The economics of empowerment

GRAPHIC BY SOPHIE REICHERT/GRAPHICS CENTER

Women’s empowerment is one of the most ferociously discussed topics in the world. Just like any complex global issue, it is multifaceted and has nuances that vary by region. The conversation around this issue is highly skewed towards the western world’s liberation ideology, and often overlooks the realities of the developing and underdeveloped world. 

That being said, contemporary western feminism has considerably penetrated the traditional societies of developing countries and encourages young women to learn and live outside regressive societal norms. However, this progress is largely seen in urban environments while rural women still live in the dimness of backwardness.

Now the question is, why is it so difficult to empower women in rural parts of the developing world? Feminism — one of the world’s most influential social revolutions — has failed to penetrate rural areas because of a lack of education, strict adherence to religious and cultural norms, and a resistance to change. Gender-based discrimination, social norms, and unequal access to education, healthcare, property, and financial services hinder rural women from engaging in economic activities and impedes empowerment, according to a report by the International Labour Organization. But the most important of them all, and the least discussed, is lack of financial literacy. 

The Organization for Economic Cooperation and Development defines financial literacy as “a combination of awareness, knowledge, skill, attitude, and behavior necessary to make sound financial decisions and ultimately achieve individual financial wellbeing.” According to a report by the Consumer Financial Protection Bureau, individuals with higher levels of financial literacy are more likely to save for retirement, have better credit scores, and make more informed decisions about their finances overall. The World Economic Forum, while advocating for financial feminism, has underlined the contributions of feminism and financial literacy in successfully empowering women in urban areas to take control of their finances and achieve greater financial independence and security. 

It’s not uncommon to hear people questioning why those living in a system of oppression don’t stand up to their oppressor. At the core of systemic oppression across the world lies the lack of financial independence that disempowers women from bettering their own lives. 

Enter financial literacy. Financially educating women generates a “multiplier effect” in economic growth that surpasses that of men, resulting in accelerated welfare and prosperity for individuals and the region. Financially empowered women are more likely to invest in their families, businesses, and communities, which leads to a ripple effect of positive outcomes.

For example, when women have access to credit and are able to start and grow businesses, they create jobs and stimulate economic growth. According to a report from the Organisation for Economic Co-operation and Development, women who are financially independent are also more likely to invest in their children’s education and health, which can lead to improved outcomes for the next generation. Additionally, when women are financially empowered, they are better able to participate in decision-making processes at the household and community levels, which can lead to more inclusive and equitable outcomes.

The words of Dr. James Kwegyir-Aggrey, a prominent Ghanaian educator and intellectual, hold true: “If you educate a man, you simply educate an individual, but if you educate a woman, you educate a whole nation.” Policy makers across the world like India’s National Centre for Financial Education and the Organization for Economic Cooperation and Development have acknowledged this fact and launched aggressive campaigns to increase financial literacy in their respective countries. But a passive classroom style learning strategy is falling short of achieving this goal. Thus, we need to explore more active and targeted literacy intervention techniques to make this possible. 

For example, an experiment led by Orazio Attanasio, a prominent Italian economist, and others in Colombia found that a tablet-based financial education program called LISTA, positively impacted financial knowledge, attitudes, practices, and performance especially among less educated, and more rural populations. Users exhibited increased financial health over two years later. 

This is why a group of graduate students, including myself, in the M.S. in international and development economics program, decided to do our research in “financial literacy and aspirations” for our thesis. Our teams (one led by my classmate Ester Agasha in Uganda and another led by myself in India) aim to improve women’s financial literacy in rural areas through two methods; through an interactive digital game that simulates the buying and selling of livestock, and by showing our target population inspirational videos of women who share their characteristics. We believe that by empowering women with the knowledge and resources to manage their finances effectively, we can promote gender equality and social justice in these communities. 

But this is not just an academic exercise for us. This is about real people with real dreams. It’s about hope, inspiration, and the power of community. To ensure that our research has a tangible impact, we have partnered with FINCA Uganda and the Shri Kshetra Dharmasthala Rural Development Project in India — two exceptional financial literacy nonprofits that possess deep understandings of ground realities and have been instrumental in empowering the people they serve. 

As I write this, I am filled with hope that together we can pave a path towards a brighter future. I invite you  to imagine a world where every woman has the knowledge and resources to manage her finances effectively and the incredible potential of feminism truly reaching all women.

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