Reaching Women Farmers With Banking: Why Last-Mile Finance Matters for Financial Inclusion
A recent analysis argued that the true test of financial inclusion (bringing everyone into the formal banking and finance system) is not how many accounts are opened. The real test is whether a woman farmer can actually get the money and financial services she needs to run a safer, more productive farm.
Women do a large share of farm work in India, but very few own the land they work on. As per the Agriculture Census 2015-16, women held only about 13.96% of operational holdings (farm plots run by one person). Without land in their name, women find it hard to get bank loans, because banks usually want land as proof or security.
Bank branches are often far from villages. For a woman who cannot leave her farm or home for a full day, a distant branch is the same as no branch.
The analysis stressed doorstep channels that reach women where branches do not: Business Correspondents (local agents who do basic banking for a bank), women agents called BC Sakhis, and Self-Help Groups (SHGs) linked to banks.
The larger point: products must fit women's lives. This means small and frequent transactions, loans that match the crop season, and services delivered close to home, often by other women.
Business Correspondent (BC) Model and Financial Inclusion
A Business Correspondent (BC) is a person or an organisation that a bank appoints as its agent to give basic banking services in places where the bank has no branch. The BC can open accounts, take deposits, let people withdraw cash, send money and help with small loans, all on behalf of the bank. You may have seen such a person in a village shop with a small handheld machine and a fingerprint scanner. This is often called branchless banking, and it is one of India's main tools for financial inclusion.
The analysis argues that branches will never reach every woman farmer, so doorstep agents are the real path to inclusion. The BC model, and especially women agents like BC Sakhis, can bring savings, credit and insurance to women at their village. But this works only if agents are paid fairly and offer more than just cash withdrawals.
SHG-Bank Linkage Programme
The SHG-Bank Linkage Programme (SHG-BLP) connects small groups of poor people, called Self-Help Groups (SHGs), with formal banks. An SHG is usually a group of 10 to 20 women from similar backgrounds who save small amounts every month and lend to one another. Once the group shows a steady record of saving, lending and repaying, a bank opens a group account and gives the group a loan without asking for any property as security. The group's own pressure and trust work as the guarantee.
The analysis sees SHGs as one of the strongest ways to reach women farmers who are outside the banking system. Through the group, a woman can save, borrow for seeds or a cow, and build a credit history in her own name, even without owning land.
- Women's share of operational landholdings (Agriculture Census 2015-16): about 13.96%
- Agriculture employs 64.3% of all female workers and 76.2% of rural female workers (PLFS 2022-23)
- Jan Dhan accounts held by women: 31.24 crore, about 55.8% (March 2025)
- Villages with a banking outlet within 5 km: about 99.9% of inhabited villages
- BC outlets: about 17 lakh; bank branches: about 1.8 lakh
- BC Sakhis deployed under DAY-NRLM: over 1.35 lakh (late 2024)
- SHGs with savings linked to banks: about 144 lakh, covering 17.75 crore households (March 2024)
- BC model allowed by RBI: January 2006, based on the Khan Committee (2005)