Why Should The Gender Gap in Financial Literacy Concern Us?

Even though women have started taking the responsibility for their financial resources, the level of basic financial literacy among them, remains very low. Financial literacy is crucial for everyone but more for women, especially in developing economies

Gunjan Nagpal
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Gender Gap In Financial Literacy
I remember myself browsing through YouTube and coming across a social experiment started by a brand for its campaign. The experiment was quite simple. Both men and women were made to stand in a row; for each question, they were asked, if the answer was yes, they had to take a step ahead and if the answer was a no, a step back. The initial questions were normal regarding the general daily life tasks but they went on to develop into questions testing the financial literacy of the participants.

What would have been the results? Are you curious to know who stepped back as questions went on? Yes, the female participants. The realisation of the gender gap in financial literacy had never hit me so hard. And mind you, these weren’t the women from socially weak backgrounds. These were women who are educated, who have degrees, who are part of the workforce, and who have businesses.

Gender Gap In Financial Literacy

Nearly 77 per cent of the global adult population, roughly 3.5 billion people, of which most of them are in developing economies, lack an understanding of basic financial concepts.  And when we inspect this data through a gender lens, the stark difference becomes more evident. Worldwide, 35% of men are financially literate, compared with 30% of women. The difference seems almost ‘not too bad’ in percentage but in actual numbers, it is baffling.

The financial sector has changed significantly in recent times and owing to increasing educational levels, the participation rate in this sector has also increased. But when we examine the gender diversity of the sector, it is disappointing. Even though women have started taking the responsibility for their financial ">resources, the level of basic financial literacy among them, remains very low.

Financial literacy is crucial for everyone but more for women, especially in developing economies. Women are treated as secondary earners and hold very less autonomy in decision-making as well as allocation of various household resources. The women continually struggle with financial dependency and a low level of financial knowledge only adds fuel to the fire.


Suggested Reading: Why women need to have conversations about money and finance

Indian society is based on a patriarchal structure and therefore, financial literacy becomes a question of nurture. Women are supposedly brought up in an environment where the male head of the household has all the control over income sources and handles money-related matters. Where to make investments, how much to save among other things, everything is treated as the responsibility of men.

This trend exists even if women in the households are working professionally. Their resources are also monitored by their male counterparts. And when we keep doing the same things over and over again, we build a system out of it. That is why elderly women are dependent on their kids (mostly sons), wives on their husbands, and daughters on their brothers or fathers to help them deal with financial issues.

Indian women and financial independence

The patriarchal system is also accompanied by the distorted educational system of our country. Not a single year in the entire duration of schooling focuses on developing financial literacy in students. While boys are accustomed to the terms through their fathers, most girls face the complete drawback of financial illiteracy. We as a population need to understand that having knowledge of finances is way more important than we perceive it to be. Women are already oppressed and being financially illiterate makes the situation worse.


Even in 2022, we are doing little to make women financially free and empower them with skills to learn money management. It is still considered a domain of men. In the same breath it must be mentioned that women too have shied away from money matters for years and deeply conditioned this internally that someone else should manage wealth for them.

The impact of financial illiteracy is chronic and hampers the growth of gender equality. As a result of the prevalent gender gap in financial literacy, women are more risk-averse toward money matters. Women are hesitant in making financial decisions and preferred to be assisted by someone most of the time. Only 33% of women take independent investment decisions. Further, participation of women in the stock market is also extremely low and so is in the overall financial sector. Lack of financial literacy implies high financial dependency which does not allow women to leave a tough situation early when they are at the receiver’s end. There are many more socio-economic consequences of low financial literacy than we can imagine.

The social experiment is just a small picture of what is happening in the real world. We need a worldwide social experiment where we can see how bizarre our condition has come to and how much work we need to do to balance this divide. The experiment included women from educational backgrounds, imagine what would have been the result when participants from rural areas were also included. Today women are deprived of something as basic as access to bank accounts. Research shows that 62% of Indian women, either do not own a bank account or have limited access to banking services. Do we need any more evidence to make this gap visible? I refuse to agree.

There is a ‘divide’ in our world and this is the ‘divide’ that needs immediate attention.

The views expressed are the author's own

gender gap financial literacy india gender gap