Initiatives such as the Pradhan Mantri Jan Dhan Yojana (PMJDY), which aims to provide banking services to underserved communities at the last mile, are critical to India’s journey in this regard. In particular, PMJDY accounts have provided millions of Indians with the opportunity to save in banks. Since its launch in 2014, the number of accounts opened has tripled from 14.72 crore in March 2015 to 46.25 crore in August 2022. Fifty-six percent of these accounts are owned by women.

However, rather than saving, women are actively using their PMJDY accounts to access the benefit transfers they receive from government initiatives. Our research at Women’s World Banking has confirmed that women from rural areas and low-income groups perceive banks as spaces not meant for them or their small sums of money. Additionally, the Inclusive Finance India Report 2022 found that more than 127 million adults made their first digital payments directly from their accounts during the COVID-19 period; however, women were found to be less savvy in undertaking digital transactions than men.

Undoubtedly, women are intuitive savers, but not all save formally with banks. They continue to rely on traditional saving methods, such as keeping the money in their homes. Deepening financial engagement through saving, building accounts, and credit histories or accessing other financial products such as microinsurance, pensions, or microloans are not women customers’ priorities. There are many reasons for this, the main one being that women perceive their incomes as negligible, and therefore not suitable for saving in banks. Culturally, women are also not enabled or taught to make financial decisions, and thus they struggle for autonomy. This often forces them to create their own saving mechanisms that give them a sense of control. As a result, women do not perceive the bank as a place to save—especially ‘small’ amounts—as it feels unfamiliar and more daunting.

Beyond financial inclusion, there is also a business case for banks to invest in women customers. As per our estimates, banks can potentially unlock an estimated inflow of INR 20,000 crore in deposits, while disbursing INR 10,000 crore in overdrafts to 20 million beneficiaries, if 100 million low-income women initiate a habit of small-scale savings.

Read the full article about women's financial inclusion by Kalpana Ajayan at India Development Review.