MT26 | Hena Mehta On How Money Works Differently For Women

We talk about the importance of saving and investing, and just overall managing your finances well. But what if your specific needs aren’t easily addressed with the one-size-fits-all kinds of products that you have in the market today? Women, in particular, face very specific issues around expenses, credit and disproportionate impacts of difficult situations.

Discussion Topics: Hena Mehta on How Money Works Differently For Women

• How women’s financial journey is different from men
• Why women are more reticent about investing and personal finance
• Barriers to accessing credit
• How women’s financial concerns significantly vary from men’s
• How men might benefit by acquiring some feminine investing traits

Transcript: Hena Mehta on How Money Works Differently For Women

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

Amit Ray: We talk so much on the show about the importance of saving and investing, and just overall managing your finances well. But what if you’re a person with specific needs that aren’t easily addressed with, you know, the one size fits all kinds of products that you have in the market today? For example, try taking a loan if you’re on a career break, I know I’ve tried, and it’s nearly impossible.

And ask all the women who’ve taken time off to raise their children, or to take care of aging parents, and I’m sure they will all express frustration with the same kinds of issues. And this isn’t the only thing not just loans on a career break. Today, we are talking with Hena Mehta, who is the founder and CEO of Basis, a financial services destination for women in India. She is going to help us understand the issues that women face with regard to money management, and also how Basis is trying to make a difference.

But before we begin a quick reminder to please follow MoneyTok, so you don’t miss any of the practical advice and tips that we share on this show. With that said, Hena, thank you so much for joining us. Maybe for a start, you could tell us about your background in money management or investing, and also more about Basis. I’m very curious to learn what you’re exactly doing.

Hena Mehta: Sure, and thank you, Amit, for having me on your podcast. As a quick introduction, I’ve spent my entire career building FinTech products actually. I am an Engineer by training, started my career on Wall Street in 2008, a very, very interesting time to be starting a career, and during kind of the middle of all the mayhem that was happening out there. Building software for an equities trading desk moved into a product management role within Goldman Sachs’s technology, and product divisions.

I spent about half a decade with the company and then decided the Indian startup ecosystem was too exciting to be missing out on and this was when Flipkart was still a startup, still the poster child of Indian startups, this was back in 2014, I took a leap of faith literally sold all my stuff my apartment in New York, moved back to Bangalore, it’s actually where I grew up and joined a startup called Ezetap, which is a Fintech startup in the payment space. So I was employee number 30 there. So it was very different from being in a 30,000-something company, but I learned so much steep learning curves and startups, which I love. So I spent two years there as a Product Manager building a variety of things in the payment space. And then business school happened. And I’ll get into how that experience actually shaped the whole thesis around Basis, which is what I’m working on, and business school.

I went to Wharton and spent two years out in the US again, but long-term plans of being back and building in India had changed. Also spent a little bit of time in the Bay Area, with Square on the capital team in San Francisco. So this was lending products. And yes, I’ve been back in India now for about three years and have been building Bases. And you didn’t introduce us in a line, but essentially what we’re building at Basis is a full-stack financial services platform hyper-focused on urban women in India. I talked about the B School experience and how that really triggered, and how really sowed the seeds for Basis. And essentially, for me, that was a wake-up call, you asked about my money management experience, it was actually fairly minimal at the time. And it did dawn on me that, you know, I had done every possible thing to get into one of the world’s top business schools, except plan for how I was going to pay for it.

I mean, it is a large amount of money for anyone, especially for a 20-something-year-old. And so that was my wake-up call. And then it kind of you know, I couldn’t stop thinking about it and my thesis was that women more so than men tend to get left out of this part of I guess being an adult right if you want to think about it. That way making investments starts early, understanding the market you know, and really taking that keen interest in your personal finances, so that you can A achieve whatever goals you’re setting out to achieve, but B also be prepared for any dire life situations that may come up.

Amit Ray: Yeah, and I mean, it must also have been a sort of formative experience to see the mayhem as you described it in 2007 to 9, actually 2008 and 9. I was actually there in New York, also, at the same time working for Citigroup. And I saw so many people whose basically entire retirement was decimated because they were longtime Citi bankers, 30 years in the company, their stocks were worth a fair amount of money till just before the crisis and after that it essentially all just evaporated.

