10% gender gap in opening accounts under the Pradhan Mantri Jan Dhan Yojna, says World Bank

By Poojil Tiwari 

A paper published by the World Bank on Prime Minister (PM) Narendra Modi’s flagship financial inclusion program, the Jan Dhan Yojna (JDY), observed a 10% gender gap in opening accounts under the scheme. The paper titled ‘Making It Easier To Apply For A Bank Account: A Study of the Indian Market (2017)’ put the number of women applying for accounts at 63%, against 73% for men. The largest gap was recorded in Madhya Pradesh, with 21% less women applying for accounts under the scheme. The survey also claimed that while the scheme had made it easier for people to get a bank account, the people wanting to open a bank account incurred a range of costs.  

The problem of financial illiteracy amongst women

The survey, which was conducted between January and March in 2016, spanned across Bihar, Chhattisgarh, Uttar Pradesh, Andhra Pradesh, Telangana, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan and Himachal Pradesh, covering approximately 70% of the Indian population. The lack of financial literacy amongst women has been a constant source of concern for the country. A 2015 survey on financial literacy by Standards & Poor found that 80% of Indian female respondents were financially illiterate. When it comes to mobilising women to open bank accounts, the success of the JDY cannot be denied.  Within the first year of the scheme, the percentage of women account-holders had jumped from 39% to 61%. However, this number does not automatically imply that women are also active in the financial cycle. According to a Financial Inclusion Insights Study, 86% of the women who opened their accounts under the PMJDY only use their accounts for basic banking services such as bank deposits. The goal of gender inclusive financial inclusion cannot be achieved unless and until women become active users in the financial cycle. 

Making women financial stakeholders

Simply opening bank accounts won’t achieve anything unless and until women are viewed as an ‘interest group’ in financial terms. In 2013, the government had launched the Bharatiya Mahila Bank (BMB) with the aim of promoting asset ownership and entrepreneurship amongst women and making banking services more accessible to them. However, the BMB, which was merged with the State Bank of India (SBI) in April 2017 was barely able to achieve anything in its three year run. While the problem identification was accurate, BMBs were barely able to add anything to the existing financial structure. Between 2013 to 2017, BMBs only extended loans of 192 cr to women. In the same time period, the SBI provided loans of ?46,000 cr to women borrowers. Furthermore, there existed only 7 women exclusive branches and 103 branches of BMBs in total in the country. The principle reason behind the failure of the BMBs was the lack of strategic planning. BMBs were primarily opened in urban areas, which already have access to banking services. 

If the gender gap within the PMJDY is to be bridged and the problem of financial illiteracy amongst women is to be solved, the focus needs to be directed towards the rural population. Furthermore, the burden also lies on the government to create financial interest group out of the women in the country, in order to mobilise investment in that area and make them an active part of the financial cycle. 

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