Approximately 80 percent of people in India over the age of 15 own a bank account, however only 34 percent of adults – and just 30 percent of women – saved money in the year leading up to this study. The authors surveyed 2,000 women in the states of Tamil Nadu and West Bengal who owned bank accounts and had histories of borrowing. Their goal was to learn more about what “women’s savings behavior reveal[s] about their financial services needs.”
In Tamil Nadu, 41 percent of women reported making their own savings decisions – without intervention from spouses or others – while in West Bengal only 23 percent of women made their own savings decisions. In Tamil Nadu, 48 percent of women reported saving for their children’s education, 33 percent saved for emergencies and 1.1 percent saved to invest in business or to increase household financial security. In West Bengal, however, 34 percent of women saved for their children’s education, 20 percent for emergencies, 21 percent to invest in their businesses and 18 percent to increase household financial security.
The authors classified the participants as Limited Engagers, Growing Opportunists and Readied Savers. Limited Engagers were defined as those with low savings and low engagement with financial services providers (FSPs). In the 12 months prior to the survey, women in this group saved an average of INR 6,285 (USD 84) – nearly all through informal mechanisms. Growing Opportunists are women with low savings but high engagement with FSPs. Women in this group saved a similar amount as Limited Engagers, but 25 percent saved with the partner financial institution in the study, and 38 percent saved with other financial institutions. Readied Savers saved double the amount of those in the other groups, with 87 percent using commercial banks and 11 percent using microfinance institutions. In addition, Readied Savers often had more diversified savings strategies than women in the other two groups, using informal mechanisms to save as well as accessing FSPs. The authors conclude that financial institutions have the greatest opportunity to encourage more formal savings among Growing Opportunists and Readied Savers because they already have high levels of engagement with financial institutions.
This is a summary of a paper by Justin Archer, Victoria Johnson, Sonja Kelly, Pallavi Madhok, and Bhargavi Ramadugu; published by Women’s World Banking (WWB); November 2021; 25 pages; available at https://www.findevgateway.org/paper/2021/11/market-opportunities-womens-savings-evidence-india
By Zachary DeLuca, Research Associate
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