Gender gap in financial inclusion
- Business Correspondents (BCs) are the vital cog for the financial inclusion strategy of every bank.
- BC: retail agents engaged by banks for providing banking services at locations other than a bank branch/ATM.
- Around 95 percent of banking outlets in rural regions are operated by BCs.
- Despite the proliferation of BCs, the representation of female BCs is dismally low (Less than 10 % of the total BC network).
Female BC is needed, because
- BCs have been able to conduct banking transactions, from nearby their homes, cutting down transportation cost, time, and hesitancy barriers.
- Female BCs are better positioned to serve and engage under-banked women.
- Male staff often deal without discussion with female customers, which hinders women’s agency and in turn decreases their engagement with formal financial institutions.
- Lower levels of financial as well as digital literacy make handholding support provided by female BCs relevant for women customers.
- Female BCs show higher profitability, wider cross-selling of financial products, and lower attrition rates.
- Female BCs have been particularly important in nudging the excluded underbanked women and addressing the last-mile disconnect.
Initiative on female BCs by the government
One Gram Panchayat One BC Sakhi
- Launched by the Ministry of Rural Development.
- Aims to increase these numbers and deploy at least one BC Sakhi in every Gram Panchayat by the end of 2023-24.
- Effect: During lockdown, BC Sakhis (female banker friend) created awareness and enabled access to Pradhan Mantri Garib Kalyan Yojana cash transfers and other Direct Benefit Transfers at doorsteps and reduced beneficiaries rush at bank branches.
Challenges with Female BCs
- Lack of funds to invest in hardware required to operate as a BC.
- Only a handful of banks extend equipment support to BCs.
- Higher minimum qualification for female BCs by some banks.
- According to the RBI mandate, the 10th pass is the minimum qualification to appear for the examination still, many banks keep their minimum qualification as the 12th pass.
- Limited additional financial support provided by banks to female BCs such as mobility, and safety.
- Solely reliability on BC work as a source of revenue.
- BCs ecosystem has a low commission structure.
- Female BCs lack the training to serve the needs of women enterprises.
Looking ahead
- Need for a policy to create a more inclusive and supportive ecosystem for female BCs.
- Additional financial support such as reimbursement of the cost incurred in commutation, internet connectivity
- Female BCs training camps to provide a broader range of services.
- It will increase their revenue streams and improve financial inclusion for women enterprises.
- Improvement in the Percentage of female BCs.
- Banks have to keep the 10th pass as the minimum qualification.
- Banks should provide the necessary types of equipment such as laptops, and smartphones to Female BCs.
BC in India is currently a male-dominated profession but good policy can bring gender parity across India in this sector. By addressing challenges in Business Correspondents, it is possible to increase the representation of female BCs. It will ultimately help us to achieve sustainable goals such as gender equality.
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