Women Get A Bank Of Their Own In India

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In many parts of India, women are prevented from inheriting property, a practice which makes it harder to get bank loans. Host Scott Simon talks to Kalpana Sharma, a columnist for The Hindu newspaper, about the first women-only, government-run bank in India, opened to give women a financial boost.


This is WEEKEND EDITION, from NPR News. I'm Scott Simon. India's opened its first state-owned bank for women. Now in many parts of India, women are prevented by cultural practice from inheriting property titles, and that makes it harder for them to offer collateral to take out bank loans. That's just one of the many reasons that women lag behind men in becoming financially independent. Only 26 percent of women in India have accounts with financial institutions. So we rang up Kalpana Sharma in Mumbai. She is a columnist for The Hindu newspaper. And we began by asking why so few women in India have bank accounts.

KALPANA SHARMA: Well, there are a number of reasons. I think the main reason is that women who are economically independent are the ones who would open their own bank accounts. And even the women who do, you know, in terms of the informal sector - that is, the non-formal sector, where it's not an established business - the kind of money they earn is not the type that will be deposited in a bank account.

SIMON: Describe that non-formal sector for us, if you could, please.

SHARMA: It would be women who are mostly poor or lower middle class. They would work as vendors, you know, selling perishable items. They would be domestic workers who go and work in homes, and get paid by the day or by the month.

SIMON: What can, potentially, a state-owned bank for women do?

SHARMA: It will have to really rethink the whole notion of banking from the women's perspective because if they just modify what is already there, in banking, and think that that's going to make a material difference to the majority of women who - as I said - are the women who either don't have any collateral 'cause they don't own property, or work in the informal sector, where they actually don't have much in terms of excess income to put in a savings - it means you really have to move out of the formal way in which banking is done, and ensure that your banking accommodates this kind of informality.

SIMON: Help us understand how you think any bank - state or private - what kind of services they might offer to Indian women that currently are not being offered, or that is just not possible for women to take advantage of.

SHARMA: See, some banks have already actually responded in small ways. For instance, in many parts of India now, there are what are called self-help groups. These are small groups of women who put aside little, small amounts as savings, and collect them together, as a group. Now, some banks have actually responded to this by allowing them to open group accounts. So the advantage of that group account is that when it gets deposited in the bank, then it earns some interest. And also, it allows them to negotiate whatever amount they have saved to get a larger loan, which can then be distributed to the members. And you know, the record of the paying back of these groups is huge. I mean, it's amazing. It's 98 percent. And they turn the money around. You give them a revolving fund, they will use it and pay it back, you know, over and over again.

So there's enough proof that if women of this kind had the access to finance, it makes a huge difference to their lives, to the lives of their families; and the bank, also, actually benefits because the money is returned with interest. It's not as if it's free money.

SIMON: India is, of course, holding national elections next year. Recognizing that no political party or government is above or below politics, do you think that figures into the plans to open this state-owned Indian bank for women?

SHARMA: I would think so because I think, you know, the timing of it, that it's happened now, is - for the skeptics anyway - very suspect. And they're rapidly opening branches everywhere. I think now, they've hit some 12 branches in different cities. And whether they have the personnel in place, and the infrastructure in place, is not very clear. But as I said, maybe one shouldn't be too skeptical. Let's give it a chance. Perhaps it will do something.

But it seems to be a political gesture, at the moment, because I think this government is very keen to project itself as being pro-poor, pro-women; and this is part of the projection of that image.

SIMON: Kalpana Sharma, columnist and former deputy editor of The Hindu newspaper, in Mumbai. Thanks very much for being with us.

SHARMA: Thank you.

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