By Veena Lakhwani
For years, women have always had less access to monetary facilities than men in many parts of the world. In a 2021 World Economic Forum Report on gender gap, India’s performance is one of the worst in South Asia and ranks 140 out of 156 countries. While there is a lot that needs to be done to address the ever growing gender gap, it has been observed that proper access to financial products and services for the economically underprivileged women in rural areas and disadvantaged communities has played a vital role in their upliftment and has built the concept of savings among them. A major step towards comprehensive growth, the financial inclusion initiatives, in recent times have undoubtedly helped to address gender gap and have strengthened the availability of economic resources at large.
The Cornerstone of All SDGs
Gender Equality is one of the 17 Sustainable Development Goals and is also essential to all dimensions of inclusive and sustainable development. In a nutshell, all the SDGs depend on the attainment of Goal 5. For this reason, a number of organisations across the globe are working relentlessly on the empowerment of women and making efforts to put an end to gender inequality.
Although India has realised some gains, long-standing gender inequality has left many
women with lower levels of education and still carrying the burden of their household’s unpaid labour. These various disadvantages contribute to a crucial barrier women face when they try to start a business or increase their income—the inability to access credit. With no credit history and, in many cases, no bank account, traditional finance structures lock out women living in poverty, denying them an essential tool of social mobility. However, there’s some hope for India- as a nation that has achieved gender parity at the primary education level and is on the pathway to attaining equivalence at all stages.
Addressing the Gender Gap via Microcredit
With the motto of ‘One Family, One Woman Entrepreneur’, Virutcham is focused on the socio-economic development of Women via microcredit. It aims to provide appropriate financial products and other support services to improve the social and economic status of the women in economically backward regions across India and abroad.
In order to give their work focus and have the greatest impact, Virutcham has identified a core objective—to carry out the service of providing financial support to underserved women, enabling them to venture into micro-enterprise activities to improve their standard of living.
To support the successful use of the loan, Virutcham requires women to undergo financial literacy training before receiving the loan. This training focuses on strategies to save, the importance of profit, and information on insurance products. Once they have received the loan, women are also provided the opportunity to build their skills in several areas of trade, for example, seaweed cultivation, detergent making, and hand embroidery.
By focusing on the well-being of the women receiving loans and providing access to financial support and literacy, Virutcham Microfinance Limited contributes to 9 out of the 17 SDGs.
This is the story of Mrs Rajammal from Anaigudi village in Kanyakumari District living below the poverty line a year ago. She was a labourer and struggled to make ends meet. Through the micro-credit programme of Virutcham, she obtained a small loan and purchased a milch cow. A year later, Rajammal sells milk to her neighbours and supplies it to the Government Milk Producers’ Cooperative Society in her district. She earns a regular income and supports her daughter in pursuing her higher studies.
Rajammal’s story of taking small loans to lift herself and her family out of poverty is one that could be told by millions of people across India. Loans to microfinance borrowers, mostly women in rural areas, have increased phenomenally, with a year-on-year growth of 17% over the past two years. With these funds, millions of impoverished communities have started and expanded their small businesses, stabilised their income flows, procured
essential during crises, and supported their children’s education.
Providing Women With More Than Credit
Microfinance institutions worldwide serve more than 140 million people living in poverty, of which more than 76% of borrowers are women. At the Grameen Bank, the world’s largest microfinance institution, over 90% of loan clients are women. Women tend to make their payments more reliably than men. But more importantly, a loan given to a woman is likely to change not just her own life but provide better opportunities for her children and contribute to the prosperity of the overall society.
Recognizing that microfinance can empower them, microcredit lenders like Virutcham Microfinance Limited are determined to focus primarily on providing financing to women to encourage economic growth and to work towards gender equality.
In terms of social benefits, women’s financial inclusion has significantly contributed to female empowerment by giving them additional income-earning opportunities, increasing their independence, and improving their status both within their families and their broader communities.
Incorporating a gender perspective into all development work can help build a more equitable and sustainable future. Today, a plethora of organisations globally are designing and implementing policies to close gender gaps and assisting women and girls to transform their lives by providing solutions to tackle the root causes of discrimination against them.
Moreover, promoting digital financial services promises to address some of the main challenges fronted by women. Providing business training, digital literacy, information access, technology development, policy, and advocacy leads to their enhanced social and political involvement.