This article is written by Devina, a gender and inclusion specialist.

This article is the third in a series of four articles understanding innovative gender-responsive lending approaches in India through the perspectives and experiences of female customers from economically and socially marginalised groups.

  • The problem: Marginalised communities in India face barriers to financial inclusion due to socio-cultural and educational constraints, along with information asymmetry.
  • Why it matters: Integrating non-financial services empowers women with essential skills and resources, creating a holistic approach to financial inclusion.
  • The solution: Offering training, healthcare, mentorship and tailored support to enable women entrepreneurs to thrive and succeed, fosters a more equitable financial landscape.

In the pursuit of financial inclusion, underserved communities in India have witnessed a growing emphasis on non-financial service offerings as a means to empower women borrowers. These offerings, ranging from training programmes to healthcare services, aim to address the multidimensional barriers faced by women in accessing financial resources. Through comprehensive research conducted with 150 women borrowers, we delve into their experiences with non-financial service offerings and shed light on why they can be transformative, as well as the challenges that hinder their effectiveness. Let's explore the potential of these initiatives and listen to the voices of the women as they share their feedback and aspirations.

A holistic approach

While financial loans are undoubtedly crucial, the integration of non-financial services can create a more holistic approach to financial inclusion. Recognising that women borrowers often face social, cultural and educational barriers, non-financial services aim to address these challenges and provide a comprehensive support system. By offering training, healthcare, mentorship and other services, they not only strengthen the financial capabilities of women but also enhance their overall wellbeing and empowerment.

Non-financial service offerings have the potential to revolutionise financial inclusion by addressing the multifaceted barriers faced by women borrowers.

“The training sessions on financial literacy helped me understand the importance of budgeting and saving. It was empowering to gain knowledge and take control of my finances,” shared Priya, a 32-year-old borrower from Pollachi. Such non-financial service offerings, such as training programmes and workshops, empower women borrowers by equipping them with essential skills and knowledge. These initiatives focus on enhancing financial literacy, business management and entrepreneurial capabilities. Over 98% of our respondents shared that they would be interested in participating in financial literacy training.

Non-financial service offerings

Over the last few years, there’s been a push for financial inclusion-linked training to go beyond access to capital. Non-financial services, such as healthcare, provide women borrowers with vital resources to improve their wellbeing. “Time in the SHG meetings to meet with Asha didis and understand options for me was so helpful. Given the limited time I can take outside of home for work, having this option made me not choose between my health and meeting financial obligations. It reduced my stress and allowed me to use any free time to build my business.”

Mentorship programmes play a pivotal role in guiding women borrowers through their financial journeys. Mentors with experience in business and finance can provide valuable insights, offer support and foster professional networks. Helena shares that, “having that mentorship class allowed me to share my challenges with someone who understands my life. Her support gave me so much confidence in myself. I wish there were more sessions.”

While non-financial service offerings have the potential to transform the female borrower experience, they are still at an early stage. More than 60% of our respondents shared that they would be satisfied with more integration between financial loans and non-financial services. 40% of our respondents shared that they had never participated in a non-financial capital-linked workshop under their borrowing history. Priya shares, “Sometimes, the training offered is broad in nature and may not be directly related to my business or my need. I make my own masalas at home and sell them. It would be good if someone can tell us more about packaging and selling. We can learn much more about the markets in the cities.” There is scope to improve accessibility and availability of non-financial services that need improvement, especially in remote areas where women borrowers face geographical and logistical constraints.

Enabling business growth

This insight emphasises the importance of customisation and relevance in non-financial services. Tailoring training programmes to address the unique requirements of different types of businesses can enable women entrepreneurs to gain practical knowledge and skills that directly contribute to their business growth. By providing industry-specific training, such as market research, branding, packaging and distribution strategies, financial inclusion players can empower women like Priya to navigate the intricacies of their markets and capitalise on opportunities. Priya's feedback also underscores the significance of understanding local contexts and market dynamics. Recognising the diverse challenges and opportunities faced by women entrepreneurs in different regions, more localised and relevant support can be provided.

Non-financial service offerings have the potential to revolutionise financial inclusion by addressing the multifaceted barriers faced by women borrowers in underserved communities. By combining financial services with education, healthcare, mentorship and other initiatives, women are empowered to overcome socio-cultural and educational constraints. The voices of women borrowers highlight the transformative impact of these services and provide valuable insights for improvement. Moving forward, it is crucial to continue integrating non-financial services into financial inclusion initiatives, ensuring inclusivity, accessibility and relevance to meet the diverse needs of women borrowers. Through these concerted efforts, we can pave the way for a more equitable and empowering financial landscape, where women thrive and realise their full potential.

Read the final article, Part 4: Digital payments - a growing uptake with some barriers, in this four-part series.

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