Empowering Women through Financial Inclusion: A Study of Urban Slum

“There is no tool for development more effective than women empowerment.”—Mr. Kofi Annan

In 2005, the former general secretary of the United Nations quoted this statement to address the issue of gender inequality as a barrier in global development. He also emphasized upon the significance of ‘Inclusive Financial Sector’ to ensure gender economic equality. As per Findex data of Word Bank, 1.2 billion adults have access to financial services since 2011, yet close to one-third, that is, 1.7 billion adults are still unbanked. About half of the unbanked population includes poor households or out of workforce (The World Bank, 2018). The G-20 summit, in 2010, perceived financial inclusion (FI) as one of the paramount pillars of the worldwide progress. In fact, financial inclusion has been identified as facilitator for seven of the 17 sustainable development goals. World Bank considers FI as the key to boost prosperity by poverty reduction. Since 2010, more than 60 countries have launched a national strategy directed towards attaining Universal Financial Access by 2020.

Women empowerment is a radical approach to transform power relations in favour of female gender that leads to better gender equality (Batliwala, 2007).


This enables females to make their life choices, which in turn, effectively improves their well-being. Gender equality and women empowerment are essential to global progress and it can be enhanced by providing affordable financial services to women (Holloway, Niazi, & Rouse, 2017). After the persuasions by G-20 in 2014, financial services were perfused to a vast section of the society, and the period between 2011 and 2014 witnessed an upward trend in the number of first-time adults as bank account holders. On the flip side, it was not able to fill the gender gap for access to basic banking services (Ghosh & Vinod, 2017).

This led to social exclusion and gender disparity, highly rampant in case of developing country as compared to a developed country (Ahmed, Aurora, Biru, & Salvini, 2001Dawar & Singh, 2016). In the words of Noble Laureate Amartaya Sen, ‘Poverty is not merely lowness of income, but deprivation of basic capabilities’ (2014). Thus, accomplishing complete financial inclusion does not just determine the issues identified with financial structure, rather its centre is annulling the condition of social exclusion (Rangarajan Committee, 2008). Thus, the inclusive financial model has emerged as an arrangement in developing nations to achieve formative objectives. Formulation of mechanism to achieve women empowerment through affordable financial services is a rigorous approach to achieve sustainable growth globally.

The concerns for women empowerment have been rising in India over last few decades. Series of political events post-2014 in India has heightened societal concerns about women’s role in economic life as well as critical roles within their households. Mostly, empirical articles in this literature have studied the effects of financial inclusion on women empowerment that has evaluated an over-broadened meaning of empowerment or a truncated part of it (Goetz & Gupta, 1996). Most investigations are typically cross-country research (Demirguc Kunt, Klapper, & Singer, 2013Lampietti & Stalker, 2000Quisumbing, Haddad, & Pena, 1995). Within a nationalized context, the studies address the conduct of female-headed family units concentrating basically on financial access alone (Fletschner, 2008Hazarika & Guha-Khasnobis, 2008Rawlings & Rubio, 2005). Another set of studies implies presence of gender gap due to lower financial literacy (Fernandes, Lynch, & Netemeyer, 2014), behaviour biases (Frisancho, 2016) and institutional segregation (Corsi & De Angelis, 2017). Estimation of women empowerment is another glitch as it cannot be straightforwardly observed and has numerous features (Beteta, 2006Mason, 2005Swain & Wallentin, 2009).
In the Indian context, most of the studies (Datta & Singh, 2018Ghosh & Vinod, 2017Swamy, 2014) have used publicly available data to determine the extent of FI. Studies using primary data are limited in number. For women, the phenomena of urbanization and the growth of city ghettoes have unique causes and unique consequences, and yet these issues are largely ignored by prior studies in this area (COHRE, 2008).

Only a handful of studies specifically focussed upon links between south Asian slums and women empowerment (Fisher, 2008Hazarika, 2010Kaur, Singh, Gupta, Bahuguna, & Rani, 2015Nasrin, 2012).

These studies relied solely on reviews of existing literature and evaluations based on secondary data. On the other side, the current study utilizes primary data from urban ghettos. The convincing motivations to examine women empowerment in this study are multifold. First, women represent two-fifth of work power, yet access to formal financial channels is very low. Second, government and RBI, both, have attempted strides to improve the number of financially included women, and its effect is yet to be assessed.

Third, India is one of the developing economies for which the household-level information is promptly accessible, on both access and usage of financial inclusion schemes, by gender orientation. Fourth, most studies in literature have discussed financial inclusion of rural poor to evaluate and formulate strategies so that the involvement of rural poor may be enhanced in economy. However, the state of financial inclusion among the slum dwellers is largely underexplored in the literature. This is useful and relevant because the evaluation of expenditure, saving, and credit pattern among urban poor may help in formulating effective strategies to make them inclusive.


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