The current government is prioritizing women’s economic empowerment, recognizing its multi-dimensional and integrated nature. Efforts are underway to expand the economic assets, participation, and influence of low-income women and their households by improving their access to financial services, knowledge, and markets. It is anticipated that the 2024 Union Budget will place a strong emphasis on ‘Naari Shakti’, particularly in terms of financial inclusion initiatives. This will be done by leveraging India’s Digital Public Infrastructure (DPI), through inter-ministerial convergence, with the focus on bringing women at the edge of finance into the formal and digital financial services’ fold.
We can anticipate measure to catalyse industry-wide collaborations between public and private entities to bring in innovation at scale; creating a large cadre of women agents; investments towards building financial and digital capabilities; and ensuring gender-disaggregated data is used to make informed decisions.
For the women, by the women
Central to this strategy is a network of women-centric financial agents (largely women) who will play a pivotal role in delivering accessible and personalised financial services to underserved regions. This transformative approach empowers women as ambassadors of digital and financial literacy, fostering trust and familiarity among traditionally underserved communities. Gender-sensitive training for such agents will help them deliver targeted customer education to women, particularly in promoting products vital to financial security, such as insurance. We may witness budgetary support, such as soft loans or seed capital, especially for women agents as they establish their banking businesses. Additionally, there could be reductions in GST rates for agents and investments in capacity building through financial training institutes.
Towards financial resilience
As an extension to this, we anticipate budgetary allocations towards achieving Insurance for all by 2047. To ensure universal, affordable, and adequate insurance coverage for all, we can anticipate a push towards creation of an alternate vehicle for rural micro-insurance, similar to the regional rural banks and public sector banks. This will attract differential costing and taxation to be profitable. For Bima Sugam to scale inclusively, we can anticipate benefits for the insure-tech industry for innovation, public-private partnerships to increase coverage. We could also see positive policies for recruitment and functioning of women Bima Vahaks.
Towards Jan Samriddhi
Given the immense focus on financial inclusion, innovations in DPI could enable a consolidated economic empowerment program uniting transformational and embedded financial services under a single umbrella. We can anticipate Jan Dhan, Jan Suraksha, affordable collateral-free credit, micro-insurance, digital payments, and other such products designed for women’s lifecycle needs converging into a program on improved financial health (it could be called Jan Samriddhi). This holistic convergence could be a game-changer as interministerial programs and missions come together. Guarantees to encourage lending
There is a growing push towards increasing women’s participation in the MSME segment, agriculture, and gig work while recognising that women are good borrowers. In India, women-owned businesses as a share of all MSMEs has grown by 50% in the past decade. Non-performing assets are lower for women-owned MSMEs, indicating women are better at repaying their loans. And yet the financing need of an estimated 70% of women-owned businesses’ goes unmet. We may see a shift towards ensuring active accessibility of affordable, collateral-free loans for deserving women entrepreneurs, building upon initiatives led by SIDBI and select public sector banks. This proactive stance involves a multifaceted strategy wherein Microfinance Institutions (MFIs), LendTech, and Non-Banking Financial Companies (NBFCs) will be encouraged to lower interest rates and will be able to avail credit guarantees. Nationwide collaborations between lenders, State Rural Livelihoods Missions, and established non-profit organizations are poised to support and amplify access to financial resources for the missing-middle and thin-file women entrepreneurs across underserved regions.
Leap towards women’s economic empowerment index
As India emerges as a frontrunner in financial inclusion, it must lead by example for other Global South nations by championing innovative gender-sensitive economic policies. This can be achieved by the committing to an index that tracks women’s economic empowerment. It could also become part of RBI’s Financial Inclusion Index. This potential Index, grounded in the utilization of gender-disaggregated data collected from DPI systems, would mark a significant leap forward in using data to assess and address the unique challenges and opportunities faced by women as well as look at underserved and untapped customer segments. By aligning with global standards and acknowledging the importance of data-driven insights, such an Index could become a powerful instrument for policymakers, businesses, and stakeholders. It can help build a nuanced understanding of the economic landscape from a gender perspective, enabling more targeted and effective interventions.
Finally, this year, the budget highlights the need for intensified efforts towards financial resilience from climate shocks, focusing on vulnerable groups and women. Low-income women face disproportionate impact from climate change but have fewer financial tools to manage their risks. To build climate resilience for such women, we may witness the announcement of gender-transformative financial products such as climate-linked microinsurance policies, weather-indexed savings accounts, green microloans, women-centred agricultural credit, renewable energy financing, community-based climate savings groups, disaster-linked cash transfers, and eco-friendly housing microfinance.
The Union Budget 2024 presents a pivotal moment for India to strengthen its dedication to women-centric financial inclusion. By focusing on innovative measures that empower women to exercise economic agency, India can ensure that no woman is left behind on the journey towards Viksit Bharat.
(The author is Regional Head – South Asia, Women’s World Banking)
Content Source: economictimes.indiatimes.com