How women’s fear of money, shaped by gender roles, impacts their financial decisions and limits their economic power
Khushi Mundhada is all set for her first day at work, in a blazer custom-painted by her mother. Pic/Satej Shinde
Khushi Mundhada, 24, is the picture of a self-affirming, hard-working woman. She likes money. She likes to earn it, even borrow it when needed. Most of all, she knows the importance of a good CIBIL score. The threat of it going down haunts her every month, on the particular date her loan EMI is due. “It is the single most stressful day of the month, but the stress doesn’t stop there, it’s ever-looming,” says the Amravati native.
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After a year in the UK pursuing a Master’s degree in Marketing, Mundhada moved to Mumbai in November for her first in-office job as a content writer. The first thing she wants as she enters her new home in the city is a warm cup of tea. “My grandmother makes the most amazing tea, I can’t start my day without it,” she says. “My family is big on rituals, my grandmother makes me tea every day, my mother is an artist so we paint together a lot. She even painted my first-day-at-work blazer.”
Mundhada’s ebullience is a bit burdened by the education loan that facilitated her Master’s degree at Birmingham. “It’s Rs 35 lakh, of which I have disbursed Rs 28 lakh at an interest rate of 9.35 per cent,” she explained. Mundhada diligently pays it; in fact her repayment is due to start in December 2024, but she began paying it off in June. The loan is for eight years. “I don’t work for the money; I want to work to be recognised,” she jokes, “but you can’t repay a loan with recognition.”
Ritu Dewan and Vipasha Attri
“It was done out of independence. Since it was my decision to pursue higher studies, I decided to take a loan instead of spending my family’s money. In fact, I take a lot of pride in the fact that every single rupee that I have paid back is money I have earned on my own. I didn’t take help from anyone else. It’s also strategic to build a good CIBIL score. My timely repayments will help me in the future, whenever I decide to take a home loan,” she elaborates.
Mundhada is one among many women who go the extra mile to make sure they pay their dues on time. In fact, most women are obsessed with paying their EMIs on time, as found by Fibe. From their study, the fintech platform gleaned that women are more responsible credit borrowers, being 10 per cent more likely than their male counterparts to make timely EMI repayments. Others corroborate this with evidence: The TransUnion CIBIL annual retail credit insights on women borrowers report from 2022 found that 53 per cent of women borrowers have a ‘prime’ CIBIL score (above 731) as compared to their male counterparts, who stand at 47 per cent.
A CIBIL score is a three-digit number that summarises the credit activity of a borrower. The higher your CIBIL score is, the more a bank trusts you. 700 and above is generally considered a good score. Timely repayments make for a better CIBIL score, whereas defaulting on loans can cause a sharp decline.
Rural women pay back loans on time as they fear harassment Pic/iStock
This may seem like a gold star for women on banks’ collective blackboard, but others argue that the obsession with repaying loans on time is the symptom of a complicated relationship with money. Women refuse to take risks with it, proven by the kind of investments they make. Not only do they participate less in the investment market, they own fewer assets as well.
The National Family Health Survey-5, 2019-21 showed the differences between ownership of houses between men and women—57.7 per cent of women don’t own homes as compared to men, among whom only 37.5 per cent don’t own a house. Only 13 per cent of women own a house alone, whereas 36.4 per cent of men own homes alone. The survey was conducted among 6.1 lakh sample households.
Their risk-averseness can be seen in the kind of loans they take, which are primarily for consumption—money spent on goods and services. CRIF High Mark is an RBI-licensed credit bureau that provides credit data, studies, and information. Reports from 2023 show a 19 per cent uptick in the number of overall loans availed by women, but a closer look shows that business loans and education loans declined by 19 per cent and 1 per cent, respectively.
Nita Menezes, Author of Be Financially Smart; (right) Dr Nisha Bharti, Guest Faculty, Tata Institute of Social Sciences
Personal loans, which are consumption loans taken typically without any securities to meet expenses, grew the fastest by 52 per cent. This reflects that women take loans to fulfil the deficit, not generate assets.
Ritu Dewan, President 64th of the Indian Society of Labour Economics, decodes this saying, “The existing gender division of labour mandates that men do productive work; women that of consumption and household management. This is not to imply at all that this is the ideal, but that it is the outcome of patriarchal norms, and extends to the financial landscape. The majority of women generally take loans for education, health, and consumption purposes. It is for the benefit of the household and the family rather than for women’s economic empowerment. Also it must be noted that women rarely renege on their loan instalments, unlike large corporations.” Dewan was also President of the Indian Association for Women’s Studies.
