Breaking down barriers to women’s economic empowerment is crucial for sustained and inclusive development, especially with regards to financial inclusion (FI) initiatives.
But, despite numerous studies being done on this subject, gaps remain. This research project seeks to fill these holes by scientifically identifying and consolidating relevant studies between 2000 and 2020.
Gender Pay Gap
The gender pay gap inhibits women’s ability to invest their income into their families, businesses and communities – as well as her accumulation of wealth over time.
In 2022, female full-time workers earned only 77 cents of what male workers earned per hour on gross hourly wages (before taxes and social security contributions), depending on country of origin. While higher education and shifting careers toward those that pay better have helped narrow this disparity somewhat over the decades, the gap remains wide at early career stages for women.
The wage gap can differ depending on job title and industry; female managers in particular tend to earn significantly less than their male counterparts. Parenthood also plays an influential role in this regard, with employed mothers earning less than women without children regardless of education level, known as the motherhood wage penalty. Financial inclusion provides women with tools for building assets, generating income, managing risk effectively and fully participating in economic activity.
Women in the workforce face many difficulties balancing work-life obligations with life responsibilities, as research indicates fewer women reach senior levels than men even when applying for promotions at similar rates. A large percentage of senior-level women cite prioritizing family responsibilities as one major reason behind this disparity, as well as lack of flexibility in workplace policies as possible explanations.
However, providers are exploring solutions to increase women’s access to wealth-building products and services, yet remain mindful of cultural norms that reinforce gender inequality and hinder women from seizing opportunities. In order to do so effectively, richer sex-disaggregated data and more impact narratives illustrating how programs help change power dynamics to enable women to take control of their fates must be provided; otherwise progress toward women’s financial empowerment will remain slow.
Social and Emotional Challenges
Women face numerous barriers when seeking financial empowerment, including discriminatory social norms that devalue unpaid work, taking on too much of household finances on their own and limited leadership opportunities in the workplace. All of these factors serve to disempower women.
To combat the cycle, advocates of financial inclusion must work closely with government and business leaders to remove legal barriers that restrict women’s participation in markets while supporting entrepreneurship that alleviates poverty. Furthermore, financial inclusion can help challenge harmful social norms by showing households and communities the benefits associated with financially empowering women.
To fill gaps in the literature, this paper offers a tabular synthesis of 24 intervention and experimental studies conducted to address six major barriers and their mediations that inhibit women’s financial empowerment. Furthermore, it identifies effective and relevant interventions such as government programs/policies/microfinance institutions/services; formal savings accounts/services; cash or asset transfer; self-help groups and digital inclusion.
Gender equity in financial matters presents both challenges and opportunities for countries. To realize this goal, women should receive training on investments and the most efficient methods of managing their finances.
Women need the knowledge and tools necessary to confidently manage and invest in their finances for a brighter future, but many do not receive these classes due to limited resources and support.
Due to traditional and unequal property rights, they often cannot access financial systems and fulfil their potential. These barriers impede their progress and growth. Breaking these barriers through educational opportunities like entrepreneurship programs and online education should not be underestimated, nor should the role of analogue social networks in supporting women who wish to pursue financial feminism and wealth empowerment be neglected. Studies have demonstrated the efficacy of combined interventions like life skills training and CT as more effective ways of increasing financial inclusion among women than sole cash transfers (Ismayilova et al, 2018; Brudevold et al, 2017). This is likely because tailored approaches can more readily meet the specific needs of marginalized populations.