Women Empowerment Through Capital Market: Aaditya Acharya

Article by Aaditya Acharya

The freedom of women to use different resources according to their own interests and choice in all avenues of life is marked as women empowerment. More precisely, women empowerment is the process through which women acquire the ability to make strategic life choices in a context where this ability was previously denied. An empowered woman is free and able to choose her lifestyle, education, work, career, nutritional diet, financial decisions, and the risk associated with it.

Women empowerment can be divided into five separate categories namely social, educational, financial, political, and psychological empowerment. We can conceive that these five areas of women's empowerment are interrelated to each other. But knowing what lacks in each category and working collectively to empower women at each level presented here can provide the right direction not just for women's empowerment but for all of us living in this society dreaming of a more inclusive form of society.

The subject of women's empowerment is discussed a lot across the world today. Attaining women's empowerment has been the agenda of many governments in many countries around the globe but even today an unacceptable degree of gender inequality prevails in the world.

Many researchers came up with the findings that the main cause derailing the empowerment of women is due to unavailability of financial resources for women. Only when women are financially active; they will be better at risk management, smooth consumption, and resource allocation and will be able to participate more in the decision-making process incorporating decisions related to their children’s education, health, and nutrients.

Financial inclusion will also help women to prosper in other aspects of life, including psychological and social aspects.
Many techniques have come to light to empower women financially.

Providing cash employment, encouraging entrepreneurship & business development, and involving investment opportunities are basic ways to make women financially active. Empowerment through employment work effectively only in those countries where there is a developed and advanced labor market. And business will assist women for empowerment only if they start a business in-country with a growing economy and favorable business environment both internally and externally.

But in the context of Nepal, the developed labor market and ease of doing business are far-cry. On top of that due to the high unemployment rate in the country, getting a well-paid job requires anyone to have a definite set of soft as well as hard skills. , Difficult and hectic registration process, unstable policies, high cost of capital, and expensive raw materials make business less preferable among women with unsophisticated entrepreneurship skills. Therefore, among the three main avenues for financial inclusion, two avenues: employment and business are closed for many underprivileged women in Nepal.

The third path to financial inclusion is the capital market (investment). The capital market allows people to invest in different companies with a small amount of capital which may be suitable for women in Nepal. A capital market is a financial market where buying and selling of financial instruments happens. Long-term debts and equity-backed securities are common types of financial instruments.

In Nepal, there is huge participation of investors in the primary market than in comparison with the secondary market. Due to the minimum requirement of capital and impressive return of capital gain in a short period of time in Initial Public Offerings (IPOs); the primary market is affordable and is the first choice of many investors.

However, with little experience and knowledge of fundamental and technical analysis; the secondary market is also the right place for everyone who is willing to make passive as well as regular income. NEPSE witnessed an average gain of 13 percent over the last 25 years with the highest gain of 100 percent in the Nepali fiscal year 2070-71 and the highest loss of 36 percent in the fiscal year 2066-67, which further shows that the investing in NEPSE is profitable in the long run if done with a proper investment plan.

Taking reference to recently closed IPOs, 2.6 million applicants can be considered as a total number of investors. Around the world, the capital market has a history of being highly male-dominated and a status for being unwelcoming and even discriminatory towards women. So likewise, in Nepal, even though we do not know the exact number of female investors in the capital market; we can predict, it is extremely low followed by overall low participation (Both men and women).

It is true that women will be financially active through the capital market but to make this happen in practice we need women to participate in the market. Public awareness of the capital market and the existence of financial instruments don’t exist among many women especially those residing in villages and remote areas. A centralized brokerage facility is another challenge in bringing more women into the capital market. Today there are 50 registered brokerage firms in Nepal which have a total of 104 branches all over the country but are highly concentrated in Bagmati province.

In addition, we have a limited supply of shares in the Nepalese Share market since only a few hundred companies are listed in NEPSE.

If we investigate more into the challenges of increasing women’s participation in the stock market, we will find other challenges like difficulties in physical access to banks & brokers, and we also lack proper and reliable online trading systems. Therefore, if we aim for women's empowerment through the capital market, these above-mentioned issues and challenges should be sorted out.

Creating awareness through training, adding financial education to school/college curriculum, regulating brokerage firms to expand in all provinces, enforcing many companies to go public, and developing a proper online trading system should be in high priority of SEBON to increase a greater number of participants in the market.

Additionally, to make it easy for girls and women, collective collaborations with banks and brokerage firms to lessen their fees and commission is most vital. SEBON can bring other qualitative policies to encourage more women to participate in the market. From time to time training and programs should be conducted to make women aware of the risk associated with the market and to save their capital from unnecessary hype created by extreme speculation.

With increased women’s participation in the capital market, we can be assured that it will escort our society towards a more financially inclusive one. Women, on one hand, being financially active will finally be able to invest in education. Women or girl can fund easily their education from the capital gain or dividend income she receives from the capital market. As the capital market doesn’t require much time commitment, a woman busy working in the house can also enjoy investing in the stock market and can pay for nutrients and other required balanced diets.

On the other hand, when women are given financial independence, it will prevent and reduce domestic violence since in many cases, domestic violence starts when men undermine women’s confidence and take away their financial resources (Australian Domestic and Family Violence Clearing House’s recent report). As an overall effect of financial independence, many barriers of discrimination will be torn down, and women will rise to the top of their chosen fields: including traditionally male-dominated bastions such as science, business, and politics.

Hence, the capital market which requires much less time commitment and allows investors to work remotely will surely work as a milestone to make women financially vibrant. And the financially sound and active woman will be able to make decisions independently regarding her education, career, health & nutrients, resource management, and other areas of her life.

With the capital market being the right place for women's empowerment, ease of participation for women in the market should be aimed. Extending broker facilities throughout the country, educating women about the market and financial instruments, and providing easy & reliable online investing systems are the key steps to be taken to increase women’s participation in the capital market. Only then, our dream of achieving women's empowerment by means of financial inclusion through the capital market will be achieved.

Acharya has published articles in SEBON's annual magazine before and is a guest author at Sharesansar. Inclined toward value investing, Acharya is an advocate of gender inclusiveness in business and finance.