Financial Literacy and Generational Change in India

A survey conducted by MasterCard this spring concluded that financial literacy in India is at the bottom of 16 countries in the Asia-pacific region, with Japan trailing behind in last place. The term financial literacy refers to the basic skills of money management – saving, investment, planning for old age – which according to this survey is severely lacking in Indian society. My financial literacy session last month aimed to raise awareness of such concepts among the women of JDM and Shenney community, as well as informing them of their economic rights and entitlements. There was a large turnout from both communities of women and girls of all ages.

I began by relaying some of the statistics on financial literacy; another survey, this time conducted by Visa, found that 34% of Indian women and 29% of Indian men claimed to have no savings. Similarly, it revealed that 43% of Indian women do not discuss matters of money management with their children, due in large part to their own lack of understanding. It is no surprise that in a society where women are less likely than their male counterparts to engage in paid work, and are therefore not expected to undertake decisions relating to the family budget, they do not educate their children in these matters. My own surveys conducted in July this year revealed much of the same; when asking women in the JDM community whether they had a household budget, many responded that they did, but that their husbands were the sole determinants of how this money was spent.

However, it seems that India’s younger generations are more financially aware than there elders. When I asked how many women owned a bank account, nearly all of the teenage girls raised their hands, whereas none of their mothers did the same. This was a more hopeful finding from both the MasterCard and Visa surveys, suggesting that across both the urban and rural parts of India, financial literacy is on the up. The internet is becoming increasingly accessible to India’s youth, providing information about financial services that was previously unavailable to older generations, and may offer an explanation for these trends.

I then informed the women that their own Self Help Groups fit most of the criteria for a bank loan. The Union Bank of India states that the group must have been in ‘active existence for a least a period of six months’, ‘have undertaken savings and credit operations from its own resources’ and have ‘maintain[ed] proper accounts/records’. Both of the Shenney and JDM treasurer’s had brought along their record books, showing that both groups of women consistently put in their share of 50 rupees a month. It may often seem that commercial banks are disengaged from the agricultural communities of rural India, but schemes like this show that large banks are becoming increasingly aware of the need to support micro-entrepreneurs. The statistics may, at first, look disheartening, but generational change is producing a new cohort of Indians more empowered in matters of financial literacy.

Anna Cooban, UK

JDM Self Help Group Project Manager