New Delhi: India is undergoing a remarkable transformation in its financial landscape, particularly concerning the inclusion of women. Historically, access to savings, loans, and investment tools has been limited for many women due to their exclusion from formal financial systems. However, with the rise of mobile technology, targeted government initiatives, and the proliferation of digital banking, this narrative is rapidly evolving, changing households, businesses, and the broader Indian economy.
Rapid Growth in Financial Inclusion
Recent data reveals the profound impact of these changes. The Reserve Bank of India (RBI) has reported a significant increase in the nation’s Financial Inclusion Index, jumping from 43.4 in 2017 to an impressive 64.2 in 2024. Women are at the forefront of this advancement, contributing significantly to the figures. Since the launch of the Pradhan Mantri Jan Dhan Yojana (PMJDY) in 2014, over 500 million bank accounts have been opened, with a remarkable 55% of these accounts held by women. By 2024, nearly 250 million women had opened Jan Dhan accounts, marking one of the world’s largest financial inclusion campaigns.
The adoption of digital technology is equally notable. In early 2024, Unified Payments Interface (UPI) transactions reached an astounding ₹80.79 trillion, reflecting a compound annual growth rate of 147%. Interestingly, women accounted for over 30% of these transactions, marking an 18% increase compared to previous years. Data from 2014 indicated that only 43% of Indian women over the age of 15 had a bank account; by 2024, that number had surged to 78%, underscoring the dramatic shift in access and engagement with the financial system.
The Role of Digital Technology
This digital revolution is driven largely by technology innovations. With 60% of women now owning smartphones, particularly in rural areas where traditional banking services are limited, mobile banking is becoming a vital tool for financial empowerment. Digital platforms are erasing barriers such as cumbersome paperwork and travel requirements that often deter women from engaging with banks. This shift is not merely technical; it enables women to control their finances more effectively.
Take, for example, women small traders, dairy farmers, and artisans who are better positioned to manage their earnings directly through digital payments. This autonomy is empowering women to save, invest, and repay loans independently from male family members. The economic stakes are substantial; a McKinsey report suggests that closing the gender gap in digital finance could potentially add $700 billion to India’s GDP by 2025.
Government Initiatives Driving Change
Strategic government policies also play a crucial role in promoting financial inclusion for women. Initiatives such as the Mudra Yojana, where 69% of microloans have gone to women-led enterprises, and Self-Help Groups (SHGs) that now enroll over 10 million women, have proved instrumental in providing access to credit. Moreover, the Stand-Up India program allocated 84% of approved loans to women entrepreneurs by 2023, showcasing a decisive shift in lending practices.
Additionally, the Financial Ministry’s commitment to gender budgeting is evident in the recent allocation of $55.2 billion (about 8.8% of the budget) for gender-specific programs in the 2025–2026 fiscal year. Enhanced access to finance has resulted in a significant uptick in women’s participation in the workforce, rising from 22% in 2017-18 to over 40% in 2023-24, an encouraging sign for the Indian economy.
Overcoming Challenges and Barriers
Despite these advancements, challenges remain. A majority of women who possess bank accounts are not fully utilizing them. Social constraints, lack of awareness, and financial literacy issues lead to approximately 32% of women’s bank accounts remaining inactive. Furthermore, women are 9% less likely than men to engage in transaction activities and face challenges in accessing credit. Currently, only 7% of MSME credit is granted to women, indicating that many potential business owners are sidelined due to collateral requirements and gender biases in lending practices.
The digital divide also persists, with many women still lacking access to smartphones and reliable internet connections. Studies show that women entrepreneurs are 34% less likely than their male counterparts to use mobile devices for work-related tasks, further illustrating the barriers that need to be addressed to ensure equitable access to financial resources.
Conclusion: A Collective Move Towards Inclusion
The trajectory of financial inclusion in India is increasingly tied to the narrative of women. With the backing of government initiatives and technological advancements through platforms like UPI and PMJDY, women are entering the financial mainstream in unprecedented numbers. However, the challenge now lies in ensuring that ownership leads to active usage and that agency follows access. The benefits of empowering women financially extend beyond individual households; they promise to reshape social structures for future generations and provide a significant boost to the Indian economy.
With a determined focus on eradicating the barriers to financial inclusion, India is taking critical steps toward a more equitable economic future. To keep up with trusted updates on banking and finance, follow Bankerpedia.
Original source: www.livemint.com
