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Business, Finance
Financial inclusion empowers women and offers them more financial authority. It ultimately could have a positive impact on a family’s entire home. In addition, agency banking and other digital financial services made available through mobile phone platforms let women conduct transactions easily and safely from their own homes, companies, and communities. Despite the substantial advantages, there are still considerable challenges that need to be overcome before more women throughout the world may access digital financial services.
- women’s economic empowerment
- digital financial inclusion
- gender equality
1. Introduction
In the post-COVID-19 era, it is imperative that responsible and sustainable business dynamics change, and transformational leaders are the key to assuring corporate creativeness and a bright future for digital businesses around the world [1].
Digital financial services are supporting financial inclusion, gender equality, and inclusive growth [2]. Financial inclusion may be crucial in reducing income inequality and raising personal revenues [3]. Extensive platforms for effective mobile money services have enabled the disadvantaged to obtain basic and customized financial services at a low cost, raising their standard of living [4].
Fintech, or digital financial technology, enables individuals who are not part of the conventional financial system to access financial services. Furthermore, it is a key policy tool for achieving the UN Sustainable Development Goals (SDGs), including gender equality and digital financial inclusion (SDG 5) [5]. Access to digital financial services allows poor or low-income women autonomy and protection. Despite the fact that these services have increased the number of female users in the formal financial system, they also perpetuate structural gender differences that lead to financial exclusion and new vulnerabilities, particularly for women at the bottom of the global income distribution. The current research investigates the advantages of electronic financial facilities for women in terms of accessibility, security, and autonomy.
People who have financial services at their disposal are much more likely to experience improved job outcomes, accumulate more wealth, and start their own businesses [6,7,8]. Despite this, women continue to have lower rates of bank account ownership and they are less likely to handle family budgets and to trade stocks than men [9,10]. According to Demirguc-Kunt et al. [11], and Breza et al. [12], new financial technology, or fintech, is expected to promote financial inclusion and reduce the gender gap in access to financial services. Both traditional financial institutions and new fintech companies promise to deliver new products that are better targeted to clients’ demands at a lower price by utilizing new technologies and non-traditional services [5,13,14,15]. Disadvantaged groups may gain disproportionately from these technological advancements [16,17,18,19].
2. Empowering Women through Digital Financial Inclusion
2.1. Digital Financial Inclusion before and after the Pandemic
The need for digitalization is greater than ever because of the coronavirus epidemic 2019 outbreak [35,36]. When the pandemic spread and lockdowns were imposed, millions of individuals used internet-enabled digital platforms to purchase goods, get credits, connect with families and friends, and receive education and health services. Furthermore, a significant challenge is being faced by countries. It is unlikely that economies will return to “pre-COVID” models. The potential of digital technologies has been made clearer by the crisis. In addition, the future will see a greater reliance on technology for many of our daily activities, including work, education, health, public services, and even social interactions [37]. Digital payments could improve people’s access to financial services. The COVID-19 worldwide health crisis and government responses, such as the lockdowns that restricted economic activity, raised the demand for noncontact financial goods and services, accelerating the switch to numerical banking in various countries [38]. Consumers increasingly use phones and cards to make payments to retailers, while governments employed digital payments to reach out to marginalized people.
The COVID-19 issue has created both difficulties as well as possibilities in the financial sector, as lockdowns and social distancing policies have an effect on credit institution operations and customer behavior. On one side, consumers struggled to pay bank loans owing to decreased incomes and incapacity to travel, while on the other side, electronic payment was preferred to cash payments. As a result, COVID-19 accelerated the development of financial inclusion digitalization [39]. According to Shafeeq and Beg [40], COVID-19 has concluded to be neutral; however, they predict that digital financial services are expected to increase, which in turn will have a positive impact on digital financial inclusion in the future.
Regulating the use of digital financial services during COVID-19 was another issue. The pandemic demonstrates these promising improvements in digital payment, but it also emphasizes how unequal these services are to access, particularly to vulnerable groups. Risks associated with consumer protection and financial capacity are just two examples of those associated with the implementation of digital banking finance. Alarifi and Husain [41] conducted comparative research to evaluate the e-service quality before and during the COVID-19 epidemic. Their findings demonstrated that competency is a key factor in customer satisfaction with KSA banks. There are discrepancies between the impact of COVID-19 on e-banking services before and after the pandemic.
