This paper concerns a pilot savings program for women that was designed as an add-on to the Indian government’s Pradhan Mantri Jan Dhan Yojana (Jan Dhan) scheme, which allows any previously unbanked person to open a savings account at any bank in the country. Jan Dhan accounts have no minimum deposits or balances to maintain, and the customer earns interest on his or her savings. Jan Dhan was launched in 2014, and it has been credited in the rise in percentage of women with access to financial services from 26 percent in 2011 to 77 percent in 2017. One of the successes of Jan Dhan is its reach to illiterate customers due its minimal paperwork requirements.
The pilot program was to offer “Jan Dhan Plus” accounts in an effort to encourage more women to save. The new accounts offer users a credit facility of INR 10,000 (USD 134) if they make four savings deposits of INR 500 (USD 7) or more at any time during the course of one year. The pilot was conducted at 101 of Bank of Baroda’s 5,300 branches from February 2020 to August 2020, during which time 50,000 men and women enrolled.
Over the course of the study, which was heavily impacted by the COVID-19 pandemic, 18 percent of women met the deposit requirements to receive the credit incentive. Whether or not they met this threshold, women with Jan Dhan Plus accounts grew their savings balances an average of 1.5 times more than customers enrolled in standard Jan Dhan accounts.
Regarding business correspondents (banking agents), the study showed that women business correspondents were better able to gain the trust of clients. Women agents had an average of 1.5 times more customers than the average business correspondent and were three times more profitable for Bank of Baroda.
As of November 2021, all Jan Dhan accounts in India have been amended to include the credit incentive.
This is a summary of a paper published by Women’s World Banking, August 2021, 53 pages, available at https://www.findevgateway.org/paper/2021/08/power-jan-dhan-making-finance-work-women-india
By Zachary DeLuca, Research Associate
Additional Resources
Bank of Baroda homepage
https://www.bankofbaroda.in/
Jan Dhan homepage
https://www.pmjdy.gov.in/
Women’s World Banking homepage
https://www.womensworldbanking.org/
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