Technological interventions in the financial sector have brought much ease, access, and convenience for end customers. All thanks to the internet and mobile penetration in the remotest of the towns of India. But this raises a very important question, whether this revolution is widening or narrowing the gender gap? From the top, it appears that due to the lack of access to mobile phones/smartphones for women and low agency of women in underserved geographies, this revolution will create more gender divide. We will try to explore this in a moment.
Understanding digital finance
Digital financial services are financial services (e.g., payments, remittances, savings, credits, etc.) accessed and delivered through digital channels, including mobile devices and debit cards. DFS accounts may be established with banks and nonbank financial institutions, such as mobile network operators, microfinance institutions, and fintech firms. DFS transactions are distinct from cash transactions in that they require formal accounts associated with individuals whose unique identity has been authenticated. Thus, DFS transactions leave a data imprint and that is very useful for vigilance and making decisions by govt.
The state of gender inclusion in the finance services
In 2005-06 only 15.1 percent of women had a bank or savings account that they used for themselves. A decade later, in 2016-17 the percentage went up to 53 percent and now as per the NFHS-5 in 2019-21 it has reached about 78.6 percent.
While these numbers are wonderful, it is not apt to give credit to one intervention for that. Though schemes like Jan Dhan Yojana have been a big booster, other interventions like the Direct Benefit Transfer scheme, the Banking Correspondent model, and then demonetization, which led to unprecedented rise of digital or cashless transactions, helped to drive financial inclusion.
Digital finance and women's economic empowerment
One way to gauge women's economic empowerment is by looking at women's labor force participation, safety, access to resources, time use, etc. For instance, the women who participate in the prominent job scheme - Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) open bank accounts, receive training on operating the bank account, get their wages deposited in it, and are more likely to be active part of the labor market versus those women without the direct deposits. Also, it has been evident digital finance could amplify the impact of other interventions aimed at women's economic empowerment i.e., access to Agri inputs, credit schemes, maternal health & nutrition programs, poverty graduation programs, etc.
The significance of Fintech on bridging the gender gap
Urbanization is increasing across India & bringing in the gig economy in the peri-urban parts too. Earlier women had barriers to work opportunities due to lack of awareness, less agency to take decisions, no mobility, etc. but these factors are all slowly diluting away. Edtech and social media have also played a role in this, making learning easier than ever. Today women are actively looking to be part of the informal or formal workforce due to massively improved public systems. The initial distrust on digital services and the apprehensions related to financial security due to low financial & digital literacy level are melting now. Due to the advent of UPI & its massive proliferation - customers are sensitizing themselves to digital economy and seeing it as a means to gain benefits from reduced costs & increased reach.
This economic development is also fostering expansion of digital banking - fintech startups or neo banks are also tapping into the emerging rural markets to support diverse sectors from Agri to healthcare to consumer durables to personal finance. It has led to democratization of credit for women too.
The change has begun
It is evident that all the technological interventions being made in finance in the country today, is increasing adoption, lowering the cost of financial transactions, saving time, bringing transparency, and reducing the opportunity cost, with the result that the access to finance has increased significantly. And innovating on specialized interventions for women will not only negate the gender gap but will also aid in women's empowerment.
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