BC Sakhis have emerged as a convenient last-mile interface of banks, especially for cash-in and cash-out transactions. However, many rural adults in the country lack access to basic financial services either through banks, BC agents, or other modes. The situation in Uttar Pradesh was no different. Many rural areas in the state lacked access to financial services.
To improve the access to financial services in the state, the state government of Uttar Pradesh launched its “One Gram Panchayat – One BC Sakhi” initiative in 2020.
Mobilizing rural women as potential business correspondent (BC) candidates in the state was a mammoth and complicated exercise, given the sheer number of BCs, currently at around 58,000. The case study charts how UPSRLM utilized technology to address the challenge of setting up a large-scale BC Sakhi network and operationalizing it in the state while managing associated risks.
Godavari Chandrasekhar, 31, used to run a small vehicle repair shop with an annual income of just Rs 1-2 lakh. She gradually started offering diversified services and scaled up her business to a vehicle servicing centre, which now earns her more than Rs 6 lakh annually.
Godavari has transitioned from being a necessity entrepreneur to an opportunity entrepreneur. However, this is not true for millions of women entrepreneurs in India, many of whom remain stagnating in micro and small survivalist enterprises.
Increasing economic opportunities for women is the key to accomplishing the vision for development set forth in the United Nations Sustainable Development Goals (UN SDGs).
Women constitute 13.3 per cent (8 million) of the total 58.5 million entrepreneurs in India, 82 per cent of them in micro-units run as sole proprietorships.
Studies suggest that 10 to 30 per cent of the enterprises registered as ‘women owned’ are not actually owned, controlled, or run by women. The pandemic has further worsened the situation and put women entrepreneurs at higher risk of business closure. Recent research by Microsave highlights that as many as 82 per cent of women-owned micro, small or medium enterprises (MSMEs) reported a decrease in their income, as compared to 72 per cent of male-owned enterprises. They face greater restrictions, decreasing demand, rising costs of inputs, inability to access markets, and an increased burden of care work at home, among other factors that severely affect their income. The story is no different for the startup sector. Funding for women-founded and co-founded startups in India fell by 24 per cent due to the impact of Covid-19.
Need for initiatives
Why is it urgent to create, sustain and help more women to run growth-oriented profitable businesses?
During the Covid-19 pandemic, women faced more job losses and closure of their businesses than men. This was coupled with the automation of routine jobs, which means that economic opportunities for women may continue to shrink. Furthermore, the increased burden of care work also means women have less time for work outside the home that earns them an income. In the absence of a suitable ecosystem promoting women’s entrepreneurship, there is a risk of women’s labour force participation declining further.
Entrepreneurial ecosystems are much like biological environments where different important elements — regulatory, cultural, and economics, in this case — interact with each other to form an optimal environment for talented individuals and innovative organisations to create value if they are appropriately combined and supported. The caveat here is optimal integration and support. Such an integrated system to promote opportunity-oriented entrepreneurship among women in high-value and high-growth sectors is an urgent need.
Numerous studies and our field observations suggest that lack of relevant financial products and enterprise development services along with gender specific barriers discourage women from pursuing entrepreneurship.
Yet, not all is lost. Innovative initiatives to promote women’s entrepreneurship, driven by private and public sector partnerships like Niti Aayog’s Women Entrepreneurship Platform (WEP), offer promise. The WEP acts as a single window for women entrepreneurs to obtain information about government schemes, marketing assistance, funding, and compliance support for their businesses. Another important initiative has been government-led market linkage support for artisans and self-help group-based women entrepreneurs. The annual ‘Saras Aajeevika Mela’ (fair) and events like ‘Hunar Haat’ enable a direct consumer connect for women from all corners of the country. These fairs attract huge footfalls and provide markets and visibility to women entrepreneurs.
More recently, UN Women has enabled State Bank of India (SBI) to launch a Women Livelihood Bond scheme. This scheme is designed as an innovative financial instrument to drive social impact. It gives the private sector the opportunity to invest in women-led enterprises, while allowing SBI to raise low-cost funding. This unique scheme will not only increase women’s access to institutional credit but will also provide support to scale their businesses, consequently spurring rural economies and job creation. Amazon’s timely launch of a store exclusively for women-owned businesses in association with UN Women is a wonderful opportunity, especially in the aftermath of the pandemic where businesses are turning to technology to access markets. As suppliers and customers move online, a conducive atmosphere is being created for women entrepreneurs to negotiate prices, market their products, and reach consumers anywhere in the world.
