The pandemic has accelerated digitalisation, which can be used as an opportunity to bridge the gender digital divide in India.
It is no news that the Fintech industry in India is booming. Globally, the Fintech adoption rate of India stands at a mighty 87 percent, second only to China. The factors working behind the promising numbers are increased smartphone usage and improved internet penetration which make Fintech more accessible. But is this digital inclusion gender sensitive in addressing the vast rural urban divide in India? The numbers paint a grim picture. The real economic repercussions to this gender agnosticism drastically affect the Fintech industry. According to the GSMA’s Mobile Gender Gap Report 2021, women are 9 percent less likely to be financially included in the least developed countries and are 7 percent less likely to own a phone than men. In Indian cities, the percentage of women who have had exposure to the internet stands at 56 percent while the figures in rural areas are as low as 34 percent, reports the National Family Health Surveys-5.
The UNCDF’s Inclusive Digital Economies and Gender Equality Playbook regards digital and financial inclusion as one of the key drivers for women’s economic empowerment and agency—it enhances access to income and assets, grants control over economic gains and the power to make financial decisions. The pandemic has obviously exacerbated the existing financial inequalities by cutting out safety nets or fall-back measures. With the sudden shift of chief commercial activities and commerce online, the digital economy seems to be the way ahead to manoeuvre in a virtual space. The need for closing the gender digital divide has never been more pressing, and Fintechs seem to be already taking a lead in areas of financial inclusion through microfinance. Equitably assimilating women’s requirements into the Fintech industry by tackling the unique socio-economic and systemic challenges faced by them is an economic imperative.
The UNCDF’s Inclusive Digital Economies and Gender Equality Playbook regards digital and financial inclusion as one of the key drivers for women’s economic empowerment and agency—it enhances access to income and assets, grants control over economic gains and the power to make financial decisions.
While the massive advancements in Fintech are an urban reality, it is still a hassle for significant rural populations to seamlessly access Fintech. Twenty three percent of Indian women remain financially excluded and a vast 42 percent of the financially included are dormant account holders. Though India has been making strides in leading gender responsive financial inclusion initiatives with schemes like Pradhan Mantri Jan Dhan Yojana 2014, which managed to bring down the gender gap in financial services from 20 percent in 2011 to 6 percent in 2017, it still needs to deal with the gaping divide in digital access that limits women’s ease of access at a policy level, especially so during a pandemic when physical realities are highly altered.
A brief exploration of the structural challenges faced by women would very easily lead us to repeated patterns that aren’t yet redressed by the policy-level financial inclusion schemes that are in place. Some of these challenges are social, such as the lack/control of mobility and the gender roles imposed on women to limit their economic participation and restrict earning and saving opportunities, while others are market constraints, such as low digital literacy, low entrepreneurial skills or market information, lack of personal collaterals or credit history. Factors like restrictions on in-person mobility and loss of employment have increased limitations of already underbanked groups such as women, making them more vulnerable. Other structural gaps lie in the ownership of ID documents, levels of mobile handset and internet access. These challenges should be redressed through thorough accounting of the nature of gaps using gender aggregated data and development of befitting schemes to troubleshoot biases and blind spots.
Factors like restrictions on in-person mobility and loss of employment have increased limitations of already underbanked groups such as women, making them more vulnerable. Other structural gaps lie in the ownership of ID documents, levels of mobile handset and internet access.
The COVID-19 predicament provides an opportunistic window to leverage benefits of technology and to stall a replication of the biases of the physical world in the digital one. Despite the increasing economic agency and access of women, they still appear to be an underserved lot in financial terms. ‘Approaches that may appear to be gender-neutral in fact default toward men’s needs and preferences’, Therefore, Fintechs need to invest more in Research and Development (R&D) to unearth distinctive challenges faced by women. They need to forge newer gender-sensitive approaches to redress structural challenges faced by women and cater specifically to them through tailor-made financial services that understand their needs and savings strategies.
A Harvard Business Review study revealed women spend 90 percent of every dollar earned into building human resources like education as compared to only about 40 percent done by men. At this juncture, when digitisation has certainly been accelerated by three to four years due to the pandemic, fintech armed with digital innovation can intervene in the arena of microfinance institutions that cater specifically to women through Self Help Groups (SHG).
The ‘Power of Jan Dhan: Making Finance Work for Women in India' report states that by serving 100 million low-income women, public sector banks in India can attract approximately INR 25,000 crore in deposits while financially empowering 40 crore low-income Indians.
The huge number of startups in the Fintech industry have the capacity to mutate their models and get innovative in their reach, impact, and problem-solving efficiency. Mann Deshi Foundation is one such organisation working towards national and international level of banking and financial inclusion of rural women in India. One of the cornerstones of the Mann Deshi is to promote doorstep banking services and promote digital banking for women. It works with an objective to empower women entrepreneurs with knowledge, skills, and access to capital. In a recent example, the internet giant Google, through its Women Will platform, pledged to help 100,000 rural women entrepreneurs in financial and digital literacy. An article in Mint quoted Google CEO Sundar Pichai, “When women have equal access to opportunity, we all benefit from their perspectives, creativity, and their expertise, and this is true all over the world. Yet, when it comes to accessing opportunity, deep inequalities persist. Building on the Internet Saathi programme success, we’re making a new commitment to help 1 million women in rural villages in India.” The vision has been launched in the five northern states of Himachal Pradesh, Uttarakhand, Uttar Pradesh, Bihar, and Rajasthan where the national averages on gender parity are the least. The ‘Power of Jan Dhan: Making Finance Work for Women in India' report states that by serving 100 million low-income women, public sector banks in India can attract approximately INR 25,000 crore in deposits while financially empowering 40 crore low-income Indians. This will not only improve financial inclusion but also provide a stable platform for Fintech companies to operate.
These challenges should be redressed after a thorough accounting of the kind of gaps that are present through gender aggregated data and through the development of suitable schemes to resolve biases and address weak points that exist in the status quo. A gender-inclusive focus can contribute to efficient collaborative efforts between the government and Fintechs. Though the pandemic has disproportionately affected women, and led them to face extreme financial distress along with gigantic job losses given their over representation in the informal sector, they can start to re-envision a smoother road from isolation to inclusion with the help of financial technology. Technology can definitely work as a great leveler of the playing field and a game changer in the financial landscape of India. It has erased barriers of the physical world and with the help of gender-focused policies, it can paint a more sustainable picture for financially-empowered women. It is definitely a long road to closing these gender gaps but Fintechs can tread these choppy waters with ease.
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