A study on Savings and Investment Patterns of Women in Bangalore

A study on Savings and Investment Patterns of Women in Bangalore

Economic growth of a nation is driven by savings and its transformation into investment. In the last three decades, Indian economy has emerged as one of the fastest growing economies of the world. Households are the biggest contributors to Indias savings rate; their savings equal 23 percent of Indias GDP. Though the percentage of savings by household sector in financial assets is increasing year on year, what is worrying is that only around half of the household savings in India are invested in financial instruments. Knowledge about saving and investment preferences, gender-wise, will help to design effective investment instruments. Another area that requires further examination is the role that a woman plays in influencing aggregate savings and investment. Till the last decade, considering the low earning potential of women to earn, save and invest, not much research has been conducted on this subject. The coming decade, is going to see more and more women getting higher education and aiming for heavy pay cheque jobs. There is an urgent need to understand the savings and investment pattern of women, so as to frame policies and develop financial products exclusively for women. Another reason for understanding the savings and investment pattern of women is that, though they are good savers, they are unable to convert all their savings into investments. They do not invest as much as the men do. According to Barber (2001) though women are not active investors, they make more profits than men when they trade because by trading more, men hurt their performance more than women. Preda (2001) comments that women are always excluded from financial discussions, on the explicit ground that they cannot understand investments. According to Chachoria (2000) women are the next generation financial decision makers and they should be targeted from a financial perspective. She suggests that marketing for financial products should be done differently for women. Through this study an attempt is made to understand the savings and investment pattern of women. The factors which influence their investment decision making are identified. As 60 percent of women in India are house wives , they have been included in this study . The vi variations in the investment pattern between working and non-working with respect to socio-demographic attributes have been analyzed. The sample size consisted of 225 women, who regularly save and invest. The study was conducted in the city of Bangalore. Convenience sampling was used for the purpose of data collection. Data was collected through questionnaires and was subjected to descriptive and inferential analysis. The major findings of the research are: ?The most important reason why a woman saves is because of a Precautionary motive. Saving money in Bank and in the house kitty (saving at home) are the most preferred saving avenues. ?Even though non-working women dont have direct income of their own, they are able to save a minimum of 5 to 10 percent from their household savings. ?Safety of the principal is regarded as a very important criterion before investing, as opposed to instruments with low initial investment. ?The main motive behind investing is to fulfill their personal and financial goals. They also recognize the importance of multiplying savings through investment. ?Gold is the most preferred investment instrument, followed by real estate, insurance products, bank deposits, chit funds, mutual funds, bonds, post office deposits, shares and SIP. ?The highest constraint in investing is found to be lack of awareness and advice. This bursts a common myth: In India women are not able to invest as they are not able to take decisions on their own.

Iyer Srinivasan Anusha

Management Studies