By Shweta Baisla
Financial literacy is a fundamental skill that empowers individuals to make informed decisions about their money, investments, and overall financial well-being. However, there exists a significant gender gap in financial literacy, particularly in countries like India, where women often face unique challenges in accessing financial education and services.
Barriers to financial literacy:
According to the Humanity Welfare Council, a staggering 80% of women in India struggle with financial literacy and around 62% of Indian women do not own bank accounts or have limited access to banking services. This statistic presents a stark picture of the dismal levels of financial literacy and freedom among Indian women. If India has to reach the next level of economic growth, women need to play a pivotal part in the same, for which they need to be financially empowered.
Societal attitudes and cultural norms in India often pose barriers to women’s financial literacy, especially in rural and semi-urban areas where overall literacy rates are lower. Women encounter resistance to financial education, limiting their access to credible resources and opportunities for learning. Additionally, women face unique financial challenges such as lower earned income compared to men and a lack of preparation for retirement due to limited financial planning inclination.
How to empower women through economic education?
Government initiatives and solutions:
Despite these challenges, various government initiatives aim to promote financial literacy among women and enhance their economic empowerment. Programs like the Pradhan Mantri Jan-Dhan Yojana, ‘Beti Bachao, Beti Padhao’, Financial Literacy and Credit Counselling Centres (FLCC), and the National Center for Financial Education (NCFE) focus on providing resources, support, and education to women. These initiatives play a crucial role in improving access to financial services, promoting financial inclusion, and disseminating financial literacy resources through projects and campaigns.
Private sector involvement:
In addition to government efforts, the private sector has a significant role in advancing financial literacy among women. Companies can prioritise corporate social responsibility (CSR) initiatives that focus on financial literacy programs tailored to women’s needs. For instance, Home Credit, as a responsible consumer lender, launched the Saksham initiative in 2022 in partnership with a national NGO, the Indian Development Foundation. This initiative targets 30,000 marginalised women and girls pan-India, aiming to impart basic personal finance skills and create responsible borrowers in wider society.
Education and awareness:
Education and awareness are essential components of empowering women through financial literacy. Integrating financial education into school curricula, particularly for girls, can instil basic financial skills from an early age. Furthermore, raising awareness about the importance of financial literacy and promoting a culture of financial responsibility through workshops, seminars, and community engagement can empower women to take control of their financial futures.
The road ahead:
To address the financial literacy gender gap in India, targeted interventions are crucial. This includes improving access to financial services, promoting financial inclusion, providing tailored financial education and training programs, and leveraging technology to reach women in remote areas. By empowering women as financially literate individuals, India can unlock their potential as active participants in the financial ecosystem, driving economic growth, and fostering a more equitable society.
Conclusion:
Financial literacy is a powerful tool for empowering women and promoting gender equality in India’s financial landscape. By bridging the financial literacy gender gap, India can unlock the full potential of its women population, paving the way for sustainable development and prosperity for all. It is essential for stakeholders across government, private sector, and civil society to collaborate effectively to ensure that women have the knowledge, resources, and opportunities to make informed financial decisions and achieve financial independence.
The author is the CFO and wholetime director of Sona Machinery Ltd.