Digital Financial Services: Win-Win for Women

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Anganwadi Workers Smartphones Delhi

Anganwadi workers -- the mainstay of India’s Integrated Child Development Scheme (ICDS) for nutrition of children -- have been protesting across the country for increased wages, regularisation of employment, social security benefits and removal of leakages in wages, which most of them still receive in cash. While increasing wages, and bringing this large workforce in the ambit of government social security benefits are bigger questions, the low hanging fruit is to plug leakage of salaries through digital payments, i.e. transfer payments due to individuals directly into their personal bank accounts. This will eliminate middlemen within the government; as a result, salaries/benefits can reach the intended recipients in full.


The low hanging fruit is to plug leakage of salaries through digital payments, i.e. transfer payments due to individuals directly into their personal bank accounts

Digital financial services are being considered across the country, and the new infrastructure of bank accounts opened by Pradhan Mantri Jan Dhan Yojana (PMJDY) and unique identification through Aadhaar can help accelerate the process. While the benefits of digital payments on the economy and governance are being discussed widely, it is important to understand the importance of payments in women’s lives -– both at the workplace and within the household and design systems  -- so that they can be taken along as new methods are introduced. As seen in the anganwadi protest, it is imperative to equip women with new tools, so they can control their own finances and hold employers, government and their families accountable.

Also Read: Finanical Inclusion: Where's the Data on Women's Accounts

In India, even after two years of the largest financial inclusion scheme in the world -- PMJDY -- only 47% of all women in India have bank accounts, and only 15% of female entrepreneurs have access to credit from formal financial institutions (because women do not necessarily have documents of ownership or credit histories in their names). In the absence of systemic records, there is little evidence of women’s participation in the workforce, and their labour becomes largely invisible and underpaid.

Financial Inclusion

Digital financial services are, therefore, extremely significant for women. Here are some things to think about:


Financial inclusion of women will be aided by the expansion of digital financial services. As women use more formal instruments of finance, they will develop transparent and accessible transaction histories, which can be used by banks and other financial institutions to design products that address specific needs of women. This would help bring women into the fold of formal financial services, give them access to better credit and increase their participation in the economy.

Digital financial services give women more control over their own finances and improve their participation in household decisions. In a cash-only economy, women have little or no control of the funds in the house (traditionally controlled by men). Their participation in family budgets and financial planning is limited. However, digital financial services give women access to their own funds, improve their understanding of budgetary matters and enable them to negotiate space within their households.

The use of digital financial services increases the visibility of women’s participation in the labour force. Women can make sure there are records of their wages being paid and that their entitlements are being given to them squarely. Digital financial services also increase the government's understanding of women’s participation in the labour force, which can feed into designing programs and policies to channel women’s work.

While the benefits of digital payments for women are plentiful, in India, even female government employees aren’t using these services to their full potential. Given that Indian women face systemic barriers at the familial and societal level, and that their levels of literacy, access to technology, even documentation etc are much less than men -- this makes it harder for them to adopt digital financial services. The government, private sector and civil society should work together to create supply side infrastructure, accessible technology and provide information and services to improve literacy, if we are to accelerate the on-boarding of women on a digital financial services platform. As we move women up the financial inclusion ladder, we can begin discussions on other demands of the anganwadi workers!

Astha Kapoor is a strategy consultant at MicroSave working on public policy issues. Views are personal. She can be reached @KapoorAstha

Feature Image Credit: Video Volunteers

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