In a remote Uttar Pradesh village, Roshni, a farm-hand, waits anxiously for the weekly visit of her Bank didi (word for ‘elder sister’ in India). She holds in her hand, ₹50 as savings and proudly says “Didi encouraged me to save even if only ₹10; initially, even that was so difficult. She was so patient and would explain the benefits. Even now, she answers all my questions, however small. She tells me about new schemes that are good for me. It is only because of her that now I have my ‘own’ money”. In this small village, the Bank ‘didi’ has become a ‘financial advisor’ and ‘relationship manager’ to many such Roshnis and is helping them in their journey towards true financial inclusion.

It has been widely recognised that Business Correspondents (BCs) are the prime drivers of financial inclusion in India.Under the BC model, supported by the Reserve Bank of India (RBI), banks in India have been engaging third party/retail agents since 2006 to drive greater financial participation among low-income populace. By enabling last mile delivery of financial services in the absence of physical banking facilities, BCs have emerged successful in communicating the benefits of financial offerings, facilitating transactions and principally functioning as the face of the bank by being a mini-branch themselves. But when considering the ability to BCs to positively impact the financial inclusion of 23.09 crore women Jan Dhan account holders (55 per cent of the total base), the “gender” of the agent becomes an important factor.

To this effect, in 2015-16, the National Rural Livelihoods Mission adapted a gender-focused variant of the traditional BC model called the ‘Bank Sakhi’ (or female banker friend) model, which was further piloted across seven low-income states in India. By February 2020, 6,094 Bank Sakhis across 12 states had collectively completed 748,454 transactions worth ₹26,635 lakh (approximately $40 Million). This reflected that while the Bank Sakhi model was an innovative strategy to achieve financial inclusion, it was women banking agents who were poised to deepen the last mile delivery of financial services, especially for women customers, in hard-to-reach rural areas and would go on to play a sustainable role in driving women’s financial inclusion.

Women BCs and banking network

The unique strengths of women BCs positively influence low-income women’s engagement with financial services and therefore, position them as a great resource for banks to hire as BCs. Research shows that women agents have distinctive strengths that help them better serve their customers. Women customers find women agents easier to approach, trustworthy, and great at maintaining confidentiality. This is corroborated by another research where women customers transacted more with women agents and they felt more comfortable with them especially when disclosing financial information.

In another recent project with a large public sector bank, women agents completed 19 per cent more transactions and had 45 pre cent higher conversions on a newly-launched small savings scheme than their male counterparts. This is because women agents are able to visit women customers more freely at their home, interact with them closely and cherish their trust. By being greatly entrenched in the community they also have the potential to play a role model for other women and become a catalyst to bridge the financial inclusion gender gap. Their relatively higher customer base, greater transaction volumes as well as ability to increase uptake of other products, further contribute to strengthening the business case for them. Furthermore, it has been noted that women agents are more likely to stay agents for longer duration even when transactions do not generate as much revenue for the agent, providing continued access to the community.

Low number of BCs

In India, while women account holders constitute 55 per cent of the total PMJDY portfolio, less than 10 per cent of business correspondents are women. ‘Why such a low number?’ is the next obvious question. While talking to leading corporate BCs many factors came to the fore, including “there aren’t any suitable candidates” (adverse selection criteria), “they need constant help” (different needs for ongoing support), “they have difficulty commuting to the branch everyday” (limited mobility), “they have so many responsibilities, it is difficult to work long hours at the BC point” (reduced ability to work extended hours) and the most telling of them all “it is more expensive to hire and onboard women BCs”.

These narratives hinted at operational and socio-cultural challenges that exist for women who aim to become business correspondents. Women aspiring to become BC agents face multiple barriers such as lack of support from family, limited capital support, low computer and financial literacy, limited mobility, and an adverse recruitment criteria in addition to limited bank and supervisor support in scaling their business. Hence, what is required is a design-led solution for key barriers women face across different stages of their agent journey.

What can banks, financial service providers to do foster more women BCs in the ecosystem?

Affirmative actions are needed from financial service providers to correct the current under-representation of women BCs. By designing a gendered recruitment strategy to attract more women BCs , including setting specific targets for their staff and corporate BCs, and training and incentivising corporate BCs to identify potential women candidates can help overcome the structural barriers that women face.

The key is to reduce entry barriers by taking favourable actions such as providing equipment and rental support (rather than requiring women to make upfront capital investments), adding incentives such as an initial stipend for the first year, solving mobility issues, offering flexible hours of operation and providing protection to women BCs and their families, on the lines of health insurance, etc. which will encourage more women to opt in. Finally, creating a supportive environment for women BCs through training, mentoring, ensuring ongoing support (through dedicated officials) and creating women agent communities, will then help them thrive long term.

The time is now!

These efforts when made in a focused and coordinated manner will have tremendous impact in creating a robust women BC workforce. Results of a significant payback were seen in a recent pilot project undertaken with a public sector bank, where the portfolio managed by successful women BCs was three times more profitable than male BCs. Progressive steps like Uttar Pradesh State Rural Livelihoods Mission adding 58,000 women BCs and supporting them for a year, is a shining example of culmination of positive government policy, adequate support and financial service provider interest. To put our spin on an old quote by Charles Malik, “The fastest way to change the financial inclusion is to mobilise women BCs of the world.”

(Sriraman Jagannathan is EVP Asia and Swati Chowdhary, Manager – Network & Development, India at Women’s World Banking)