Striving for Financial Inclusion: Need Women-Friendly Ecosystem

Striving for Financial Inclusion: Need Women-Friendly Ecosystem

In India, one half of the population i.e.women contribute enormously, whether it is in the formal sector or the informal sector or unpaid care work. It’s almost a thankless job for women in the family, not credited appropriately financially. Even after 75 years of independence, they still remain on the threshold of economic inclusion. This is #AlsoViolence. 

There are several flagship schemes like the National/State Rural Livelihood Mission (N/SRLM), which paves the way for women's leadership in financial terms but the objectives are yet distant and remain to be fulfilled. The reasons are lack of awareness, proper education, weak capacity/context/perspective-building mechanism and above all administrative and political will. 

As per the NFHS-5, only 38.3 per cent of urban women own a house and/or land alone/ jointly with others compare to rural women (45.7%). As per the Centre for Monitoring Indian Economy (CMIE) report Female Labour Force Participation Rate (FLFPR) is significantly lower than Male Labour Force Participation Rate. During January-April 2022, Male LPR was 66 per cent while the FLFPR was 9 per cent. While the male LPR for the age-group 25-59 years is systematically over 90 per cent, the FLFPR has never breached 20 per cent for any age group. There is an immense need to promote such a safety net for women that can assure their presence in Labour Force Participation. However, there are various initiatives being taken by the govt. but remarkable changes are yet to take place for women when seen from the gender lens.  

In a study conducted by Micro Save Consulting on financial inclusion of women (Nov 2019), there are 77% of women in India have financial services compared to earlier (before 2014); three years (2014-17) succeeded in reducing this gender gap by 14%. This move received wider appreciation and acknowledgement. However, going deeper into the Findex data presented a disappointing story that more than half of the women (ie. 42% of 77%) have dormant accounts. Collectively, 23% of women who do not have an account and 42% with dormant accounts formed almost two third (65%) of the total population. It is also surprising to note that 35% of women who are actively operating an account in a bank/ post office/ financial institution also include proxy users (ie. accounts being operated by other family members).

Suggestions for improvement: -

  1. Legal provisions are mandatory for ownership in favour of the women head of the family (as earlier ration cards under PDS were made in the name of the female head of the family).
  2. No restrictions/limitations for women in satisfying Know Your Customer (KYC) requirements at banks.
  3. No discriminatory social norms for women at banks (friendly environment such as a bank sakhee appointed in Uttar Pradesh for SHGs under SRLM).
  4. Extension and outreach services (small retail outlets of nationalised banks in villages) should be opened and preferably run by women.
  5. Open access of women to the formal labour market.
  6. Mandatory provision of financial literacy for women.
  7. More female participation (through reservation) in the financial sector.
  8. Develop digital products and services that empower women to promote digital financial services. 



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