ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Financial Inclusion of Female Sex Workers

A Study from Andhra Pradesh

Aritra Chakrabarty ( is a social researcher working with Environment Resource Management Consulting, Mumbai. Varun Sharma ( is a public health researcher working with Child Rights and You, New Delhi.

The clandestine nature of sex work and the stigma surrounding it restricts access to and utilisation of financial services by female sex workers, and makes it more difficult for policymakers to design appropriate programmes for their empowerment. An examination of the factors that contribute to the utilisation of financial services focused on FSWs reveals that there is an urgent need to strengthen linkages with formal banking institutions for the financial inclusion and empowerment of FSWs.

This article uses the data collected from the Behavioral Tracking Survey Round 3, of India HIV/AIDS Alliance under Avahan India AIDS Initiative, funded by the Bill & Melinda Gates Foundation. The views expressed herein are those of the authors and do not necessarily reflect the official policy or position of the Bill & Melinda Gates Foundation and Avahan.

Female sex workers (FSWs) constitute a vulnerable community in India and elsewhere and are left to live at the fringes of society. There is abundant literature citing the reasons that women enter into sex work and the conditions in which they live (Balfour and Allen 2014; Patel et al 2016; Saggurti et al 2011). Targeted intervention strategies have documented the social, cultural, and economic deprivations suffered by FSWs which have limited their interaction with mainstream society (Balfour and Allen 2014). The needs of FSWs are manifold due to the nature of their work and the risk it poses to their physical and mental health and well-being. Moreover, their social and economic condition does not make for an argument for leaving them out of the basic entitlements and services, which are necessary to sustain a living. Marginalised communities like that of FSWs do not have a voice in the public space.

Lately, the role of community mobilisation has been identified in various interventions, to empower FSWs and for them to raise their voice for claiming their rights and entitlements. The role of collective efficacy and collective action is crucial to integrate them through legal and financial linkages and other community activities (Parimi et al 2012). However, the process of integration has not materialised at the pace and in the manner in which numerous programmes had perceived the outcome of their interventions (Stangl et al 2013). The interventions have focused on isolated domains, such stigma reduction, instead of a comprehensive programme which can influence discrimination against FSWs (Stangl et al 2013).

The literature on sex work and sex workers is substantial, primarily focusing on health intervention programmes, especially on HIV prevalence among sex workers. In India, the Bill & Melinda Gates Foundation (BMGF) has carried out a targeted health intervention programme for them called Avahan. Vulnerability reduction programmes/packages have, at best, paid lip service to financial inclusion. The existence of microcredit and self-help group (SHG) networks has been shown to have a beneficial effect on the lives of FSWs, especially in reducing risk-taking behaviour with health and life (Arrivillaga and Salcedo 2014). However, the linkage of banking institutions with sex workers has been little explored in literature until recently (Moret 2014).

Majorly, sex workers come from impoverished backgrounds, being sold into sex work when they are young, divorced, or widowed (Moret 2014). A majority of them are largely illiterate and have limited skill sets of their own, specifically with regard to financial literacy (Moret 2014). It is fairly established that once they enter into sex work, their status in society is further degraded (Moret 2014). Given the nature of their work, their mobility in mainstream society is restricted and they have to remain invisible to the public eye. Moreover, because of the clandestine nature of their work, sex workers cannot approach a legal mechanism when they are denied basic entitlements and services that are easily accessible to other sections of society. Social stigma has an impact on sex workers at a much deeper level and is the primary cause of low self-esteem (Moret 2014).

In the Indian context, Phase-III of the Avahan intervention recognises that access to financial services is a critical component in reducing the stigma suffered by this section and integrating them into mainstream society (VLC 2014). Financial literacy and access to financial institutions form a part of that strategy and, therefore, connecting FSWs with financial service providers is an essential task to help them overcome vulnerability. A study by Patel et al (2016) on linkages between community collectivisation and financial vulnerability indicates that FSWs with higher levels of collective efficacy are less likely to report financial vulnerability. The study also highlights the social aspects, such as stigma, associated with linking FSWs to formal financial institutions. The inability to access formal financial institutions in the hour of need forces FSWs to borrow from informal sources that charge exorbitant rates of interest (Patel et al 2016). Moreover, the study establishes the importance of collective efficacy in reducing financial vulnerability among FSWs.

However, an important limitation of the study, apart from those stated by the authors, is the lack of any specific mention of banking inclusion of FSWs. Therefore, whether collective efficacy alone can contribute towards the integration of FSWs with formal banking institutions cannot be claimed explicitly from the study. This article analyses the factors contributing to the use of financial services by FSWs based on the data collected through the Behavioural Tracking Survey (BTS) conducted in 2013–14. The use of a financial service automatically implies that the person is linked to a financial institution. This fact is the foundation of this study, that is, being linked to a financial institution makes a person financially inclusive and, hence, mitigates the person’s risk-taking behaviour towards life and work, as in the case of FSWs.

