Business Correspondents (BCs) are the vital cog for the financial inclusion strategy of every bank, with over 95 per cent of banking outlets in rural regions being operated by them. Critically relevant for women customers, BCs have been able to conduct banking transactions, from the convenience of their homes (or nearby their homes), cutting down the transportation cost, time and hesitancy barriers.

It was expected that the government would account for their increased participation, especially female BCs; in this year’s Budget, however it was given a miss. This article brings to the fore the rationale for the enhanced engagement of female BCs as well as draws attention to some of the challenges that make this profession unviable for them in the current ecosystem.

Preferring female BCs

Female customers, especially in rural areas are reluctant to visit bank branches as the male staff often deal summarily with them, which hinders women’s agency and in turn decreases their engagement with formal financial institutions. Here female BCs, are better positioned to serve and engage under-banked women who feel more comfortable reaching out and trusting them. Lower levels of financial as well as digital literacy make handholding support provided by female BCs relevant for their women customers.

From a business point of view, studies indicate that female BCs show higher profitability, wider cross-selling of financial products and lower attrition rates. During the lockdown, Self-Help Group (SHG) members engaged as BC Sakhis (female banker friend) played a crucial role in creating awareness and enabling access to Pradhan Mantri Garib Kalyan Yojana cash transfers and other Direct Benefit Transfers at the doorstep as well as reducing the rush of the beneficiaries at bank branches.

Despite the proliferation of BCs, the representation of female BCs is dismally low and the available figures suggest that they form less than 10 per cent of the total BC network. ‘One Gram Panchayat One BC Sakhi’ initiated by the Ministry of Rural Development is an ambitious plan to increase these numbers and deploy at least one BC Sakhi in every Gram Panchayat by the end of 2023-24.

Apart from deploying a pool of BC Sakhis what also requires policymakers’ attention is some of the immediate entry-level and sustenance concerns that hamper creating a more inclusive and supportive ecosystem for female BCs.

First, is the lack of funds to invest in hardware required to operate as a BC. Only a handful of banks extend equipment support to BCs in general and expect them to have the ability to invest in handheld devices, laptops, and Point of Sale machines.

Second, minimum qualification is another hurdle that hinders the onboarding of female BCs, especially in underserved rural areas. The current BC/Business Facilitator certification mandated by the RBI from the Indian Institute of Banking and Finance provides a 10th pass as the minimum qualification to appear for the examination. However, many banks have made this onerous by keeping their minimum qualification as 12th pass.

From a gender lens, such bank practices become counterproductive and exclusionary, by turning a blind eye to educational gender disparities, particularly in the underserved rural pockets.

Third, there is limited additional financial support provided by Business Correspondent Network Managers or the banks to address the socio-economic hurdles such as mobility and safety faced by a female BC. Affirmative steps such as reimbursement of the cost incurred in commutation and access to social security benefits may go a long way in making the working environment more enabling and conducive for them as well as incentivising others to join the profession and thrive long term.

Serving women enterprises

Fourth, female BCs need to be trained to provide a broader range of services. It is because most female BCs rely solely on BC work as a source of revenue. Our research suggests that BCs lack training to serve the needs of women enterprises. Given that the ecosystem already has a low commission structure, training female BCs to serve the needs of small women enterprises would not only increase their revenue streams but would also improve financial inclusion for women enterprises.

From a gender standpoint, female BCs have been particularly important in nudging the excluded underbanked women and addressing the last-mile disconnect. Building on an understanding of their crucial role and the challenges that currently persist in the ecosystem, concerted efforts must be made by policymakers as well as individual institutions involved to prioritise creating an inclusive and well-supported BC ecosystem.

A starting point would be to mandate a certain percentage of BCs being hired by banks to be female. By addressing some of the aforementioned challenges, it may be possible to increase the representation of female BCs in an otherwise male-dominated profession as well as make the profession more viable for them.

The writer is a Research Fellow in the Law, Finance and Development team at Vidhi Centre for Legal Policy