Women lead Financial Literacy

International Women’s Day falls each year on 8th March. For a country that was infamous for its gender disparity in education rates, one could argue that India has made a sharp U-Turn in the last 20 years. As per the 2018 Education Statistics report from the Ministry of Human Resource Development, over 60 percent of India’s female population from both rural and urban areas are now literate, reflecting the successes of governmental institutions and education programs.

Even in the financial arena, women are not too far behind. Women are making inroads into the financial arena at an unprecedented rate. Let's commemorate the 7 ways Indian women are striding forward in the realm of financial literacy.

Fewer women are ignoring life insurance

Women in India, today, are taking on the role of breadwinners. The modern Indian family has grown to acknowledge the financial contribution that women makes to the household. Thus, for Indian women and their dependent families, life insurance has begun to play a monumental role. 

The new generation of women in India are choosing to opt for life insurance at a higher rate than their preceding generation, suggests an IRDAI study. Women bought 32% of life insurance policies in FY 2017–2018. And although this number is not ideal, it’s a drastic improvement from before. This monumental shift can be pegged down to financial literacy from programs such as SEBI’s financial awareness programs. 

Get paid more and invest more

India’s gender pay gap has been steadily decreasing over recent years, owing to increasing awareness. This is strongly reflected in the investment choices of Indian women. ClearTax Save aggregated the average amount invested by women 2 years ago on their Mutual Funds investment platform. The amount was ₹13, 738. Within the first three months of 2018, this number grew to ₹32,064. On the other hand, the average amount invested by men has stayed more or less the same.

The hardcore budgeters

Most women in India single-handedly run households which requires balancing expenses on food, transport, electricity bills, etc. As per a recent study, a whopping 79% of women are more than comfortable with balancing the family budget.  While it may be discouraged as a traditional gender role, the habit of budgeting can help women move forward in the financial world. Setting aside funds, whether for emergencies or for retirement savings, is always recommended to financially secure one’s future.

Women are the bigger investors

This might come as a surprise to many, but a 2018 study by ClearTax confirmed that women invest more than men. Financial services, too, have become more inclusive of women in India. ClearTax reports that, on average, women invested 12.7% more than men using their website. 

Additionally, one might assume that it is high-income bracket women who are able to save enough to invest. In actuality, the fastest-growing segment of female investors on ClearTax falls in the salary bracket of less than 1 lakh and 1–5 lakh per year bracket. These findings shows that women in India are making sure to start saving from an early age and that investing is becoming an intersectional feat. 

Chasing long-term goals over returns

One financial advantage women investors have over men is the ability to block out market noise. Financial planners claim that Indian women are disciplined at saving money as they chase their long-term goals instead of returns. This makes them better investors as they often do not put their accumulated funds at risk. Being less impulsive than men serves women well, when it comes to their financial decisions.

Trading as an additional income stream

Recent data suggests that Indian women are starting to trade more to diversify their portfolio. This is happening for many reasons, financial literacy being the core one. However, studies also claim that female investors are motivated by the likelihood of success. As they are more selective, risk-averse and less impulsive than male counterparts, women are less likely to hold on to bad trades. 

Don’t forget about commodities

Women are tapping into all possible financial reserves available to them. They are also dominating in the field of commodity trading. An article, by Entrepreneur, charts the earnings of four Indian women who are making millions by trading in the commodity market. They are Madhu Vadera Jayakumar- formerly the CEO of E-commodities Limited, Jyothi Budhia- Director of BK trading, Vaishali Sarwankar- Director at Atlantic Industrial & Trading, and Deepali Singh, owner of Jaya Laxmi Foods. It seems there isn’t any mode of earning that women are bad at.

In conclusion, this International Women’s Day, let’s celebrate how far women have come. Financial literacy across the country still has a long way to go but it seems India may be progressing at a faster rate than expected. If you are looking to make new investments in 2020, consider investing with Axis Direct. With instruments ranging from equity offerings to ETF, Bonds and Tax Planning options, Axis Direct is bound to have the financial product for you. Sign up on the Axis Direct website today.