Financial literacy of Bangladeshi women

“No society, country or economy can achieve its full potential if girls and women don't have the same rights and opportunities as boys and men,” says the World Bank.

One of the most important rights is the right to financial freedom. Bangladeshi women have fallen behind their counterparts around the world when it comes to the right to financial freedom and independence.

To minimize the gender gap regarding financial stability, Bangladesh as a whole and its individuals are steadily working on women’s financial independence. However, there is a significant gender gap in terms of availing the opportunities for financial independence as a woman.

Compared to the past generations, working women are now financially stable because of having regular earnings but they are still lagging in terms of participating in complex investments such as capital market investments. Women are not aware that investment management is part of financial literacy.

Increasing awareness among working women is important for individuals and as well as for the country because, in the long run, Bangladesh’s economy will also be benefitted by increasing participation in investments.

Individual investments have an impact on the country’s economy since households’ investments open the scope to start a new business or extend businesses that are partially or fully funded by loans. This money circulation process of a country improves when everyone can contribute or participate equally in making investments.

Yet studies have shown that working women lag behind men when it comes to making complex investment decisions. Women are risk-averse and they prefer less risk-containing instruments.

Most working women prefer mutual understanding between themselves and their spouses or other family members rather than making the investment decisions independently. In terms of financial literacy, there is a significant gender gap visible between men and women. 

Possibly the gap occurred due to some practices of Bangladeshi cultures. In Bangladesh’s most of the family system is based on patriarchal family system where men were prioritized in taking any kind of decision including the financial ones. Women’s investment behavior is affected by the practices and cultural patterns of Bangladesh.

In addition, the scope of education, occupation, and lack of family support for women might have impacted women’s current participation in investment.

The participation of working women in the capital market is limited despite the many benefits of investing. Investments in the capital market and financial institutions may create an additional income source for working women. Moreover, it may help them to become financially secure without relying entirely on their jobs. It may give them an opportunity to retire early.

Additionally, women working positions and roles have direct and indirect influences on their participation in the financial markets. For example, a woman will invest more if she works at or has a professional affiliation in the market. The reason behind this, she has knowledge about the market which can help them to measure risk and returns accurately before making investments.

Along with making working women aware of encouragement factors, it is also important to keep in mind that women’s financial independence should be maintained. Women should also be encouraged to undertake high-risk investments like stocks, and bonds with proper certainty and offers to protect their investments.

Practicing financial decision-making activity may reduce their tendency of avoiding risk. Working women are already financially stable and it is high time to increase awareness among them so that they feel confident enough to make own financial decisions.

Education is helping women to make informed decisions, for which they are more aware of investments in this era.

It has been also evident that in the long run, working women's participation in investments will minimize the gender gap in terms of financial literacy. Working women who invest do not need to continue unsuccessful and unhealthy relationships because they are financially stable enough to financially secure their future.

The families of working women today are more supportive than the previous generation. Women who are financially independent are a positive role model for their children. They would have more disposable income which can be invested in their children’s future.

We as a country cannot develop without the active participation of 50 per cent of our population in the economy.

The writer is freelance contributor. She can be contacted at [email protected]