Advancing women’s financial inclusion is a key policy objective for both advanced and emerging economies. Providing access to formal finance is seen as an important lever in helping poor women seize economic opportunities and build a resilient future for themselves and their families. Over time, however, the narrative on women’s financial inclusion has become adjoined to parallel narratives on gender equality and women’s empowerment. This has produced several undesirable effects. It has led to a misplaced understanding of the gender gap in formal finance and has accommodated incomplete and often one-sided theories of change alongside weak measurement frameworks. It has also not seriously confronted the poor evidence base on women’s financial inclusion, and finally, it has induced exaggerated expectations of the financial industry regarding its role in empowering women.
This chapter does not intend to conduct a landscape assessment of the state of women’s financial inclusion. Instead, it intends to sensitise the reader to the many shortcomings in the current approach to such inclusion. Section 8.2 begins by demonstrating that the narrative on women’s financial inclusion is conceptually muddled and charts a forward path to clearing up some of these muddled issues. Section 8.3 summarises the evidence base on women’s financial inclusion, which points to limited effects of such inclusion on women’s empowerment and, when there are effects, to a limited understanding of the causal mechanisms at play. The section then proposes a financial wellbeing perspective for thinking about the impact of financial inclusion on poor women’s lives. Finally, Section 8.4 describes the kinds of gender disaggregated data required to enhance the discourse on women’s financial inclusion, provides an assessment of the state of gender disaggregated data currently available for the Indian context, and makes recommendations for strengthening this existing state.
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