In an age of globalisation where not only do villages blend into towns which further blend into cities, there emerges a collective conscience. A collective need for something unifying. One such thing has been the steady need of financial independence for women.
76 years after India’s independence, there remain some major challenges when it comes to financial independence for women. Some of the indications are in clear sight : the number of women who own small businesses (often a marker of not only financial agency but huge generators of employment themselves) and the access to financial services.
Let’s examine these aspects.
Businesses and enterprises owned by women
As per the annual report by the Ministry of Micro, Small and Medium Enterprises for the year 2019-20, only 20.4% of the proprietary concerns were run by women. Not only that, the pandemic hit 90% of women entrepreneurs saw a decrease in income post-covid.
This is important because of the opportunities entrepreneurship and enterprise generate for women. When they are in control or in steering positions of MSMEs, it translates into better outcomes not only economically but also socially.
These figures currently reflect the urgent need to encourage more women towards enterprise.
Access to financial services
The numbers are more encouraging in this particular aspect. The percentage of women who have a bank or savings account used by themselves is now 79 percent, according NFHS-5.
There is also an indication that there remains a gender digital divide. Only 22.5% of women with mobile phones use them for financial transactions.
The aspect of access to financial services goes beyond access to banking. It is also about access to services that enable women to save more and gain financial literacy about various services like credit access and insurance among others.
The bigger picture
Financial independence for women, especially in rural India means moving towards equity and equality in not just access but also usage of financial services.
Usage of credit services, for instance, remains low for women in India. According to Global Findex 2021 data, the percentage share of women who borrowed formally in the year prior to the survey was at a low 10%.
When public policy along with interventions by formal institutions like banking and fintech come together to tailor solutions for women, we will enable true financial independence.
Rang De’s role in democratizing access to financial services
As Rang De, a RBI backed peer-to-peer lending platform, we have reached thousands of women who are often first-time borrowers. Getting a Rang De loan opens the doors to multiple opportunities and better income for them. The interest rate charged too is affordable - between 4-8% per annum. In addition to customizing our loan product according to women’s requirements of tenure, amount and interest rates, we also run our financial literacy program - Swabhimaan. Swabhimaan introduces women from underserved communities to the fundamentals of personal finance, responsible borrowing and usage and operation of their bank accounts. Not only this, the program also helps women get acquainted with using phones for banking operations.
We wholeheartedly support a gender-sensitive approach to lending and credit, especially in rural India. We hope the efforts of organizations like ours coupled with policy directives and changes in the way women interact with formal banking will truly set them free.