![<p>Image used for representative purpose</p>
<p>“/><span>Image used for representative purpose</span>Clare Boothe Luce, the 20th-century playwright and US politician, was on to something when she said, “A woman’s best protection is a little money of her own.” However, in a country like India — with such diversity in geography, society and demographics — the concept of money can get a bit complex, especially for women.</p>
<p>Women’s financial inclusion is particularly important because it helps achieve three outcomes: More equality, empowerment and better business results.</p>
<p>So, what’s driving this change? “A factor that seems to have contributed to this progress is the increasing number of women in the workforce,” says Arnika Dixit, president – branch banking, Axis Bank. Financially independent women in the workforce tend to fulfil their monetary goals and actively manage their own and their family’s finances.</p>
<p><strong>Driving a change</strong></p>
<p>“Women’s financial needs may not be fundamentally different from those of men, but it is important to recognise and address the specific challenges and considerations that women face,” says Shoma Narayanan, MD and head of group strategic marketing communication, DBS Bank India. Women currently make up 29% of the bank’s total customer base. About 35% of its high-net-worth individuals are women.</p>
<p>Experts agree that in terms of major financial needs that arise in a typical lifetime, men and women share similar aspirations — saving for retirement, purchasing a home, funding their children’s education, managing unexpected expenses, etc. But women can also have additional financial responsibilities like taking care of children and managing household work, which involves taking time off work, affecting their income and earning potential.</p>
<p>In addition, women also have unique investment preferences and financial risk tolerance levels, Narayanan adds.</p>
<p>A Manimekhalai, MD and CEO, Union Bank of India, agrees. Improving access to financial services for women is crucial, she feels, in addition to tweaking existing products to suit women. “These tweaks could include more flexible repayment schedules for loans, concession in collateral requirements, providing financial literacy programs targeted at women, etc,” she explains.</p>
<p><strong>Women at the forefront</strong></p>
<p>YES Bank, which has about 17 lakh women customers, is actively targeting women with its offerings, shares its executive director Rajan Pental. “Our bank’s efforts are primarily geared towards empowering women from low-income and marginalised communities,” he says.</p>
<p>Apart from women needing customised products based on their gender, their socio-economic backgrounds and life stages need careful consideration too. For banks, these demographic cuts are reflected in several offerings for female customers. Some examples include savings accounts that automatically transfer idle funds into fixed deposits, a debit card leaning towards higher cashback, loyalty points for women customers, discounts on locker rentals and preferential pricing on loans or flexible repayment options on loans.</p>
<p>“We’ve observed that women have an affinity towards safe investment options like fixed deposits,” Pental says, adding that 65% of women with active balances have invested either in fixed or recurring deposits. Other preferred products include credit cards, life insurance, trading and demat services and lockers, he adds.</p>
<p>Typically, however, women who are just starting their financial journeys prefer secure investments like fixed deposits and savings accounts, Dixit says. “As they gain more experience and understanding, they may explore other asset classes that offer the potential for higher returns, such as stocks and mutual funds,” she notes.</p>
<p>“The contribution or share of women taking loans has steadily grown over the years,” says Ravi Santhanam, group head, CMO and head, direct to consumer business, HDFC Bank. “We have seen the fastest growth in consumer durable loans — more than 85% growth in five years — followed by the business loans segment that has seen a 26% growth across five years, and then the two-wheeler loans segment that witnessed a rise of 13% across the same period,” he says.</p>
<p>DBS’s Narayanan says, “As women progress through different life stages, their long-term financial priorities undergo a notable evolution. For individuals aged 25 to 35, buying or upgrading a home often takes precedence, while those in the 35 to 45 age bracket typically prioritise investing in their children’s education.”</p>
<p><strong>Demographic designs</strong></p>
<p>The urban woman’s financial behaviour is quite different from those in rural and semi-urban places, especially if she’s an entrepreneur. Vaibhav Sharma, director, consulting, Deloitte India, explains, “Several urban women entrepreneurs rely on working with their family — husband or parents — where they [the family] primarily own the product.”</p>
