Women’s financial empowerment: a catalyst for change

Johannesburg - As we observe Women's Month, we are once again made aware of the impact women have on families, community development, and the economy. However, for this impact to be fully realised, one important factor must be prioritised: financial empowerment. Without it, vast opportunities remain unreachable for women. With it, they, and the nation, thrive.

Although there is some progress, the persistent lack of access to financial independence is a women's reality. This stagnation affects families, communities and even entire economies. A report by the World Economic Forum states that women tend to be less financially literate and, therefore, more "unbanked" meaning they lack access to basic financial services like savings accounts, credit, or investment opportunities.

Sanet Egget, Senior Independent Financial Planner at ASI Wealth add that, In developing economies and rural areas, the problem of financial exclusion is even more intensified. Cultural, educational, and systemic barriers make it difficult for women to obtain basic financial tools.

The confidence gap in finances

Studies have found that women have less financial confidence than men. A McKinsey report from 2022 states that confidence gap influences women's savings and investment patterns. Women save more than men but invest less which reflects risk aversion shaped by lack of information and opportunities.

Unlocking economic growth through empowerment

Women's access to capital, education, and business opportunities fosters more inclusive economies. And, since women reinvest almost 90% of their income compared to 30-40% for men, the positive social outcomes multiply.

Building blocks of financial empowerment

Access to financial services such as banking, insurance, and mobile banking is only one aspect of financial empowerment. The understanding, tools, and confidence to use them effectively is equally important.

• Financial literacy: Women need education tailored to their realities, helping demystify investing, budgeting, and credit management.
• Access to banking and credit: Removing barriers to financial services ensures women can save securely and access affordable credit.
• Digital financial inclusion: Mobile banking and fintech innovations hold promise for reaching unbanked women, especially in remote areas.
• Protection mechanisms: Insurance, medical aid and retirement plan reduce vulnerability to health crises, unemployment, and other shocks.

Wider effects: From individuals and households to societies and nations

True financial empowerment requires more than access, it demands knowledge, tools, and confidence:

• Financial literacy: Women need education tailored to their realities, helping demystify investing, budgeting, and credit management.
• Access to banking and credit: Removing barriers to financial services ensures women can save securely and access affordable credit.
• Digital financial inclusion: Mobile banking and fintech innovations hold promise for reaching unbanked women, especially in remote areas.
• Financial habits and literacy create intergenerational changes: The ability and habits to manage finances are known to transform generationally, altering the framework of poverty.

A call to action this women's month

We cannot overlook the fact that this Women's Month celebrates the women who, when given the financial tools, generously strengthen families and are powerful builders of communities and entire economies.