How NFHS Data Can Help Craft Policy for Women’s Financial Inclusion

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Why in News?

  • Financial inclusion plays a pivotal role in achieving eight out of the 17 SDGs, emphasising its crucial role in fostering a sustainable and inclusive future.
  • Despite its significance, disparities persist, as highlighted in India's below-average performance in the Global Gender Gap Report 2023, particularly in the economic domain.
  • Therefore, it becomes crucial to have an assessment of the nuanced dimensions of financial inclusion for women in India, drawing insights from various sources, including the World Bank's Global Findex Database and the National Family Health Survey (NFHS).

Global Progress in Financial Inclusion

  • Financial inclusion has emerged as a crucial driver of economic growth and development globally, with India making significant strides in this domain.
  • The WB's Global Findex Database highlights a notable increase in adult ownership of bank accounts worldwide between 2011 and 2020, with India experiencing a commendable rise of 42 percentage points during this period.
  • This surge underscores the effectiveness of initiatives aimed at expanding access to financial services, particularly for marginalised populations, including women.

Impact of Initiatives Undertaken by the Government in Finance Inclusion

  • Reduced Gender Gap in Account Ownership
    • India's efforts to enhance financial inclusion have yielded promising results, with the gender gap in account ownership witnessing a considerable reduction.
    • The introduction of the Pradhan Mantri Jan Dhan Yojana (PMJDY) in 2014 played a pivotal role in this regard.
    • PMJDY aimed to provide universal access to banking services, offering basic savings accounts, remittance facilities, and overdrafts to underserved communities, including women in rural and urban areas.
    • As of January 2024, PMJDY has facilitated the opening of over 28 crore accounts for women, significantly contributing to bridging the gender gap in financial access.
  • Instrumental in Women’s Economic Empowerment
    • Moreover, various government initiatives such as the Deendayal Antyodaya Yojana and the National Rural Livelihood Mission (DAY-NRLM) have been instrumental in fostering women's economic empowerment and enhancing their participation in the formal financial sector.
    • These schemes provide avenues for skill development, entrepreneurship training, and access to credit, thereby enabling women to establish and sustain livelihoods.
    • Additionally, social protection programs like the Pradhan Mantri Awas Yojana and Pradhan Mantri Matru Vandana Yojana offer financial assistance and support to women, particularly during key life stages such as pregnancy and homeownership.

Broader Impact of Financial Inclusion on Women's Empowerment

  • The progress in financial inclusion is not merely confined to access to bank accounts but also encompasses broader economic participation and empowerment.
  • By providing women with avenues for savings, credit, and investment, financial inclusion enables them to mitigate risks, accumulate assets, and seize opportunities for socio-economic advancement.
  • Furthermore, increased financial access enhances women's resilience to economic shocks and vulnerabilities, fostering greater household welfare and economic stability.

Insights from NFHS Data about the Progress in Financial Inclusion

  • Financial Autonomy and Decision-making
    • NFHS data provides valuable insights into the nuanced dimensions of women's financial inclusion in India.
    • Over the past two decades, there has been a notable improvement in various indicators related to women's economic empowerment and access to financial services.
    • One significant aspect highlighted by NFHS surveys is the increasing financial autonomy among women.
    • Women are gaining greater control over financial resources, with a growing number possessing self-operated bank accounts and exercising sovereignty over financial decisions within their households.
    • This trend signifies a shift towards greater economic agency and independence among women, contributing to their overall empowerment and well-being.
  • Awareness and Utilization of Micro-Credit Programs
    • Micro-credit schemes play a crucial role in providing financial assistance to women entrepreneurs and small business owners, particularly in rural areas.
    • NFHS surveys indicate a growing awareness of these programs among women, with an increasing number availing themselves of micro-credit facilities to support their economic activities.
    • This underscores the importance of targeted interventions and support mechanisms in enabling women to access formal sources of credit and finance, thereby fostering entrepreneurship and income generation at the grassroots level.
  • Access and Utilisation of Formal Banking Services
    • By analysing factors such as education, occupation, and household characteristics, NFHS surveys identify key determinants of women's financial inclusion.
    • Education emerges as a significant driver, with educated women exhibiting higher levels of awareness and utilisation of financial services.
    • Similarly, occupation and access to electronic media also play crucial roles in shaping women's access to formal banking channels and digital financial tools.
    • These findings underscore the importance of targeted interventions and policy measures to address disparities and barriers hindering women's financial inclusion, particularly among marginalized and vulnerable groups.

Challenges and Future Directions

  • Addressing Financial Literacy Gaps
    • Despite the expansion of banking services, many individuals, particularly in rural and marginalised communities, lack adequate knowledge and understanding of financial products and services.
    • Enhancing financial literacy through targeted education and awareness campaigns is essential to empower individuals to make informed financial decisions and fully utilize available resources.
  • Bridging the Digital Divide
    • While digital financial services hold immense potential to enhance access and convenience, disparities in internet connectivity, smartphone ownership, and digital literacy limit their effectiveness.
    • Expanding digital infrastructure and promoting digital literacy initiatives are imperative to ensure equitable access to digital financial services for all segments of society.
  • Promoting Inclusivity of Marginalised Communities
    • Moreover, ensuring the inclusivity of marginalized communities, including women, minorities, and persons with disabilities, remains a pressing challenge.
    • Despite concerted efforts to promote financial inclusion, these groups continue to face systemic barriers, including social, cultural, and economic factors.
    • Tailored interventions and affirmative action programs are necessary to address these disparities and create an enabling environment for their meaningful participation in the financial ecosystem.
  • Advancing through Multi-stakeholder Collaboration
    • To overcome these challenges and advance financial inclusion, a multi-stakeholder approach is indispensable.
    • Collaboration between government agencies, financial institutions, civil society organisations, and grassroots initiatives is essential to coordinate efforts, leverage resources, and implement holistic solutions.


  • Advancing financial inclusion for women in India is pivotal for creating inclusive growth and sustainable development.
  • Initiatives such as PMJDY and DAY-NRLM have laid a strong foundation, yet concerted efforts are needed to address existing disparities and harness the full potential of women's economic participation.
  • By prioritising education, digital literacy, and targeted awareness programs, India can unlock new avenues for women's economic empowerment, driving forward the agenda of inclusive growth and prosperity.

Q1) What are Sustainable Development Goals (SDGs)?

Sustainable Development Goals (SDGs) are a set of 17 global objectives established by the United Nations in 2015 to address various social, economic, and environmental challenges, aiming to achieve a more sustainable future for all.

Q2) Why are Sustainable Development Goals important?

SDGs are crucial as they provide a comprehensive framework for international cooperation and action to tackle pressing issues such as poverty, inequality, climate change, and environmental degradation, fostering a more equitable and sustainable world for present and future generations.

Source: The Indian Express