Pushpa (name changed) says she did not like men touching her when she visited the bank. Other women listening to her in a village in Uttar Pradesh’s Badohi district nod in empathy. Like Pushpa, they are in the late twenties and early thirties. Sensing the bafflement of outsiders at this shared understanding, Pushpa dramatises her typical bank visit to explain her sense of physical violation. Male tellers and clerks take hold of her hand. They feel her thumb out. Press it into an inkpad. Then, her inked thumb in pinch-like grip, they use it like a seal to make impressions on numerous forms and registers.

Recounting her embarrassed unease at being manhandled in banks as an illiterate woman makes Pushpa grimace. Pushpa’s experience provides valuable data on the complex barriers that prevent meaningful inclusion of Indian women into the country’s financial mainstream despite government efforts. Covid-19 has made access to banking for women such as Pushpa even harder.

Jan Dhan: Beyond a mere account

Women hold nearly 55 per cent of the 41.93 crore accounts opened under the Pradhan Mantri Jan-Dhan Yojana, the flagship financial inclusion mission launched in 2014. The Jan-Dhan mission has been successful in narrowing the gender gap in bank account ownership from 20 to 6 percentage points between 2014 and 2017, according to the Global Findex-2017. However, in terms of active account usage, there remained a 11 percentage point gap.

Bringing significantly more women into the banking system nominally may not have had the desired impact. An amalgam of confounding factors that perpetuates the gap needs to be understood before it can be confronted.

A recent study of a women’s adult literacy programme in the rural regions of Uttar Pradesh and Uttarakhand offers a window of understanding. It establishes the existence of a direct link between literacy among women and a rise in their banking activity. In turn, it shows that policies that promote banking among women must be accompanied by female literacy campaigns. This is not a trivial insight, given that according to the 2011 census there were about 167 million illiterate women above age 15.

Jan Dhan accounts surge to 42 cr with total balance at ₹1.4-lakh cr

The road to the bank is through the school

To understand the linkages, India Development Foundation (IDF), a research organisation, evaluated the impact of the TARA Akshar+ (TA+) programme and the results were published in April 2021. In its third phase since 2017, TA+ has imparted functional literacy to 23,000 women across 90 villages in UP’s Badohi, Lalitpur and Bhagwanpur districts.

Covid-19 boosts Jan Dhan; close to 2 crore new accounts opened in 3 months

Implemented by the civil society organisation Development Alternatives, the programme consists of two parts: computer-enabled lessons in Hindi and basic mathematics over 56 days, topped by literacy retention sessions over six months. The combined outcomes of both parts were assessed by IDF’s study. The subjects of the study comprise what is termed the ‘treatment group’ in research parlance. Then, women from similar villages who hadn’t undergone literacy interventions constituted the ‘control group’ for the purposes of comparison.

Not surprisingly, the survey results confirmed the effectiveness of government’s aggressive financial inclusion drive. They showed that banks were now accessible to large numbers of women across villages, in both the treatment and control groups. However, the study found that literacy was crucial in transforming women from passive account holders to active financial participants.

While more than 61 per cent of the account-holding women in the control group did not even know the name of their banks, over 82 per cent account-holding neo-literate women could name their banks. Even more significantly, a sizeable 61 per cent of the neo-literates reported transacting by themselves in the last six months. The corresponding figure for this in the control group was a meagre 33 per cent. Similarly, the scores on questions testing financial literacy were markedly better for the neo-literates. (Refer the Table)

Qualitative research and focus group discussions with neo-literate women and interviews with key family and community members substantiated the causal links between literacy and a rise in self-esteem and the capacity to negotiate the outside world, including banks.

Women recalled feeling ignorant and ashamed in banks for being unlettered. Unable to read or write, they remembered scrounging for assistance with banking procedures and processes. They relived the indignity felt at strange men touching them to facilitate their thumb-impressions. Bank visits were usually avoided, mostly undertaken under compulsion to withdraw government cash transfers. And almost always made as appendages to male relatives.

Increased self-esteem

But literacy has rewritten their narratives, observed the newly-literate women. Women said they were able to sign on forms now; many can even fill them out; and some even claim to be able to read entries in their passbooks. Some spoke of withdrawing money their husbands and relatives sent ‘online’ into their accounts from faraway towns and cities. Most women were, in fact, able to name the government schemes under which money came into their accounts; with the Ujwala gas subsidy finding frequent mention.

Almost 89 per cent of the neo-literate women were aware of government schemes as opposed to just 51 per cent in the control group. The neo-literates, for instance, were aware that a monthly ₹500 cash transfer was made into Jan Dhan accounts held by women from April to June 2020 as Covid-19 assistance. Some said they learnt of these transfers through SMS alerts. The pride in being able to read SMSes was apparent. Most pertinently, the sharing of these happy banking experiences made neo-literate women without bank accounts express eagerness to get one.

This increase in women’s banking activity in the programme villages found another remarkable indicator in the primary and upper-primary schools there. In an unprecedented trend, according to school principals, compensation in lieu of suspended mid-day-meals for students during the Covid lockdown was finding its way into mothers’ accounts in large numbers. Of the recompense transferred into parents’ accounts in three schools situated in three study villages, 48.68 per cent of the money went to mothers’ accounts. The change, according to teachers and principals, is because now more women had bank accounts, and with literacy they were more assertive about taking charge of money meant for their children’s well-being.

Even while the study showed up literacy as necessary to eliminating women’s fears and inhibitions around banking, it also identifies other factors that stimulate their interest into becoming active bank customers.

For one, that the TA+ programme increased the appetite for enterprise and income in women helped. Of the surveyed neo-literates, 74 per cent said they got new ideas for business or farming while learning and interacting during the course of the programme. About 10 per cent reported starting a business after joining the programme. Also, there is a 13 percentage point increase in remunerative activities among the neo-literates because, according to the women, it had exposed them to working women role models. Women professionals, ranging from anganwadi workers to teachers to policewomen, were invited as guest speakers. Local educated women are recruited to work for the programme. Overall, the programme managed to create positive narratives about women who work.

Second, women are encouraged to connect with self-help groups (SHGs) or form new ones, to imbibe the culture of thrift, savings and micro-entrepreneurship that is at the core of these collectives. Expectedly, only 8 per cent women in control villages were SHG members, as against 23 per cent among the neo-literates. Approving of this new development, the sarpanch of a programme village in Lalitpur district listed the changes he observed among the women in his community. They could read and write now, they were out of purdahs, they participated in SHGs, attended gram sabha meetings, could keep accounts, borrow and lend money and conduct banking transactions.

The author is a Fellow at India Development Foundation