So it was a learning moment for me as well, actually, at the same time. And you’re right, I think everybody needs to worry about not worrying, but everybody needs to plan to manage their money. And I’m happy that you’re not just planning for yourself, you’re actually taking the effort to take everybody on the journey with you, which is actually trying to create a service for urban women in India. So, tell me more, you know, I feel like I know a fair amount about managing finances. I’ve been doing this for a while for myself. But you’re saying that women’s needs can be quite different from men’s. So tell me more about this, like, what are some of the challenges? Or in what ways is it different?

Hena Mehta: Right. So if you look at a woman’s life, whether it’s career or more personal life events, the trajectories are very different from those of men. I am strongly generalising here but if you look at it, from a macro standpoint, there are stark differences that have not been taken into account with financial advice out there with financial products that are being curated, and designed in the market today, starting with just financial goals that women may have. So one of the most popular tools on the Basis app is our career break calculator. If you think about it, and you talked about when you took a career break, it is a financial event, you are suddenly left without that active income, without that salary, without that paycheck coming in and no one wants to depend on someone else for an allowance or anything like that and women tend to take more career breaks than men do. So that’s one example of a financial event that no one really talks about.

But beyond that, as well, if you look at the financial needs of women, starting with, you know, we earn less for the same jobs we do as men, the gender pay gap, and it’s great that it’s been talked about so openly. Now in India, the gap is anywhere between 25 to like 34%, which is ridiculously high. Women tend to live longer than men, on average, women outlive their male peers by four to five years, and that’s not a small amount of time, which means we’ll have to plan for a longer retirement. And if that wasn’t enough, we also have higher health care costs and higher personal care costs. You might have heard of something called the pink tax, which is this gender-based price discriminatory strategy that companies adopt.

Amit Ray: I actually read about it quite recently, and it was very surprising to me that the same item can cost differently.

Hena Mehta: Exactly. And I mean, it is probably part of some marketers and companies saying, hey, women may have more of a willingness to pay or, I mean, there’s a lot of discussions on why it exists. Hopefully, it goes away. But the bottom line is, with the pink tax with higher health care costs, it also costs more to be a woman. So not only are we earning less than our male peers, we need that money to last us longer and it costs more just to live, so across the board, women have very specific needs, and events that financial services need to account for while designing whether it’s advice, whether it’s actual products or services that target this audience. And so far, I think globally, this problem of women not participating enough in financial services has always been seen as a marketing challenge, right? Like how we target women better, what campaigns we can do, what are discounts and offers, and all of these things that can be done march is obviously Women’s History Month where we see all kinds of campaigns and stuff targeting women but that’s very superficial.

Women are not adopting these because these services and products have just not been designed, to take women’s needs into account. Obviously how women invest also differs, risk appetites differ from those of men. And I know we’re going to dive more into the credit space as well. And if you look at insurance health insurance, and life insurance there are very obvious gender-specific nuances that need to be taken into account, as these products are being designed, and the data that’s being taken into account while designing them needs to address a woman’s life.

Amit Ray: Right, okay, so this is very eye-opening Hena. I mean, I kind of had an awareness. And in fact, we’ve done an episode on investing for women kind of thing in the past a few episodes back. But we didn’t get into this much discussion around why it is different. We talk just about, hey, you know, women need to think more about their financial situation and how to manage that. But we didn’t get so much into, you know, these more fundamental differences, which might be creating that kind of situation.

So thanks for sharing this. I think many of these are new to me as well and I’m sure it’s quite educational to everyone listening. So this being the situation, I mean, I suppose this is maybe what led to the birth of Basis, right? I mean, these are the problems you’re trying to solve. So how does Basis help with all of this or what are you trying to achieve?

Hena Mehta: So we are fixing these massive gaps that exist in the financial services space, amongst the women market. In India, today, the market, if financial services actually cater to the needs of women, it’s we’re talking about a $40 billion tap in the next five years, so it’s not a small market and that’s the market we are operating in. What we started off with a couple of years ago, was financial education and communities because we saw the main gaps that were preventing women or the main barriers that were preventing them from taking that leap into, let’s say, making their first investment or getting adequate health insurance or understanding how credit could work to actually enable different financial goals boils down to a lack of knowledge, a lack of trust, and a lack of relatability.

