Women’s Banks: An answer to Financial Inclusion of women?

A women’s bank has been a suggestion in Union budget in 2013-2014. Endorsement of this suggestion as well as critiques of it has come from several quarters of society. Many of these discussions look at bank as a gender-neutral institution which creates biases based on credit distribution on class differences and not gender. So to state some facts on how gender neutral the credit system is and how it further adds to feminization of poverty:

According to statistics given by UNIFEM, women constitute at least 60 per cent of the world’s poor. Poverty is experienced more severely by poor women than poor men due to less access to food, education and health care, unequal inheritance rights, lack of equal opportunities, etc. Poor women’s ability to overcome poverty is also much lower. Women in poor households are burdened with a significant responsibility constrained by limited resources. This constraint stems from not only a disadvantaged class position but often an intersection of class and gender which systematically deteriorates their position in the labor market and credit circulation. Getting loans become even more difficult for women entrepreneurs who have to prove their credibility over their male counterparts. Several women are sexually harassed when they approach money lenders or even banks for loans. HSBC India head, Naina Lal Kidwai mentiones: “It is difficult for women entrepreneurs to get a loan. There is no doubt that women are discriminated against in the loan giving process”.

Even when microfinance and self help groups have been expanding in a big way, the evaluation by RBI tells us that despite SHG’s trying to incorporate women in the ambit of banking there is much disparity in women’s participation vis-à-vis men. On an average there are 93 women per 100 men in India, but there are only 21 loan accounts per 10, 000 women as compared to 118 loan accounts per 10,000 men in the country.

Is women’s bank a solution to this? Do we have to keep creating structures after structures? Why can’t we sensitize the already existing banking structures and develop ways of incorporating women in the formal banking structures? Why is their no effective gender budgeting in formal banking sector? Why are informal groups more successful in terms of circulation of money for women in communities?

We don’t know yet if the women’s banks will be able to resolve all these problems. If not contextualized sensitively, they might end up catering to only a certain class of people and exclude women from the minority groups. Why don’t we think of vulnerable women while looking at financial inclusion? What happens to all the rape survivors who are much excluded in the financial circulation anyway because of discrimination that they face in society?

 If there is no social audit of these suggested women’s banks, they might end up as just another bureaucratic hassle of some public sector undertaking. One might argue that with this decision women are now seen as bankable community. This announcement looks at them not just as a beneficiary but also a contributory to the growth of our country. In a system where women can’t access banks because of several social constraints, a women’s bank can allow them to visit and participate more freely in credit systems. For women who are forced to give away all their financial resources to an alcoholic husband, a women’s bank might just help these women save their own earning.

Even when the laws and social customs still continue to be patriarchal, and financial institutions are not easily accessible by women, women’s banks (if operated in a gender-sensitive manner) can be a path breaking initiative to include women in the credit circulation and empower women financially. If operated like any other public sector undertaking, women will always have to rely on alternatives.