Poshak Agrawal, CEO & Co-founder, Florence Capital

Poshak graduated from Princeton University in Economics and Finance. Back in India, he founded his first company, Athena Education, one of the most renowned in its segment in India. During his years at Princeton, he worked at Fortress Investment Group, as one of the only two summer analysts.


Exceptional Women

1959 – seven housewives from Mumbai gather on the roof of their building complex. Sitting together, they expertly form papad after papad, laying them out in the sun to dry. They’ve done this hundreds of times before, but there’s a difference today. Instead of being eaten at home, this papad will be packaged and sold for profit.

A sympathetic social worker has lent them Rs 80 to buy the ingredients, and they’ve borrowed utensils and stoves from neighbours and friends. The women are determined to make this a success.

Today, Lijjat Papad is a household name. Its products are sold in local kirana stores, Big Bazaar, and Grofers. With an annual turnover of Rs 1800 crore, it provides meaningful employment to 45,000 women across India. Women who are not just employees but co-owners of the brand. Entrepreneurs.

But the women of Lijjat remain exceptions. Even today, out of India’s 136 Unicorns, only 5 are led by women. Exceptional women.

Where Women Win

Women thrive in ecosystems designed to their strengths and needs. Capital that isn’t complicated to access, business models that use their existing skill sets and resources, safe working spaces, empathetic business partners committed to upskilling them, and support from friendly peer-to-peer communities.

These systems are best designed by women themselves or at least with their input and guidance on the very real challenges and barriers that women face. Over the last 50-years, a lot of work has been done by private players (10,000 women – Goldman Sachs), the government (SEWA), and international agencies (Led by Her – UN Women) to build such systems, but truth be told, they are still fledgling and nascent in India.

Challenge: A Millennia of Culture

Millenia of cultural and gender norms mean that women in India have been excluded from not just business spaces but also basic finance. Finance—down to the smallest detail or decision—is seen as the domain of the provider, and the provider has traditionally always been male.

The impact of these norms can be seen in social and structural barriers. Socially, women’s mobility has been restricted to the home and immediate community, thereby denying them the opportunity to earn, save and build a financial history.

This translates into market constraints such as a lack of personal collateral, credit history, ID documents, low entrepreneurial skills, and access to market know-how. All of this adds up and prevents women from accessing capital through traditional institutions.

Meenakshi is one such woman – a housewife of twenty years, she took the plunge five years ago to start a small eatery and contribute to her family’s financial security. She has basic ID documents but doesn’t receive a regular salary. Her business took a big hit during the pandemic, impacting her bank balance. Her dream is simple – to sustain her business, ride out the rough times, and plan for growth. On paper, Meenakshi is not a creditworthy candidate to any bank.

This is the status quo that fintech is poised to disrupt. With the right vision, fintech in India can take successful women entrepreneurs from exceptions to the norm and help them live empowered lives.

Fintech Plugs the Gaps

Broadly speaking, fintech refers to any business using software or modern technology to augment or enhance financial services. Fintechs often bridge the gaps between brick and mortar financial institutions and underserved communities by making financial processes simpler, less time-consuming, and therefore easier to access.

This is best illustrated by the Indian government’s ambitious India Stack project principles – presenceless, paperless, cashless, and consent-based infrastructure.

Building on this infrastructure and using alternative data, Indian fintechs have designed services that make it commercially viable to provide credit to women like Meenakshi.

Other fintech offerings, such as payment gateways, online marketplaces, mobile POS, P2P payment, digital wallets, and account management services allow women to grow their businesses from safe working spaces such as their homes and communities. Wealth management, aggregators, and policy management fintechs help them grow their financial knowledge and assets.

And finally, digital women-led communities create safe spaces where women can find the right peer-to-peer encouragement and mentorship that is critical to helping them overcome the traditional and cultural norms holding them back.

This means that Meenakshi can now apply for a loan from the comfort of her home using her smartphone. The paperwork is minimal and all online, and even though she does not have regular salary slips, lending fintechs use alternate data to assess her creditworthiness and approve her loan.  The amount is disbursed within 24 hours and she is all set to continue to build her business.

Her reliance on Fintech doesn’t end here.  To attract more customers, she starts accepting digital payments. As her confidence grows, she begins to use account management services to scale and make sure her business runs smoothly.

If her business and profile grows, she might turn to the all-women financial communities that have sprung up to advise and mentor women like her. These safe spaces take women through the basics of financial literacy, investing, and growing; moreover, she’ll begin using wealth management services to invest, grow her money, access insurance, and become a real player: an equal, empowered, productive member of society.

Fintech in Numbers

Currently valued at $31 billion, the Indian fintech industry is expected to grow to $84 billion by 2025.

Fuelling this growth is the rise of mobile penetration in India, from 19% in 2015 to 45% in 2021 to a projected 70% in 2025. Out of the existing mobile users, 43% are women—an encouraging number that must be improved.

Also rising is the number of Indian women who own a bank account, from 26% in 2014 to 77% in 2017. This has led to a threefold increase in the number of women applying for loans in the past 6 years, and according to a report by Swaniti Initiative, today around 3 million MSMEs either have full or partial female ownership, which in turn provide employment to over  8 million people.

The Fintech Future: From Exceptions to Every Woman

These are encouraging numbers, but there’s a lot more that can be done. For fintech to truly take off and contribute to women’s entrepreneurship and empowerment, we first need to improve women’s access to technology, digital literacy, and ID documents. The Pradhan Mantri Jan Dhan Yojna and other such projects are already driving massive change here.

We need women-led and women-first design in the fintech space in order to take advantage of and empower these women who’re entering the market. It’s heartening to note the rise of several fintechs being led by women—CashKaro, Mobikwik, Zest Money to name a few.

Finally, the importance of peer-to-peer interactions and the safety and comfort that community brings to women can’t be ignored. Women need encouragement and support to challenge the norms that have held them back and often still exist in their families.

Historically, technological and process innovation has driven social progress for women. Birth control extended their life expectancy and freed them from childcare; labour-saving devices such as washing machines gave them more time to devote to careers; and maternity leave helped them balance work and family.

Today, fintech is the next chapter in this saga.

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