The COVID-19 outbreak fundamentally altered the financial technology industry. The development of mobile money, fintech services, and internet banking can have a significant positive impact on low-income households and small businesses. The COVID-19 epidemic has accelerated digitization and raised questions about the viability of digital financial inclusion as a strategy for reducing adverse economic effects and boosting household and company resilience. Digital technology adoption sped up at the same time, resulting in the quick growth of online payment, online marketing, and fintech industries. By implementing digital technologies, several economic entities saw possibilities to reduce the negative economic effects of the current crisis. The results of Daqar et al. [42] demonstrate that by avoiding the use of physical payment methods, inclusive finance perception and behavior among digital payment users are impacted by the spread of COVID-19.
2.2. Digital Financial Inclusion and Women’s Economic Empowerment
Women’s economic involvement is still unequal in both developed and developing nations, and the COVID-19 crisis is judged to have exerted a disproportionately negative impact on them. To help women’s financial resilience as they are affected by and recover from COVID-19 and the associated economic issues, priority for women should be recognized in policy and strategic measures [43]. Haq et al. [44] argue that strategies have to be implemented to develop the skills and knowledge in the majority of relevant business administration fields to allow the inclusion of women. This will motivate women to make better decisions than expected and grow respectable businesses. Haq et al. [45] promote the discussion of increasing women’s empowerment by creating new employment opportunities that give women greater prospects, particularly in rural areas, which are the most underserved region in emerging economies.
Enhancing women’s economic inclusion is essential because women experience poverty at higher rates than men do as a result of unfair labor allocation and lack of control over economic resources. Women in developing nations who are still dependent on their husbands for major purchases also feel powerless over household finances. To overcome barriers to women’s financial inclusion in the digital world, a range of solutions may be taken into consideration, depending on the country’s cultural environment, infrastructure, and resources. Three main types of obstacles that prevent women and girls from using financial services are identified: a lack of access to the essentials for financial inclusion, a lack of a powerful digital financial infrastructure, and unfavorable rules and regulations. Kulkarni and Ghosh [46] determine the main obstacles affecting women’s accessibility to digital financial services. Their findings show that digitalization enhances women’s social and financial autonomy. Research by Elzahi Saaid Ali [47] looks at how to use relevant Islamic financial services and products to empower Muslim women in Comoros. Covering three focus groups with data from a survey, his findings underline the need of addressing the barriers that prevent Comorian women from accessing Islamic banking services. Furthermore, his findings indicate that women are either unable to access financial services due to a lack of funds or because they are ignorant of the information that would enable them to do so.
Several researchers demonstrate that reducing the gender gap in digital financial inclusion could have good consequences on regulating consumption, reducing financial risks and costs, offering security, raising saving and investment rates, and creating new business opportunities. In addition to launching businesses, women can promote growth by managing their finances more wisely. Access to and use of a variety of financial services improves not only how much women and women-led businesses contribute to growth, but also how autonomous women are, allows them to make better use of their own and their family’s resources, and diminishes the vulnerability of their homes and businesses. Ojo [48] demonstrates that digital financial inclusion boosts women’s economic empowerment in four African countries: Ghana, Kenya, Namibia, and Lesotho. He concludes that applying gender fairness in the digital environment is important to smooth the way for the future and attain sustainable development in the long run. These findings are confirmed by Kim [49]. The author uses data covering eight areas of Nairobi to show that empowered women practice a higher degree of financial independence after using digital banking services. A comparative study by Corrêa [50] concluded that fintech’s do hold the possibility to reinforce women’s financial inclusion. Financial inclusion can help to reduce income inequality, women’s participation in the non-financial system, in particular, reducing the inequality gap, allowing for more inclusive development, which improves both economic and social well-being [51,52].
Furthermore, in order to determine whether financial inclusion supports women’s economic empowerment, Jedi [53] tests this relationship through a descriptive analysis approach and examines the study’s variables, including financial inclusion (possessing a bank account, a credit card, saving with an authorized financial institution, borrowing from an authorized financial institution, borrowing from family or friends, receiving income from both the public and/or private sectors) as an independent variable and its link to economic empowerment as measured by the women proportion. According to the study, there is a substantial association between financial inclusion and women’s empowerment in Iraq. After COVID-19, women embraced technology far more swiftly. COVID-19 influenced the use of technology, which impacted women’s work life and income [54].
This entry is adapted from the peer-reviewed paper 10.3390/su15129154
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