Ways to enable women-led startups
We suggest six key enablers that would encourage more women to take the road to entrepreneurship:
The first is family support. Social norms and the level of family support can influence and shape women’s decisions, such as the location of the businesses, feasibility of work travel, time spent on business activities, and networking. A recent paper shows how policies meant to encourage female entrepreneurs to migrate to higher-return enterprise sectors should aim to effect change in gender norms at home.
The second enabler is facilitating women’s access to markets and networks. Women’s limited mobility, along with a greater burden of unpaid care work, means that women are not well integrated into formal and informal networks. They do not have access to markets, with low or no representation in local business associations. Better access to market information is a well-documented benefit of mobile phones. However, the digital divide impedes access to e-markets. As per the National Family Health Survey 5 (NFHS 5), less than 3 out of 10 women in rural India, and 4 out of 10 women in urban India have ever used the Internet.
Third, we must make more women leaders in business visible to create role models for young girls, and encourage mentorship wherein successful business leaders contribute back to society by mentoring potential and early stage entrepreneurs. This will create a pipeline of future women entrepreneurs.
Fourth, education in business skills and technology can be a great enabler. Deliberate efforts are required to improve women’s participation in industry-aligned skilling programmes at all levels, across low, medium, and high-skill industrial sectors, preparing women for entrepreneurship opportunities in future-oriented industries.
Fifth, access to capital, or sufficient capital, is a necessary precondition for any enterprise’s creation and expansion. While all entrepreneurs navigate complex challenges and competitive markets, women entrepreneurs face specific regulatory and social hurdles that limit equal access to the assets, credit, and capital required to establish and grow their businesses. UN Women recently ran a survey of 105 women entrepreneurs to understand the impact of Covid-19 on women-owned businesses. The survey found that 70 per cent of women-led enterprises have no history of taking formal loans. Appropriate and relevant products, easing access to long-term and affordable capital for different segments of women entrepreneurs is crucial.
Sixth, it is important to have a supportive public and private sector. The cultures and practices of public and private sector institutions and businesses have a significant impact on women’s economic opportunities. Public and private sector entities have the levers of control to sway the ecosystem in favour of women entrepreneurs when they desire to do so. For example, the government has steadily increased the share of public procurement from women-owned businesses from zero in 2017 to 0.55 per cent in 2020-21. Before Covid-19, only 17 per cent of women entrepreneurs reported awareness about government schemes. It is important to address this information asymmetry and increase convergence among different government programmes for women. It is also important to provide incentives and recognition to industries sourcing from women entrepreneurs, as well as certifying women-owned enterprises. Private sector entities can better integrate women in their supply chains, invest in promising women-led start-ups, and support the creation of an affordable, quality universal child-care system for the country.
Public and private sector players must work on these ecosystem enablers to create future business leaders.
Women business leaders will help achieve the Sustainable Development Goals through their energy and innovation. Women business leaders with a seat at the decision making table can contribute to solving humanity’s toughest challenges like climate change, poverty and disease. We need one hundred per cent of our business talent to kick start the global economy, post the pandemic. This will depend on our ability to unlock the choked pipeline of women’s talent.
The Print first published this article on 19th March, 2021.
Availability of quality and affordable paid care is essential to reduce the burden of caregiving on women
The last elections in a few States sparked a new political and social debate by promising salaries for women’s household work. Some courts also awarded compensation to families of homemakers. Although isolated, these events accentuate a widening fault-line — the lack of a policy framework that acknowledges the contribution of caregiving to the country’s economy.
Whether childcare, caring for the elderly or doing domestic work, caregiving is the invisible engine that has silently fuelled the economy. The work that makes all other work possible.
Indian women disproportionately shoulder the burden of unpaid care work, spending more than five hours per day on it as compared to only 1.37 hours by men. This disproportionate burden is an issue of equality — and economic growth.
Considering unpaid care work as a quintessentially feminine activity, is one of the key reasons behind women’s falling participation in paid work in India, currently at 16.1 per cent.
Institutionalising equity in caregiving has become urgent. Systemic measures like workplaces more actively supporting men’s roles as fathers and caregivers and men sharing a more significant burden of caregiving at home are essential. Similarly, the ubiquitous availability of quality and affordable paid care is essential to reduce the burden of caregiving on women.
