Summary of this article
Framework shifts focus from access to usage
Women central to credit, savings and protection
Data and capability drive deeper financial inclusion
Earlier this month, the Reserve Bank of India (RBI) introduced an ‘Updated National Strategy for Financial Inclusion’ that lays out a plan through 2030. The strategy is based on what RBI has described as the ‘Panch Jyoti’ approach, founded on five pillars and focused on improving the quality and use of financial services.
The five pillars are: access to formal financial services, gender responsiveness and resilience, livelihoods and skills, financial literacy and capability, and consumer protection with grievance redressal. The five pillars are basically intended to push the frontiers of financial inclusion beyond having an account to meaningful engagement in the financial system.
A strong emphasis is placed on women within this framework. Though accounts with banking facilities have dramatically increased over the past decade, there are inequalities in the usage of credit, insurance products, and online facilities.
Access Has Improved, Usage Gaps Remain
According to the Women and Men in India 2024: Selected Indicators and Data report published in April 2025 by the Ministry of Statistics and Programme Implementation (MoSPI), around 39.2 per cent of all bank accounts are now held by women, indicating progress on formal inclusion. However, account ownership has not necessarily translated into greater use of financial products.
Women in India are constrained by income disparity, the lack of collateral assets, and limited engagement with the credit system. Such issues commonly lead to lower uptake of loans, insurance products, and long-term savings instruments despite account usage.
According to Kalpana Ajayan, regional head-South Asia, Women’s World Banking, “Access alone is not enough. Financial literacy and digital financial capability are critical enablers of women’s financial security.”
Gender-Responsive Product Design and Delivery
The Panch Jyoti model gives importance to gender responsiveness in terms of product and last-mile delivery. This includes the design and scaling of financial products that cater to the needs of women.
However, as Ajayan points out, there is evidence to support this strategy. “Women...face systemic barriers to finance, and the evidence is clear...Inclusion strengthens families, communities, and entire economies,” she says.
Examples highlighted by policymakers and development institutions indicate that savings-linked products, small incentive-based deposits, and simple digital nudges can encourage regular usage and improve financial discipline among women customers.
Supporting Livelihoods and Small Enterprises
Another component of this framework focuses on livelihood/skills, particularly at the nano and micro enterprises. A large share of women-owned businesses tend to operate on a small scale and are usually based on informal credit. As of early 2025, a total of around 2.2 crore women-owned micro, small, and medium enterprises (MSMEs) have been registered on the Udyam Registration Portal (URP) and Udyam Assist Platform.
According to government surveys, around 20-26 per cent of all MSMEs are owned by women. Most of these establishments need small loans and non-financial assistance to stay viable.
Ajayan points out collaborations with SIDBI, as well as other State Rural Livelihoods Missions, as examples where leveraging credit and training has delivered success. “Building women’s digital and financial skills, alongside business management capabilities, [has driven] credit discipline, better bookkeeping, and sustained adoption of digital payments,” she says.
Importance of Gender-Disaggregated Data
This financial inclusion strategy also mentions how Gender-disaggregated data helps address financial inclusion disparities. Without such data, financial institutions may not be aware of trends for female borrowers or depositors.
Ajayan emphasises that this sector requires a stronger targeted focus. “When financial institutions analyse data through a gender lens, they can design more relevant products, improve risk assessment, unlock new markets,” she adds.
Furthermore, gender-disaggregated information can also help policymakers monitor the progress of their intervention programs and analyse whether the expected goals are being achieved.
Financial Capability and Consumer Protection
Financial education is another important aspect of the Panch Jyoti model. The emphasis has now shifted from basic awareness to building financial capability, including knowledge and confidence in using financial services safely.
This is coupled with stronger consumer protection and grievance mechanism provisions. Female consumers often rely on trust-based networks and may be more susceptible to mis-selling and fraud, especially when the consumer protection mechanism is weak.
RBI's National Strategy for Financial Education (NCFE) aligns the goal of financial literacy with consumer protection by involving regulators, banks, community groups, and non-profit organisations. Ajayan observes that combining capability development and protection is critical. “Gender-disaggregated data, combined with financial capability building and strong consumer protection, transforms gender equity from an aspiration into an actionable strategy. What works for women ultimately works for the entire financial system,” states Ajayan.
The Panch Jyoti framework signals how financial inclusion is measured and pursued. The real emphasis is now on depth of usage, resilience and long-term participation rather than just access.
