A woman in a rural part of India who owns a bank account and has access to a loan for her business can safely be assumed to be financially included. It is a big cause of celebration for policymakers, donors, development agencies and service providers as the number of financially included women increase globally, but what does this financial inclusion mean for her? How does a low-income, rural woman view the financial services offered to her? What is her mental process when it comes to managing her money and her livelihood?
Let’s examine her perspective from our field visit to rural Odisha in eastern India.
Seema is a member of her local Self-Help Group (SHG) which also helps her earn a small income through a collective livelihood activity. She has a savings account in a bank that is less than a mile from her house and she is well acquainted with the transaction process. But she still chooses to save her money in boxes at home in the kitchen where her husband doesn’t generally enter. Sometimes she parks her savings with a trusted member of her SHG for safekeeping but with easy access.
Seema values the privacy of her savings the most, which is taken away when she visits her bank branch. Her fear is that she will face emotional and verbal abuse from her husband if he finds out that she has kept away some of the money she withdrew from the bank. It is a common belief in Seema’s community that a woman should not hide any savings from her husband.
I hide some of my income in different boxes in the house. That way my husband does not know my entire income and can’t spend it all
Thoughts for design: How might financial services protect her from the sanctions she is likely to face in such a scenario?
Meena is a mother whose aim is to save for her children’s higher education in the city. To make that dream come true, she runs a small business from her home that gets her a steady monthly income and a regular saving that is tucked away for future needs. But Meena is in a dilemma. Through the government’s program, she has easy access to a loan to expand her business and earn more. It is not an easy decision for her to make. She says that unlike in the case of men, the community will look down upon her because a woman should not burden her family with her debt.
Meena fears that if she is not able to return the loan in time, her in-laws will blame her for the debt and stop her from running the business completely. With that income gone, she might lose her dream of educating her children and surrender the little agency that she has earned in her own home.
As a woman, it is scarier and riskier to take a loan, compared to a man. We are not only answerable to the bank, but to our family and community as well.
Thoughts for design: How might we rethink of credit that helps women feel secure in availing loans for their small business?
Durga is a newly married woman who prefers walking to her trusted local post office to deposit her money after selling vegetables in the market. She can easily deposit the money with the local banking agent in the market, but her problem is that the banking agent is a man.
She worries that if she visits him frequently, Durga’s relatives will question her integrity and she might bring shame on her family. Social norms in her village dictate that a young woman should not interact with other men unless accompanied by her husband or family. On the other hand, the post office might be a bit of a walk for her, but it offers a safe space for her transactions as most women in her village visit it for different reasons.
I prefer to visit my local post office for savings. It is familiar and no one questions me when I visit.
Thoughts for design: How might we deliver financial services in easy-to-access spaces that make women feel safe?
In all these cases, women are financially included with access to formal financial services, but these services aren’t necessarily relevant or tailored to their needs. It is no surprise then that of the 77 percent of women account holders in India, almost 40 percent of the accounts lie dormant (Global Findex 2017). For most rural, low-income women, these accounts seem to be inert products that don’t understand their mental process of planning, saving or borrowing.
These cases and statistics go on to indicate:
Unlike men, women, and especially low-income women, lead extraordinarily complex social and financial lives. Her financial behaviour – how she plans, spends, saves and borrows – is highly conditional on what sanctions will she face – from her husband, family and her community– if she were to break a social norm.
These cases, and many more that we observed in the field, go on to show that for a woman, achieving financial health is like playing an infinite strategy game. In this game, she must overcome obstacles and reach the next stage by prioritizing resources and making allies.
At every stage, women must get past the social norms to open possibilities of driving change before moving to the next one. She must find an ally in her family to support her. She must prove that she has the capacity to run a business successfully to formal institutions that tend to think otherwise. She must constantly negotiate boundaries to bend or transform the norms that block her at every stage.
Financial interventions and services can act as a power booster for women, if they are designed to shape not just behaviours but the norms that drive them. Only then will women move from access to absorption of financial services paving the way to achieve financial security, resilience and control in their lives. Moving the spotlight from the destination to this complex yet remarkable journey of women is the way to create meaningful financial systems that work for women.
Gendered social norms at play within communities and households have critical bearings on women’s access to resources and their financial behaviours. An intricate combination of these two components, in turn, determines if individuals and communities are financially secure and resilient, and able to feel control over their financial lives. If financial interventions and services want to enhance women’s access to and use of resources, and shape financial behaviours, they need to dig deeper and grasp the hold of social norms on women’s decision-making process.
Most women we met in our field visit to Odisha, expressed the limited agency they have over financial decisions at home, despite being responsible for taking care of household expenses and saving for future emergencies. Financial services, on the other hand, are often designed assuming the user has complete autonomy over their decisions, discounting the numerous social barriers faced by women (IDEO, 2019).
For instance, recent global evidence shows how digital and mobile money accounts offer women the requisite privacy and control over their finances (CFI, 2021). But such benefits for women using technology are far from universal, especially in developing countries like India where women often share the phone with their family. A woman may not want to reveal her savings or the money she transferred to her sister last month without her husband’s knowledge. Use of financial services on a shared phone is a risk to her financial privacy and a potential loss of control over her finances.