Quality and affordable care is required at both ends of life in all societies. However, the provisioning of care in India remains a frayed patchwork of state, market, and familial care. As a result, women end up being the primary caregivers. The US recently unveiled the American Families Plan that classified “care” as essential infrastructure, marking a major shift in perception.
Most people cannot work unless they are confident that their child or elderly parent in need of care is being looked after. A single caregiver who provides safe and quality care might provide all other family members a chance to earn money, creating a multiplier effect. However, India cannot rely on women to do the bulk of unpaid care work and keep pushing them out of the workforce. Anyone who has ever looked for reliable paid care for their family knows that finding such care in India remains an arduous task. The demand far outstrips supply.
Example for early childhood care, most households where both parents work have to rely on family-based circles of support. The few who can afford help, opt for home-based untrained nannies. The constraints are severe for low-income households. Poverty necessitates both parents to work, and they cannot afford market substitutes for their unpaid labour.
Govt support inadequate
Central and State government programmes remain inadequate in catering to the growing demand for early childhood care. Studies estimate that given the rapid shift toward nuclear families, the demand for childcare could be as high as five million facilities in cities alone.
Similarly, with India’s rising life expectancy, the demand for long-term elderly care, preventive and supportive care services has continued to rise.
The government has played a crucial role in facilitating innovation and market development for critical sectors. Encouraging innovation in the care sector will be critical to turning the unfair burden of unpaid work into an economic opportunity.
The WEF estimates 40 per cent of emerging job opportunities will be located in the care sector, given the global shift in demographics, changing social norms that have led to greater social acceptance of paid care, and the uptick in demand for trained caregivers.
Studies show that rich countries with a higher tax base have larger paid care sectors. However, some middle-income countries also have paid care sectors that make up more than 15 per cent of their employed population. Deliberate creation of policy and care infrastructure by governments can go a long way in providing universal affordable and quality care.
First step in this journey should start with better enforcement of existing government provisions.
Second step would be to experiment with different types of decentralised provisioning, understanding the pros and cons of different models of care, and subsidising care for certain groups as essential. Some models of care could include encouraging childcare entrepreneurs, co-locating childcare and elderly care programmes, cooperative- and community-based models for low-income households, vouchers, and care credits.
Three solutions
Market development and innovation to encourage the growth of a paid care sector offers three solutions.
First, paid care workers provide professional skills that differ from the knowledge and skills of family caregivers. They include certified early childhood care and geriatric care professionals.
Second, availability of quality and affordable care creates choices for families, particularly women, to share some of the labor of care with paid workers and make a choice to enter the paid workforce.
Third, it creates more employment opportunities for women represented disproportionately in the care sector. It also encourages change in social norms by de-stigmatising men in caregiving roles at home and as care work professionals.
India is poised for creating a policy framework that allows the government to explore, experiment and take risks on behalf of the public to create an ecosystem for a robust “paid care” sector. But first, we need a paradigm shift in how we treat, value, and invest in care work.
Mustika (name changed) has been the sole breadwinner of her family ever since her husband, a former factory laborer, was laid off due to the COVID-19 pandemic. She works as a nonpermanent teacher in a junior secondary school. She also takes on side hustles as a grocery reseller and a domestic helper, providing ironing services to several households.
Mustika is an active member of “Doa Bunda,” a women’s cooperative under the Pemberdayaan Perempuan Kepala Keluarga—The Female-headed Family Empowerment Foundation (PEKKA). As part of the cooperative, she commits to saving money every month consistently. She has been paying off her low-interest rate (~1%) business loan from PEKKA. Mustika reloads her e-wallet regularly to buy products in bulk on e-commerce platforms. She believes that she gets a better price on these platforms, especially using cashback promotions from the e-wallet provider.
Mustika lives far away from the city. So she prefers to use a branchless banking (Laku Pandai) agent for banking services, including money transfers, cash withdrawal, and social assistance benefits. In this way, she saves both time and money spent commuting to the faraway bank branch.
