Financial empowerment will help bridge gender gap fast. However, globally, 35 per cent of women are estimated to be financially excluded. 0.7% of women in rural areas and 81% in urban areas had deposit accounts in banks. This is an improvement over the 77% of women estimated to own bank accounts in India, as reported by the last Global Findex Report (2017). The male-female gap in bank account ownership has reduced over the past few years thanks to the roll-out of Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. Currently, a little over half of Jan Dhan account holders are women. But access to financial services in itself is not financial inclusion. According to various research reports, 55% of women still don’t actively use their PMJDY accounts.
India has among the lowest female labour force participation rates in the world, at under 20%, having fallen to almost 16% in the pandemic-hit second quarter of 2020-21. Low usage of financial services can be attributed to low labour force participation and low earnings.
20% of rural women have reported having debit or credit cards, compared to 64% of men. There is a 17% gender gap in card ownership even in urban areas. In India, the ownership of mobile phones by women is 20% less than that by men, and the usage of mobile internet is 50% less. In addition, only 14% of women in India are found to own smartphones. This significantly deters access to and the use of mobile-based digital financial services by women.

Reasons

• Lack of education is one of the major factors hindering women’s access to institutional finance. Without adequate literacy, it is very difficult for men and women to understand and appreciate the role of formal finance in their lives. This often results in their reluctance to avail themselves of the savings and loan products from financial institutors.
• Some level of basic education is essential to enhance financial literacy. However, the scenario on female literacy is not encouraging.
• practice of getting the female children married before they are economically independent
• along with early motherhood, makes them entirely dependent on the husband or in-law’s family.
• women are not allowed to go to a bank which is generally staffed with more men. Women also often do not have control over the assets they own as they are controlled by her male relatives.
• In a patriarchal society, it is the sons who inherit the ancestral property.

Need for female financial inclusion

• It is vital to both women’s empowerment and poverty reduction to provide low-income women with effective and cheap financial instruments to save and borrow money, make and receive payments, and manage risk.
• According to the Global Findex statistics from 2017, 83 percent of males over the age of 15 in India had a financial institution account in 2017, compared to 77 percent of girls. This is due to socioeconomic variables, such as the availability of mobile phones and internet data, which are greater among males than women.
• Women’s engagement with financial institutions, as well as their ability to participate in work and obtain credit from such institutions, can help them build social capital. Thus, financially empowering 230 million women Jan Dhan customers has the potential to improve the lives of 920 million people, based on a family of four.
• Building Financial Resilience: Women are the primary decision-makers in most low-income homes when it comes to spending and saving. As a result, they are more dedicated and disciplined savers than males. Many studies have demonstrated that when women are given the chance to save, they do so and acquire financial resilience as a result. As a result, banks may profitably target women while also contributing to societal good.

Measures

• Improving women’s literacy levels must be the first priority for enhancing their financial inclusion.
• Crediting women’s salaries directly to their bank accounts will increase their financial empowerment.
• launching of exclusive bank accounts for girl children, e.g., Sukanya Samriddhi Yojana
• Women have to be made aware of their rights to access financial services. There must be greater awareness and enlightenment among men too to bring about greater gender equality.
• Financial literacy is perhaps the most important factor in achieving universal financial inclusion.The Reserve Bank of India has launched a scheme called Project Financial Literacy in this regard. The project’s goal is to provide knowledge on the central bank and basic banking principles to a variety of audiences, including school and college students, women, the rural and urban poor, military people, and older residents.
• Gender-Disaggregated Data: Financial service providers must use gender-disaggregated data to develop strategies that target the Jan Dhan women segment. Women should be targeted and communicated with, and goods and procedures should be designed with them in mind. Collecting and analysing gender-disaggregated data is critical for the development of products and services for low-income women at the policy level.
• Design changes that take into consideration women’s special requirements and preferences can improve women’s access to financial products and the impact of such products on their capacity to make investments and smooth consumption in the face of income shocks.
• Women’s financial products that provide them more control and privacy over their earnings and spending decisions look to be particularly promising.

All these, combined with the availability of relevant data and information, will further help in designing tailor-made financial products and services for women which will, in turn, augment their financial inclusion.

https://www.thehindubusinessline.com/opinion/empowering-women-through-financial-inclusion/article65214339.ece

How to structure

1. Give an intro about the state of financial freedom of Indian women. Give a small comparison with urban and rural
2. Explain the reasons why women are not financially empowered when compared to men- try to give multiple angles into the reasons you give.
3. Suggest measures to empower women and also mention any government initiatives
4. Conclude