<p>While managing the finances might be a shared activity between these women and their spouses, Sharma says almost all urban entrepreneurs independently operate their bank accounts and use mobile apps.</p>
<p>On its part, the Indian government has launched a few financial inclusion and financial literacy initiatives to help women become more financially aware and empowered. These include the Pradhan Mantri Jan Dhan Yojana (PMJDY), which provides access to banking services such as deposit accounts, remittances, credit, insurance and pensions, especially to the poor and marginalised.</p>
<p>Dixit says that there is evidence that women Jan Dhan customers are more profitable than men as women are committed savers. Sharma validates this, calling them “trusted borrowers”. “This might be because women are more comfortable sharing their personal requirements and life-stage issues,” he says.</p>
<p>The Pradhan Mantri Mudra Yojana (PMMY) is another government scheme that provides financial assistance to micro and small enterprises. Then there’s the Mahila Samman Saving Certificate, a recent initiative to boost women’s financial inclusion. Banks too are doing their bit to boost women’s financial empowerment, particularly in rural areas. Self-help groups (SHGs) emerge as a vital instrument in this endeavour.</p>
<p>“SHGs are instrumental in improving women’s access to credit, fostering a culture of savings and facilitating income-generating activities,” explains Manimekhalai.</p>
<p>Rural and semi-urban female customers, who typically have a small child and handle multiple familial responsibilities, also prefer the flexibility of doorstep banking, reveals Sharma. “Many rural women take micro-finance loans wherein they’re more comfortable paying the instalments at their doorsteps. They prefer this over a faceless digital transaction,” he adds.</p>
<p>Women from this demographic typically like their last-mile banking service to be empathetic, customised and in-person. Since they tend to run their businesses from home, they are unable to adhere to a bank branch’s timings. Even digital banking can be a challenge since many women tend to use their husband’s mobile phones, which are unavailable during the day. “Schemes like BC (business correspondent) Sakhi, where women from SHGs are trained to help members with banking services, are extremely useful,” says Sharma.</p>
<p><strong>Overcoming roadblocks</strong></p>
<p>But despite the progress made, a lot more can be done to help women embrace finance. Depending on the demographics, there can be problems like lack of financial literacy, limited mobility or access to formal identification, a gender pay gap and patriarchal cultural norms that restrict women from taking charge of their money. “Women found the terminology and the world of finance so complex that they inherently gave all their earnings to the man of the house to deploy,” says Manisha Girotra, CEO, Moelis and Company.</p>
<p>Demystifying the world of finance is a great first step to making banking more inclusive for women, she says. “This can be done by putting up online tutorials or courses, by using technology to find ways to get women comfortable with the business of investing or by getting wealth managers to do teach-in sessions,” Girotra suggests.</p>
<p>For women entrepreneurs in rural and semi-urban areas acquiring loans, showing collateral, a lack of access to digital banking services and a lack of relationship management pose a common challenge. “This is difficult for women entrepreneurs more than men because the property [or assets for collateral] might not be in the woman’s name,” says Sharma, suggesting banks look at non-collateral and non-secured loan products.</p>
<p><strong>Selling money to women</strong></p>
<p>Banks also need to invest in marketing to the female customer. Currently, common strategies include educating women about financial products, using targeted digital campaigns, organising workshops and partnerships with women-centric organisations, says Pental.</p>
<p>Collaborations with influencers and community leaders also play a crucial role in building trust and reaching a wider audience. Messages to women audiences need to be tailored to address specific financial needs and concerns; this goes a long way in fostering a connection.</p>
<p>Santhanam surmises, “The bigger task is to make the overall population more open to women managing money on equal standing with men. We leverage opportunities on platforms like social media to promote the role of women in money management.”</p>
<p>With inputs from Shannon Tellis</p>
<p><img decoding=](https://etimg.etb2bimg.com/photo/108251600.cms)
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- Published On Mar 6, 2024 at 08:06 AM IST
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