Guest Articles

December 2

Anant Nyshadham / Shalin Gor / Divya Nair / Emily Coppel

Access, Understanding and Trust: Breaking Down the Barriers to Women’s Participation in India’s Digital Finance Revolution

The digital gender divide has long occupied international development headlines, as gaps remain between men and women in both access to and usage of digital technologies in many emerging economies. India is no exception: Though overall mobile phone ownership at the household level is now very high (around 92% in rural areas and 97% in urban areas, according to the most recent National Family Health Survey), less than half of women in rural areas have mobile phones that they report using themselves. Similarly, while over half of households in India have access to the internet, only one-third of women have ever used the internet. Internet access is even lower for rural Indian women (25%), and it’s particularly low for those in the lower wealth quintile (9%). This means that poor women in rural areas are almost entirely excluded from digital access.

The consequences of digital exclusion on women’s empowerment in India are substantial — and they’re well-exemplified by the challenges facing women in financial inclusion. Accelerated by the pandemic, both private sector and government actors around the world have increasingly relied on digital solutions to engage with populations at scale for the provision of financial services and the delivery of economic relief. If women in emerging economies like India remain disproportionately excluded from these digital services, they will continue to have unequal access to government programs, financial products, employment opportunities and other benefits, further hampering their ability to support themselves and their families. 

That’s why it’s important to understand the obstacles that are preventing women from participating in digital services. These challenges can be organized into three distinct areas: 

  • Access — i.e., does a person own, or have access to, digital services?
  • Understanding (also known as process literacy) — i.e., does a person understand the steps of using a digital service?
  • Trust — i.e., does a person have enough confidence in a digital solution to adopt it and move away from the status quo?

These three types of obstacles can serve as key dimensions that can guide engagement with excluded women, enabling service providers to better understand their challenges, and to design effective solutions. Below, we’ll discuss how these obstacles are impacting women in India, and share some implications for providers of digital financial services.  


Access to Digital Services

Access to digital services is a two-way street: Can service providers access recipients, and can recipients access providers? Successful examples of increasing women’s access typically involve service providers actively engaging with the people they are trying to reach — i.e., connecting directly with women, to better understand their situations and problems. This task became more challenging during the pandemic, as traditional face-to-face engagement was replaced with phone-based communication as the preferred mechanism — for example, phone-based data collection. Unfortunately, the gender inequity in access to mobile devices has compromised service providers’ ability to reach women in this way, presenting a risk of gender bias in the data collected over the phone, and potentially limiting providers’ understanding of the challenges faced by women. 

Results from seven phone-based household surveys conducted by IDinsight in 2020 in rural India, cumulatively comprising more than 36,000 responses, show that the high prevalence of male mobile gatekeeping significantly reduces researchers’ access to female respondents. Further, those household members that first answer a phone call are overwhelmingly male (as frequently as 71% of the time for one survey); and regardless of who picks up the phone, they are often unable or unwilling to pass the phone to another member of the household during the same call. We believe this may be because most respondents are not co-located in the same vicinity as their opposite-gender cohabitants during the daytime. 

The consequences of this lack of access are familiar to providers. “Women are harder to locate because of the absence of gender-disaggregated data,” said Seema Prem, CEO of FIA Global, which has a significant presence as a neobank in India. “The cost of serving a woman customer is higher, and that makes selling to women that much more difficult.” Speaking of the significant resources and labor required to reach women in India in a discussion with IDinsight, Prem added: “Often, one has to convince not just the woman but also the men in the family. The account usage gap for women is higher, especially if the services are not available at their doorstep.”


Understanding How to Use Digital Tools

Assuming that a person has access to a device or a digital service, understanding how to use digital tools — or understanding the fundamentals of personal finance — is the next barrier to adoption of digital financial services. National Family Health Survey data indicates that only 23% of Indian women overall use phones for financial transactions, and this is again lower (17%) in rural areas. 

To explore the limitations to functional and informational knowledge (i.e., process literacy), Good Business Lab and IDinsight conducted a study with approximately 600 garment workers at Shahi Exports, one of India’s largest manufacturers of ready-made garments, to investigate the remittance behaviors of low-income female migrant workers in urban areas after they received training on how to use a digital payment tool. Of these female workers, 86% were sending remittances back home. But only 5% used digital payment tools to send these funds, in contrast to the 91% who transferred money using over-the-counter agents or shopkeepers. The training did improve the usage of the digital payment tool — classroom training increased usage by 5 percentage points (from 6% to 11%), and individualized training sessions increased usage by 10 percentage points (from 6% to 16%) — but the impact wasn’t as dramatic as hoped. 

