For women to actualize financial security, they must first fully embrace the term financial independence, which refers to their ability to make informed financial decisions regarding their money.

Earning monetary benefits or social respect?

The need for financial independence for women, particularly in developing economies

Released in 2019, Bill & Melinda Gates Foundation’s India Report, ‘The Financial Agency of Women’, reveals that there exists a vast gap between men and women in developing economies, be it in terms of financial independence, literacy or freedom. It is repeatedly emphasized, to the point of blatant internalization, that phones, banks and services are too smart for women. This outlook further corroborates that money is mainly considered the domain of men. Developing markets rely heavily on male income to sustain households, while women are allocated the gender-biased role of looking after the house and kids, without any real say in the family’s financial decisions. This poises the necessity of attaining financial independence for women in developing economies.

The Global Findex, an extensive database focusing on details of individuals saving, borrowing and managing risk in 148 countries, divulges that ‘women are less likely than men to have formal bank accounts. In developing economies women are 20 percent less likely than men to have an account at a formal financial institution and 17 percent less likely to have borrowed formally in the past year.’ In the lucky cases that women are able to get their hands on loans via formal borrowing channels, they still lag behind when it comes to benefitting from financial services including digital e-payments, insurance and savings to name a few. This is due to the many obstacles in place such as requiring male guardians’ permission prior to opening bank accounts which are at the crux of most digital financial services.

For women to actualize financial security, they must first fully embrace the term financial independence, which refers to their ability to make informed financial decisions regarding their money. This includes monetary choices to save, spend as well as to invest money as considered best by these women. Financial independence naturally negates the patriarchal assumption of men controlling women’s hard-earned money and is hence a topic of debate within developing economies.

The consistent sidelining of women in employment opportunities as well as more men being retained while downsizing during recession indicates a void between the lives that women live and the digital financial services that they avail. Women suffer due to inadequate savings in their emergency funds coupled with a low spending power for personal expenditures. The little money they get access to is often channeled back towards household necessities and catering to the demands of children. Sadly, working women are expected to contribute more than their husbands in domestic work and childcare which eventually results in many women resigning to focus on one task at hand, thus further reducing their financial independence. In the absence of their own wages, while dependency on their male counterparts increases for every day expenditures, there is an added problem of zero say in the family’s financial decisions which are likely to constrict their financial freedom cyclically.

The key advice to women in developing economies would then be to keep their personal bank accounts active after marriage, something they are quick to merge immediately after. This allows privacy and greater autonomy over their financial freedom. Another optimistic approach would be to actively seek out resources that aid them in becoming financially literate so that they can vouch for their own financial decisions and uphold discussions with their families regarding risk management, schooling choices, investments and marriages. Regarding independent income as an indicator of empowerment, helps women to streamline their priorities when it comes to making employment decisions

In a study published by CLP on working women in North West Bangladesh, one of the results of being employed was increased respect towards women: when asked if they feel respected by their husband and their community, 87.1% of women reported that they felt their husband respected them and 90.6% said they felt their community respected them. Thus it can be safely concluded that financial independence also equates respect and inclusion for women who are otherwise subjected to the implications of a skewed patriarchal social structure in developing economies.