How women use their money: a report card

Around 85% married women aged 15-49 are involved in deciding how to use their own earnings, the latest National Family Health Survey (NFHS 2019-21) showed. This is up from 82% in 2015-16. But a large share do so jointly with their husbands: just 18% of all women pull the strings themselves, down from 21%.

Note that in another survey by Tata AIA Life Insurance, 44% of women said they were willing to make their own decisions “if given a choice”. But this was primarily in tier-1 cities: elsewhere, women still wanted to depend on their husbands, the insurer said, based on its survey of 1,000 women across 18 cities in October 2022. Apart from the lack of financial awareness, factors such as the social structures, lack of confidence and the prospect of being answerable for their investment choices make women more hesitant, said Renu Maheshwari, co-founder of Finscholarz Wealth Managers.

Some progress is on the way. The latest YouGov-Mint-CPR Millennial Survey showed that more women are now investing in financial or physical assets. Around 21% women said they invested in only financial assets such as stocks, bonds and mutual funds, up from 17.5% a year prior.

Fair share?

Women are often considered more risk-averse than men, which translates into lower proclivity towards equities. Globally, women were around 24% of the stock market investors on BrokerChooser’s broking platform in 2021, and in India, the share was even lower at 21%.

But here, too, as the YouGov-Mint-CPR survey showed, improvement is on its way. “Things have already improved a lot compared to the situation 7-8 years back,” said Alok Chaturvedi, head of products, HDFC Securities. “The government’s digital initiatives have also played an important role.”

Women made up 13.5% of the total investor base in equities as of September 2021, up from 11.7% in September 2019, a National Stock Exchange report said in 2021. While Chaturvedi sees this as an encouraging trend, he believes raising awareness and financial literacy, promoting diversity and addressing systemic barriers, among other things, can boost their participation in equities.

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Promising trends:

Women’s ownership in other traditional financial products such as mutual funds and insurance may not be up to the mark but has been progressing well.

The tribe of female mutual fund investors is only about one-fourth of the total base but has seen a threefold increase in the last five years, according to a 2022 CAMS report. Millennial women make up 30% of this base.

Women’s share in new policies bought in 2021-22 stood at 29% and 36% for private life insurers and Life Insurance Corp. of India, respectively, shows regulatory data. “Lack of awareness and discourse remains a major impediment for insurance adoption among Indian women,” said Murli Jalan, chief distribution officer (proprietary), Bharti AXA Life Insurance. “All the stakeholders of the insurance industry have to do away with the idea of portraying men as the sole breadwinners and decision-makers for all the financial goals.”

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New-age assets

Lastly, new-age asset classes such as cryptocurrencies. “Women, especially in urban India, form a significant user base of wealth-tech apps, investing in emerging and traditional asset classes,” said Swati Pincha, head of growth at CoinSwitch, a crypto platform. “This shows the challenge was not that women were not investing, but that platforms were not accessible.”

Trading platform eToro reported that cryptocurrencies were the second most widely held asset class by women globally in 2022, just behind cash. Pincha attributed the growth of cryptos among women to rising internet penetration and the decline in data inequality. Moreover, women in developing countries led in crypto adoption in 2021 with two in five crypto owners in India being women, reported crypto platform Gemini.

All in all there does appear to be light at the end of the tunnel as women try to bridge the large gaps.

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