Rural women entrepreneurs still prefer in-person banking: Study

Mumbai: Nearly 90% of rural women in India still prefer in-person banking, despite the growing availability of digital services, according to a survey by DBS Bank India and Haqdarshak. The survey, which provides insights into the financial behaviours and challenges faced by rural women entrepreneurs, highlights that while there has been an increasing trend of women saving a portion of their income, a significant reliance on traditional banking methods remains.The survey, conducted across Madhya Pradesh, Maharashtra, and Rajasthan, found that 90% of rural women entrepreneurs save a part of their income each month. Among these, 33% save between 20% and 50%, while 57% save less than 20%. Only 5% of respondents manage to save over half of their income. The remaining respondents, unsure about their savings, pointed to a need for improved financial literacy and planning. The majority of savers prefer bank deposits, with 56% opting for this method. Around 39% participate in Self-Help Group (SHG) savings schemes, while 18% store cash without investing it. Fixed Deposits and Recurring Deposits are less popular, with just 11% and 5% of women choosing these options, respectively. Notably, 64% of women reinvest their business profits into their enterprises.While 99% of respondents have a bank account, only 38% use digital banking services for business transactions. The digital users primarily rely on UPI, with 70% using only UPI for their transactions. Around 20% combine UPI with mobile or internet banking, and 10% use only mobile banking or other digital services. This suggests a significant opportunity to improve digital financial literacy, especially in rural areas, enabling entrepreneurs to make better use of digital banking.The survey also revealed that 36% of rural women entrepreneurs funded their businesses with personal savings, 25% relied on loans, and 29% combined both savings and loans or borrowed from family and friends. Family and friends were the primary source of funding for 9% of the respondents, indicating the importance of social networks in supporting small businesses. Around 80% of the women secured funding through SHGs or other lending channels, while 43% depended solely on SHG loans. About 15% had accessed government credit schemes, which underscores the need for improved outreach and awareness of such schemes.To expand their businesses, rural women entrepreneurs seek support in various areas, including industry and govt support (72%), digitisation (39%), business mentorship (35%), and networking (32%). Focus group discussions revealed a strong commitment to community development, with many women aspiring to create job opportunities for others in their villages.Azmat Habibulla, managing director and head of group strategic marketing & communications at DBS Bank India, said, "A 2024 World Bank estimate indicates that 22 to 27 million people are employed by women-owned businesses in rural India, underlining their critical role in local economies. Our report aims to identify the challenges faced by these entrepreneurs and provide insights to help accelerate women’s entrepreneurship."Aniket Doegar, co-founder and CEO of Haqdarshak, said, "Our collaboration with DBS Bank India aims to address the challenges faced by rural women entrepreneurs in accessing financial services and enhancing their financial literacy. We hope this study will spark dialogue and provide actionable solutions to improve their access to financial services and promote a more equitable economy."Haqdarshak, which has been supported by DBS Foundation since 2018, recently partnered with the DBS Foundation for a new program to advance financial inclusion in rural India. With a funding commitment of SGD 5.1 million, the program will focus on improving financial resilience and social security for 500,000 beneficiaries, including 50,000 nano entrepreneurs in India.