I. Women Empowerment in Financial Services- Gender Imbalances(Source:The Hindu February 26th 2017)

Merely opening accounts for women will not ensure equality. Changing attitudes will address gender imbalance in financial services.

If simply having women running the show was the answer to addressing the vast gender imbalance prevailing in the financial services sector, the issue should have been solved without taking recourse to creating a special bank run by women. After all, India’s largest nationalised bank is run by a woman. So is India’s largest private sector bank. Infact, women led banks in India both nationalised and private sector control an estimated 40% of assets in the banking sector. This is the highest proportion in the world – no other country comes even close. So, if having women in charge was the answer, the issue of gender inequality in financial services should have been solved long ago.

Infact, the biggest measure this government or indeed any government that we have had so far has taken towards redressing the gender imbalance in financial inclusion has been simply ensuring that more women have a bank account to start with. From 39% of women having bank accounts before the Pradhan Mantri Jan Dhan Yojana kicked off, the figure jumped to 61% of women within a year. This has been the largest single-year narrowing of the gender gap in banking achieved in any country in the world. However, dormancy in the accounts are to be avoided and brisk operations should be ensured.

Lack of financial literacy is one big factor. A 2015 Standard & Poor’s survey on financial literacy found that 80% of female respondents in India were financially illiterate. There is also a huge ‘digital divide’with only 44% of women having a cell phone compared to over two-thirds of men in India. According to reports, women own one-third of small and medium enterprises (SME’s) but only 6% of the SME banking portfolio is allocated to women. According to reports, women in emerging markets face a global credit gap of $260-$320 billion. Other things being equal, the rejection rate for loan applications from women run SME’s was twice that of male run ones.

According to the latest national family health survey it is heartening to note that women having more say in money matters has witnessed an impressive jump as follows:

Healthier, Wealthier and Connected-Chart 1

Women are more influential, own more assets and communicate far more freely than a decade ago (in %)- (Source: National Family Health Survey)

As per National Family Health survey findings, 84% of married Women are part of decision making.

Leap Forward-Chart 2

Seeing an opportunity

Contrast this with the microfinance sector, especially self help groups, where a majority of the customers are women. By simply viewing women as being worthy of taking a financial bet on, the fortunes of millions of poor families have been transformed. An astonishing 97% of the customers of Bandhan Financial Services, India’s largest microfinance institution which has just turned into a bank, were women. The MFI sector’s bad loan portfolio is smaller by several multiples than that of the traditional banking sector

What is the difference? They saw in these women what organised banking – regardless of whether it is run by women or not – did not: an opportunity.

Conclusion:

It can now be concluded that women when empowered can add value to their family and the nation as a whole by being financially literate

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