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    View: India cannot attain its goal of inclusive growth if financial independence of rural women is ignored

    Synopsis

    The inequity is reflected in the human development standing, for the two are closely correlated. Despite being one of the fastest-growing economies, India ranks 131 out of 189 countries on the Human Development Index. It follows, therefore, that plugging the gender gap and making women financially independent are imperatives — not just to improve the ranking, but for a desirable social compact.

    ​Helps rural women entrepreneursiStock
    Three out of every four women aged 15 years and above in India are not financially independent. And female labour participation rate has been falling steadily and stands barely above 20% today.

    The inequity is reflected in the human development standing, for the two are closely correlated. Despite being one of the fastest-growing economies, India ranks 131 out of 189 countries on the Human Development Index.

    It follows, therefore, that plugging the gender gap and making women financially independent are imperatives — not just to improve the ranking, but for a desirable social compact.

    By most accounts, financial independence is linked with the opportunity and capacity to earn, though not limited to those.

    If you ask Rashmi Devi, a resident of Alwar district, Rajasthan, she will say, “It is the power with which I was able to purchase my very own motorbike, allowing me to work independently and efficiently for the past six years.”

    For Poonam Devi, who works in Mewat district in Haryana, financial freedom is all about “bringing people out of poverty and enabling them to create small financial goals for themselves.”

    Implied in these definitions is the notion of financial awareness. Even a woman who works and earns may not be financially independent if she is not financially aware and does not have other concomitant freedoms to exercise that awareness.

    Statistics, too, bears this out. The recently launched FINDEX by The World Bank shows, 76.6% of women in India were ‘financially included’ in 2017, i.e., were registered within the formal banking channels. The gender gap in account ownership had dropped to 6%, down from 20% in 2014, largely attributable to the Pradhan Mantri Jan Dhan Yojana (PMJDY) launched in 2014.

    As of July 27, 2022, 461 million PMJDY accounts had been opened, of which 55.6% belonged to women.

    But 32% of women account holders reported not using their account, as opposed to 23% of male account holders. In addition, only 20% of women reported owning a debit or a credit card, as compared with 35% of men folk, according to the report.

    The same report also points out that India, only next to China, is home to the world’s largest population of unbanked individuals (190 million out of the total 1.7 billion in 2017). Women constitute ~60% of these unbanked adults.

    For India to realise inclusive growth — which, for reasons of rising inequalities and concentration of power is becoming harder and harder to ignore — financial independence, awareness and empowerment of women are all key.

    The first, in large part, needs public policy support. Policies that focus on increasing the labour force participation of women in quality jobs are paramount.

    Two, such policies should be accompanied by widespread efforts to spread financial literacy. For instance, women need to be made aware that they could save in formal and safe channels, be able to freely articulate their financial goals and opt for various products tailored around them, avail of credit for productive purposes, and secure their future and old age.

    Three, all that knowledge needs to lead to positive behavioural change in financial practices.

    It is in the second and third areas that companies, through their corporate social responsibility (CSR) programmes, can coordinate with government efforts to achieve quality and scale of financial awareness among the rural masses.

    For instance, CRISIL’s flagship CSR programme in Assam and Rajasthan called Mein Pragati started out with the aim to empower rural women and their households by strengthening their financial capabilities.

    The quality of this work led the Reserve Bank of India (RBI) to empanel CRISIL Foundation (CRISIL’s CSR arm) for its MoneyWise Centres for Financial Literacy (CFL) project in 2017, starting with 20 centres in Maharashtra and Haryana as a Proof of Concept (PoC). Today, this has been scaled up to cover over 60,000 villages across 429 blocks of 234 districts in 18 states and union territories. The work is supported by the RBI, 10 public sector banks and the National Bank of Agriculture and Rural Development (NABARD).

    The learnings from this partnership are immense and can be summed up in 5Cs: coordination, which starts with clearly defining areas of priority; collaboration, by defining the contours of the partnership and delineating each one’s role; communication, through open and transparent channels; convergence, by building community level institutions to bring together like-minded stakeholders with common objectives towards financial awareness & inclusion, and women empowerment; and customisation, whereby there is recognition that programme will need constant fine-tuning based on the local milieu and other factors.

    A leaf from young Afrooza Bano’s life helps us glimpse what difference one such partnership can make. Afrooza hails from Doda district in Jammu & Kashmir. Armed with the requisite financial knowledge, she took a loan of Rs 2 lakh from the bank to build her own embroidery business. Gradually, she has expanded her business by bringing in 10 more women from her community.

    Financial awareness also brought Vitthal Kavale, a resident of Kothari Khu village in Maharashtra, closer to securing his 5-year-old daughter’s future. A daily wage agricultural labourer, whose income barely suffices to make ends meet, Kavale badly wanted a better life for her. On hearing about the Sukanya Samriddhi Yojana from CRISIL Foundation, he started investing little by little in it. Today, he is a proud and happy father, who can look forward to seeing his daughter cut a new path for herself.

    Now imagine what a multitude of companies and governments can do together.

    (Maya Vengurlekar is the COO of CRISIL Foundation, the CSR arm of CRISIL Ltd)


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