By Neha Gupta,
Sona Muwel, a woman farmer from a tribal village - Bapdud of Dhar district of Madhya Pradesh, produces vermicompost commercially. As she says, earlier she had no knowledge about money and used to only prepare compost and work on the farm from morning till evening, while her husband handled all the financial matters. It was when Geeta Didi from Naari Adhikar Kendra, discussed her control of her own income, which motivated her to learn about financial transactions in business and maintain records. Today, Sona Muwel earns over INR 1 lakh annually by selling her compost locally. Similarly, Sharda Bhawel from Dhar, after learning financial literacy skills, started her own aggregation centre and now manages her business successfully.
Such stories highlight the critical intersection of financial literacy and agricultural productivity. Financial education, when targeted at rural agricultural communities, can have a profound impact on both individual livelihoods and broader economic outcomes.
Current Context of Financial Literacy Reach among Farmers in Rural India
In India, 89% of farmers manage small subsistence farms, where margins are tight, and every rupee counts. For such farmers, financial literacy is essential to breaking debt cycles and improving income stability. Research shows that financially literate farmers are more likely to adopt modern techniques, access credit, and make informed investment decisions, boosting resilience to economic shocks. Women, in particular, who often face gender-based barriers in rural India, if they benefit from financial literacy, tend to have greater control over household income and decision-making.
However, financial empowerment alone is not enough in today's world. With the increasing digitization of financial services, digital literacy is becoming an essential complement to financial literacy, especially for rural women.
The digital divide also poses a barrier, with many rural farmers, particularly women, lacking digital literacy and access to technology. The Global Findex Database 2021 (Leora Klapper), revealed that India has doubled account ownership since 2011, which is 78% and is 6% points higher than the developing economy average; however, 35% of adults in India used digital payments, lagging behind the 57% average in developing economies and less than half the rate of its BRICS peers. A significant gender gap exists, with women 13 percentage points less likely to use digital payments.
Additionally, only 30% of rural adults use digital payments, compared to 40% in urban areas. If we consider the agrarian community through the lens of intersecting factors like gender, caste, class, and geographical remoteness, this gap in financial inclusion is likely to widen. This aims to strengthen the targeted financial literacy programmes for rural farmers, especially women farmers so that she could leverage the expanded opportunities of financial inclusion, accompanied by digital infrastructure, which will lead to increased opportunities for accelerating the agri-investments.
Globally, the importance of financial inclusion is well recognized. Access to financial services is critical to achieving several Sustainable Development Goals (SDGs), including poverty reduction, gender equality, and economic growth. The G20 has committed to advancing financial inclusion and has emphasized digital financial inclusion through its High-Level Principles for Digital Financial Inclusion. (htt1)
While global efforts set important benchmarks, implementing financial inclusion at the grassroots level requires tailored approaches. In rural India, several specific initiatives have been launched to address the unique challenges faced by farmers.
Few Specific Efforts to Enhance Financial Literacy for Farmers in Rural India
To enhance agricultural productivity and ensure sustainable income for marginal and small farmers in rural India, a strategic focus on improving financial literacy and inclusion is essential. This approach should integrate financial literacy with initiatives such as skill development, digital financial services, and broader rural development programs. Flagship initiatives like “Mahila Lakhpati” offer a foundation for such integration, building on community institutions promoted under the DAY-NRLM program. Financial literacy for rural women enhances their ability to manage the finances of their collectives and increases access to financial products like savings, credit, and insurance for themselves and their families.
Through the Samaj-Sarkar-Bazar collaborative approach, Transforming Rural India aims to increase women's access to financial resources, thereby creating new income opportunities. Financial literacy forms the bedrock of these efforts. Tools like “Simply Khata” integrated into women Farmer Producer Organizations (FPOs) foster financial management and accountability. These FPOs enable small-scale women farmers to pool resources, negotiate better prices for inputs, and sell their produce competitively—achievements that rely on robust financial literacy initiatives.
Ori Jamra, a tribal woman, who is the Board Director of Baira Alirajpur Producer Company Limited in Sondwa block of Alirajpur, Madhya Pradesh, exemplifies the power of financial transparency in FPOs. With her mobile number and email linked to the FPO’s bank account, she receives real-time transaction notifications and ensures financial transparency by reviewing financial statements in monthly FPO meetings.
TRI, along with its partner organizations, included financial literacy as a vital component for promoting Agri-Entrepreneurs, who provide essential input-output market linkages to nearby farmers. These nano-entrepreneurs enhance farmers' financial knowledge and facilitate better decisions regarding input quality and produce pricing, contributing to informed and empowered farming communities. In TRI's Community Action Labs, positive experiences gained around CLF-owned hubs also facilitate access to financial services to its women farmers like the Kisan Credit Card and also increase access to other financial services through partnering with NBFCs like Rang De, Sammunati, NABARD, and Money Wise Centres. Financial Literacy is central to all these initiatives. The organization intends to shape these insights into scalable, system-driven solutions that could be delivered through government programmes in Rural India & private partnerships.
What is More Required…
Empowering rural marginal and smallholder farmers requires inclusive and strategic efforts, with financial literacy being a key priority. Essential strategies include integrating tailored financial literacy programs with other development initiatives, promoting digital financial inclusion through proper training, and translating national financial inclusion efforts via collaboration among communities, panchayats, and local administration. Cluster-level Federations can play a pivotal role in raising financial literacy among women farmers. Gender-inclusive practices in designing financial literacy programmes will address barriers faced by women. Partnerships between women’s collectives and private entities will offer financial literacy around diverse financial products. Ensuring responsible delivery of financial products focused on farmers' protection is crucial. Financial literacy programs can’t be looked at in isolation as scaling such awareness efforts to reach every corner of rural India requires significant investment which could be possible through convergent actions. Such strategies will cumulatively empower rural communities, boost productivity, and contribute to flourishing rural livelihoods
(The author is Associate Director, Transform Rural India. Views expressed are personal and do not reflect the official position or policies of the Outlook Media Group or its employees.)
