Lessons on Customer Empowerment from Women in Rural India

People who work on financial inclusion often make assumptions about customers and what drives their choice and use of financial services. But do we know how customers feel about their ability to engage and use these services? CGAP is seeking to answer this question and test out some initial ideas as it explores the concept of empowerment and the role it can play in building customer trust and confidence.

Women in Philki village in India’s eastern Bihar state, where I spent some time two years ago and again recently, offer insights. Women in rural Bihar often handle household finances, as many men migrate to cities for work. In Philki, they had their first taste of branchless banking two years ago when a kiosk resembling a brick-and-mortar branch, called a Customer Service Point (CSP), opened with two agents staffing it. Initially, the women in the village were enthusiastic but somewhat skeptical. “Will this bank run away?” was a phrase I heard repeatedly. They talked of withdrawing money from the kiosk, but not of conducting other transactions.

When I visited Philki and a few neighboring villages more recently, however, doubts about the CSP “running away” had disappeared. In addition, almost all of the women I spoke with were not only withdrawing money from the kiosk but making deposits. This new confidence was striking.

In another village close by, called Nekpur, a small focus group of six women talked about how they navigate their range of choices based on the value they offered. For instance, they discussed their different savings options and said: 

• I use my self-help group savings as a risk fund I draw from for emergencies, especially health-related emergencies in my family. These savings also entitle me to access microcredit from the group.
• I make small-value deposits, ranging from Rs 20-100 ($0.32-1,60), at the CSP, something that would have gone under my mattress earlier.
• I use the post office’s recurring deposit for longer-term savings over two to three years because “the post never goes away.”
• I use a bank branch in the nearby town of Rajgir, which I have to take a train or bus ride to, for transactions worth more than Rs 10,000  ($160) that I could not make in the kiosk.
• Whenever there is an issue with the biometric machine used for authentication at the CSP, we collectively approach the manager at the State Bank of India branch in the town, who helps resolve the problem.

These women were in their thirties and their level of literacy was basic. Over two years, they had learned to trust the CSP, and were making decisions about their savings options with confidence. How did this trust and increased confidence form?

CGAP has defined customer empowerment as a process and not an end point. We have an evolving vision of an empowered customer as someone who has the knowledge, confidence, skills, and access to channels to be able to make the right choice for his/her needs, is able to effectively access and use the products and services offered, and is able to exercise voice in his/her engagement with providers.

On this visit to Bihar, accompanied by Anton Simanowitz and Antonique Koning, we aimed to test concepts about how customers perceive empowerment in their relationships with financial service providers. The journey experienced by the women in Bihar resonated with our vision of an empowered customer. Here are some highlights:

Learn by having to do. The journey often begins through necessity. Women customers in a state like Bihar, despite gender norms, have to manage and operate financial services because men migrate to cities for work. Over time the women have grown more comfortable with, and become more trusting of, their financial service providers, enabling them to navigate a range of services. Being members of self-help groups provides them with confidence and tools to collectively address issues.

First impressions matter. Women talked about different factors that helped or hindered their journey to build understanding, trust and confidence in using financial services. For new things outside of their comfort zone, such as mobile money, it is important that the first experience is positive: “I’ll try it, and if it works I’ll use it. If it doesn’t, I won’t.” It was also clear from the interviews that confidence is developed through engagement over time and that support can be important. For example, the women appreciated support from a “mitra” (meaning “friend” in Hindi) in the Rajgir branch of the State Bank who helps customers fill in documents and answers questions.

Voice develops over time. While access to effective feedback and redress mechanisms are important for customers, we noticed that customer awareness of what they can or should expect from their provider and their confidence to engage develops over time. For example, a woman in Nekpur said she would like the CSP to send text alerts for deposits in the same way that the bank branch does. We found that the more confident customers become, the more empowered they are – and the more aware they become of what they don’t have access to.

You can read more about our findings from the field. Moving forward, we are holding similar consultations in Cote d’Ivoire and the Philippines to learn how customers are empowered in other contexts. Our findings, from the women of Bihar as well as from other communities, ultimately will help us develop research-based guidance for financial service providers. The goal is for financial service providers to learn how to better facilitate customer empowerment, so that poor customers like the women of Bihar are making the right choices for themselves, accessing and using the services offered, and exercising their voice.