Banking & Women: How To Financially Educate Women
- IWB Post
- December 4, 2015
Do you know, only 26% of Indian women have a bank account, as compared with 46% of men. And, less than 15% of women entrepreneurs in India have access to finance from a formal banking institution.
Recently, a Goldman Sachs Global Investment Research Report found that loan rejection rates for women-owned SMEs in India were almost double than those owned by men.
Is it because women maintain a safe distance from banking? Or, is it the dominance of men? Either way, women here are the ones who suffer and become financially dependent.
Women actually make ‘good banking customers’ and studies across the world show that women customers have many positive characteristics including lower risk behaviour that leads to higher profitability for a bank and better retention rates. Women tend to have deeper relationships with their financial institutions; allowing banks to cross sell additional products and services to them with much more success than to their male clients. Women tend to favour relationship banking and have fewer banking relationships, often preferring to meet their financial needs from one institution.
But we can cheer up because there are measures taken to make this scenario a little better. The government’s focus on financial inclusion, Pradhan Mantri Jan Dhan Yojana, is one step that will positively contribute towards increased financial inclusion for women. This scheme is gender agnostic, and it will have a much more significant impact on women entrepreneurs who have struggled with accessing finance due to a disproportional lack of collateral for decades in India.
How else can we strike a balance, you may ask. Financial literacy for women is a key, but awareness for all of us will play a big role in addressing the gap.
Excerpts taken from HuffPost.