“Gender division of labour exists at a societal level as well as at economic and policy level. Don’t separate the two, because the current nature of the State cannot survive unless it depends on patriarchy which it upholds, and unless it depends on women’s unpaid and also underpaid labour. A large number of women are in unpaid labour: the recent employment data that claims a rise in women’s labour force participation clearly reveals that this increase is due primarily to the expansion of women as unpaid family workers. Additionally, their contribution to the economy is unrecognised and undervalued,” explains Dewan.
Mundhada has moved to Mumbai, to pursue an in-office job for the first time, after taking up an education loan. Pic/Satej Shinde
Prof Dewan, the first-ever woman Director of the Department of Economics at the University of Mumbai in over a century and a half, points out, “One of the many consequences is the separation of gender from the ‘male’ domain of macro-finance, indicating how financial knowledge only percolates down to women in slow drops, and not as her right to economic equality.”
“Women prioritise stabilisation and security,” says Nita Menezes, author of Be Financially Smart: The Modern Woman’s Guide to Money. “They want to get rid of a loan as quickly as possible. In the case of home loans, I’ve seen wives say, ‘I’ll take care of house expenses, the maid’s salary, the groceries’, and husbands pay for the EMI. And since the man pays the EMI, the house is in his name, not the wife’s. Women don’t understand that they have to build assets. When you pay for the groceries, you pay for the house needs, for the education. Those are not assets; they are expenses.” Menezes is also CEO and Founder of Financially Smart and MoneyPrastha; and National President, Financial Literacy & Management Council of the Women’s Indian Chamber of Commerce & Industry.
Financial conscientiousness is slipped into women through gendered roles. Placing the responsibility of overseeing and facilitating household consumption also creates credit dependency for many of them. Dr Nisha Bharti, a guest faculty at the Tata Institute of Social Sciences in Mumbai, completed her PhD on migrant workers employed in garment manufacturing units in the city. Her research highlights the financial struggles of these workers, whose irregular incomes often prevent them from sending money home consistently. Wives of migrant workers stay back in the village. Unlike their migrant husbands, they have to face their situations at home. Dr Bharti says, “Their wives are forced to borrow funds from relatives, moneylenders, or micro-finance institutions to support their families in the village.”
Timely repayment then becomes a matter of safety. Women don’t get a loan to provide food to the family if they won’t repay their previous one. “If the loans go unpaid,” Professor Bharti explains, “the lenders’ representatives come to their homes, where the absence of male family members leaves the women vulnerable. To avoid harassment, these women have to manage money from somewhere else to repay their loans.”
Right from childhood, men are made part of conversations about money, shaping their access and understanding of it. For women, access to money comes late in life, as a householder or when promoted to a decision-making place in the family business. “Unfortunately,” Mundhada says, “women are always told that they are ‘paraya dhan’ in their own homes. Families treat sons as future assets, maybe that’s why they distil financial knowledge into them; a woman is only coached to take care of another man’s home.”
Without proper access to knowledge, women are afraid of investing money. Data collected by the National Stock Exchange shows that of the approximately 10 crore registered NSE investors, as of 2024, only 22 per cent are women.
Even if women have access to money, they will save the money for an emergency instead of investing it. Vipasha Attri is a gender practitioner, who works in the intersections of any social issues with gender. She pursued a Masters in gender studies from Jamia Millia Islamia, Currently, she is working with the Pratham Education Foundation as a content and training associate. “If there’s conflict in your marriage, as a woman, you don’t want your money sitting in stocks,” she advises. “You want some money out of reach from your husband, his parents, and your parents. You want some money that is completely yours.”
When it comes to money, most women operate from a place of fear. This may drive them to be better at paying loans, but it hurts almost every other aspect of their finances. “Much power flows directly and proportionately with money, and women are not ready to take on that onus,” says Attri. Ultimately, the one with money and the ability to handle it, will call the shots in a household. Women’s fears inhibit them from becoming equal decision-makers.
This fear of money seeps into every aspect of society. If a woman is not a decision-maker at home, who will trust her with decision-making anywhere else? “Our life is the sum of the decisions we take daily,” says Menezes, “and most decisions are about finance or money.”
When women stop themselves from taking financial risks, they get stuck in this negative feedback loop: I don’t understand money, hence, I cannot take risks with it; hence, I cannot yield returns; hence, I am not good at handling money; hence, I’m not a good decision-maker; hence, I cannot be good at other things.
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