Even though there has been a lot of development in India, and people are changing their mentality, the issue of the gender gap and financial inclusion is still there. Women still face challenges while accessing jobs, savings, or credit. No matter how educated or talented a woman is, it can still be difficult for her to become financially independent in India.
As per a study done under MasterCard’s Connectors Project, fifty-eight percent of women in India report difficulty accessing credit, savings, or jobs because of their gender. This study was done in 4 countries including India, Egypt, Mexico, and Indonesia, and in India, the highest number of women reported difficulty in accessing financial independence due to their gender.
In this write-up, we are going to discuss, why women find it difficult to access financial independence in India due to their gender and what challenges they face on daily basis. We will also discuss how it can be made easy for women to access jobs, savings, and credit. So now let’s get started.
Why is It Difficult for Women in India to Access Credit, Savings, or Jobs?
There are various reasons why it is difficult for women in India to access credit, savings, jobs, and overall financial inclusion. One of the major issues is gender inequality, as patriarchal norms in Indian society can limit women’s access to education and training, result in lower pay for the same job, and favor men over women. This can make it difficult for women to build a credit history, accumulate savings, and secure good jobs.
Additionally, many women lack financial literacy, which can make it challenging for them to navigate the complex financial landscape and access financial services like bank accounts and loans.
In rural areas, limited access to formal financial institutions like banks can further hinder women’s ability to access financial services. Furthermore, cultural and social norms can discourage women from pursuing employment or taking out loans, prioritizing household duties and childcare instead.
Addressing these challenges requires a comprehensive approach that includes education and awareness-raising, policy changes, and cultural shifts to empower women economically and create a more equal society in India.
What Barriers Do Women Face While Accessing Economic Independence Due to Their Gender?
India has come a long way. Earlier, women were not even allowed to go out or earn money due to the patriarchal society, but now, the time is changing and now most women get proper education and earn money. But even today, gender-based biasedness is still there and women face several barriers to accessing economic independence due to their gender. Some of these barriers include:
1. Discrimination in the Workplace
Women face discrimination in the workplace, including lower pay for the same job, lack of opportunities for promotion, and gender-based harassment. These factors limit women’s earning potential and make it more difficult for them to achieve economic independence.
Other than this, some women also face workplace harassment, and they are not even able to talk about it due to the fear of losing their job and their image in the workplace. This can also give them trauma for years and bad mental health which directly affect their work potential.
2. Limited Access to Education
In many parts of India, girls and women have limited access to education, which can limit their opportunities for employment and entrepreneurship. Without education and training, women may lack the skills and knowledge necessary to start businesses, pursue higher-paying jobs, or advance in their careers.
Especially in rural places and states like Haryana and Rajasthan, women are still not allowed to study and complete their education. And even though child marriage is illegal in India, women are married off even before they reach the age of 18 years and then are only allowed to do house chores.
3. Unpaid Care Work
Women often bear the brunt of unpaid care work, including childcare, eldercare, and household duties. This limits their ability to pursue employment or start businesses, as they may not have the time or resources necessary to do so.
The main reason for this is the deep-rooted patriarchal thinking, that women belong to the home or kitchen and are supposed to take care of everyone and cook food for everyone whereas men are supposed to go out and earn bread.
4. Lack of Access to Financial Services
Especially in rural areas, women do not earn money, and even if they have savings, they do not have a bank account where they can deposit their savings. Additionally, they have limited access to formal financial services like bank accounts, loans, and credit, due to which they are not able to save money. Without access to these services, women struggle to save money, build a credit history, or start businesses.
5. Gender-Based Violence
Even though there are proper laws and legal frameworks against it, women still face gender-based violence. One of the most common types of gender-based violence in India is domestic violence.
Women who experience gender-based violence are unable to pursue economic independence due to physical or emotional trauma, loss of income, and other factors. Additionally, women who are victims of violence discrimination, and stigma in the workplace and other settings.
6. Cultural and Social Norms
Cultural and social norms limit women’s opportunities for economic independence. For example, some cultures discourage women from pursuing employment or starting businesses or may prioritize men over women in inheritance and property rights.
In India, in some states and especially in rural areas, the patriarchal thinking is still persistent, and girls are not even allowed to study and complete their education. Daughters are considered a liability and are married off as soon as they reach puberty.
