I spent the week in India and held live workshops in India – Mumbai, Delhi, Bangalore. In 2011, I lived in Bangalore for four months as an MBA exchange student at IIM Bangalore, one of the premiere business schools in India. It was great to be back to talk about the mandate for women to invest. I was delighted to see and hear that one of India's key marketing and advertising messages is Female Empowerment.
I was invited as a speaker by the US Consulate as part of the Road to the Global Entrepreneurship Summit, a global conference that is held in a different country each year. India will host the event next week and the theme is “Female Entrepreneurship.”
Here are three key takeaways:
1. Indian banks offer women-focused programs
2. Shift in focus on cash to investments
3. Confusion about investment providers
1. Indian Banks Offer Programs Tailored to Women
It was a pleasant surprise to learn that Indian Banks provide dedicated programs to women with benefits such as higher interest rates. (Top 8 Bank Accounts for Women in India.) Women in my workshops said these programs made them feel included in the financial system. I told them that women in the US often are overlooked by the banks and investment firms (a trend likely to change with a business focus on women over the next decade).
Notably, India passed a policy in 2015 (SSY) in which parents can create a fund for daughters for education and expenses (including weddings). Savvy urban women talked about how costly weddings are and that families are focusing more on the trade-off between costs for weddings and education. That's the dialogue to encourage so there is choice! Twenty years ago in the US, it would be a shock to the family if you decided NOT have a family wedding. In 2017, there is so much more flexibility with choice and family expectations.
2. Cash is Queen – Shift Mindset to Investing
Like most of my workshops, women talked about a preference for cash. Here in India, there is a Cash mindset. There was plenty of talk about the after-effects of Demonetization one year ago when certain currency bills (500 and 1000) were removed from the system, ideally to combat corruption. While the topic remains controversial, the conversation about investing is welcomed and more popular due to the disruption in the holding of cash. Demonetization also opened the door to the electronic payments trend that is sweeping the country. Click & Go with a card is the way here — while in China/HK it is Click & Go with your phone. The US has been slower to adopt Click & Go.
Here in India, the interest rate on cash is 4% (inflation is 4% as well) and some investment programs pay a guaranteed 8-9%. Guaranteed. My workshops focused on this shift from cash to investing to obtain a higher rate of return over several years.
3. Where Do I Buy Investments – It is so Confusing!
While I focus on the approach to Investing rather than products, it was clear that there is confusion with investment providers. Banks, investment providers, mutual fund providers, wealth management firms and robo-advisors all offer products here in India. There was concern about the lack of transparency and how these companies make money from them as clients. (These ladies are no fools!)
Overall, these local trends in India support the importance of financial education. In the US, we can learn from India's women-focused initiatives to make women feel more included in the financial system. I am grateful to be part of the conversation and to offer online programs to educate women about personal finance.
BONUS TREND: Just like entrepreneurs in the US, India-based entrepreneurs need to create retirement plans as entrepreneurs. We have to pro-actively create these accounts since we are not provided with them when we go off on our own. This was a reminder to many women who are now pursuing entrepreneurship as a departure from the corporate path. We discussed the tax benefits of saving money for retirement — just as a fallback in case your company doesn't have a financial exit.
I also created a short Facebook video with footage from Bangalore. Check out the video here!