Financial Literacy: a new way of women's empowerment

We are taught to look down on money. We are also taught to worship money. But we are not taught to understand money, let alone manage it. That is why this relationship is so complicated.

When I tell stories, I dwell on numbers. So, what story do these numbers tell you?

A recent survey revealed that only 27% of Indian adults are financially literate, that's a little more than a quarter, barely. What do the numbers in the rest of the world tell? 67% of adults in the UK, 59% in Singapore, and 57% in the United States. We have a long way to go.

In India, people are openly misled on the pretext of financial advice, which is also a reason why a lot of people do not want to invest in formal structures. They are unaware of how to go about it, and they are scared of being duped. They are tricked into making bad investments and all this happens because they do not have the basic financial skills. A lot of people apply for credit cards blindly. Nothing against credit cards, but you have to use them judiciously, like everything.

They get debt trapped. They borrow more money to pay older loans and get trapped in this vicious cycle. I recently looked at an RBI report that stated that 43% of the Indian population is borrowing money from informal sources. That implies, 43% of Indian people are paying higher interest than they have to. They don't have to do it but they do it because they don't know better, and that is where initiatives like financial literacy awareness campaigns come in.

We must start the process of change to make financial literacy mainstream. Essentially, we should encourage Indian schools to do this. 60% of Indian school students do not understand the term 'investment', do not understand the concept of risk and reward, and 45% of students do not know how to make a budget.

I'd also like to highlight the stigma about finance being considered a domain for men, educated men. It is a myth that needs to be busted urgently. We must evolve out of this thinking. For several generations in India, we've all had mothers and grandmothers who secretly saved money. You will see some rolled cash under a mattress, in a rice container, or a jewelry box. We also saw some of the stashes come out during the 2016 Indian Banknote Demonetization era. But that was their way of saving money for a rainy day. That was their way of taking a little money out of the monthly budget, just in case, there was an emergency.

This shows that budgeting and saving come naturally to women, especially Indian women. There are around 100 odd things in an average Indian kitchen and our mothers, who do not possess hands-on excel sheets, know it all in their brains. They know when they will run out of a particular food item and when they will need to restore it. They are naturally good at it.

Imagine what will happen if we teach them financing and how to make investments. The money that they have saved, the money that they have been keeping, if we can teach them how to make that money grow, and not keep it stashed under the mattress, it could be a game changer, not just on a personal level, but an institution level, even a national level.

There was a recent survey of the Jandhan accounts. It revealed some very interesting findings. The average balance maintained by women is 30% more than men. Women tend to save. Today, more women are also earning, women are leading great startups at various levels. But earning money is not enough. It does not make a woman financially independent.

She needs to know that she has the right over her money, that it's hers to spend, it's hers to control. She needs to know her financial rights. More importantly, she must be made aware of the various ways in which she can save, invest, and grow her money. A lot of women, still, irrespective of which social strata they come from, depend on the male members of the family to make their financial decisions. They're the ones who decide how taxes will be filed, they're the ones who decide which stocks and bonds you will invest in.

Only 33% of Indian women take independent financial decisions. 64% of men take independent financial decisions. We need to double this "33%". That is the only way for real empowerment to come. We have to make women more financially skilled. There's no better time to do this than now.

Digitization is a huge gift. People don't have to go to a bank, they don't have to stand in a long queue, and they don't have to fill out those long, difficult-to-fill forms anymore. It's all on our smartphones at our fingertips, we can do it. On the other side, digitization has also made people vulnerable to financial fraud. That is why, it is important to learn what to do, and how to do it. It is necessary to learn from the experts to understand our money in depth.

Financial independence is empowerment. It is also the first step towards parity and equality. A woman who has good savings and a sense of investment will not be suppressed by money power, and a woman who is financially skilled and has insurance will not think twice before spending her own money on her healthcare and well-being. Studies have shown that a financially independent woman is more likely to walk out of an abusive relationship because she has options, she has avenues to support herself.

A financially independent woman can take care of her elderly parents, she can share caregiving responsibility, and she can send her child to a school of her choice. I keep coming back to numbers because numbers give you a clearer picture of where we stand. 62% of Indian women either don't have bank accounts, or if they do, they don't have direct access to them, someone else is controlling them. They might have the money, but they won't be able to use that money without the permission of that one person in their house.

If we improve this number, we will make a difference to the economy at a national level. Teaching a woman from rural India how to save the resources that she has, will make local banks stronger. Introducing her to phone banking and cashless payments will make digital India stronger. If you teach women how to invest, you contribute to a bigger cause. Financial literacy is a national asset. We have the potential to increase it by making the majority of women part of this. What we need to do is ensure that our women are financially aware, financially skilled, and financially wise.

-Anon