In rural communities across the country, women in particular lack access to formal financial services
Namgay Om, 51 from Dzomi Gewog from Gubji village in Punakha has not attended any formal schooling and has no knowledge of financial matters, instead relying on her husband for all money transactions. Although her children sometimes teach her, she is unable to understand.
“I do not have much money and I do not care about such services. I sell vegetables in the market, but I deal in cash. Whatever I earn from selling vegetables, I buy groceries with that money and the money is used up,” she said.
Many rural women lack access to financial services like lending and saving to run their enterprises, foster entrepreneurship, and make future plans. Women in particular still rely on conventional sources of funding like borrowing from family or friends or occasionally selling hard-earned assets.
Many of the women Business Bhutan interviewed said that the fact that the majority of financial institutions are located in easily accessible areas, the absence of advocacy efforts in rural areas, and their lack of education are the main causes of their lower levels of financial literacy when compared to women in urban areas.
Khandu Om, a 46-year-old woman from Bali Chiwog, Chhubu Gewog in Punakha, has always dealt in cash and is uneducated. She also has no knowledge of banking. Similar to her, few women in her village are financially not literate.
A farmer by occupation, she sells vegetables at the market but only accepts cash payments. “I don’t know anything about financial services like MBoB/Tpay or Mpay. Most of my clients always enquire about whether I have any of such services. I didn’t know at first, but now that I do, I still don’t understand how it’s used,” she said.
Tandin Pem, 60, from Chapcha, who occasionally travels to Khuruthang town to sell dried pumpkins, turnip leaves (Lhom), and chillies, claimed she is not financially literate. “I don’t know anything about financial services or anything related to banks because I never went to school. At home, my daughter manages the finances,” she remarked.
She said, “I have to rely on other people for assistance with transactions. I occasionally feel sad and appear foolish when I visit banks,” she added.
“Financial knowledge and awareness are more prevalent among urban and educated women. This is because they have more financial freedom and more exposure. The government, therefore, needs to bridge the wide gap between urban and rural women in terms of financial literacy,” said 34-year-old Kinley from Dzomi gewog.
She does not know about loans, “So I haven’t applied for any, instead I borrow money from my friends,” she said.
Sonam Pem from Laptsakha village in Talo Gewog said women like us usually don’t know the importance of saving. “Whatever, we earn from selling vegetables in the market, we buy groceries and the money is finished,” the 53-year-old said.
“If the government or the local leaders in the village could advocate us banking services then it would make our life better,” she said.
Gyem, 60, a resident of Toedwang gewog in Punakha said the need to address the financial literacy among the women in the rural is a way to improve their financial empowerment, opportunities, and well-being has not been acknowledged much by the authorities concerned.
According to the Bhutan Living Standard Survey Report (BLSS) 2017, access to household loans is more prevalent in urban areas (42%) than in rural areas (33%).
Role in advocating financial literacy
Samten Phuntsho, gup of Shengana gewog, said that no advocacy campaigns have been held among rural women in his gewog to date. However, going forward, whenever there is a gathering in the village or gewog, he plans to instruct the women on the fundamentals of banking, such as the value of saving and how to use bank applications.
The majority of the women in the gewog have not attended formal schooling and are unable to use financial services but said when they request financial assistance then they assist he said.
The Guma Gup, Kinley Gyeltshen, said that because there was no budget, he did not engage in any advocacy. “It would be very beneficial for the women if the necessary agencies could promote financial literacy among rural women. They are dependent on other people, he said.
Although the RMA does not specifically have a program to support or educate rural women on financial literacy, an official from the organization stated that the authority has focused on school children. The official said, “When we educate children, then we want the students to return to their homes and teach their parents,” he said.
According to a bank official, rural women’s lack of financial literacy is the main reason why there is still a significant gender disparity in the use of bank accounts. In addition to having little or no access to financial information, rural women frequently lack literacy, which prevents them to engage with banking services, especially when they are online and digital.
“Although there are more women working in diverse roles across the country’s banks, according to him, not enough is being done to advocate for giving rural women the same possibilities as urban women or to promote financial literacy among them,” he said.
According to the State of Financial Inclusion 2020 report, access to formal financial services, a lack of appropriate financial products and services in terms of access points, infrastructure, affordability, KYC requirements, and a lack of financial literacy, especially in remote areas, are the biggest obstacles to accelerating financial inclusion.
The country’s hilly geography, according to the report, creates an access barrier and raises the cost of operating financial services.
The role of the RENEW Microfinance
RENEW Microfinance Private Limited (RMFPL) is certified by the Royal Monetary Authority to provide micro-credit to the public and actively works to improve financial literacy in rural areas, enabling rural people to save and borrow wisely, which is a real boon for many rural people, especially women, to shape their future.
In an interview with Business Bhutan, the focal person of RMFPL, Tshering Denkar, said the project started as a cooperation between RENEW and the German Savings Banks for International Cooperation (DSIK).
The project was a result of Her Majesty Queen Mother Gyalyum Sangay Choden Wangchuck’s vision to empower women and make them financially independent.
“We are covering 11 districts, but eventually we will cover the rest of the dzongkhags. Our goal is to serve the underserved population and increase financial penetration in the country. We provide a broad range of financial services to low-income households with a primary focus on women,” she said.
She said, they also aim to improve the quality of life and the status of vulnerable women and their families, mainly in rural areas by providing credit products, savings, and financial literacy thereby creating favorable opportunities for them to participate in socio-economic activities to improve their income and enhance their role in the society.
RMFPL not only facilitate in financial assistances but also educate them in financial matters on how they can save for their children’s education and for unforeseen events such as the pandemic.
For the people in the village, saving used to be the last option, but RMFPL have been educating them on the importance of savings and they also go to the nearest point in the locality every month to educate them on the importance of savings while we go for collection and loan disbursement.
Today the clients have started to save more, and the amounts have increased from Nu.100 to 500 to 1000 and above. Even while availing a loan, they used to take the ceiling amount, but now, they do their calculations and take only the required amount.
She said that this really shows that the financial education that has been provided to the clients has really brought an impact.
Most of the clients in the microfinance sectors are not literate, that is why it is a challenge to provide financial education but RMFPL has developed a customized booklet for them called the budget book.
The book has visual pictures and the names of the items in both Dzongkha and English so that they can enter the income and expenditure accordingly.
Microfinance also includes facilities such as door-to-door services. “The ease of availing services for both savings as well as loans are easier and convenient compared to other commercial banks,” she said.
As of November 2022, RMFPL caters its services to 27,819 clients across the country covering 11 dzongkhags which includes Thimphu, Samtse, Punakha, Dagana, Wangdue Phodrang, Tsirang, Bumthang, Trongsa, Monggar, Trashigang, Zhemgang.The story is funded by the Journalists’ Association of Bhutan for Rural Reporting Grant supported by the Canada Fund for Local Initiative.
Chencho Dema from Thimphu