Indian Prime Minister Manmohan Singh last week opened the first branch of the Bharatiya Mahila Bank (Indian Women’s Bank) in Mumbai, which will employ only women, and accept deposits from and lend mostly to women.
Importantly, this bank will have branches in smaller towns and villages where its services are most required. And while men may also operate accounts here, the focus will be on women, and making educating women financially-aware.
Why a bank – primarily – for women? Only 26 percent of women in India have an account in a financial institution – be it a bank, a credit union, a post office or a microfinance institution – compared with 46 percent of men, according to a study by the World Bank.
Financial inclusion is a big challenge in many developing countries where barriers to opening a bank account or taking a loan include physical distance, lack of documentation and high costs; only 35 percent of Indians have access to banking services compared to a global average of 50 percent, and a developing-nation average of 41 percent, according to World Bank data.
In India, even as more women are getting an education and jobs, millions still have no access to basic financial services and are reduced to being dependent on their fathers or their husbands to manage their money. At the same time, some of the top private banks, from ICICI Bank to HSBC Plc and JP Morgan in India have women CEOs.
Microfinance institutions and self-help groups have done much to improve access to financial services for women, as have the advent of mobile phones and the rollout of India’s unique identification system. Simply setting up a bank of women will not solve entrenched social issues and traditions which continue to favor men. But it is a start, and much like India’s popular ladies’-special-trains, the bank may lower the barriers for women in a deeply patriarchal society.