7. Lack of Confidence in Women
No matter how talented a woman is, even if they get a job, they are allowed to work in some particular types of professions only. For example, it is a general thinking that women are supposed to do teaching, designing, and nursing jobs, and they would not be able to work in other professions like engineering, and the army force.
This restricts the work opportunities for women and they are allowed to work in some particular fields only. There are also some other social taboos like women are bad drivers, and women cannot do technical jobs, which further decreases the work opportunity for women.
Why Women’s Financial Inclusion and Economic Empowerment is Necessary?
India is a country where women are often excluded from many aspects of society, including access to education, employment opportunities, and financial resources. This lack of access to financial resources and opportunities can lead to a cycle of poverty and inequality for women, which affects not only them but their families and communities as well. Therefore, it is crucial to promote women’s financial inclusion and economic empowerment in India.
One reason why women’s financial inclusion and economic empowerment are necessary for India is to promote gender equality. By providing women with equal access to financial resources and opportunities, we can help to bridge the gender gap and promote gender equality. Women can become financially independent, and this can help to break down barriers that prevent them from participating fully in society.
Another reason is poverty reduction. Women make up a significant proportion of India’s poor population. By providing them with economic opportunities and access to financial services, they can be lifted out of poverty and become self-reliant. When women have access to financial resources, they can invest in their families and communities, which can have a positive ripple effect on the economy.
Women’s economic empowerment can contribute significantly to economic growth in India. Women entrepreneurs can contribute significantly to the Indian economy, but they face many challenges, including a lack of access to capital and financial services. By providing them with financial inclusion and empowerment, women entrepreneurs can launch and grow their businesses.
Moreover, promoting women’s financial inclusion and economic empowerment is essential for creating a more equitable and prosperous society in India. Women in India are often excluded from formal financial systems due to factors such as a lack of documentation and low levels of financial literacy. Providing them with access to financial services can help to increase their financial stability and resilience.
All in all, promoting women’s financial inclusion and economic empowerment is crucial for creating a more equitable and prosperous society in India. By providing women with equal access to financial resources and opportunities, we can help to promote gender equality, reduce poverty, stimulate economic growth, and empower women entrepreneurs.
How It Can Be Made Easy for Women to Access Credit, Savings, and Jobs?
In the current scenario, it is very important for women to become financially independent. There are several ways to make it easier for women in India to access credit, savings, and jobs. Here are some suggestions:
1. Provide Financial Literacy Programs
Women in India often lack access to financial literacy programs, which can hinder their ability to understand financial concepts and make informed decisions. Providing financial literacy programs specifically designed for women can help them develop the skills and knowledge needed to manage their finances effectively.
2. Encourage Non-Discriminatory Lending Practices
Women often face discrimination when trying to access credit, such as higher interest rates or collateral requirements. Encouraging financial institutions to adopt non-discriminatory lending practices, such as providing lower interest rates and flexible repayment options, can help women access to credit on equal terms. As the new credit score system is helping in bridging China’s credit gap, the same can also be applied in India to see if it will make it easy for women to get credit or loans.
3. Establish Women-Led Savings Groups
Women-led savings groups can provide a platform for women to save money and access credit without relying on formal financial institutions. These groups can also provide financial education and training to their members, helping them build financial literacy and develop business skills.
4. Offer Flexible Work Options
Women in India often face challenges in finding and maintaining employment due to family responsibilities. Offering flexible work options, such as part-time work, remote work, and job-sharing, can help women balance work and family responsibilities, enabling them to access job opportunities that might otherwise be unavailable.
5. Implement Skill-Building Programs
Women in India often lack the skills needed to access higher-paying jobs. Implementing skill-building programs, such as vocational training, entrepreneurship programs, and mentoring, can help women acquire the skills needed to access better-paying jobs and become successful entrepreneurs.
6. Develop Gender-Sensitive Policies
Gender-sensitive government policies can help women access to credit, savings, and jobs. This can include policies that provide women with access to land, property, and inheritance rights. Along with this, references from some innovative ideas from foreign countries can also be taken into consideration to offer holistic development for women. For example, evidence favoring the embedded education from Zambia can also be helpful for India.
