According to the DSP Winvestor Pulse 2019 Survey, “Only 33% of women take their own investment decisions, compared with 64% men. Of these, only 30% did so of their own volition, while most were prodded by their spouses or parents.”

This could imply that women don’t understand finance. However, the reality is quite the opposite when it comes to managing the purse strings. In most Indian households, women have always managed home finances. Women have saved and invested their money prudently albeit in instruments that do not form a part of the formal investment portfolio. Traditionally, women have been saving up cash from their monthly budget and from the gifts they receive. Additionally, they have been participating in schemes like chit funds and kitties, the equivalent of Recurring Deposit (RD). Then, of course, they invest in gold, often creating a corpus that surprises their partner. In fact, in 2019 India’s household gold reserves were valued at 40% of the country’s GDP.

Women: Money-Wise & Finance-Wiser!

A fact that is corroborated through two instances:

● The success of the microfinance or self-help group models, which typically cater to women. This group largely comprises women who mostly have studied till secondary school.

● The corpus that each housewife pulled out during the demonetisation phase elicited unwanted jokes. However, it showcased a careful and disciplined manner in which women had been saving money. In most cases, this would have been used for the family.

As Indians, we know that in an emergency, it is the woman who becomes the first go-to person. She readily steps up, sells her gold, digs into the very corpus that came into focus during demonetisation. Thus, it is fair to conclude that women have an intuitive acumen for money and its management.

Women usually don’t shy away from savings and investments is a known fact. So, now let’s touch upon why women hesitate to invest in the formal sector. Financial literacy, ease of investing and concern for liquidity could be key reasons. [3] As experts it becomes our responsibility to suggest products that will meet their life goals: retirement plans, protection of favourable certainties such children’s education etc. They also must be convinced that their money is safe. Products like a life insurance policy or an annuity plan are apt examples of offerings that will specifically cater to what women want.

Women Are Diverse, Their Solutions Should Be Too!

Every woman is distinct and unique. From the perspective of economics and investing, we can classify them into the following broad categories –

● Primary bread earners, single and making their own decisions regarding personal finance

● Non-primary bread earners who save using their monthly allowance

● Former primary bread earners who were focused on career, but now put family first.

All three categories have varying financial literacy levels, aspirations, risk appetites and needs.

So create plans that will suit each group. For example:

- Single primary earners could resonate with robust retirement plans or long-term income plans, which guarantee stable continuing income.

- Non-primary bread earners could channel their savings into more formal sectors like a Life Insurance Policy or a Fixed Deposit (FD) or a RD to protect their principal at all times while earning some returns.

- Former primary bread earners who have now put family first, should remember that only when they are fit physically, mentally, and financially, can they nurture their family best. They could look at a combination of Mutual Funds (MFs), long-term income plans or ULIPs basis their risk appetite.

Once women believe in themselves and take command of their finances, nothing can stop them.