Women more likely to use bank services in low-use context: Report

Women are more likely to own a bank account or engage with formal banking institutions compared to men, according to a study released on Wednesday on the extent of low bank account use among poorer households in India despite new policies that encourage account opening.

“Our survey of 25,000 individuals across rural Uttar Pradesh and Delhi/NCR showed that 58 per cent of the adult rural sample and 67 per cent of the adult urban sample had bank accounts. However, over a third had not operated their accounts in the last three months and a fifth in the last six months,” according to the joint study titled “Decoding bank account usage by low income segments” by the Grameen Foundation India (GFI) and Institute of Rural Management, Anand, that was supported by J.P. Morgan.

“These numbers are significant from a low income segment perspective, given that 50 per cent of rural households and 75 per cent of urban households in the study sample fell below the poverty line for rural and urban areas as defined by the Rangarajan Committee,” it said.

The study, however, also found that nearly 72 per cent females prefer depositing money in formal banks as compared to men, who prefer to keep their money at home.

“Even when there was a willingness to bank, the issue of access was a clear hindrance, with a 28 per cent likelihood of an account sliding into low-usage the farther an individual was located from the bank branch,” the report said.

“Further, the greater the distance to the branch, the likelihood of an account having zero balance was nearly 80 per cent,” it added.

The report said that to unlock “the catalytic potential of Digital Financial Services (DFS)”, its “solutions will need to target women as digital gatekeepers” .

“Women showed a lower ownership of mobile phones compared to men (especially in rural areas, where only 34 per cent had mobile phones) but they showed a definite greater propensity to bank and use the phone as a medium to engage especially in getting information around additional products such as loans and savings products.”

“Women can thus drive DFS adoption,” it added.

The report also said that account activity is also linked to the level of economic activity in a given area. It suggested that financial inclusion policies must be in tandem with economic activity in the given geography.

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