The Role of Financial Inclusion in Driving Women's Economic Empowerment

Introduction

Access to Financial services is recognised globally as a key factor for economic and social development (Sha'ban et al., 2020). Individuals “excluded from mainstream financial network are prone to different type of risks such as social exclusion and missed opportunities for” economic pursuit. The empirical studies have emphasised on the benefits of financial inclusion (FI) is enhancing the individual’s livelihood and focusing on building inclusive and financially resilient societies (Aslan et al., 2017; Kass-Hanna et al., 2022). According to World Bank Findex data, 1.2 billion adults have had access to financial services since 2011, yet about one-third, or 1.7 billion adults, remain unbanked (Demirguc-Kunt et al., 2020). Out of these, Females make up 56 per cent of the unbanked population (Demirguc-Kunt et al., 2018). The majority of financially excluded live in developing world and mainly in South Asia and Sub-Saharan Africa (Demirguc-Kunt et al., 2018). The policymakers and other stakeholders argue that inclusive financial systems empower individuals, especially the most vulnerable, to save, borrow, build assets and protect against risk (Gash and Gray, 2016).

The gender gap in FI, such as difference in access to bank account, building saving and access to credit, “raises concerns because of its economic implications interms of gender inequality. The gender gap in FI is a major consequence for women empowerment by restricting the ability of women to play economic role”. These differences exert long term impact on financial stability of women especially from lower segment of society (Perrin and Weill, 2022). Also, there are limited empirical evidences available in literature to make arguments for FI of women in slums and required further investigation.

Women's empowerment is high on the development framework's agenda. Women make significant contributions to the economy, but their returns are disproportionately low because they lack control over resources, savings, and bank borrowings. Since its inception, the welfare of women has continued to be one of the areas of concern of the United Nations (UN, 1995). In the last two decades, significant progress has been made toward the empowerment of women through the xMillennium Development Goals and Sustainable Development Goals in health, education, and economic well-being”. Gender equality and women’s empowerment are critical to global progress, and they can be aided by making financial services more affordable (Holloway et al., 2017). FI is providing financial services at no expense to vast sections of the distraught and low-income populaces (UNCDF, 2006; Ardic et al., 2011; Demirgüç-Kunt and Klapper, 2013; Allen et al., 2016). Thus, FI has become a priority for governments and institutions in numerous OECD nations (Ardic et al., 2011; Demirgüç-Kunt and Klapper, 2013; Allen et al., 2016). The government's emphasis on providing banking services to the unbanked will benefit lower-income households.

“In this direction, the Government of India launched “Pradhan Mantri Jan Dhan Yojana” (PJD), “Pradhan Mantri Jeevan Jyoti Bima Yojana” (PJJB), “Pradhan Mantri Suraksha Bima Yojana” (PSB), and “Atal Pension Yojana” (APS) in 2014, contributing to the achievement of Sustainable Development Goals (SDGs). In this background, the study investigates the trajectory of women empowerment through recently launched FI schemes by Government of India (GOI) in urban slums.”