Empowering women through financial services in India

While traveling through Tamil Nadu, in the southern region of India, Per Helmersen met a 27-year-old widow with three children. She lives apart from two of her children, as she is only able to support one child on her monthly salary of 4,000 Indian rupees (536 NOK/$89), earned by selling packets of detergent to local retailers. After expenses such as housing, food, transportation and medical expenses, this woman is left with 150 rupees (just over $3) each month. But despite this tight budget, she took out a loan and purchased her daughter an expensive gold necklace, in an effort to secure her financial future.

The role of social capital

Per’s encounter with this woman is not unique in India. Many families take out loans beyond their means to cover expenses, purchase insurance, make payments on previous debts, or simply purchase gold jewelry for their daughters. But how can an already struggling family not only make ends meet, but also repay their mounting debts?

“The answer is social capital. In India, many people are on what I call the “money-go-round”. People are borrowing, and then in order to pay the installments on the loan, they take out new loans,” explained Per Helmersen, Research Scientist, Telenor Group. “The entire system is based on trust. It’s the people you trust who are willing to loan money. And in return they can count on you to loan them money. Social capital means that even if you don’t have the financial resources, at least you have people you trust to help you out.”

Navigating India’s complex financial ecosystem

The purpose of Per’s journey through southern India was to gain an understanding of the woman’s role in the country’s complex financial ecosystem. Due to Uninor’s active working relationship with Hand-in-Hand, a local NGO, Uninor has already played an important role in elevating the status of women and empowering them to become “Citizen Centre” entrepreneurs. As entrepreneurs, these women are running businesses that provide their communities access to and training in the use of communications tools such as computers and the Internet.

“We were interested in how women interact with formal and informal financial service providers who offer loans, micro-savings schemes and insurance coverage. Hand-in-Hand is largely centered in the Tamil Nadu area, so they provided a gateway into the region and introduced us to several women’s self-help groups (SHGs). We contracted CKS, an Indian research and design agency, to organize and facilitate the fieldwork,” said Per.

Taking financial services beyond Pakistan

Telenor is no stranger to financial services, as its easypaisa offering in Pakistan has received worldwide acclaim for its breadth of offerings and ability to serve even the most rural areas. But India, due to its size, complex culture and regional variations, represents new and unique challenges that Per sought to unearth.

By empowering women, you empower the community

“We know that women in emerging markets are extremely important. Men are often absent for various reasons, such as work abroad, so the women are left behind to manage the family,” said Per. “This includes generating an income for the household and handling expenses. By empowering women financially, you are essentially empowering a community – as the women are the ones who are often responsible for healthcare and educating children.”

During his fieldwork, Per also interviewed women in Tamil Nadu who worked as banking or insurance agents. Often through their association with Hand-in-Hand and the SHGs they had received basic training in accounting and bookkeeping, as well as computer literacy. The social connections of these women served as a starting point for their new businesses, as they were able to build upon their social network to sell services.

Listening to women’s stories gives new market insight

“When looking at the important role of women in these local communities, it becomes clear that they are the key to any village-level financial services strategy in India. They have the social network, they’re physically present in the village and they’re not only concerned about the welfare of their families but the welfare of the community at large,” said Per. “It’s so important for a company like Telenor to listen to these women’s stories, as it gives us new insights into the needs of the market.”

Closing the gap between knowledge gained and practical application

With all this valuable knowledge in tow, how does a company like Telenor put it into practical use? Per is a strong believer in the importance of closing the gap between the knowledge generated in the field and the activities that are occurring in the business units through the organization.

“We need to make sure that the insights from the field, for example what we’ve learned about women in India, are accessible to the right people back home and in our other business units. We also need to illustrate why it’s so important to look beyond the statistics and listen to the customers, as the numbers will only tell you part of the story. We’re a customer-centric company, so it only makes sense to be out there, listening to and observing our customers,” asserted Per.

Understanding culture to successfully appeal to the Indian market

With any country as complex and sizable as India, there are significant regional variations. In Tamil Nadu, gold was a common and secure investment, whereas, in the western region, the cooperative organizations dominate most of the financial transactions. The role of women also varies regionally, and Telenor will have to understand these cultural intricacies in order to successfully appeal to the Indian market.

“The market is changing constantly and we have to monitor the changes and trends in India,” said Per. “The important thing is to build trust, and for us that’s closely linked to our brand. That trust will impact the services we offer. If a local money lender can build a trusting relationship with their clientele, I see no reason why Telenor cannot do the same.”