Methods and Tools

Study site: This article uses the data collected from the third round (2014) of the BTS (India HIV/AIDS Alliance 2016), conducted in six districts (Warangal, Karimnagar, Nalgonda, Anantapur, Chittoor and Khammam) of undivided Andhra Pradesh under the Avahan India AIDS Initiative, funded by the BMGF. The BTS was conducted with the following objectives: (i) to measure the major outcomes and impacts of the interventions funded by the BMGF under the Avahan India AIDS Initiative; (ii) to understand the relationship between community mobilisation and service indicator outcomes, such as promotion of condom use, reduction in violence and improved service utilisation; and (iii) to make information available for modelling the impact of the intervention.

It was a cross-sectional survey and the data were collected in 2014. Interviews were conducted by trained female investigators with verbal and written skills in Telugu. The survey instrument (structured questionnaire for the FSWs) was developed in English and translated into Telugu. The questionnaire was pre-tested in communities similar to those living at the survey sites, prior to the main survey. All the interviews were held in a private location specifically hired for the survey, or in a location convenient to the study participants.

Sampling method and sample size: The Probability Proportional to Size sampling method was adopted for selection of different clusters. Within different clusters, a sample of 2,400 FSWs was selected. All the FSWs selected for the study were members of a community-based organisation (CBO) in the respective districts. The eligible FSWs participating in the study were females aged 18 years or older, either brothel or street or lodge or home-based, who had sold sex in exchange for cash at least once in the past one month.

Data collection tool: The BTS collected information from FSWs on demographic aspects, sexual behaviour and condom use with sex partners, knowledge and awareness about HIV/AIDS, community-led structural interventions, self-efficacy, claimed identity, information related to exposure to the intervention, and social and financial inclusion using a structured interview schedule. We have used the collected information for this analysis.

Ethical considerations: The overall study design and questionnaires of the BTS were reviewed and approved by the institutional review boards of Family Health International and the Karnataka Health Promotion Trust.

Key questions and terms: In this article, financial inclusion is defined as the use of any of the following financial services in the last one year: (i) investment in schemes like National Saving Certificate (NSC)/Public Provident Fund (PPF), or (ii) investment in fixed deposit or bonds, or (iii) purchase of any insurance policy. All these investments are meant to secure uncertainty in the future. The BTS questionnaire asked three questions: (i) Have you invested in schemes like NSC/PPF during past one year? (ii) Have you invested in fixed deposits/bonds during past one year? (iii) Have you purchased any insurance policy during the past one year? These three questions were used to construct the dependent variable, that is, the use of any financial services in the last one year that defines financial inclusion. Financial autonomy is defined as the ability to exercise control over the use of money. The following question from the BTS was used to define “financial autonomy”: Do you have any money of your own that you alone can decide how to use?

Statistical analysis: Bivariate analysis was performed to assess the association between the key dependent variable, that is, the use of any of the financial services in the last one year, and independent variables and financial autonomy, using chi-squared test statistics. A probit model was used to examine the factors that would determine the probability of the use of any of the financial services by the FSWs in the last one year. Given that the dependent variable is binary, that is, either the FSW used a financial service or did not, standard probit model specification was employed. The results of the probit regression model are presented in the form of marginal effects, along with the corresponding 95% confidence interval (95% CI) (Table 2, p 33). Marginal effects are interpreted as how much the (conditional) probability of the use of any of the financial services in the last one year changes when you change the value of a regressor, holding all other regressors constant at some values. Here the regressors are demographic, socio-economic, claimed identity, perceived discrimination and financial autonomy variables. All analyses were conducted using Stata.


Table 1 documents the association between access to and utilisation of financial services by the FSWs and various demographic and socio-economic factors. Of the sampled 2,400 FSWs, nearly half (45%) were home-based sex workers and a majority of the FSWs (56%) were in the middle age group, that is, 26–35 years of age. The median age was 30 years. More than half (56%) of the FSWs were non-literate. A majority of them (66%) were married at the time, some of them were either divorced/separated or widowed (29%), and only 5% were unmarried. Nearly 60% of them were living with a spouse or a female partner. One in every 10 FSWs (11%) was living alone. A minuscule percentage of FSWs (3%) were residing in rural areas. One in every four (26%) FSWs was exclusively involved in sex work. One in every five FSWs (20%) did not have a cell phone. A majority of the FSWs (64%) did not have any savings in the last one year and one in every third among them (33%) had loans. Around half of them (45%) had financial autonomy and a majority of them (89%) were not ashamed to be identified as sex workers. Almost 93% of the FSWs were members of a CBO.

