Effect of Financial Inclusion on Women’s Economic Empowerment in Kenya

Despite Kenya’s economic growth averaging 5 percent between 2010 and 2021, significant challenges remain. Women have not benefited fully from this process of economic growth and development. Poverty is still high among women. It is revealed that in 2021 about 53 percent women in Kenya are experiencing extreme poverty compared to 47 percent men. A report on women’s economic empowerment points out that, although women make up more than half of Kenya’s population, they still face high levels of unemployment and underdevelopment. Several studies have shown that access to finance promotes women’s economic empowerment. The ability to access financial services has been associated with decreasing poverty among women, as it allows them to obtain assets, improve asset security, and mitigate the effects of income fluctuations. However, there is a dearth of research on this subject tailored to the Kenyan context. Therefore, this study seeks to investigate the effect of financial inclusion on the economic empowerment of women. The study adopts a mixed methods approach using household-level data drawn from FinAccess 2024 survey and Kenya Integrated Household Budget Survey. The results show that an increase in financial inclusion by one unit leads to increase in women’s economic empowerment by 0.025 units holding other factors constant. Based on the empirical findings, this study proposes that policymakers should deepen gender responsive financial inclusion strategies. While Kenya has made notable progress in digital financial services expansion, targeted policies are necessary to ensure that women not only access accounts but actively use them for productive purposes. Financial institutions should design low-cost, flexible transaction accounts tailored to women in informal and rural sectors.