The Context
Digital financial services (DFS) hold great promise for low-income households, with the potential to improve privacy, security, and access to financial services. They also allow individuals to transact and manage finances, regardless of location. These benefits are particularly clear in India, which has become a leader in digital financial inclusion, opening more than 460 million bank accounts in 2022 alone. India has also linked accounts to unique digital identities and developed a Unified Payments Interface (UPI), which accounted for over 40% of real-time payment transactions in the past year. India’s ability to rapidly expand DFS has relied on the increasingly widespread use of mobile phones, which are used to conduct four in every five digital payments.
Though mobile ownership at the household level continues to increase, benefits within the household are not equally captured – women are 40% less likely than men to own a smartphone in India, representing a gap of 23 percentage points, which is larger than that seen in other low- and middle-income countries. This gap is driven, in part, by conservative gender norms that limit women’s phone use. As reliance on mobile phones and access to the internet for DFS increases, women may disproportionately miss out on the benefits of DFS.
One way to close the digital gender divide, both in terms of access to mobile phones and to DFS, could be to leverage India’s self-help groups, or SHGs. SHGs are credit collectives – groups of women that meet and provide small loans to members to help with financial expenses and emergencies. But in India, SHGs do much more than traditional models — they serve as a platform for the government to engage rural, marginalized women in activities such as trainings on income generation and other public sector schemes. Do SHGs also help connect women to DFS and counter norms that restrict women’s phone use? Here we report from new survey data collected across the central Indian state of Chhattisgarh, where we seek to understand whether SHG participation relates to women’s use of DFS, and whether SHGs can play a role in women’s digital inclusion.
Our Sample
In collaboration with our data collection partner, we recently completed interviews with over 20,000 rural women and men across 13 Chhattisgarhi districts. We found SHGs to be ubiquitous across this largely rural and remote state. In 98% of the sample Gram Panchayats (GPs, typically comprising one to two villages), there is at least one SHG present. 43% of female respondents are members of SHGs hosted under the State Rural Livelihoods Mission (SRLM). In our study area, on average, these women are married (94%), have little education (5.7 years), work in agriculture, and are representative of traditionally marginalized groups, such as “other backwards castes” (48%) and “scheduled tribes” (34%), which have been identified as vulnerable by the government and targeted as core participants in safety net schemes.
What We Found
Nearly all women in the sample have access to mobile phones within their households. Nearly nine in ten of these households own a smartphone, meaning these women could theoretically access mobile internet using a household phone. While households often own both smartphones and basic phones, 77% of women with phone access reported that the phone they access most frequently is a smartphone. That said, women’s phone ownership is much lower than their access: only 23% of women reported that they own and use their own phone. Many women simply borrow a phone from a family member.
Though digital inclusion has improved over the past several years, most women still do not use phones for advanced tasks like accessing the internet and using apps, including for DFS. Instead, they primarily use their phones for basic tasks like making and receiving calls. Even amongst women who reported primarily using a smartphone, only 27% reported using WhatsApp in the past month, 13% had sent an SMS, and less than 4% reported recently sending or receiving money using the phone.
Figure 1: DFS Knowledge by Gender
Across the board, knowledge of DFS is relatively widespread, but women are significantly less likely than men to engage with these services. As shown in Figure 1, just under 45% of all surveyed women have heard of payment apps, and 30% know that local shopkeepers use them. In contrast, 77% of surveyed males have heard of DFS, and 61% know of local shopkeepers that accept mobile payments. An even larger relative gap exists for DFS usage, where only 5% of all female respondents, regardless of SHG status, have ever used DFS, compared to 28% of male respondents.
How do women in SHGs compare to those outside SHGs? In the remaining analysis, we control for demographic characteristics including age, education, marital status, and women’s district to understand how SHG membership relates to women’s use of mobile phones and DFS. Controlling for these characteristics allows us to ensure that obvious differences across women that correlate with SHG participation, such as the household’s income level or differences in available services by location, do not drive results. Instead, we are able to assess the relationship between SHG participation and phone use while comparing across otherwise-similar women.
First, we see an SHG ownership advantage: women in SHGs are three percentage points more likely to use their own phone, compared to similar women not part of an SHG . Though they have slightly higher access to phones, SHG women who use phones are still not using them in more sophisticated ways. For example, 53% of SHG members dialed a phone number in the past 30 days and 70% answered a phone call, while only 18% used WhatsApp and 8% read information online, rates similar to non-SHG members.
Second, we see some advantages among SHG women in terms of knowledge: SHG members are five percentage points more likely to have heard of DFS, compared to women with similar demographics in their district that are not in SHGs. Although we lack data to definitively state what drives this knowledge advantage, it could reflect that women in SHGs have larger networks than those not in SHGs, have more direct exposure to DFS through other members of their SHG, or these women may have more direct exposure through information provided directly in SHG meetings. Despite this advantage, SHG members are no more likely to have used DFS than non-members, suggesting that other barriers to women’s DFS use persist.
Implications
In rural Chhattisgarh, women who belong to SHGs have better access to their own phones and are better informed about DFS than similar non-SHG women. However, SHG members are no more likely than non-members to use DFS, and DFS usage remains very low overall. In future analysis, our team will analyze data to unpack why SHG-affiliated women have better access to phones and more knowledge of DFS, but are not more likely to use DFS than non-members. In other research, we find that training women to help them access digital transfers can have important impacts on women’s economic activity and can even liberalize the restrictive norms that govern rural women’s lives. The potential to leverage SHGs to train women to access DFS and help them benefit from this technology is a fruitful area for future research.
References
[1] GSMA Policy Spotlight 2023 – India
[2] GMSA India: on the road to a digital nation 2023
[3] GSMA Mobile Gender Gap Report 2023
[4] Unless stated otherwise, all results reported here are statistically significant using a p-value of 0.10 or lower. This means that similarly conducted surveys of these women would have uncovered these differences in approximately 90 out of 100 cases, which indicates these results are unlikely to have arisen due to random sampling-based variation in results.
[5] Field, Erica, Rohini Pande, Natalia Rigol, Simone Schaner, and Charity Troyer Moore. 2021. “On Her Own Account: How Strengthening Women’s Financial Control Impacts Labor Supply and Gender Norms.” American Economic Review, 111 (7): 2342-75.
Anwesha Bhattacharya, Erik Jorgensen, Urvi Naik, Aruj Shukla, and Charity Troyer Moore.