One in every four (25%) FSWs perceived discrimination while accessing banking facilities. Almost all of them (99%) had been exposed to targeted interventions and about half of them (52%) were confident that they could access government services. Three out of every four FSWs (76%) had a bank account: Out of those who had bank accounts, most FSWs were home-based (43%), in the middle age group (57%), non-literate (54%), currently married (67%), and living with a spouse or female partner (61%). Most of them were residing in urban localities (49%) and had other means of earning apart from sex work (73%). A majority of them had a cell phone (82%) and around half of them (49%) had financial autonomy.

One in every five FSWs (19%) had used one of these financial services (invested in NSC/PPF or invested in fixed deposit/bonds or purchased insurance) in the last one year. Among those who had used any of these financial services, a majority of them were home-based sex workers (50%), in the middle age group (60%), illiterate (58%), currently married (60%), and living with a spouse (53%). A majority of them were residing in urban areas (49%) and had other means of earning apart from sex work (74%). Almost 83% of them had cell phones and around half of them had some savings in the last one year (48%). Two-thirds of them (66%) did not have any loan and more than half of them (59%) had financial autonomy. Most of them were not ashamed to be identified as sex workers (89%) and a majority of them were members of a CBO (93%). Most of them did not perceive any discrimination while accessing banking facilities (74%), and more than half of them (53%) were confident that they could access government services.

Table 2 documents the results of the Probit Regression Model to calculate the probability of an FSW using any financial services in the last one year. Age significantly increases the probability of an FSW using any financial services in the last one year (marginal probability = 0.003; p = 0.047). The change of type of sex worker from brothel-based to others, such as street-based, significantly reduces the probability of the FSW using any financial services in the last one year (marginal probability = -0.064; p = 0.014). A change of living arrangements from living alone to living with a spouse/female partner (marginal probability = -0.111; p = 0.0008) and with family/others (marginal probability = -0.070; p = 0.013) significantly reduces the probability of an FSW using any financial service in the last one year.

As residence changes from rural to urban or semi-urban, it significantly reduces the probability of the FSW using any financial services. The possession of a cell phone increases the probability of an FSW using any of the financial services in the last one year (marginal probability = 0.055; p = 0.005). The probability of using any financial service in the last one year increases significantly for those who had accumulated some savings in the previous year (marginal probability = 0.086; p = 0.000). Likewise, the probability of using any financial service increases significantly with the financial autonomy of the FSW (marginal probability = 0.089; p = 0.000).

Financial Literacy

Financial literacy and access to and utilisation of financial services by FSWs is limited, as established in the beginning of the article. Various studies also suggest that intervention programmes have mainly focused on collective efficacy (community mobilisation) and behavioural outlook towards health (Balfour and Allen 2014; Moret 2014; Patel et al 2016). Access to financial services has been limited due to demographic (gender, occupation, education), social (social status in society, discrimination), and economic (low savings, nature of work, lack of financial literacy) factors. This article attempts to define the factors contributing to the inability of FSWs in accessing and utilising financial services.

In a study of 285 FSWs across nine states in India conducted under the United Nations Development Programme (UNDP) Trafficking and HIV/AIDS (TAHA) project, it was found that 65% of the FSWs had never visited a bank, nor did they have a bank account (UNDP 2007). Financial autonomy is strongly related to the level of education. Out of the 285 respondents of this study, 226 reported not having received any formal education. About half of them (52%), hence, kept their savings with members of their family.

Information related to financial services is disaggregated. For example, only 21% of the 285 study participants had ever taken a loan from a financial institution and only 36% had any savings with a bank. In this study using the BTS 2014 data, 76% had a bank account, whereas only 19% had used any of the financial services (invested in NSC/PPF or invested in fixed deposit/bonds or purchased insurance) in the last one year. The UNDP–TAHA study reports that the majority of its respondents relied on their family members or their spouse for savings. Fifty-two percent of the respondents in the study kept their savings from sex work with their family members. Similarly, findings from the BTS 2014 tell us that 64% of the 2,400 FSWs did not have any savings with financial institutions. Probit analysis also showed the marginal effect of change in living arrangements from living alone to living with a spouse or other family member significantly reduces the probability of using any financial service during the last one year.


Discrimination against the marginalised and the poorest sections of society is prevalent widely. The findings of this article from the BTS data show that one in every four FSWs had perceived discrimination while accessing banking facilities. This finding is corroborated by the UNDP–TAHA survey, where a majority of the sex workers never had any contact with an official from a banking institution. In another study conducted in India by Prabhakar et al (2014), it was shown that the main reason for not having a bank account was either the complete lack of money or having too little money. This facet has been explored in this article. The lack of any other economic activity, resulting in the lack of money to save and invest (Prabhakar et al 2014), is corroborated in this study in the reverse manner: the possibility of engagement in an economic activity apart from sex work for the FSW.

