Typical rural economies of developing countries have many constraints in common, such as small landholdings, small savings, non-accumulation of capital, stagnant productivity, and paucity of resources. Short-term relief programs like cash transfers cannot find a solution to these problems. They need well-structured permanent institutional financial assistance and services in order to cope with these issues. Today, financial services have already made their entry into the rural economy. They not only indulge in agricultural transactions, but also in a variety of services like lending for non-agricultural activities and consumption purposes, rural savings deposit services, and other financial services like insurance.
Even with all these, rural women are at a disadvantage when it comes to financial inclusion. Women play important roles in the rural economy as farmers, wage earners, and entrepreneurs. They also perform household chores, take care of children and the elderly, and take on many other responsibilities which fall under the category of unpaid work. Thus, women form an integral part of every economy.
Yet, women in rural areas face constraints in engaging in economic activities because of gender-based discrimination, social norms, disproportionate involvement in unpaid work, and unequal access to education, healthcare, property, and financial and other services. So that at the time of any disasters or setbacks it will be women who would become more vulnerable to the impacts. The inclusion of women into the financial sector can influence economic growth, and the human development of the villages can enhance the chances of poverty reduction, betterment of education and health, and so on. However, this inclusion requires a lot of effort.
Though men and women of villages are working towards the same cause, their social and cultural profiles are completely different. Therefore, the financial services or any other services intended for rural women have to be designed in a way that they ensure equity. For instance, in rural areas, women’s access to financial institutions like banks is more limited, compared to men. One of the major reasons for this stereotypical norm is that women have to depend on men for traveling. Another reason is illiteracy; in general, the literacy rate is low in rural areas, but women’s literacy rate is particularly lower than that of men. This makes it difficult for them to go through the series of paperwork in the banking process.
More target and impact-oriented policies are necessary, as the inclusion of women is not an impossible task. Microfinance institutions like Grameen Bank of Bangladesh and Mann Deshi Foundation in India have proved to be a success by structuring their programs for rural women. Grameen Bank developed a support group-based credit system as most of the villagers cannot offer any collateral. These support groups create peer pressure, which is enough to motivate rural women to become entrepreneurs despite hardships in the family.
In the case of the Mann Deshi Foundation, they emphasized two important points. The first one is to never provide poor solutions to poor people, and the second one is to invest in women. Their bank offers specially-designed savings accounts, pension services, insurance products, as well as individualized loans.
The development in the villages where these institutions worked proves that empowering a woman can bring many social changes along with it. An educated empowered woman can take care of her and her children’s health. They also spend a considerable amount of their earnings on their children’s education. This improves the overall human development of these places. Thus, investing in women is like investing for a sustainable and equitable future.