From Gullak to Portfolio Investing

Traditional savings practices

Historically, women managed household finances discreetly, often saving small amounts in informal ways such as hidden compartments or masala dabbas. Through ages, we have often heard our grand moms/aunts talk about the power of saving. But these practices reflected limited financial autonomy and access to formal banking systems, especially in patriarchal societies.

India’s economic diversity defies simple categorisation as its unique financial ecosystems showcase diverse approaches to wealth creation. Every community has its own financial learnings, passed through generations and are important parameters of investment behaviour.

Modern financial empowerment

Today, women’s financial behaviour is evolving due to better education, employment opportunities and access to digital technologies:

Women go from savers to investors

The women investor base in India is growing, with a significant increase in the number of women opting for mutual funds and other products. Women investors’ assets under management (AUMs) in mutual funds in India more than doubled to Rs 11.25 lakh crore in March 2024 from Rs 4.59 lakh crore in March 2019, according to a report by the Association Mutual Funds in India (AMFI) titled The Sahi Journey.

The mutual fund industry has witnessed a surge in women’s participation. As of March 2024, women accounted for one in every four mutual fund investors, underscoring the growing trend of women’s empowerment in financial decision-making.

The allocation of women investors’ AUM across various categories has undergone a significant shift over the last five years. Notably, the share of equity in women’s overall AUM increased to 63.7% in March 2024 from 43.3% in March 2019. This suggests a growing affinity among women for equity as an investment avenue.

The allocation to hybrid categories has remained relatively stable, hovering around the 20% mark over the years. However, debt AUM allocation declined to 10.7% in March 2024 from 22.7% in March 2019.

Furthermore, women’s allocation to passive investment strategies surged to 4.1% in March 2024 from 2.5% in March 2019. Women investors’ AUM constituted 5.2% of the individuals’ total passive gold AUM in March 2019, which has increased four times to 24.9% in March 2024, indicating a strengthening commitment to passive investing and increasing preference for electronic modes of investing in gold, as per report shared by AMFI – The Sahi Journey.

The Power of the Self-Help Group (SHG) Model

Based on statistics from the National Rural Livelihood Mission, there are over 82 lakh SHGs spread across 745 districts and 7,158 blocks of the country[1].

Collectivisation through the SHG model has played a major role in the social empowerment of women – be it enhancing their negotiating abilities, decision making powers, independence in money matters.

The SHG-Bank linkage model has been an indigenous model of micro-credit evolved in India and has been widely acclaimed as a successful model. Over 4.1 crore poor households have gained access to the formal banking system through the programme.

Investing in SHGs also makes a lot of business sense. The NPAs in SHG loans is very minimal. Due to the entire ‘pride’ factor, SHGs are also keen to repay their loans on time.

Barriers and Opportunities

Despite progress, challenges remain. According to Women’s World Banking organization, ~1 billion women around the world are unserved or underserved by the formal financial sector. Thus, financial inclusion matters. However, digital platforms and financial literacy programmes are empowering women to actively manage investments and secure their futures. This evolution reflects a broader societal shift toward gender equality in financial domains, with women increasingly taking charge of their economic destinies.

The rise of digital technologies has significantly influenced women's engagement with financial markets, driving greater inclusion and empowerment, while addressing traditional barriers.

Impact of Digital Technologies

1. Increased financial inclusion: Digital financial services (DFS) such as mobile banking and online payment platforms have made it easier for women to access financial tools. These have been particularly impactful in regions where mobility, time constraints, or socio-cultural norms previously limited women's ability to visit banks.

2. Economic empowerment: Digital finance has enabled women to manage income, save, and invest more effectively. During the Covid-19 pandemic, the adoption of digital payments surged. This shift has also facilitated entrepreneurship for women and enhanced their household decision-making power.

3. Narrowing gender gaps: Innovations in financial technology (fintech) are helping close the gender gap in financial inclusion by offering tailored products that address women's needs. For example, digital platforms reduce reliance on intermediaries and offer privacy, making it easier for women to control their finances.

4. Leadership in fintech: Women leaders in fintech are playing a pivotal role in developing services that cater specifically to other women.

5. Challenges and opportunities: Though digital finance has narrowed the gender gap in some regions, disparities persist due to factors like the digital gender divide and lower financial literacy among women. Policymakers must prioritise investments in digital literacy and infrastructure to ensure equitable access. Overall, digital technologies are reshaping women's participation in the financial markets, fostering economic growth and empowering them socially and economically.

Several studies such as Women and Finance by DBS Bank and Crisil (a survey-based study of 500 working urban self-employed women), have deep dived into investment habits of women investors in India. Below are the key findings:

Conclusion

Product innovation and education will play a key role in financial solutions. The future of financial services lies in products that are not just investments, but also life companions. The multifaceted nature of Indian financial aspirations will drive product strategy. For women, customised solutions aligned with financial independence goals can be developed. More customised options consistent with solution-oriented schemes linked to personal milestones, such as weddings, education or home ownership, can foster financial confidence.

Source: DBS Bank India_Crisil_Women and Finance Report, The Sahi Journey by AMFI- Crisil Factbook, The mutual funds route to Viksit Bharat @2047

[1] https://www.nrlm.gov.in/shgReport.do?methodName=showIntensiveStateWiseReport (as on March 6th, 2025)

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