Today, financial independence has become a vital element for the well-being of an individual. In fact overall well being includes physical, emotional, mental, and financial well-being. Several financial products are now available in the market that can assist people in achieving their financial goals and becoming financially independent.


Even though the importance of financial planning is widely acknowledged, financial literacy is often overlooked, especially among women. Despite the fact that it is imperative that women be given the same authority to make financial decisions as men, many Indian women encounter a number of cultural, social, psychological, and physical barriers that make it challenging for them to develop financial literacy. Thus, there is a need to fully comprehend the problem of financial literacy among Indian women.


Financial literacy: Why is the scale unbalanced?


Despite numerous initiatives, there is still a sizable gender gap in the proportion of adults who are financially literate. Today, women make up 44.84 per cent of our population, but only a small proportion of women have significant influence over the "how" and "where" of financial decisions in households. This is due to several factors that are impacting women’s financial literacy. Even though the women's literacy rate in India is 70.3 per cent (National Statistical Office data), financial literacy is still inadequate. The RBI developed financial literacy standards in order to instil financial literacy concepts among the different segments of the population through financial education. But according to an Asian Development Bank study, only 27 per cent of Indian adults, including 24 per cent of women, have the bare minimum of financial literacy. So what are the factors impacting this?


Cultural and societal norms: Many families consciously or unconsciously prevent women from managing household finances. As an orthodox practice, men are expected to handle finances, while women are expected to take care of the family and the home. As a result, because financial decisions and matters are handled by men, most women in India prefer not to participate. According to a recent DSP Winvestor Pulse study, 67 per cent of women take advice from their husbands before making an investment.


Lack of awareness and accessibility: The government has come up with several financial literacy programs such as FEPA (Financial Education Programme for Adults) to increase the adult population's awareness of financial matters. However, the majority of women are not aware of the financial services and programmes that are available to them. Therefore, the lack of awareness makes it difficult to develop financial independence. Also, in some remote areas, the financial institutions are far from the residential areas, so women are unable to access them because they think it is time-consuming and expensive.


Women have a lot on their plates: Most women today juggle between their personal and professional obligations. Whether we accept it or not, women do far more unpaid work at home than men. Taking care of their families, domestic chores, maintaining their careers, and maintaining their social lives. On the one hand, those who study are prohibited from working or choosing their career paths and in some cases, girls are even not allowed to pursue higher education. In addition, when women do enter the workforce, they frequently have to face biases originating from gender based stereotypes- the maternal bias and the glass ceiling.


Despite all the conditions, the percentage of Indian women serving as CEOs or MDs has increased significantly in recent years, reaching 55 per cent in 2022, according to Statista. In addition, women are establishing themselves in a variety of fields; according to ICAI data, women make up 28 per cent of the organisation's membership overall and 42 per cent of its student body (Institute of Chartered Accountants of India). In addition, women are able to handle the household on a budget with bargaining, savings, and expense planning. In all avenues of life, women have an increased level of participation, and therefore, financial literacy will not only empower them but also help them to uplift living standards of their families and eventually the nation.


Economic empowerment of women: A pressing need


When demonetisation happened, millions of housewives across the country came up with saved cash. This was money they had saved from monthly expenses and were collecting for a rainy day. Had they been aware of the right financial investment tools, the money would not have turned paper overnight. It would have in fact grown.


When there is increased financial literacy among women, it will result in economic security, financial independence, and more confidence in making financial decisions. For this to happen, certain measures and initiatives must be taken.


Challenge the mindset: A major obstacle to establishing a financially literate workplace is unconscious bias. Such biases can affect hiring, mentoring, and promotions and may limit women's opportunities for advancement into high-level management and leadership positions, as well as their selection. Everyone in the organisation must be aware of how these can affect their decision-making during hiring, promotions, and mentoring by talking about unconscious biases and making them conscious. Women should be encouraged to participate in learning programmes on investments and learn about different investment tools. She should be encouraged to speak up and understand their salary structures, taxation slabs and structures.


Establish relevant policies and HR practices: Equitable Human resources (HR) practices where women have the same opportunities to learn and grow in an organisation need to be implemented in letter and spirit. The hiring, training, pay, and promotion gaps must be merit based and not influenced by gender or life stage of a woman and HR can play a key role by way of policies, decisions, and implementation. Furthermore, it must be made sure that women are becoming financially literate via training, sessions, and workshops. As a result, corporations and women may benefit in a variety of ways by implementing financial literacy in the workplace, including increased productivity, greater focus, less stress, and higher retention.


Create awareness: Women need a broad range of financial competencies to succeed in today's society. These abilities, such as budgeting, saving, comprehending financial services, managing debt, negotiating financial terms, and investing, will help them both personally and professionally. Therefore, they must be taught about financial concepts through financial awareness programs and courses that concentrate on crucial aspects of life planning.


All things considered


Today, our finance minister is a woman. We have had a woman Prime Minister. We have had and have women chief ministers. We have women like Indra Noori, Leena Nair and Falguni Nayar who have led and built businesses and this proves that when given the opportunity and financial literacy tools, women can make a remarkable impact on families, communities, and the nation. It is imperative that people comprehend the one-line maxim, "Manage one's life and claim one's rights," as this is a crucial part of the definition of real women's empowerment.


Gaining financial independence not only raises one's self-esteem but also gives women equal standing in decisions affecting their families and communities. As a result, financial literacy has become crucial for all women, not just those who live in low-income areas but also those who come from families where women's economic independence is not considered a primary concern.


Sonica Aron is the managing partner and founder of Marching Sheep.


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