7. Encourage the Private Sector to Adopt Gender Diversity Policies
The private sector can play a significant role in promoting gender diversity and inclusion. Encouraging companies to adopt policies and practices that promote gender diversity, such as hiring more women and promoting them to leadership positions, can help women access job opportunities and advance in their careers.
8. Address Cultural and Societal Barriers
Cultural and societal barriers, such as gender stereotypes and discriminatory social norms, can prevent women from accessing credit, savings, and jobs. Addressing these barriers through awareness campaigns and education can help to create a more supportive and inclusive environment for women.
9. Provide Affordable Childcare Services
The lack of affordable childcare services is a significant barrier for women trying to balance work and family responsibilities. Providing affordable childcare services can help women access job opportunities and participate in the workforce.
10. Increase Access to Technology and Digital Literacy Programs
Technology can be a powerful tool for women to access online job opportunities and financial services. Increasing access to technology and digital literacy programs can help women develop the skills needed to use these tools effectively, enabling them to access credit, savings, and jobs more easily. This will allow us to reach the benchmarking progress toward financial inclusion.
FAQs: Frequently Asked Questions
Q1. What were the reasons women were not able to access financial resources?
There are several reasons why women in India have historically struggled to access financial resources. Here is the list of some reasons:
- Lack of financial literacy and knowledge.
- Societal norms and gender stereotypes limit women’s economic opportunities.
- Limited access to formal financial institutions and services.
- Discrimination in lending practices, such as higher interest rates or collateral requirements.
- Lack of property and land rights for women.
- Cultural expectations and responsibilities for women as caregivers limit their ability to work and participate in the formal economy.
- Limited access to education and skills development opportunities limit women’s employment opportunities and earning potential.
- The lack of affordable childcare services makes it difficult for women to balance work and family responsibilities.
- Limited access to technology and digital literacy programs hinders women’s ability to access online job opportunities and financial services.
- Limited access to government programs and policies that support women’s economic empowerment, such as microfinance programs and gender-sensitive policies.
Q2. How does gender affect a woman’s financial stability?
Gender plays a crucial role in shaping a woman’s financial stability. Women face several challenges in accessing economic opportunities, managing their finances, and building wealth. The gender pay gap, for instance, often results in women earning less than men for the same work, limiting their earning potential and ability to accumulate wealth over time.
Additionally, women often bear a disproportionate burden of unpaid care work, which can limit their ability to pursue education and training opportunities or work outside the home. Discriminatory lending practices, lack of collateral, and limited property rights can also hinder women’s access to credit and financing, limiting their ability to invest in their education, start a business, or build assets.
Moreover, traditional gender roles and cultural norms limit women’s ability to control household finances, make financial decisions, or access financial services. Overall, these factors have a compounding effect, resulting in a significant gender wealth gap and limiting women’s financial stability and independence.
Q3. What is the gender gap in financial inclusion in India?
The gender gap in financial inclusion in India remains a significant challenge, despite various efforts to promote women’s economic empowerment. Women in India face several barriers to accessing financial services, including discriminatory lending practices, lack of collateral, limited property rights, and limited financial literacy.
According to a study by the World Bank, only 26% of women in India have an account at a formal financial institution, compared to 46% of men. Women are also less likely to have access to credit and insurance, limiting their ability to invest in their education or start a business. This gender gap in financial inclusion has broader implications for women’s economic empowerment, including limited employment opportunities, lower earnings potential, and limited ability to save or invest.
Addressing this gender gap in financial inclusion in India requires a multi-faceted approach, including efforts to increase financial literacy among women, promote gender-sensitive policies, and address systemic barriers to women’s access to credit and financing. India can also take some examples from applying behavioral insights inside Latin American financial institutions, and try to work on the behavioral implications.
We cannot deny the fact that women still face difficulty in getting jobs, credit, and savings in India. Addressing the systemic barriers will require a comprehensive approach that involves the government, financial institutions, and civil society organizations working together to create an enabling environment for women’s economic empowerment.
- Jonas Taylor is a financial expert and experienced writer with a focus on finance news, accounting software, and related topics. He has a talent for explaining complex financial concepts in an accessible way and has published high-quality content in various publications. He is dedicated to delivering valuable information to readers, staying up-to-date with financial news and trends, and sharing his expertise with others.