I don’t know enough so my money is best parked in a fixed deposit at a bank or gold that I may have gotten during my wedding or maybe the insurance plans that are being offered by my employer is enough you know, it’s actually not, we can get into that as well, to other things around just relationships and money there are what we talk about it Basis are these four D’s in a woman’s life, that disproportionately impacts them more than they do to men. So the four D’s are divorce, death of a spouse, debt, as in loans, and a disaster, which we saw play out in the last couple of years with the pandemic. So all of these events tend to impact women more so than they impact men.

Anyway, long story short, we started off by bridging these knowledge and trust gaps, we’ve actually built the largest community of women in the country that is focused on money. And so it’s a learn, discuss sort of a user journey right now on our app, our app is live on Android and on iOS. And where we are now in our journey is launching curated financial products for this audience. So the learn and discuss is now going to convert to transact. And we’re launching something called a power card, which is a credit product. It’s a BNPL card that is again, hyper focused and designed for women and happy to get into our approach there, but it’s the first card in the country that is focused on a very specific demographic.

The gap, obviously, that we saw Amit, in the market was I mean, women aren’t participating in the credit system as much as they should be doing. Credit cards in India are exploding now as we speak, but women represent somewhere between 10 to 12% of the outstanding credit cards which is a tiny, tiny sliver.

And, yes, the education bit does play a big role. You know women tend to not know what credit scores are tending not to have credit scores, tend to maybe think that had an add on card to, you know, my father and my husband, and that’s enough. But as we sort of, again, we’re diving deeper into this space there’s strong appetite to want to participate in the credit markets, obviously, with a platform that women could trust. And so that’s also what gave birth to this our first again customised curated product, a financial product for women.

We are launching it soon and right from pay focused rewards and benefits to, you know, even once we have a good chunk of data to even curate better interest rates for women, because women tend to be more trustworthy, more diligent, you know, just better borrowers. So why should women have to deal with rates and offers that are not really taken into you haven’t really taken their needs and their data into account. So that’s the first product, we’re launching. Pain points in this space, yes, range all the way from access and approval.

Women tend not to get approved for credit without a male cosigner, or a male present. We’ve heard tons of horror stories around that women tend to, you know, even on the collections and repayments front, right? If you do a quick Twitter search, you’ll see all of these, again, anecdotes, where it’s borderline harassment, like your called, but before that people tend to, again, find out who your husband or in laws are, or parents are and tend to call them for your payments and so privacy is out the door. So these were all, again, nuances that were preventing women from adopting this product at the scale at which they should be doing and where we’re changing that from both an experience standpoint, and a product standpoint, with the power card.

Amit Ray: Wow, I really did not know that such things happen and that that is insane. So Hena, well more power card to you. Wow, that’s great. So, again, thanks for sharing that. So effectively, what you’re saying is, you started out by trying to create the education elements so, it’s people should know about finance, and then the community part so they can discuss finance and kind of learn from each other and know that there are other people in the same boat and things like that. And now is when you’re moving into transactions and the actual product space, the first product being the power card, which is BNPL, essentially.

Okay. So, since you’ve been in the community space for a while, and you have a lot of people, at least I saw you have more than 100,000 downloads of your app, which means there are plenty of people in the community. So what are some of the questions or concerns that you’ve seen play out via the community or what are the top issues that people seem to be facing?

Hena Mehta: Sure. And before I dive into that, I also want to talk about an anecdote and experiment we did very early on in our journey where we wanted to get to the answer, is there a need for a woman-only space to discuss money, like, on the surface money isn’t gendered. But what we did very early on, in the Basis journey to test out this hypothesis was, we created a community, all were welcome, men, and women, everyone joined, but we saw that men tended to take over most conversations, and most discussions and women tended to take more of a backseat and be more silent.

And that actually mimics what happens in real life as well, when there are men in the room women tend to not participate in these conversations, whether it’s family, friends, you name it. And as soon as we kind of flipped our community to be sort of a private women-only space, we saw the floodgates just open right from discussing, you know, the basic things on like, what are mutual funds and how do I invest in them to more sort of queries discussions around and women tend to do this more so than men do around like taking care of family, whether it’s kids, whether it’s parents, whether it’s in-laws, questions around how do I not only get health insurance for myself, how do I get health insurance for my 60 plus-year-old parents and in-laws, all the way to even more sort of sensitive topics that, again, women didn’t have an avenue to really talk about before and when we talked about the four D’s like I’m recently separated, I need to reconstruct my financial life, and for her to be able to connect with peers who may have gone through a similar thing, or going through a similar thing and having that space to freely discuss this without any judgment is super powerful.