Women’s cooperatives are vulnerable to being left behind in the rapidly evolving digital economy
Data from the Ministry of Cooperative and Small Medium Enterprise (SME) in 2021 revealed 13,212 active women’s cooperatives in Indonesia. But, these are only 9% of the total active cooperatives across 34 provinces. Considering this limited representation, can women’s cooperatives achieve the four strategies the President of Indonesia set forth? These strategies include:
Modernization of cooperatives
Emergence of new entrepreneurs
Integration of MSMEs to global value chain
Scaling up of MSMEs
Among the strategies, “modernization of cooperatives” poses the most significant challenge to women’s cooperatives, especially in rural areas. Rural women’s cooperatives have limited access to information, resources, and digital tools. Typically, they are small-scale, semiformal, and are often left behind amid the charge toward digitalization.
The Minister of Cooperation and SME, Teten Masduki, mentioned that only 0.73% of all cooperatives are connected with the digital ecosystem. Women’s cooperatives play a critical role in the economic empowerment of rural women by helping them accumulate assets under their name through savings and providing small-scale finance. Seeing them left out of the movement is disheartening.
Moreover, modernization should go beyond digitizing the operational system of cooperatives. It should also encompass the development of digital banking products and services to meet the needs of cooperative members.
Women’s cooperatives can potentially be a great partner for banks to extend digital financial services to the last mile, especially to low-income women
MSC and PEKKA Foundation have collaborated to enhance low-income women’s quality, uptake, and usage of digital financial services in rural areas. PEKKA runs a network of women’s cooperatives in 20 Indonesian provinces.
The pilot project will cover four districts in four provinces: Tangerang, Karawang, Pekalongan City, and Bantul. We are working to integrate the cooperative and Laku Pandai agents to provide financial products and services on a digital platform. The platform will serve the existing member base across the women’s cooperative offices during the pilot phase, and from the result, it will be expanded to other locations under the cooperative’s network.
Cooperatives that were once limited to offering basic loan and saving services can now provide their members the full suite of a bank’s financial services. They can now offer money transfer, cash withdrawal, bill payment, disbursement of cash social assistance, and People Business Credit (KUR) applications. Also, transaction fees charged by the agent are a potential source of income for the cooperatives. It can turn into residual income or Sisa Hasil Usaha (SHU) at the year-end.
The integration of Laku Pandai and cooperative
MSC’s study on female banking agents in India found that female agents create a reassuring environment for women and men to make transactions. It also noted that the acceptance and success of female agents depend significantly on social perceptions, which play a more influential role for them than their male counterparts. For instance, our research shows that most customers generally perceive male agents to be faster, more knowledgeable, updated about product features, and less prone to commit errors in the DFS business.
Although the findings reflected India’s perceptions, social norms, and culture, MSC found similar phenomena while undertaking need assessment in the pilot project locations of Indonesia. Women need another group of empowered women of higher capacity and broader insights—“influencers”—to help them adopt digital finances.
For this reason, Women Digital Ambassadors (WDAs) are recruited from the cooperative members. These ambassadors consist of women small business owners who will be equipped with knowledge and tools through training from MSC on digital entrepreneurship, selling through social commerce, and digital finances. These small entrepreneurs are selected because they have actively accessed multiple banking products and services. They are commonly known as the “early adaptor, trailblazers, and movers” in digital finances.
These woman ambassadors will mentor the members of cooperatives to access the digital financial services and products offered through Laku Pandai agents. The weekly meetings of cooperative groups provide an excellent forum to exchange information and knowledge.
Women Digital Ambassador (WDAs) can become the torchbearers to accelerate women’s financial inclusion
Women’s cooperatives integrated with Laku Pandai services and supported by the WDAs are expected to give deeper, broader, and measurable impacts on collective initiatives that engage women in the digital economy, especially in rural areas.
Through these initiatives, MSC expects to support the vision of financial inclusion for Indonesian women outlined in the National Strategy of Financial Inclusion—Women (SNKI-P). SNKI-P intends to achieve 90% financial inclusion by 2024. The initiatives need support from financial service providers, including bank and nonbank institutions, to upskill Laku Pandai agents in operation and customer services to create quality agents.
However, financial inclusion is not the endgame. Instead, it is a vehicle to accomplish objectives like gender equality, women’s economic empowerment, leadership, and poverty alleviation.
Over the next few months, MSC and PEKKA will develop a training module for WDAs and an operating model for the new “cooperative Laku Pandai agents.” MSC has also partnered with financial service providers to ensure that these banking agents receive sufficient support to succeed. Tune in as we publish more updates.
