77 mn women added  to banking system 

As many as 358 million Indian women (61 per cent) have bank accounts, up from 281 million (48 per cent) in 2014, the biggest jump for “banked” women among eight South Asian and African countries surveyed by Intermedia, a global consultancy.

The survey revealed that more women in India are financially included than ever before, and women closed the gap with men by four percentage points, the quickest among all the surveyed countries. However, finer details on their participation in the banking system are not available because the government is not releasing data on other financial-inclusion indicators.

“Financial inclusion among women in India and Bangladesh is driven primarily by access to bank accounts while most Tanzanian women rely on mobile money for their financial needs, a trend that was enabled in part by greater mobile phone ownership and ‘text savviness' among women in Tanzania, compared to India or Bangladesh,” Nathaniel Kretchun, Senior Associate Director, InterMedia, told IndiaSpend. “The gender gap persists despite positive growth in all countries.”

India and Tanzania have successfully reduced the gender gap over a year (2014 to 2015) -- from 12 per cent to 8 per cent in India and 11 per cent to 9 per cent in Tanzania. Inclusion among women in Bangladesh grew in absolute terms, but the gap between men and women grew from 3 per cent to 10 per cent over this period.

Although a greater proportion of Indian women have access to financial services than before, “very few” rely on formal financial services to save or borrow compared to Tanzania or Bangladesh, said Kretchun. “This indicates that Indian women with access to formal financial services do not engage with them fully, and instead continue to rely on informal means to meet some financial needs,” he said.

This finding is in line with the larger tendency of Indians to rely on informal sources, such as moneylenders, friends or family. For instance, while the flow of credit to the agricultural sector increased, the share of small loans from formal institutions has steadily declined, IndiaSpend reported in July 2016.

The Pradhan Mantri Jan Dhan Yojana (PMJDY) or Prime Minister's Programme for People's Bank Accounts, has largely been responsible for the growth of financial inclusion in India, said Kretchun. Over 21 months, deposits in what are called “Jan Dhan”, or basic savings, accounts grew 118 per cent, IndiaSpend reported in June 2016.

“What's interesting is that despite the fact that the programme was not targeted at women, financial inclusion among women has grown at a faster rate than among men under PMJDY,” said Kretchun. One explanation is that very few women had a bank account to begin with (in 2013, before PMJDY, only 39 per cent of women had bank accounts, compared to 55 per cent of men). “Thus, it had more room to grow,” said Kretchun.

“It is also likely that by requiring banks to provide accounts and advertising the existence of those accounts, the programme lowered social barriers to access, which disproportionately affected women.” No open data on banked men and women: A policy challenge But PMJDY is one part of the financial system. There are other indicators which require evaluation to monitor the progress of financial inclusion.

“It is heartening to see that the PMJDY Mission Directorate has progressed from monitoring only the number of accounts to tracking a number of indicators,” Sumita Kale, chief economist at Delhi-based Indicus Analytics, wrote in Business Standard in May 2016.

By Saumya Tewari