My husband works as migrant labor. When he is back home, he asks me for money for his expenses. If he gets to know about my savings, he might spend them all. If I don’t give him money, he will start a fight. He checks my phone [messages] to see the amount in my bank account because he thinks I am hiding money from him.
Invisible or unquantifiable barriers such as lack of control over their resources due to prevalent gender norms, have serious consequences on women’s financial behaviour and restrict their choices. Various studies across developing countries, including India show that seed money and loans to women entrepreneurs are quite often utilised to supplement their household expenses or support their husbands’ businesses rather than their own, explaining the lower rate of return among female borrowers (CFI, 2021). Men’s control over women’s resources highlights the deep entrenchment of existing gender norms that go unaddressed even at the institutional level despite an increase in financial inclusion of women.
In our visit, we noted that even when individual and group loans are easily accessible via the government program, many women in the SHGs do not want to avail of that credit. Their family expects them to use the loan to address immediate household needs and women fear that they will not be able to repay the credit, if it is spent in such a manner. They don’t want to risk their creditworthiness; in case they might need to borrow for any emergency or genuine business needs in the future.
We don’t have a business idea right now. If we take a loan, we will end up spending it on household expenses. How will we repay it then? If we don’t pay back the loan, it will leave a bad mark on our SHG or those who did not pay back, and we will not be able to take loans when we might really need it.
Our observations show that low-income women constantly (and rather creatively) navigate their boundaries to find answers to their problems. However, these solutions are largely sub-optimal and unable to improve their financial security, resilience, control or freedom. Only when financial systems understand these barriers, are designed to be gender-conscious, and unlock her capabilities and agency, will they find relevance in a woman’s financial world and contribute to her financial health.
Access to and use of formal financial services can provide a gateway for low-income women to increase their income, savings and wealth. But unless they connect with other facets of women’s social and economic lives, they will continue to be inert, underutilised services that find little relevance in women’s financial world.
Alternatively, when women identify their limitations and capabilities and find ways to make use of their human and social resources in combination with the limited financial assets at their disposal on their own terms, it has a cascading effect on their immediate and external environment. Not only does this process advance their financial journey, but it also creates a space for use of these financial services that can, in turn, accelerate their financial progress. With that, women start to write a new script for norms, slowly dismantling the old ones. This process is neither easy nor quick. It takes time, resources and collaborative energy from different stakeholders and institutions to turn the tide in favour of women.
Financial health as an approach focuses on building and strengthening this very internal process or journey of women that bends and eventually transforms norms by unlocking women’s own potential. It shifts the spotlight from a product-oriented, gender-adjacent strategy to a process-led, gender-conscious approach.
To put this in action, we derive inspiration for financial health solutions from women and women groups who have led change in their community. In Odisha, we uncovered some remarkable cases that highlight the power of a collective and the role of a sponsor in transforming gender norms.
We visited an SHG that has been running for the last 15 years. Over the years, they took out small loans to expand their business of making masalas (ground spices) and papad (a thin crispbread or wafer, usually made of lentil flour). Now, they have found the confidence to apply for a bigger loan to buy machinery to make the spices on a bigger scale. They earn a steady annual income that supports their needs. They have expanded their business beyond the local markets often travelling to nearby cities to sell their products. Along with their business, they take care of the housework because they feel that family is still their first priority. But that does not curtail their agency in any way.
As a group, they have more control over how they utilise the loan and not spend it on household consumption. Their husband or family have no control over this loan which is secure in the SHG account. The women felt that taking a loan as a group reduced their fear of paying it back and increased their risk appetite. Together they have created reliable social insurance and a collective that gives them a sense of power and security over their income.
We observed that by bringing men into their fold, women could garner more strength to change norms. We met a couple, Tara and Sanjeev who have been married for 20 years. Today, Tara heads her SHG and has been instrumental in its success at their collective livelihood. She is also perceived as a local influencer for both women and men from the village who approach her for counsel on various issues.
This journey was not easy for her. She worked hard to create a conversation around having a family and a robust savings plan with her husband. She took care of the family while also taking care of her SHG business. Over time, her husband saw the merit in having an extra income and realized the importance of his wife having a saving of her own. Today, he actively engages with other men in his community to encourage separate savings by women for long-term household needs.
Several other women SHGs and entrepreneurs who had crafted their collective or individual livelihood narrated their own unique journey to success. What stays common among those paths are the invisible fences of gendered social norms that they have tried to jump over or break down by nurturing their capabilities, collaborating with allies, negotiating with their families, and securing a social standing to prove their worth.
Our aim through the partnership with the Government of Odisha is to offer design insights and opportunities for policymakers and financial service providers to devise financial health solutions that not only consider women’s capabilities and their constraints but the place where it arises from, to create meaningful financial systems that are relevant in women’s world.
About the Mission Shakti Living Lab
UNCDF’s Centre for Financial Health has partnered with the State Government of Odisha in India under their flagship program – Mission Shakti. The program aims to empower women entrepreneurs socially and economically by organizing them in self-help groups (SHGs). Presently, over seven million women, organized into six-hundred thousand SHGs throughout Odisha, benefit from the program. Under the initiative, almost all women members have access to a bank account in the nearest bank branch.
Over the next four years of the program, with this partnership, UNCDF aims to improve the financial health outcomes of 3.5 million low-income rural women and women entrepreneurs and build 10,000 women-led micro-enterprises in the state.