Financial Literacy and Its Role in Women’s Empowerment
Currently, global statistics show that one-third of the world’s population is financially illiterate. Of these individuals, women in impoverished countries make up a disproportionate rate of the financially illiterate compared to men. As financial illiteracy is directly correlated to income levels, it is no surprise that women are also disproportionally living in poverty. The pandemic is further widening this gender poverty gap and earlier this year, FINCA Canada projected 120,000 of its women-owned small and micro-business clients will be financially devastated by the effects of COVID-19.
As the impact of the pandemic continues to fluctuate our global economy, the need for financial literacy of women in impoverished nations is intensifying and is critical in the effort to stop the reversal of decades of progress toward international poverty reduction.
Effective Financial Literacy Helps Reduce Global Poverty
This month, the world celebrates Financial Literacy Month to acknowledge and advocate for the resources necessary in developing the skills, capacity and behaviours that lead to financial resilience. More specifically, FINCA Canada, in partnership with the Government of Canada, is focused on supporting the financial inclusion of women in Haiti and the DRC. This includes everything from micro-loans and business advice to financial literacy training and tools to improve financial wellbeing. FINCA Canada recognizes the vitality of bringing financial literacy to women in these parts of the world, helping them increase their standards of living and education levels while enhancing economic prosperity.
Improved advocacy for increased financial literacy practices is key to relieving the economic strain in many impoverished countries as it helps remove a critical barrier to financial inclusion. This also paves the way for improved risk management, increased customer usage of financial services and empowers both men and women to gain better control of their savings. Over the past year, it has become clear that financial literacy education is a critical tool in the age of COVID-19 and ever-looming natural disasters.
Closing the Gender Gap Through Enhanced Financial Inclusion
Deeply rooted social norms coupled with gender biases have fueled the financial hardships women face in impoverished countries today. This had made it difficult for them to achieve financial independence which is crucial to their personal and entrepreneurial success. To address this inequity, in 2017 FINCA Canada partnered with the Government of Canada on the Financial Inclusion Project, a five-year partnership designed to promote economic prosperity for low-income women and men in Haiti and the DRC.
At the conclusion of the fourth year of the project, FINCA Haiti has cumulatively provided financial literacy training for a total of 76,290 Village Banking (VB) clients, 92 percent of whom were women. In addition, FINCA DRC has provided financial literacy training to a total of 140,482 clients, more than half of whom are women, helping 216,072 clients in both regions build financial resilience.
By providing women entrepreneurs with equal opportunities, knowledge, and financial portfolios, FINCA Canada has significantly contributed to the improved financial empowerment among women in Haiti and the DRC. Through a global lens, 4.5 million women in developing countries have partnered with the Global FINCA network, indulging in the appropriate educational measures needed to better navigate the evolving financial landscape and lift themselves out of extreme poverty. Equal access to financial literacy and advancement is a human right, and at FINCA Canada, we believe we can break down the vicious cycle of inter-generational poverty by promoting economic education and financial inclusion for all.
Click here to learn more about FINCA Canada’s work with improving financial literacy standards in developing countries and show your support for increasing financial education in impoverished communities.