Difference is 21% in Madhya Pradesh

A World Bank paper has noted a 10% gender gap in opening accounts under the country’s flagship financial inclusion programme — Jan Dhan Yojana — with 73 % men applying for accounts against 63 % women. Madhya Pradesh recorded the largest gender gap of 21%. The World Bank’s policy research working paper ‘Making It Easier to Apply for a Bank Account: A Study of the Indian Market’ (2017) by Asli Demirguc-Kunt, Leora Klapper, Saniya Ansar and Aditya Jagati also noted an income gap — 64% being poorer adults and 71 % richer adults — in applying for an account.

The share of wage earners (72%) was higher than the share of adults who are out of the workforce and applied for an account (64%). Among adults with primary school education, 62% applied as compared with 70% of adults who had completed secondary school education (and 84 % of adults with a graduate degree).

The survey was carried out between January and March of 2016 in 12 States — Andhra Pradesh (including Telangana), Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Uttar Pradesh — which make up about 70% of the country’s population.

The paper explored the costs of opening an account, the efficiency of the account application process, and demographic differences between those who choose to apply and those who do not.

The research said despite initial successes, people who wished to apply for an account continued to incur a range of costs, including the cost of travelling to bank branches, the cost of collecting documentation and various other monetary costs. The confluence of these factors makes account opening a tedious task, researchers said.

Some adults declined to get an account as they were unable to afford the fees for maintaining and using an account, or think the fees are not worth it. Yet 40 % of adults cited lack of trust in financial institutions as reason for not opening an account.