Women over the last few decades have emerged from the four walls of their houses, started working and have become earning members of the family. There is since, a marked amelioration in their socio-economic conditions. Women constitute half of the world’s population and female participation is critical to boosting the economic potential of any nation.
Many women stay away from investing due to age-old inequalities, resulting in poor involvement in financial markets. According to the investment management company BlackRock, average female investors keep 68% of their portfolio in cash and cash equivalents, like money market accounts, treasury bills, and certificates of deposit.
Whereas, men keep 59% of their portfolios in cash, and women participation in stock investment is just 20%.
According to an IMF study, increasing women’s participation in financial services as users, providers, and regulators would have benefits beyond reducing gender imbalance. Closing the gender gap brings stability to the banking system while boosting economic growth. It could also help to implement monetary and fiscal policy more effectively
Covid, women and financial market participation
Indian women have been struck more severely by the pandemic than men. From lowering of wages to job losses and increased mortality, they have suffered disproportionately.
Data shows that their unemployment rate rose to 17%, more than double the rate for men during the pandemic. The ongoing series of lockdowns, anomalous salaries, pay cuts and job loss aggravates the need for women to look for alternate sources of income.
The lockdown has been an agonising period, however, it allowed women to utilise their time to find alternatives in maximising earnings. Rising gold prices, low returns on fixed deposits and real estate have moved savings from physical to financial assets.
More women have entered equity trading, by educating themselves through mock trading practices and video tutorials. The widening reach of the internet, work from home options, low initial investments and similar factors acted as great stimuli.
Women also tend to prefer lower financial risk compared to men. Fear, doubt and uncertainty prevent many from venturing into risks because women are also expected to “stay safe, within boundaries“. Women are conditioned to save in trustworthy chit funds, FD’s and POS rather than risking speculating and gambling which are considered masculine
According to an IMF study, increasing women’s participation in financial services as users, providers, and regulators would have benefits beyond reducing gender imbalance. Closing the gender gap brings stability to the banking system while boosting economic growth. It could also help to implement monetary and fiscal policy more effectively.
The gulf between men and women
Women are under-represented at many levels, and although they excel in all walks of life, they still struggle to reach the same levels in financial market participation.
The stock market remains male-dominated and women have a long way to go. 23% of women lack access to formal financial services, while 65% do not use financial services at all. They face barriers related to mobility, gender bias, and lack of financial and tech literacy.