The findings from the BTS show that 73% of the respondents had some other income earning activity apart from sex work. In a study of cisgender women sex workers (CWSWs) and transgender women sex workers (TWSWs) in Malaysia, Lall et al (2017) have examined the readiness of the participants to engage in other occupations and jobs of their interest, using in-depth interviews. Results from the interviews showed that participants had a high degree of motivation in seeking alternate employment opportunities. The authors further examined the feasibility of a microfinance-based intervention among the CWSWs and TWSWs, and the results supported their hypothesis of the acceptability of microfinance intervention and training on financial literacy.

This article has also segregated the marginal effects of variables on the probability of using any financial services. These variables include change of living arrangements from alone to living with a spouse/family, change of location of sex work from brothel to street, and a change of residence from rural to urban/semi-urban. A change in these variables from the former state to the latter reduces the chances of accessing financial services in a given year. In fact, financial constraints increase significantly when the FSWs move from a place of residence to operating on streets. This has also been established in a study conducted to evaluate the effects of an empowerment programme called Pragati for FSWs in Bengaluru which highlighted the financial constraints that lead marginalised women into sex work (Euser et al 2012). The study by Euser et al (2012) emphasises the barriers to financial services which are aggravated further once women enter into sex work. FSWs struggle with earning a decent amount of income, and later with ensuring that their savings remain safe when kept with family members who could steal it from them. Living on the streets also increases the degree of constraints to access financial services, as observed in our study.

Access to Banking Facilities

In order to address the issue of savings remaining safe, this article further examines two case studies of banking institutions established solely to cater to the financial needs of FSWs. There are two such banks in India. The first such bank was established in the red-light area of Sonagachi in Kolkata. The Usha Multipurpose Cooperative Society was set up in 1995 with ₹ 30,000 as working capital. As of 2017, the turnover stood at nearly ₹ 30 crore. The loan disbursement amount to sex workers was about ₹ 7 crore. With three branches, the bank covers a network of 16 collection centres in red-light areas. Twenty-eight agents from the FSW community collect deposits every day (Bhattacharya 2017).

The second such initiative took shape after a decade’s gap in 2005. FSWs in Mumbai’s red-light area, Kamathipura, started a cooperative group with support from Population Services International (PSI), a non-profit organisation based in Washington, DC (Badam 2007). After a lot of efforts, the Sangini Women’s Cooperative Bank was launched, with ₹ 16 lakh funding from PSI. According to news reports, as of 2005, the bank used to mobilise deposits on a daily basis, amounting to about ₹ 25,000. This money is deposited in fixed deposit schemes with state-owned banks (Badam 2007).

According to the response received for a right to information query submitted to the Ministry of Health and Family Welfare, Government of India, in 2010, there were 6,88,751 sex workers in India (Dash 2010). This number was based on data submitted by the respective State AIDS Control Societies. In other words, these numbers were based on the targeted interventions carried out for the sex workers (Dash 2010). Taking this estimate into consideration, two banks for a population of 6.8 lakh FSWs is not the best representative scenario of financial inclusion for FSWs in India (Dash 2010).

Programmes for the economic strengthening of FSWs typically incorporate microfinance and/or vocational training with the goal of reducing financial dependence on sex work (Moret 2014). In this context, financial inclusion as defined in our study has not been undertaken as a specific theme of analysis. Using the BTS 2014 data, this article has analysed the incremental effects of a change in certain variables on financial inclusion, both access and utilisation. This necessitates further discussion on these parameters, especially in the context of women in sex work.


The findings of this study are not exhaustive and are dependent on the availability of data and should be interpreted with caution. The questionnaire of the BTS 2014 has limited questions on financial inclusion and the use of financial services by the FSWs. In-depth interviews and case studies of selected samples across different states will help in developing a better understanding of the deprivation faced by the marginalised women of our society, especially FSWs.

Access to financial services by FSWs as a separate topic for study has garnered attention recently, specifically exploring microfinance as a mechanism for linkage. Most of the literature reviewed for this article emphasised both the aspects—economic strengthening or community mobilisation—in isolation. It would be interesting to see how future work considers both of these aspects in combination.

The current literature on FSWs is focused on community mobilisation and community engagement to increase the positive outcomes of targeted interventions such as the Avahan project. The subject of financial inclusion and financial autonomy of FSWs features as one of the subsections of the study. An attempt should be made to study this topic separately under the broader lens of enabling inclusion into mainstream society. A separate research tool should be developed to study this issue, keeping the theme of targeted intervention constant.


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Updated On : 2nd Nov, 2018


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