So we’ve seen conversations range from some of the more technical aspects of finance, how does a mutual fund work? I mean, crypto is another hot topic, which again, as with all of these things, women tend to participate less, it becomes a very sort of a bro, you know with everything, and we’ve also sort of structured our community around topics specific focus, like, it is hard to just like money is a huge topic, but how do we make it highly contextual so when you’re part of this community, you know you’re gonna get information, advice, content that actually works for you, from people you can trust. So that was essentially how we had structured it. And so yeah, conversations range from more technical aspects to softer aspects of life.

How do I know if I’m financially compatible? I’ve just gotten engaged, right? How do I know I’m financially compatible with my fiancé? What are some questions we should be discussing upfront and credit as well? Now, I mean, India has been a very savings culture for a very, very long time. Credit is now super hard making its way to all kinds of segments and we get a lot of queries around how it works. Is it a good thing to have a credit card, what is a credit score, and how does it even help me?

So, these are examples of discussions and conversations we have in the community. We also run masterclasses as sort of a compliment to the discussions that are happening on our app. And so that provides, again, a more intimate space, we don’t post any of these recordings, obviously, by design, but a space for women to actually connect with experts, connect with each other. Again, we pick a topic deep dive into it and always make sure we have actionable advice, not just the typical quote unquote, gyan where you will find a ton of that on the internet, without really any way to activate it and then you’re stuck with your FDs, gold, some bare minimum insurance plan and no credit score, which is what the state of this market is right now.

Amit Ray: Right. So what you’re saying is that the key questions that seem to emerge around, or rather what may be a bit different, versus what you normally read on the internet would be things that are maybe more family oriented. So it’s not just my personal finance, it’s our collective finance, maybe financial compatibility or family issues, those kinds of things. I think how-tos you mentioned, and credit in general.

So, I think that makes sense. And again, to me, the interesting element over here is the family orientation element, because again, even if you’re speaking from a male perspective, maybe but even if, let’s say you’re the breadwinner, yes, you’re supposed to be looking after family, etc. but the orientation tends to be personal finance. It’s not, it’s called personal finance in fact. So that’s interesting. And again, I mean, maybe there could be products, which are more group-oriented or family-oriented, to kind of satisfy these kinds of requirements, which again, there isn’t that much of in the market.

Hena Mehta: Right and if I may also add and that was a beautiful summary Amit of what the community is most popular for. Also, we’ve seen given the pandemic and we actually launched right before the world went into this pandemic is around emergency and long-term planning, and women also tend to be better contingency plans rather than men. Maybe that’s how we’re wired. I don’t know. But this topic of having an emergency fund where to park your money, in the case of an emergency, how many months’ worth of expenses, should you have become super popular as well as long-term goal planning, and obviously kids being a huge priority for at least the moms in our community, but also how do I invest for some of my longer-term goals, and women tend to be more long term thinkers versus just chasing sort of short term returns, which is what we typically see with men in this market, again, broadly generalising, but there is that difference in terms of the approach.

Amit Ray: Which is actually, first of all, I think, from an anecdotal or observation point of view, I tend to agree. I mean, whenever you read or hear about people who want to day trade, oh, how can I make money in the stock market quickly? That’s usually not a woman asking that question.

Hena Mehta: Yeah, unless it’s a professional trader.

Amit Ray: Yeah, that’s their job.

Hena Mehta: Yeah, exactly.

Amit Ray: And frankly speaking, like even the concept of trading for your personal account is not something that even on the show we hear about, from women, per se, or as a question. I think, paradoxically, this whole long-term thinking, you mentioned that the emergency planning, the family orientation, and also the longer-term thought process, I think, paradoxically, these are all things that are the hallmarks of financial success. So, interestingly, all the things that may be potentially holding women back in the short-term game, and the chase for riches, let’s say, I think sounds to me like, these are all things that will actually make them successful in the longer term, wealth creation. So in a way, I mean, things that may seem like it’s holding people back actually might be the exact thing that’s going to help them win the race, you know, the hare and the tortoise.

