By Priyanka Bhatia
The gender gap in wealth management remains one of India’s most significant financial challenges. India has the largest gender wealth gap in the Asia-Pacific region at 64 per cent, a staggering disparity driven by societal norms, caregiving responsibilities, and limited access to financial education. While there has been progress in recent years, with more women entering the workforce and investing in financial markets, systemic barriers continue to hinder their full participation in wealth creation. Bridging this gap requires a concerted effort to empower women with financial literacy, tailored investment opportunities, and digital tools to achieve independence and security.
Financial Literacy: The Building Block Of Empowerment
Financial literacy is fundamental to enabling women to take charge of their wealth management. Yet, only 20 per cent of Indian women are financially literate compared to 27 per cent of men, a reflection of the persistent socio-cultural biases that limit women's financial autonomy. These biases often begin at home, where women are discouraged from engaging in financial decision-making, leading to a lack of confidence and knowledge.
Financial literacy equips women with the ability to manage budgets, optimise taxes, and make informed investment decisions. Initiatives aimed at enhancing this literacy must address systemic barriers, such as limited access to resources and education. For instance, tax education can empower women to maximise deductions and exemptions under provisions like Section 80C of the Income Tax Act. Such awareness not only improves financial well-being but also builds confidence in navigating complex systems.
Changing Trends In Women’s Investment Behaviour
Despite challenges, women in India are beginning to assert themselves in the financial landscape. As of February 2024, there were approximately 7.9 million women investors in India, a 25 per cent year-over-year increase. Women now hold 33 per cent of the total assets under management (AUM), amounting to Rs 7.5 trillion. This growth is driven by a combination of increasing financial independence, awareness, and accessibility to investment platforms.
Younger women, particularly those aged 20 to 35, are leading the charge, showcasing a proactive approach toward financial planning. Systematic Investment Plans (SIPs) have become especially popular among women, with 26 per cent of all SIP accounts now attributed to female investors. The average SIP size of Rs 3,738 highlights their focus on disciplined, long-term wealth creation.
Digital Platforms As Catalysts For Change
Digital financial platforms play a crucial role in bridging the gender gap by democratizing access to financial education and investment opportunities. These platforms enable women to learn and invest at their convenience, breaking barriers of geography and socio-economic status. Tailored products, such as microinsurance and low-cost mutual funds, provide entry points for women who may otherwise be excluded from traditional financial systems.
In addition, initiatives like Gujarat’s Gift City create pathways for women to explore tax-efficient investments without the complexities of international financial regulations. By leveraging digital tools, women can seamlessly access global and domestic investment opportunities, empowering them to participate in wealth creation.
Societal And Economic Impacts Of Financial Independence
Financial independence is more than a personal milestone—it has far-reaching implications for families and society. Studies show that financially independent women are more likely to invest in education, healthcare, and community development, creating a ripple effect that uplifts entire households. Moreover, their participation in the economy could significantly boost India’s GDP by unlocking untapped potential.
Addressing the gender wealth gap also has direct economic benefits. McKinsey estimates that achieving gender parity in India could add $770 billion to the country’s GDP by 2025. Empowering women with the tools to manage wealth effectively not only fosters equality but also drives national economic growth.
Overcoming Barriers Through Collaborative Efforts
Bridging the gender gap in wealth management requires collaboration among policymakers, financial institutions, and educational platforms. Tailored financial literacy programs must target women across demographics, with a focus on rural areas where access to resources remains limited. Policies that incentivize women’s investments, such as preferential tax rates or startup grants, can further encourage participation.
The role of online education platforms in this transformation cannot be overstated. These platforms simplify complex financial concepts, provide real-time investment advice, and foster a community of support for women taking their first steps into financial independence. By addressing both knowledge gaps and confidence barriers, such platforms serve as vital tools in narrowing the wealth gap.
Conclusion
The journey to bridging the gender gap in wealth management is both a challenge and an opportunity. With the right mix of education, digital innovation, and policy support, women in India can achieve financial independence and security. Empowering women in this way is not just a step toward equity; it is a stride toward national progress. By fostering an environment where women are active participants in wealth creation, India can unlock a powerful demographic dividend, setting the stage for a more inclusive and prosperous future.
(The author is the Co-Founder of Women on Wealth, a financial education firm. Views expressed are personal and do not reflect the official position or policy of Outlook Media Group and/or its employees. The article is for information purpose only; please consult your financial planner/s before investing.)
