Empowering Women through Financial Inclusion

August 5, 2015


  • Despite efforts from the Indian government to provide assistance in food, education, and pension plans, many communities, and women, are left without it. With access to financial services (bank accounts, loans, etc.), women’s bargaining power in society increases.
  • Indian NGO Alternative for India Development (AID) noticed that despite great government programs, citizens were still often left without life changing basic services. In 2007, AID established the Mahila Bank.
  • AID is part of the growing social enterprise sector that is bridging the gap between effective government services and last mile populations. In 2013, AID was awarded the World Bank Group’s (WBG) 2013 India Development Marketplace grant.

Sarita Musharin, whose sun-wrinkled face makes her seem much older than her 30-something years,  sits in front of her small mud hut in the hills outside of Daltonganj, in the Indian state of Jharkhand, to barter with a drifter. The drifter, thin to the point of starvation, offers her a dried cobra head – among other herbs and bark to be used as food or thought to bring luck – for a small bag of rice. Sarita, with no outlet to other financing options, picks a few items and makes the exchange.

“My rice has been the only way for me to purchase things. The men of the village deal with exchange outside,” she says, as she gestures with her well-worked hands towards a group of men sitting in the center of the nine hut village. “[The women] are made to stay here to care for the children.”

Jharkhand is home to many tribal communities who are often left out of mainstream society. Often equated with the Maoist insurgency that has plagued the area for the past few decades, its residents are further ostracized for their misunderstood beliefs in mystic powers and outdated practices. In addition, these communities remain dominantly patriarchal and women are left only for childbirth and cooking.

Despite efforts from the government of India to provide assistance in food, education, and pension plans, these communities, especially women, remain without as they cannot access the bank accounts that unlock these benefits. With access to financial services (bank accounts, loans, etc.) women’s bargaining power in society increases as they are equipped with the tools that help them earn and maintain a living. Additionally, studies overwhelmingly show women are more likely to save, allocate, and invest money in order to be protected against unexpected expenses, and in their children’s education; giving an opportunity for a better livelihood to the next generation. 

Mahila Bank: An innovative solution

Alternative for India Development (AID), an Indian NGO that works to better the lives of tribal communities, noticed that despite great government programs, tribal citizens were still often left without life changing basic services.

" These communities are so outside of society that reaching them with normal channels the government is used to, is not enough. We must understand that many of these people do not know these services exist, let alone the financial channels needed to access them. "

Dr. K.T. Arasu

Director of AID

Applying its community-based approach to this issue, AID established Mahila Bank in 2007. Mahila Bank is a unique twist on the mobile banking trend that had been sweeping the development sector. Instead of simply providing accounts to women across these communities, AID employs women from the community to manage local ‘branches’ in easy to access locations. When applying for a bank account, these branches use biometric technology to ensure the bank accounts are secure and may only be accessed by the owner.  Additionally, AID employs a cadre of local women who provide training, and lead community meetings in the scattered villages across Jharkhand on the various schemes available and why banking is important.

By doing this, AID not only gains trust  from the communities, but also learns from the women the best ways it can impact the lives of those who need it most. This community-based approach ensures the women receive bank accounts, but also, that they fully understand how to access and use them, and the government benefits they will now be able to access.

“Working at Mahila Bank has allowed me to be a part of lifting up my own community,” said Maya Kumari, a field worker for AID who leads community trainings. “Our community is often the victim of different people who steal our money or do not want anything to do with us. Now we can improve our situation without being vulnerable to exploitation.”

Social enterprises bridging gaps

AID is part of the growing social enterprise sector that is bridging the gap between effective government services, and last mile populations, like the communities across Jharkhand, who are just out of reach of the government. A social enterprise is a privately owned organization - either for-profit, nonprofit, or a hybrid of the two - in which social impact is at the core of its sustainable business model. These organizations try to maximize their social impact rather than profits for external shareholders, often getting to the root of the problem in service delivery as they are; (i) usually from or present in the communities they serve, (ii) small and nimble, allowing for more flexibility and freedom to experiment with their model; and (iii) able to operate outside of strict government schemes and the rules that accompany them.

In 2013, AID was awarded the World Bank Group’s (WBG) 2013 India Development Marketplace grant in order to scale its operation into Jharkhand. The WBG program was more than a decade old when it evolved into the Social Enterprise Innovations program that incorporates these models into work the WBG and its government partners are already doing across the globe. 

To date, AID has created 10 Mahila Banks to reach women in these remote areas. To date, 32,000 women across Jharkhand have been brought into the banking sector, of which over 17,000 were connected to government schemes such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNAREGA) that guarantees wage employment for adults in rural areas in India. Additionally, AID has trained over 3,000 women community leaders who run regular community meetings on the importance banking and the government schemes available.

On the ground, these numbers turn into true impact for women like Sarita. “Without AID’s women coming here and helping us, I would have never known what I could get. Just last week I received a few hundred rupees from the government for a housing stipend,” she explained as the drifter walked away, “With that, I was able to easily buy rice to eat and trade and keep a little money aside for the future.”



Banking on India’s Women through Social Enterprise Innovations