An assessment of value chains in rural India with high women participation has interesting findings
“The Indian rural retail segment is dominated by unorganised, independent, owner-managed shops, majority of which are set up within household premises and often managed by women,” said Himanshu Bansal, Associate Partner-FS Advisory, at advisory services firm Intellecap, part of the impact investment-focussed Aavishkaar-Intellecap Group.

Intellecap was selected as project advisor by international development agency USAID recently to identify and digitise rural value chains where high volumes of financial transactions occur, representing potential for digitisation.

In a project that aimed to expand acceptance and use of digital payments in a rural setting, women were identified as key beneficiaries as they play an important role in the rural ecosystem, both as workforce or labour on farm and non-farm related activities and as micro entrepreneurs.

Take, for instance, the dairy sector. It contributes nearly 18 per cent to agricultural GDP and provides livelihood to over 75 million women. Food and beverages too provide employment to over 48 million people, with high women participation.

Noting that rural women “have an appreciable, albeit under-stated presence in all facets of rural life”, Bansal felt it is but natural that they become the fulcrum of activities around digitisation of rural value chains, digitisation of households, and financial transactions.

The findings of the study initiated by Intellecap revealed that though there exist multiple rural value chains with significant women participation — like poultry, fisheries, rural retail, apparels and textiles, beauty and wellness, several barriers line the way, including low literacy levels, low financial awareness and a knowledge gap on digital transactions. What also came to the fore was the significant potential of Digital Financial Services (DFS) to not only extend financial inclusion but also digitise core areas of multiple value chains.

High potential
The study, ‘Digitising rural value chains with high women participation in India’, showed that though rural retail and micro finance are common intersections for financial transactions for rural women, what remains relatively discreet is the influence of these segments on rural communities as enablers of change.

“Rural communities, especially rural women, are largely under-served as far as formal financial services like savings, credit and insurance are concerned,” Bansal said, adding that digital inclusion of women has the potential to empower them to make better financial decisions and also drive value chain and household consumption spending. Pointing out that the retail sector has high women participation, with over 2.4 million women-led establishments, Bansal said, “While majority of rural retail stores are informal establishments, a few private-led initiatives such as the Sakhi retail model in rural Maharashtra around Solapur and Mahol are managed by women, through the assistance of self-help groups, and have expanded rapidly, offering value added services.”

However, rural digitisationneeds the integration of digital payments into the rural ecosystems. “Enabling merchant payments through digitisation of the rural retail store can go a long way in building confidence among rural users for using digital payment platforms,” Bansal said, Rural retailers, through digital financial transactions, could also get improved access to credit to grow their businesses.