Gender and financial inclusion: does technology make a difference?

Abstract

Using district-level survey data, the analysis assesses the impact of technology in fostering the financial inclusion of women in India. The findings show that women are 12% less likely to use a mobile phone while opening accounts and 9% less likely to actively use such accounts. Relatedly, account ownership and its use are less likely for women with mobile phones, especially in the post-PMJDY period. The evidence also reveals a differential impact of mobile phones on women across strata and primarily for below-poverty line respondents. The analysis suggests the need for carefully-crafted policies to address this mobile gender gap in order to further reduce the gender gap in financial inclusion.

Keywords:

• Gender
• financial inclusion
• Probit
• Heckman Probit
• India

JEL classification codes:

• J 16
• P 16
• G 21

Acknowledgment

I would like to thank two anonymous referees for the incisive comments on an earlier draft which greatly improved the exposition and analysis. Needless to say, the views expressed and the approach pursued in the paper strictly reflect the personal opinion of the author.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The Prime Minister Jan Dhan Yojana (literally, Prime Minister’s Mass Wealth Scheme) was initiated in August 2014. The Scheme is aimed at ensuring universal access to banking facilities starting with basic banking accounts and an overdraft facility after six months and a debit card facility with an in-built accident insurance cover of US$1500.

2 Established by the Indian government in 2009, the Unique Identification Authority of India (UIDAI) was mandated to assign a unique 12-digit identification number (termed as Aadhaar) to all the residents of India. The number is linked to the resident's basic demographic and biometric information such as photograph, ten fingerprints and two iris scans, which are stored in a centralised database.

3 These three waves were conducted during October 2013 to January 2014 [Wave 1], September – December 2014 [Wave 2] and June – October 2015 [Wave 3]. Jammu and Kashmir and the Union territories of Andaman and Nicobar Islands and Lakshadweep were not included in the survey.

4 The poverty indicator employed is the Progress out of Poverty Index (Desiere and D’Haese, -., 2015).

5 The classification of states in terms of regions is based on the codification adopted by the Indian central bank (See, Reserve Bank of India, 2015India, 2020).

6 The average price of a smartphone in India ranges from US $150 to 175.

Additional information

Notes on contributors

Saibal Ghosh

Saibal Ghosh is presently working with the Qatar Central Bank in Doha, Qatar. The present article is based on research that was conceptualized and initiated when the author was working with the Centre for Advanced Financial Research and Learning (CAFRAL), Mumbai, India. I would like to thank two anonymous referees for the incisive comments on an earlier draft which greatly improved the exposition and analysis. Needless to say, the views expressed and the approach pursued in the paper strictly reflect the personal opinion of the author.