Title: Linking Financial Access to Women's Empowerment through Financial Literacy: Insights from Tanzania's Informal Sector
Authors: Sunday Isdory Mkama
Volume: 9
Issue: 9
Pages: 70-79
Publication Date: 2025/09/28
Abstract:
Women's empowerment and access to finance have remained key development issues, especially in relation to poverty reduction, gender equality, and inclusive growth. Despite efforts to improve financial access, women in developing economies still face structural and cultural barriers that restrict their ability to benefit from financial systems fully. This study explores the mediating role of financial literacy between financial access and women's empowerment within Tanzania's informal economy, where most women entrepreneurs operate. Using Financial Capability Theory and the Financial Literacy-Inclusion Nexus as frameworks, the research employed a quantitative cross-sectional design with 384 women entrepreneurs in Dar es Salaam. Applying Partial Least Squares Structural Equation Modelling (PLS-SEM), the results show three primary outcomes: firstly, financial accessibility significantly influences financial literacy; secondly, financial literacy has a positive impact on women's empowerment, including economic independence, decision-making, and self-confidence; and thirdly, financial literacy partly mediates the relationship between financial accessibility and empowerment. These findings emphasise that access to finance is vital but not sufficient on its own without the accompanying financial skills and knowledge. Empowerment results not just from financial access, but also from women's ability to convert that access into sustainable outcomes. The research underscores the importance of combining financial education with inclusion initiatives and advocates for dual-objective strategies that increase financial accessibility while enhancing women's financial capabilities. These findings are relevant for developing theory in financial capability research and informing policy and practice for policymakers and practitioners committed to promoting gender-sensitive financial inclusion and achieving the Sustainable Development Goals in Tanzania.