FINANCIAL TECHNOLOGY AND FINANCIAL INCLUSION EFFECT ON WOMEN ECONOMIC EMPOWERMENT IN KENYA
Abstract
Purpose: This study aimed to examine the impact of FinTech and financial inclusion on women’s economic empowerment in Kenya.
Methodology: A cross-sectional research design was adopted, utilizing secondary data from the 2021 Kenya FinAccess Household Survey. Principal Component Analysis (PCA) was employed to construct indices for women’s economic empowerment and FinTech adoption. Multinomial logit and probit models were applied to analyze the relationship between FinTech usage, financial inclusion, and demographic characteristics.
Results: The study found that FinTech adoption had a negative but statistically significant effect on women’s economic empowerment (β = -0.1664, p < 0.05), indicating that while digital financial services contribute to financial access, they alone are insufficient to drive economic empowerment due to barriers such as digital literacy and gendered financial constraints. Conversely, financial inclusion showed a positive, though modest, effect on women’s empowerment (β = 0.0894, p = 0.010), highlighting the importance of supportive policies and educational programs in enhancing the impact of financial services.
Conclusion: This study found that while FinTech adoption is statistically significant, it negatively impacts women’s economic empowerment due to structural barriers. In contrast, financial inclusion positively influences empowerment. Demographic factors also play a key role, highlighting the need for supportive policies and systems to complement digital financial services for women.
Recommendations: To enhance women’s economic empowerment through FinTech and financial inclusion, the study recommends improving digital literacy, designing gender-sensitive financial products, subsidizing transaction costs, expanding digital infrastructure, supporting women’s entrepreneurship, and enacting inclusive policies. These combined efforts can transform digital finance into a tool for sustainable and inclusive empowerment in Kenya.
Keywords: Financial Technology, Financial Inclusion, Women’s Economic Empowerment, Gender Disparities, Principal Component Analysis
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