Household Finance

For the first time, the majority of Indian women have been financially included. Fresh data show that the proportion of Indian women with individual accounts in formal financial institutions (primarily banks) reached 61% in 2015, a sharp increase from 48% in 2014, lagging men by only eight percentage points.

Imagine you are a labourer in a village in Odisha and have painstakingly completed your Aadhaar formalities (for which you gave a proof of permanent address and your fingerprints).

This chapter documents the growing informalization of India’s labour force and the consequences of this phenomenon for the state of social protection in India.

Governments and lenders provide loan moratoria to help struggling borrowers, particularly during an economic crisis. While it can provide relief to borrowers, such a policy also has a possibility of inducing moral hazard among the beneficiaries.

The study explores the financial lives of platform workers and finding answers to the following questions: do platform workers face volatility in their income and expenses, and how much do their earnings and expenditures vary on a day-to-day basis; how long do they work to earn as much as they would like to; whether and where they save and borrow; what strategies do they adopt to manage their money to meet their day-to-day expenses, raise lump-sums, deal with and recover from shocks; what social protection benefits do they have access to; what their financial goals are; and what barriers exist, if at all, in their pursuit of those goals.

Insurance companies should align their sales practices to generate the best outcomes for low income households by ensuring easy access to a variety of products with disclosures that provide accurate information.

There is a need for updated dataset on households' consumption patterns, increased frequency of surveys on households’ balance sheet, and to collect data on financial well-being.

Despite significant policy support for financial inclusion, there is little evidence about what has been achieved by way of knowing which households and individuals are financially included, or what is the impact of such inclusion on these persons.

Low-income households seek loans often, but credit is suitable if it helps sustain or improve financial well-being. This is what must be ensured by lenders, regulators & policymakers.