The study uncovered myriad factors that were preventing the uptake and adoption of the digital payment option. Many of these pertained to technical requirements of the phone or account types, and cumbersome regulatory procedures. But perhaps most stark among them was the fact that women were indeed already sending remittances without a familiar digital mechanism. This meant that even though we as researchers or policy designers could conceive of many ways in which digital tools would be more efficient and powerful than traditional means, the women themselves did not necessarily see these benefits as large enough to outweigh the immediate cost of learning and practicing a new method for doing something they were already successfully accomplishing. 

The study also reminded us of something more basic: Digital transactions are two-point in nature. Although training the senders in digital remittance technologies might improve their technical abilities in using the tools, the recipients might not possess the same level of understanding and comfort, consequently forcing both parties to revert to their existing remittance practices rather than adopting digital solutions. This suggests that perhaps trust is required to bridge the gap between the theoretical value of digital innovations and their real-world adoption.


Building Trust in Digital Platforms

In India, large segments of the population are comfortable with using over-the-counter services or agents to support financial remittances. If there are concerns or questions, people regularly reach out to agents to resolve them. But these customers don’t have the same level of trust in digital platforms, creating a major barrier to the adoption and use of these services. Encouraging people to change their remittance habits and adopt digital options requires intense and empathetic change management to understand their needs, processes and comfort levels, and then to demonstrate how adopting digital alternatives can benefit them and improve their lives.

Building this trust is challenging, as it takes time and can be destroyed in an instant. But a good place to start is by putting women at the forefront. Government schemes, financial service providers and NGOs all rely on networks of agents to reach isolated populations, and these agents typically speak in a local tongue, and act as on-the-ground change-makers. However, there is strong evidence that the use of male agents is often a barrier to onboarding women to a service, in populations where cultural circumstances have a large influence on societal behaviors. This is particularly prominent in low- and middle-income countries like India.  

“Among our agents, just about 12% are women,” said Sasidhar N Thumuluri, MD and CEO of the India-based fintech Sub-K IMPACT Solutions, in a conversation with IDinsight. “We have been working out ways of increasing women agents, however. This is a KPI for the business and marketing teams. It is a strong belief that we will need more women among our field staff and agents to ensure greater inclusion among customers.” In a case study conducted by BRAC, on enrolling off-the-grid and unbanked illiterate women in rural Bangladesh to the financial service bKash, using women agents was found to improve the chances of effectively engaging with these women customers. As Seema Prem from FIA Global put it: “Women are better able to convince women to adopt digital financial services. So it makes sense to hire more women in roles related to the promotion of financial services.” Similarly, for financial service providers looking to more deeply understand their potential customer base, IDinsight found that using female enumerators for women-centric surveys increased the rates of households consenting to and participating in the survey.


The Nuanced Truth About Digital Inclusivity in India

As the world becomes more digitally connected, and statistics track the penetration of smartphones into a variety of households, it can be easy to overlook the nuanced truth about inclusivity. The first barrier may indeed be access to technology, and as costs come down and infrastructure expands, access might seem like an obstacle that can be quickly and easily overcome for even the most marginalized populations. 

But, as in the case of female financial inclusion, the devil is in the details. Households may have phones, but women may not use them often. In the absence of frequent interactions with those phones, they will be slow to develop a comfort level with all the capabilities the phone can unlock, including financial services. And even if subsets of the female population — for example, young migrant women working in cities — have a phone of their own and know how to use its potentially transformative digital services, these women likely have elderly women family members in rural areas who are left behind, which may continue to present a barrier to the adoption of more sophisticated tools. This will prolong the process of developing both functional literacy and trust in these tools among the broader population of Indian women. 

In response to these challenges, researchers, service providers and policy makers need to think holistically about the process of change for all stakeholders when attempting to advance digital financial inclusion in India. Transformative change will be possible only when private and public sector actors combine innovation with empathy, data, rigorous research and a contextual understanding of user experience — while keeping the unique challenges of women customers top of mind.


Authors’ note: We are grateful to Fahad Hasin and Satyavrat KK for their contributions to this article. We also thank the FIA Global and Sub-K IMPACT Solutions teams for their timely input and perspective. While this article shares the authors’ opinions, it reflects a synthesis of work undertaken by teams at IDinsight and GBL on financial inclusion in India.


Anant Nyshadham is the cofounder of Good Business Lab; Shalin Gor is a management consultant; Divya Nair was a Director at IDinsight; Emily Coppel oversees strategic communications at IDinsight.

Photo courtesy of © 2012, Charlotte Raymond Photography for International AIDS Vaccine Initiative (IAVI).




Finance, Technology, Telecommunications
digital finance, financial inclusion, remittances