Breaking Barriers in India’s Finance Industry

At responsAbility we are proud to co-manage the Global Gender Smart Fund (GGSF), the world’s largest gender-lens investment fund, launched in 2024. The Fund addresses the USD 1.7 trillion gender gap in credit by providing gender-smart financial services to underserved women, as well as women-owned and women-led businesses in developing markets¹. Additionally, the GGSF promotes women’s leadership and enhances gender balance within financial institutions. 

GGSF invests in financial institutions that demonstrate a strong commitment to improving gender performance over time. Beyond providing debt financing, these institutions receive targeted support to identify key gender priorities, resulting in a gender action plan (GAP) outlining agreed-upon activities and targets to be executed within a specified timeline. Our partner Sagana, an impact investment advisory company specializing in gender mainstreaming and technical assistance, assists this endeavour. 

TruCap: A catalyst for gender equality in finance 

One of the first investments concluded for GGSF was with TruCap Finance Limited (TruCap), an Indian Non-Banking Financial Company (NBFC) providing credit solutions to underbanked micro, small and medium enterprises (MSMEs). Over the last four years, TruCap has expanded from Maharashtra to eight states, with over 100 branches, predominantly in semi-urban areas. The company is deeply committed to gender equality, led by its Executive Management and supported by dedicated HR, product, and impact teams. As of June 2023, TruCap has over 18,000 women borrowers in its portfolio, representing slightly more than a quarter of its total borrowers². To put this in context, female-owned MSMEs account for 20.5% of registered MSME businesses in India, according to government data³. With a USD 5 million debt facility from GGSF, TruCap aims to add 1,000 to 2,000 female borrowers, contributing to closing the USD 158 billion credit gap faced by women-led MSMEs in India⁴.

Striking gold: Women at the forefront 

The gender engagement process at TruCap involved close collaboration between the teams at responsAbility, Sagana and TruCap’s impact and HR teams. Several gender priorities of the organization were identified, with a particular focus on increasing female representation in TruCap’s gold loan branches. Gold loans, using gold jewellery as collateral, are typically availed by low-income and lower-middle-income borrowers, especially women in developing markets, particularly in Asia, where gold ownership is widespread and often constitutes the main means to store value. Loan purposes are mainly for business but also for short-term (often emergency) consumption purposes. At TruCap, around 70% of the gold loans are used for business purposes. Rohan Juneja, MD & CEO at TruCap, notes, “In our gold loan branches, female employees have consistently outperformed their male colleagues in attributes such as diligence, prudence, learning on the job, and building a strong connection with women borrowers. The gold loan product often requires careful explanation and reassurance regarding the safety of the collateral, tasks at which female employees excel. We observed both an increase in origination and conversion of leads for branches with a higher share of female employees, as well as stronger portfolio quality. Therefore, further increasing female representation in their branches is of great strategic importance to TruCap.”

Overcoming the odds: TruCap’s journey 

The challenge of low female labour force participation in India is significant. According to the World Economic Forum (WEF) Global Gender Gap Report 2023⁵, the estimated labour force participation rate (LFPR) for females in India is 28.3%, significantly below Vietnam’s female LFPR of 68.5%, China’s 63.7%, Malaysia’s 55.4%, and Indonesia’s 52.5%. Several factors limit women’s employment in India and South Asia, such as lack of education, safe transport, care giving responsibilities, as well as deep-rooted social norms. These constraints prevent South Asian countries from reaching their full growth potential⁶. While specific figures are not available, female workforce participation for field office roles is likely to be even lower. Hence, concerted efforts are needed by companies like TruCap to attract and develop female talent in such field roles. TruCap has already implemented several initiatives in this regard, such as setting annual recruitment targets for branch managers, partnering with specialized recruitment agencies to shortlist women returning to work after a career break, and piloting employee referral programs in some operating markets. Through these measures, TruCap managed to increase the share of females in the gold loan branches from 10% in March 2022 to 23% in March 2023. However, the company faced challenges in further increasing this share and sought support. Key challenges included:

1. Attracting female talent for senior field roles: This was particularly an issue in states where branches were not located close to Tier-1 or Tier-2 cities. 

2. High attrition rate among mid-level female employees, not returning to work after maternity leaves or career breaks taken to fulfill caregiving responsibilities for family members. 

In the context of the GGSF support, the GAP focusses on TruCap branches in Rajasthan and Maharashtra. The idea is that if the measures were successful in the more difficult branches, then replicating learnings in others would be much easier. The GAP aims to increase the percentage of women in gold loan branches across Rajasthan and Maharashtra from 22% to 27%-37% by December 2026. Key steps include:  

1. Formalizing and structuring a referral program to systematically tap into the networks of existing female talent in the company. 

2. Developing sponsorship programs that involve identifying promising junior female staff in gold loan branches and matching them 1:1 with internal senior female leaders. The sponsor is responsible for championing the career progression of their protégée by providing ongoing guidance, growth opportunities and connections, and modelling behaviours that enable advancement. Such programs help boost the confidence of female staff, resulting in accelerated development of talent, making them ready to take up senior positions faster. It is imperative to create accountability for such programs by monitoring promotion rates and representation of women in senior roles. 

3. Making job descriptions more inclusive. Key points include:  - Highlighting only essential requirements to limit self-elimination by women from the applicant pool. Specific educational qualifications or requirements from past work that are nice-to-have but may not be necessary should not be included. Women are less likely to apply for roles if they do not meet 100% of the requirements.   - Emphasizing non-discrimination, equal pay, and diverse representation policies which help create an inclusive and safe workplace.  - Reducing emphasis on traits typically associated with men or women. For example, using terms like ‘implement’, ‘promote’, and ‘handle’ instead of ‘lead’, ‘drive’, and ‘manage’ to make the language more inclusive. 

What is next for TruCap and GGSF? 

We are committed to continue collaborating with our partner TruCap to reduce the gender credit gap and increase female workforce participation. We expect these measures to yield the desired results, and we look forward to reporting on the outcomes in future case studies. This partnership underscores our commitment to gender-smart investing and the impactful change it brings to developing markets.

Sources: ¹ Global Gender-Smart Fund (GGSF) - Innpact  ² TruCap Finance Limited  ³ https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2031097  ⁴ Women Businesses: Women-led businesses face a $158 billion finance gap - The Economic Times (indiatimes.com)  ⁵ Global Gender Gap Report 2023 | World Economic Forum (weforum.org)  ⁶ South Asia needs more women in the workforce (worldbank.org)