Women wait in line outside a bank branch in Delhi. (Photographer: Anindito Mukherjee/Bloomberg)

India's First National ID System Is Helping the Country's Women

(Bloomberg) -- India’s adoption of its first nationwide identification system is helping empower the country’s women and driving increased use of banking services, according to the first study of the nationwide Aadhaar program.

Virtually all homes in the western state of Rajasthan have at least one bank account, and most have several, since the introduction of the Aadhaar program, the Center for Global Development said in a report. Despite the advances, problems remain in digital authentication for the biometric system that now covers more than 1.1 billion people, or 15 percent of the world’s population.

Aadhaar was implemented to improve the efficiency of welfare payments that account for over $60 billion in annual spending, replacing cash with bank transfers and subsidies. The program assigns a unique 12-digit number to each user that is associated with their iris, fingerprints and facial features. While the program has been praised for reducing fraud and preventing leakages, it’s been criticized for not paying enough attention to issues including privacy and data security.

The study was done in partnership with consultancy MicroSave and surveyed 633 households in rural and urban areas of Rajasthan. The group represented a variety of income and landholding categories, with 64 percent of respondents being women.

“The mandating of welfare payments to female heads of the family is changing local level dynamics and age-old hierarchies," said Anit Mukherjee, a policy fellow at the Center for Global Development and one of the authors of the study. “In many villages, women are setting out in groups to go to the bank, it’s a visible change,” he said in a phone interview.

The survey included sections on financial inclusion, empowerment, user experience as well as perception.

In Rajasthan, a state known to be patriarchal, the requirement for the family head to be female drove a massive increase in banking use with 66 percent of the female heads of family opening accounts when they didn’t have one before registration.

However, men still control the use of mobile phones as only about a third of the households had a female head who can read and write text messages.

“What the debate was missing so far was data,” Mukherjee said. “We wanted to move from anecdotal evidence toward hard data, making it a more rigorous method of policy evaluation,”

The study also found bottlenecks in the technology infrastructure with more than 25 percent saying it takes three to four attempts to authenticate. About 4 percent said they were unable to authenticate themselves on time to access benefits.

©2017 Bloomberg L.P.