India’s banking and financial institutions have digitally transformed themselves in the recent past, in order to take banking to the doorstep of a majority of India’s population.
The government’s push for financial inclusion through the Pradhan Mantri Jan Dhan Yojana (PMJDY), has ensured that India saw 37.3 crore bank accounts as of October 2019, according to a PwC report entitled ‘A wider circle’ focusing on digital lending and financial inclusion in India. Along with the PMJDY scheme, the push for Digital India and Aadhaar have ensured greater financial inclusion among women and rural population in the country.
The Global Findex database publishes a report once every three years, and is a comprehensive account of borrowing, saving, and payments behaviour of people across the globe. The reputed database, last published in 2017, points out that between 2014 and 2017, India accounts for 55 percent of the over 51 crore new bank accounts opened across the world. This timeframe is also significant because of the adoption of smartphones and internet connections, which have made payments and receiving money easy. According to the Global Findex 2017 report, the introduction of biometric identification or Aadhaar has been responsible for ensuring financial inclusion of women. On this front, the report further adds that in 2014, the gender gap was 20 percent while that reduced to 6 percent at the time the report came out. This can only mean good news for women empowerment.
How does digital finance ensure women empowerment?
Digital finance becomes imperative so that more women are brought into the ambit of banking and empowerment. Whether it is digital mode of payments such as the united payments interface (UPI) or mobile wallets or the use of cards and mobile banking, awareness campaigns are the need of the hour. As more banks, especially in the rural areas digitally transform themselves, and more NGOs and, government bodies create awareness and bring about financial literacy among women, there will be greater empowerment.
The Reserve Bank of India (RBI) has also recently launched a National Strategy for Financial Inclusion, which has a roadmap charted out till 2024. Recommendations as part of the strategy report include provision of banking facilities to every village that lies in a five-km radius of the bank’s branch or any hamlet with 500 households in the hilly regions. The strategy also emphasises the need for financial literacy for women, senior citizens and young adults in such regions. More importantly, the report stresses the need for strengthening digital financial services and creating awareness on digital modes of payments, while also stressing the need for privacy and consent.
FinTech boost to women empowerment
Thanks to the emergence of FinTech or financial technologies, many fintech firms provide solutions to Micro, Small and Medium Enterprises (MSMEs) in India. MSMEs are instrumental in providing livelihoods to many women across the country, and also encouraging more women to become entrepreneurs. Thanks to digital finance and the emergence of FinTech solutions, it becomes easy for women to get more comfortable with the mobile interface for their everyday accounting or banking needs. FinTech solutions can be adopted by banks in both urban and rural areas to provide women tailor-made solutions such as medical insurance or savings schemes.
There are many hurdles for women among some sections of society when it comes to financial inclusion. These hurdles could be in the form of lack of literacy, wage disparity, and patriarchal norms. Many women may be working in the unorganised sector which leaves them even more vulnerable. Financial inclusion and decision making is still far from being accomplished even in urban areas and among highly qualified women. For this to be accomplished, all stakeholders, including the government, non-governmental bodies, FinTech solutions providers and banks need to be involved. Government schemes towards greater digital and financial literacy will help. The availability of cheap internet and smartphones will only ensure that more women have access to financial solutions at their fingertips.
Digital finance and greater inclusion of women would also ensure development on other fronts — as more women gain access to financial solutions, they become equal stakeholders in decision-making and stake claim to greater participation on every front. Financial inclusion is the first step towards socio-cultural change in society as well.
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