Women Know Finance, Need Little Guidance: Kalpana Ajayan, Financial Services Expert

The society in which we live assumes finance is out of women's horizon, and that is how the financial system is built, excluding services to suffice women's needs. The lack of financial inclusivity often throws women out of the formal system and forces them to avail money from dubious sources.

Over 100 million Micro, Small, and Medium Enterprises (MSMEs) are registered in India, among which women own 18% of businesses, however, lending to women entrepreneurs remains low. What are the problems? Where the gap lies? What is happening on the ground? Where is it heading when it comes to financial inclusivity and women? What efforts are being made to reduce biases? To understand these issues, SheThePeople spoke with Kalpana Ajayan, a Regional Head, of South Asia of Women’s World Banking (WWB). Ajayan has 25+ years of experience in financial services in retail banking and Insurance. She also spent her time building and supporting leadership development.

Kalpana Ajayan Interview: On Financial Inclusivity

Ajayan, over time, has experienced, alone charity or protests cannot eradicate biases against women. Practical measures are important. Instead of discussing women's problems only from a social perspective, it is essential to see them from a business lens. Women's financial inclusion becomes easy and sustainable when financial institutions and organisations see business or investment opportunities in women. On these lines, Ajayan, through the WWB, has been working with public sector banks, financial institutions, and the government convincing the potential of investing in women. On the other hand, gearing women to find their space in the financial system.

Ajayan said, “Women's World Banking has been working for over 40 years and it's exclusively focused on women and financial inclusion. It reaches grass root levels and predominantly works on three broad approaches - Savings-led approach, Credit approach, and Advocacy to ensure financial inclusion. I believe that if you're gender-intentional, men also benefit. But if you are designing products and processes only for men, women are excluded. This is our research.”

Women Are Natural Savers, Yet Not Part Of System

Ajayan too, agrees budgeting and saving come naturally to women. The only problem is these savings need to be put in the formal financial system. She said, “Our hypothesis says saving is important from a resilience point of view. If you give ₹100 to a woman, her natural tendency is to keep a little aside. But the problem is how to bring savings into the formal financial system. It is necessary to bring it into the system first to become visible to the system and help create a credit history making her eligible for loans. Only 10% of women access the formal system. We work with SIDBI, which takes care of MSMEs. There are a lot of schemes, for instance, MUDRA. Unless they are not in the system, how will they benefit.”

Challenges Faced By Women

Ajayan spoke at length about the challenges women face to evolve in the system. According to her, the biggest problem is usage; women are not aware of how to use it to its fullest. The access is created through the Jandhan accounts, over 45 crore accounts are Jandhan and 56% are women-owned. They are unaware of schemes, and other banking facilities and no one tells them. There is a documentation problem, again unaware of what is needed. Now, these Jandhan have low-cost inflow, money comes and is withdrawn immediately. So, bankers usually don’t find these accounts beneficial for business purposes. But there is a potential, no one looks into it. Mental attitude is another barrier. Women lack courage, confidence, and also paperwork. As per qualitative research, women do not participate in the family's financial decisions. From an entrepreneurial perspective, they lack the discipline that business requires. For instance, they use current and savings accounts to carry out business. Most of the relationships are maintained by bank correspondents, who might be grocery shop owners in the village. Women do not find bank managers welcoming. They have no courage to walk into a branch and initiate a conversation with the branch manager.

Inherent biases Of lending Institution

If women have their challenges banks have their own prejudices which make inclusion more difficult and neglect women. Ajayan remarked, “We all understand what a bias is and a lot of it is unconscious. We don't even realise that there is a bias, even technology is moulded to resonate, a bias that creeps into data simply because you are training the machine through algorithms to analyse the data. Most of the data pertain to men, then your machine learning is learning little data about women. So the biases then get started building. So first we need to ensure, our organisations are aware of these biases. The organisations need to have gender-disaggregated data when looking at the portfolio.”

Can Biases Be Eradicated?

Speaking about how these biases can be removed, Ajayan added, “Having a process in which women can relate like start the use of language that they relate to. When you say I want to be fair, I need to be biased towards women to bring fairness because it is so skewed. To bring parity, I need to have some norms. How do you do it? So can I give a loan to a woman who is, say, 0.1% cheaper than a male? Can I see the difference in the term? Can I give the woman a little more repayment time? Can I have more women employees? There are not too many women in the formal financial system. How do you make it more gender intentional in terms of when you actually process the application? In servicing, can we have more women in your call center? If there is a woman, we have more gender-sensitized training. So it starts with fairness definition, understanding where the biases lie and then working systematically towards each one of them.”

Ajayan feels the bank needs to design products keeping women in mind. For instance, design A product, called Choti bachat, says that a woman can save ₹500 for a certain period and become eligible for an overdraft of ₹10,000.

Practical Solutions To Attain Inclusivity

Ajayan has been experimenting with how these challenges could be dissected and initiatives could be drawn to work on them. Ajaya pointed out extensive need for awareness, a goal-oriented approach, and handholding is required. There's so much noise, but there is a need to draw sharp attention to schemes that are relevant to this woman. Holding camps, sending useful WhatsApp messages, and digital capability building are a few of the tools. Doing extensive training on how to use G-pay, and other instruments to transact. Also, providing information on certain schemes that are beneficial needs to be told. The rural woman requires handholding and a mentor. Under the Mentorship program, there is a leader, she does the handholding job and others listen to her. They need to tell why to keep money in the bank. Women are waiting for these opportunities. Nobody is talking to them. Nobody is talking to them in the language that they understand. 

“However, things have started to change since WWB first started. Women did not even have visibility and no data to prove that. Now we could access the lowest common denominator; earlier was not possible. In the micro financial institution, the whole digital and the Fintech development in this country has made digital lending and enterprise lending so cheap and more importantly, available. The technology has played a key role in the last few years”, said Ajayan.

Is Future Bright?

Ajayan on the future of women and financial inclusion said, “The access is no longer the issue, Usage is the big focus and I think we need all stakeholders to play a role. Financial inclusion is only the starting point. Eventually, we want to do financial empowerment. When a woman starts getting included, she will automatically do everything to ensure financial empowerment. Big forum needs to hear grassroots voices. We need to get women into the big leagues, less than 50% of women are comfortable taking small loan amounts. 77% of the Shishu category of MUDRA are women, whereas, in the Kishore and Tarun, it's 12% and 2%. So this curve needs to go up, this will come from awareness and training.

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