ENHANCING WOMEN ECONOMIC EMPOWERMENT THROUGH FINANCIAL INCLUSION:EVIDENCE FROM SMEs IN ETHIOPIA

Abstract

Financial inclusion is considered one of the most effective catalysts for the economic growth of any nation. The study aims to examine the role of government policies and regulations on women’s economic empowerment through financial inclusion: evidence from small and medium-sized enterprises in Ethiopia. To achieve the objective, this study used an explanatory research design and a mixed research approach. The study adopted both primary and secondary sources of data. Primary data was collected using questionnaires, and secondary data was collected from the review of different related works of literature, the internet, and journals. The target population of the study was all registered women entrepreneurs found in Addis Ababa. For this study, a judgment sampling technique was used to select respondents from women SMEs, and data were collected from 324 women-owned SMEs in Ethiopia. SMART-PLS version 3.3.5 was used to estimate both measurement and structural analysis of research variables. The study's finding implies that government policies and regulations positively and significantly affect women's economic empowerment in both direct and indirect effects. Besides, financial inclusion positively and significantly affects women’s economic empowerment directly. Hence, the partial mediating role of financial inclusion is observed. More specifically, the study result implies that constraints on financial inclusion like a collateral requirement, start-up capital, illiteracy level, high-interest rate, bureaucratic procedures, and lack of technical skills hinder women’s economic empowerment in Ethiopia. The study is novel in contributing contemporary empirical literature on the issue of women empowerment and financial inclusion in a single study and provides evidence for the governments to set different economic policies that deliberately affect the level of financial inclusion.