Developing Women’s Cooperative Banks to Close the Gender Gap


Shri Mahila SEWA Sahakari Bank has been in existence for over four decades. Even so, these banks have to go the extra mile to understand the credit needs of people at the bottom of the pyramid. We need products, but we must not lose sight of processes.

Banking should be simple and based on mutual trust. Banks should spend time reviewing their operations, whether applying for a small loan or a more complicated product like microinsurance or retirement.

Cycle 5 of the National Family Health Survey (2019-2020) reveals that 77.4% of rural women have a savings bank account. Yet there are gaps in women’s financial inclusion. In rural areas, the loan rejection rate for women-owned businesses is 2.5 times higher than for men. This divide is equally significant in the area of ​​digital financial inclusion, where 20% of rural women reported owning debit and credit cards, compared to 64% of men. Their accessibility to mobile phones is 20% lower than that of men, and as for the Internet, it is 50% lower. There are many inherent shortcomings in the provision of financial services, especially credit, to women in rural areas.

constant effort

Women’s cooperative banks constantly strive to provide credit and loans to women in the low/middle income group. Mann Deshi Mahila Sahakari Bank, Pune, a women-led cooperative bank, provided small advances to women who have different cash flows and livelihoods.

The bank offers a weekly cash credit product for small vegetable vendors who need cash to manage market transactions or nearby haats. It is one of the most sought after services. The product is the result of several pilot projects and ongoing engagement with customers.

The process of applying for credit in many banks is still cumbersome, so women turn to Mann Deshi for buffalo/goat/chicken loans.

Mann Deshi has structured several credit products for rural women who today have transformed into micro-entrepreneurs and successfully repaid several rounds of business loans.

Simplification of mobile banking, authentication based on biometrics, financial literacy, credit counseling, digital literacy, analysis of customer attitudes and behaviors are some of the processes that could increase the efficiency of banking operations.

Mann Deshi and SEWA Shakari, as women-led cooperative banks, have turned financial inclusion into a strong and profitable business proposition, meeting a range of financial needs of rural women and their families through structured products and well designed.

Women lack ownership of assets and control over their finances. Weak land titles, lack of collateral, right to family property, lack of guarantor, and poor access to mobile and technology undermine progress in financial inclusion.

Research shows that when women have better access to finance, they spend productively on the health, nutrition and education needs of their families. .

With around 1,500 city cooperative banks and 360 district central cooperative banks, there is huge potential to improve financial inclusion.

Addressing women’s differential financial needs is crucial to developing rural entrepreneurship and employment. This requires sex-disaggregated data, more female business correspondents, better digital inclusion.

Hema is Director and Anshu is Assistant Professor, Vaikunth Mehta National Institute of Cooperative Management, Pune

Published on

April 17, 2022


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