enterprises).

Speaking in an interview with World Bank she says –

Our vision for the Indian financial system has three parts:

1. An adequate number of local, high-quality financial providers that provide complete access to financial services. (We have borrowed heavily from Prof. Jonathan Morduch in defining complete access to be: reliability + continuity + convenience + flexibility + increasing financial well-being.)
2. Orderly ways for systematic risk to be transferred from these local providers to risk aggregators. This would be done through mechanisms like reinsurance and securitization, among others.
3. The presence of well-regulated and well-capitalized aggregators like commercial banks, mutual funds, and insurance companies.

The government made plans like Jan Dhan Yojna, movements and individuals try to deliver them to the last mile. But to make these schemes a success #Fintech firms are coming up with innovative solutions to help women in getting financially empowered. Fintech firms are providing technology enabled solutions that could facilitate Money Transfers, Cashless Payments, Microfinance, Health Insurances, Loans, and Investments.

With government initiatives like Aadhar Enabled Payments fintech players are sure to bring in affordability, reliability, and usability of the banking services.

Some of the leading experts in the industry says –

Financial inclusion is one of the greatest advantages brought by FinTech into the developing world.

Women are Profitable Customers to Banks

Some of the other reason why Banks/Fintech should try to get more female customers are –

1. Women are “Good banking customers”
2. Due to their lower risk behaviour, they could turn to be profitable customer to a bank
3. Women have better retention rates
4. Women build relationship and hence have deep rooted sentiment attached to the financial institutions they start with.
5. Women prefer their financial needs to be met with one financial institutions

References:

• Why financial inclusion for women is critical for shared prosperity
• Two Persistent Divides in Financial Inclusion: Gender and Rural
• 5 Challenges for Women’s Financial Inclusion
• Why the Vast Majority of Women in India Will Never Own a Smartphone
• Mobile phone usage in India
• MBAs for India’s Rural Women
• Bank Built for Women Blooms in India
• Chetna Gala Sinha—innovative activist, and a visionary banker
• India’s Vision for Technology and Financial Inclusion: Interview with Bindu Ananth of IFMR Trust
• Banking On Women: The Path To Financial Inclusion In India