13th June 2024

Better business. Better community

Business Industry and Financial

Women as financial ambassadors: Key to expanding inclusion

Pramila Hole, 26-year-old from Bhetwadi in Pune, has swiftly mastered a spectrum of banking services within a mere ten months. Her adeptness spans facilitating seamless transactions, including deposits and withdrawals, while encouraging her customers to embrace insurance and pensions. Earning an average monthly commission of Rs15,000 within this short span showcases her dedication and proficiency. Pramila harbours ambitions of broadening her horizon by aspiring to become a loan recovery agent, demonstrating her commitment to evolving within the banking sector.

Gender Equality.(Getty Images/iStockphoto)
Gender Equality.(Getty Images/iStockphoto)

Business Correspondents (BCs) in India have revolutionised access to banking, and the gender balance in this domain has been steadily improving over the years. Strides made by the Pradhan Mantri Jan Dhan Yojana (PMJDY) have helped widen access to formal savings accounts, however, tremendous potential lies untapped within the realm of women serving as banking agents, especially in catering to the 27 crore women Jan Dhan account holders. Leveraging this potential could not only significantly enhance financial inclusion but also transform the dynamics of the banking sector.

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Extensive research conducted in India underscores the invaluable contributions of women banking agents. They exhibit higher sign-up rates, facilitate larger transactions, and, perhaps most importantly, forge enduring relationships with customers compared to their male counterparts, which is especially critical for women customers. It’s this untapped potential that presents an opportunity to foster greater diversity within financial institutions, unlocking new revenue streams, and importantly, paving the way for meaningful careers for women in finance. The Jan Dhan Plus work with public sector banks in India underscores that women BCs consistently outperform their male counterparts, showcasing stronger relationship-building skills and experiencing improved financial independence. Acknowledging this, India’s department of financial services (DFS) aims to escalate the number of women BCs to 30% from 18% at present (DFS internal meeting notes), ensuring significant outreach to low-income women. However, for this goal to materialise, regulators and policymakers must spearhead targeted initiatives. Setting industry targets for women banking agents, providing financial support for essential resources, and incorporating gender sensitivity in training processes are pivotal steps.

The recent collaboration between public sector banks and state rural livelihood missions (SRLMs) across India is a monumental stride that could prove transformative for both women customers and agents alike. Under the vision of ‘One Gram Panchayat, One BC Sakhi’, states are committing to identifying, recruiting, training, and supervising BC Sakhis, linking them with banks. For instance, UMED-Maharashtra SRLM aims to recruit 15,000 BC sakhis from existing self-help groups for the entire state by 2024 and Uttar Pradesh plans to include over 50,000 BC sakhis.

From the standpoint of Financial Service Providers (FSPs), investing in women agents can be more lucrative, given their likelihood to continue with the agency business once they start and their willingness to engage with “last mile” customers lacking access to financial services. Data from the Jan Dhan Plus solution also underscores that women customers exhibit a 7.5 percentage point increase in the likelihood of transacting with a woman agent, thereby expanding the bank’s customer base.

While the benefits of employing women banking agents are evident, it’s essential to adopt new approaches to investing in them. Recruiting women agents may face challenges due to gender norms, demanding different onboarding and training methods to ensure their success. Another advantage lies in women agents’ adeptness at building connections with customers, translating into higher transactions, especially considering research in India revealing women customers’ preference for female agents during doorstep banking services.

While the narrative often focuses on how women agents drive financial inclusion, it’s equally crucial to prioritise their empowerment and support. Becoming a banking agent not only generates income but also enhances financial literacy, confidence, and status within the community. In some contexts, women agents leverage their positions as micro- and small-business owners to increase income through foot traffic. Alternatively, they focus solely on agent banking, providing services for multiple banks or mobile money providers, becoming an invaluable source of income.

Additionally, gender-disaggregated data collection on banking agents is fundamental for effective policy formulation. Initiatives spotlighting the success of women agents in engaging customers underscore the immense potential they hold. India’s strides in promoting women banking agents serve as a blueprint for other nations. The Insurance Regulatory and Development Authority of India recently announced the Bima Vahak Programme (insurance agent) to achieve the goal of “Insurance for all by 2047” and improving the accessibility, availability of insurance products throughout India. It will serve as a crucial last-mile connection for insurers by establishing a field force of both corporate and individual representatives. Here again, the focus is to consider onboarding more women agents.

By harnessing the potential of women as banking agents, we bridge financial inclusion gaps while fostering women’s economic empowerment and reshaping societal norms. As BC sakhi Roshani Aakare from Wardha district says, “People come to me for all their financial and banking needs and treat me with immense respect, calling me ‘madam’. This gives me the confidence to make bigger financial decisions for my own family. I am planning to invest my money in purchasing property”. Policies and practices that champion women in agent banking can be a transformative force in achieving equitable financial services for all. The true realisation of this potential lies not merely in recognising the capabilities of women but in taking proactive steps to unleash their full power within the realm of financial inclusion.

This article is authored by Prabir Borooah, programme officer, Bill & Melinda Gates Foundation and Ajit Agarwal, policy lead, South Asia, Women’s World Banking.