Women in low-income communities may choose a channel based on the most economical choice that suits their life best, given their acute burden of unpaid care work and time poverty. It is critical to decode gendered aspects that lead women to choose their selected channel to help build their financial resilience.
MSC’s DEBIT framework helps us understand which channel the individual chooses and why. Comparing the DEBIT scores helps us identify actions that stakeholders like governments and financial service providers can undertake to help women have a wider range of channels to choose from.
Financial inclusion for women in India still has a long way to go. While more women appear to be financially included, the use of these accounts remains limited across the country, especially among low- and moderate-income (LMI) women. Women’s ownership of bank accounts has improved over the years. The increase is primarily due to the PMJDY mission, which was crucial to reducing the gender gap in bank account ownership—from 19.8% in 2014 to 6.4% in 2017. Findex 2017 reported that 77% of Indian women owned a bank account against 43% in 2014 and 26% in 2011. Yet it also shows that the estimated gender gap in account ownership and usage remains significant.
Women face relatively higher barriers to using financial services at the bank or agent point due to their limited mobility and adverse gender-based norms. Although pivotal to accelerating the usage of bank accounts, digital financial services continues to be under-utilized, especially among women in India.
Key drivers of the gender gap
Women’s low utilization of bank accounts mainly stems from operational factors and limitations placed by social-cultural norms. On the supply side, a lack of focus on women’s needs and financial behavior remains a crucial driver to their low utilization of financial services. Banking products and services do not recognize that women and men have different financial behaviors deeply influenced by gendered social norms. For example, women prioritize privacy and savings. They have horizontal social networks, smaller economic geographies preferring to transact closer to home due to less free time available, and constraints on safe mobility. They also have varied lifecycle needs as they experience more transitions like marriage, maternity, and childbirth.
The promise of DFS in addressing the gender gap
DFS can help women overcome these barriers by offering solutions that they can access remotely, safely, and cost-effectively. Such solutions could be designed to enhance privacy and women’s control over their money. It could address women’s time poverty and mobility constraints by allowing them to transact at their preferred time and location. The solutions could also help them cope better with emergencies by making it easier for women to send and collect funds from different sources. Effective digital savings tools could help women with managing risk better and enhancing their financial asset base. A digital footprint of women’s transactions can also help make their creditworthiness more visible to banks and financial service providers.
Suffice to say, DFS could be a strong catalyst for women’s economic empowerment.
Inspired by the “Elephant, Path, Rider” framework by psychologist Jonathan Haidt, an examination of the journey of using DFS for the first time by men and women shows the interplay of the emotional and the rational mind for each step within the journey. The customized framework highlights three essential contributors to changing a user’s perspective to DFS and their interaction with it. These are:
The below is a snapshot of Kajal’s (a volunteer at Odisha Livelihoods Mission) journey of using a mobile payment service for the first time. Despite a positive experience, she hesitates to use DFS the next time due to her risk-averse nature and the limited availability of customer service to help with any errors she may make.
This examination has helped identify the following critical factors that contribute to limiting the uptake of DFS, especially among women:
The government’s response
Government departments have undertaken several initiatives to enhance the use of financial services, including DFS. These initiatives include efforts undertaken by the Department of Financial Services, the Ministry of Rural Development, and NITI Aayog. They focus on enhancing access to financial services among women and ensuring account ownership at the last mile.
While these government initiatives are laudable, the complex range of physical, social, and psychological barriers mean that they are unlikely to be adequate, even if they achieve scale. If India intends to achieve real digital financial inclusion for all, it will need to expand the financial services space for millions of low-income women.
Expanding the financial services space would require creating convenient access, valuable use-cases, exposure, and trust-building—first through assisted access to DFS. Female BC agents at the last mile could be a critical channel to encourage exposure, build trust, and ensure a positive first experience of DFS for women users. These local agents are an integral part of the community and enjoy women’s trust. Ultimately, these agents could provide women with the skills, confidence, and trust to use digital tools to conduct self-initiated transactions—especially if they can get their hands on intuitive user interfaces.
Financial inclusion for women in India still has a long way to go. While more women appear to be financially included, the use of these accounts remains limited across the country, especially among low- and moderate-income (LMI) women. Women’s ownership of bank accounts has improved over the years. The increase is primarily due to the 
