Financial Inclusion Among Rural Indian Women: Comparative Evidence from Two Recent Rounds of the National Family Health Survey

Abstract

This study aims to characterise the financial inclusion gap between rural and urban women in India. Taking a cue from literature that it is demand-side factors which determine the diversity in financial participation among women, such factors are explored using the National Family Health Surveys—a hitherto unutilised source of data for such studies. Subsequently, the gap in financial inclusion between rural and urban women is split into quantifiable and non-quantifiable factors, so as to understand the nature of efforts required to bridge the gaps. The findings indicate that the rural–urban gap in ownership and usage of bank accounts has come down from 12 percentage points in 2015–2016 to almost 3 percentage points in 2019–2021; the gaps occur on account of urban women being better endowed than rural women in terms of wealth and education-related characteristics. Policy implications for stimulating financial inclusion among women to close the rural–urban gap conclude the article.