“Women should be financially independent. It doesn’t matter who the man in your life is, you need to be responsible for your finances.” – Priyanka Chopra
LXME (pronounced Lakshmi), which started as a Facebook community and an investment platform, is all geared up to become India’s first Neo bank for women. It is building a unique digital platform integrating LendingTech, BankingTech, PaymentsTech, and WealthTech to offer a seamless, platform-centric financial experience to women, with product solutions that address women-specific financial needs and their emotional preferences.
While Neobanking started in the UK and spread across Europe, the US, and China with millions of customers across the globe, it started in India in 2021 right at the time when the Indian market was ready to make the great digital shift during the pandemic. I launched two Neo-banks around the same time – The fastest growing Neobank NiyoX for millennials and salaried, which saw a world record growth of 1 million accounts in 9 months, as well as the credit-backed Neobank FreoSave. These Neo banks specialise in offering a superlative digital customer experience to niche segments left untouched and unexplored by the incumbent banks.
Market gap and opportunity
“For women, financial independence is a matter of necessity.” – Carrie Schwab-Pomerantz
Today, 48.5 per cent of India’s population is women. While LXME is considered the Goddess of Wealth in India, it is paradoXical to note that women and wealth do not enjoy a close relationship. LXME had undertaken a survey of Indian women along with AXis Money India research team early this year in March 2022, which surprisingly revealed a lot about women’s money behavior such as 73 per cent of women save less than 20 per cent of their income. A shocking 49 per cent of women are either not investing or are not aware of their investments. Also, women prefer safe investment options such as gold, fiXed deposits, and PPF. Family and children seem to be the biggest motivators for women’s investment behaviors. A whopping 63 per cent of women prioritise family security and child education as the primary drivers for investments. On the other hand, personal goals like self-security, retirement, and starting their own business were only 12 per cent combined. A shocking 92 per cent of women said that they do not access any financial investment-related websites. 78 per cent of women said they would like to try a financial platform that is exclusively designed for women.
Also, as per the Global Gender Gap report, World Economic Forum, July 2022, it will take another 132 years to fully bridge the gender gap globally. India ranks 135th out of 146 countries and has closed only 62.9 per cent of its gender gap.
LXME is aiming to address this market gap and opportunity through its unique Neo Banking Platform, and thereby create a long-lasting impact on how Indian women manage money.
Financial literacy and micro products
“Teach her about how money works, and she can change the world.” – Linda Davis Taylor
Since traditionally women have stayed away from money topics, their financial literacy levels are low. Hence, to bring them up the learning curve, LXME conducts regular boot camps and workshops on money and finance through its money coaches. We are also launching learning courses and micro modules that women can avail of on the neo-banking platform and learn more about savings, investments, and money management. Women also have access to various community benefits where they can ask questions, discuss and learn from peers and coaches, and then make investment decisions. We offer micro- investment products where women can start with as small as Rs 100 in equity portfolios so that they get to start small, learn and then gradually build up their investment portfolios as their confidence increases. Also, to make investment decisions easier for women, we offer curated, goal- based investment portfolios, such as for Child Education, Retirement, Emergency, Tax planning, etc., so that women do not have to scan through hundreds of mutual fund schemes available in the market, but can easily invest in the portfolios most suited to their life goals.
“We innovate by starting with the customer and working backward.” – Jeff Bezos
In my article, “The gender-agnostic approach needs to change” in Banking Frontiers May 2021, I have shared examples of innovative financial products for women such as digital savings accounts bundled with locker facility, preferential interest rates for home loans and gold loans, free insurance cover, free health check-up and consultation by gynecologists and mental health experts, free family group accounts, doorstep banking facilities, etc. Including women-specific health insurance policies with in-built pregnancy cover, congenital disability cover, breast, and ovarian cancer cover, etc. Other examples are women’s special debit cards with features like roadside assistance, expense tracking, and discounts on shopping, dining, travel, etc. LXME aims to offer a wide range of these women-centric features. The idea is to make women financially free and fearless, by offering them integrated product solutions that holistically address their financial needs along with their emotional preferences.
Driving financial inclusion
“I dream of a Digital India where mobile and e-banking ensures financial inclusion.” P M Narendra Modi
As per World Bank’s Global Findex Data for measuring global financial inclusion, released on 29th June 2022, India is among seven countries home to half the world’s 1.4 billion adults, without access to formal banking. People without an account at a financial institution or a mobile money service provider have been classified as unbanked. The survey also found that women were more likely to be unbanked than men.
Women are often excluded from formal banking services because they lack official identification documents; do not own a mobile phone or other forms of technology, and have a lower financial capability. Distance is also a barrier to a large majority of unbanked adults. Mobile money has become an important enabler of financial inclusion, especially for women; it is both a driver of account ownership and account usage through mobile payments, savings, and borrowing.
So while Financial inclusion in the country has seen improvement in the past few years, due to large-scale efforts and success of the JAM framework – Jan Dhan, Aadhaar, and Mobile, a lot needs to be done to ensure that the accounts opened are of continuous use for savings and investment and do not lie dormant. Hence, micro- savings, micro-insurance, and micro-deposits that promote regular, systematic saving habits are most crucial. LXME foundation aims to play a vital role in improving financial inclusion for women by ensuring easy access to loans at competitive market rates; savings, deposits, and payments for the mass women segment of the country through its women-centric platform.
LXME aims to be a full-fledged Digital Bank for women and wants to impact 60 million women in the next five years. The aim is to build a $12 billion AUM business focused on women, by women, for women. LXME has partnered with leading banks and NBFCs and is primarily targeting women in the age group of 25-45.
Views expressed by Dr. Jasmin B Gupta, CEO, and Co-Founder, LXME.