Hena Mehta: Absolutely. And there are actually studies done globally where women’s portfolios do tend to outperform men, so you can look it up. I think Fidelity has done this a couple of times. So it is super interesting. I mean, women tend to make better investors than men. There’s actually a book titled, ‘Warren Buffett Invest Like a Girl’ talks about all these, quote-unquote, feminine traits that Warren Buffett has that make them one of the world’s greatest investors. So women tend to just be, yes, better investors and we should leverage those skills to your point of just creating just massive, long-term wealth.

Amit Ray: Yeah, I mean, that’s perfect. My wife does a lot of investing in our family, and I need to listen to her more now.

Hena Mehta: Great. Absolutely.

Amit Ray: Yeah, so thanks a lot Hena. This was a really great discussion. I mean, frankly, I learned a lot of things that I didn’t know otherwise and it’s been quite eye-opening. So if you don’t mind, let me just take a moment to summarise some of the points I was writing down. I think the first thing, the reason, the basis for being of your company, is the fact that women have different needs, they have higher expenses, lower pay, unfortunately, greater family orientation, and a kind of desire to take everybody along and so therefore, overall different financial needs, and hence are unable to participate. Even if they’re interested, they don’t have those products available to participate in a manner that works for them. And you pointed out something on the side, which is that people tend to treat this as a marketing problem. Hey, if you just make people aware that there’s this fabulous credit card, they will start using it.

Hena Mehta: And a pink credit card, maybe a pink credit card using that.

Amit Ray: Yes, let’s have a pink credit card, and people will use it. And that’s actually not really the reason. So that’s, I think, your first point. A related point was the risk appetites are different. And you say that later as well, which is that the thought process is more long-term and family-oriented, and therefore, maybe generalising. Most women may not be or many women may not be willing to take the kind of short-term volatility and stuff that maybe men seek out. So that’s the second point.

You had a really good thing with the four D’s, divorce, debt, debt, and disaster. Four things to plan for. These are things I mean, nobody likes thinking about all of this the same way nobody likes thinking about insurance, but life happens and it’s good to know these and in these situations, the woman tends to be the person who’s kind of more impacted than the man is in these situations. So definitely worth thinking about and something to consider. Even if you’re a financially savvy woman, may as well look at your portfolio and see if it works with these as well.

Another thing that you pointed out, you know, the main barriers that may be in people’s minds, and I think you summarised it very well, which is knowledge, trust, and relatability. I mean, the knowledge bit is there. I mean, even on this show, we try to share knowledge in that sense. But trust and relatability were two interesting add-ons. And I can totally see that, like, you ultimately have to feel that the person who is selling you the service is somebody who is like you and is giving you something that you can actually use, versus you’re being hard sold something which, you know, it’s like it’s within quotes best for you. And so therefore, you’re focusing on community and education and that seems to be the right way to move forward.

It was also interesting to me that making it women-only and a closed private community encourages more discussion. But it’s not a surprise. I mean, ultimately, people open up when they are talking to people like them, with maybe similar problems. It’s the same relatability point from earlier. So that’s good to know. And if anybody is trying to kind of work with women investors, this may be something worth thinking about.

And finally, I think you mentioned, some of the key areas, or the topics that women tend to focus more on, which may be a bit different from what men are looking for. One is the family orientation and the collective responsibility thought process versus the individual. The question about compatibility is not just what can I do, but how is it going to work overall. And then, of course, how to understand credit and the fact that women tend to be more long-term focused and therefore are almost naturally better set up for emergency planning and long-term investing.

Again, as we discussed, I really think that’s the recipe for success. I think these are great insights. And really appreciate you joining us today. It was a really fun conversation. And for everyone listening, if you liked the episode, please do remember to rate us five stars and follow MoneyTok, so you don’t miss any of the cool practical tips and insights that we have in upcoming episodes. Also do join our community on CrazyTok.media to access all of the summaries of all of our episodes, and also kind of interact with other people who might have similar thoughts and questions to you, actually very similar to Hena’s community in that sense, but she’s far, far ahead from where we are right now. So, thanks a lot for joining. We were Hena & Amit with MoneyTok. See you next time.

Hena Mehta: Thank you.

Our Guest: Hena Mehta

Hena Mehta is the CEO and Co-Founder of Basis, India’s financial services destination for women. Launched in 2019, Basis helps women make financially well-informed and independent decisions by offering financial education, safe spaces to discuss money, and curated financial recommendations and products that work for women.