Financial Access Boosts Women's Climate

Greater financial access for women can strengthen household resilience to climate shocks, according to a new study published in Climate Risk Management. The research, analyzing 25,511 women-headed households across 37 sub-Saharan African countries, finds formal financial tools like bank accounts improve a household's ability to withstand short-term economic crises caused by extreme weather.

However, the authors state that protecting households from long-term climate vulnerabilities, including droughts, floods, and sea-level rise, requires pairing financial access with wider efforts to tackle gender inequality. The findings could have important policy implications for a region highly vulnerable to climate disasters.

Financial Inclusion and Gender Gaps

The study highlights persistent gender disparities in access to financial services across sub-Saharan Africa. Women are often dependent on male relatives for finance and are less likely to have their own bank accounts. While the number of women with access to an account in the region rose to 52% by 2024, the gender gap has widened significantly.

Using an OECD framework, the study measured financial inclusion through factors like bank account ownership, mobile phone access, and internet availability. Co-author Francis Anaisie, an economist at the University of Cape Coast, Ghana, said the research was motivated by UN Sustainable Development Goals on gender equality and climate action. He noted that while financial inclusion is a key policy tool for empowering women, whether it translates into better climate outcomes was not well known, a gap this study sought to address.

The research found a clear link. Households with higher levels of financial access for women showed higher levels of women's empowerment, defined as the ability to make choices and control economic and social outcomes. This empowerment was particularly strong in political and economic areas like financial security and voting rights. The link was weaker for social empowerment measures, indicating financial access alone cannot erase cultural barriers.

The Climate Vulnerability Link

Women are disproportionately affected by climate change due to income disparities, higher displacement rates, and unequal access to land. Tracy Kajumba, director for the LIFE-AR initiative at IIED, explained the connection to financial barriers. She said women are on the front line doing farming and other activities impacted by climate change, and without income to invest in adaptation, it becomes difficult for households to adapt.

Measuring Resilience and Policy Needs

The study used a UN Food and Agriculture Organization metric to quantify household resilience to shocks like food insecurity and economic crisis. The surveyed households showed a relatively high capacity to bounce back from climate shocks but a much lower ability to adapt in advance of extreme events.

Critically, women's financial empowerment positively impacted a household's ability to absorb a climate shock. This access enables decisions about crops, emergency credit, and better food prices. It helps manage immediate consequences, like using savings or community networks during a drought.

Anaisie stated that including women in the financial system means they can save, be independent, and rely on investment to absorb climate shocks. Yet the study notes financial access does not automatically reduce long-term vulnerability. Lasting change requires structural and cultural shifts.

The authors suggest policies like gender-sensitive agricultural credit, subsidised climate insurance for women farmers, joint land-titling, and quotas for women in local climate committees. Anaisie pointed to recent floods in Ghana, where such measures could have protected women's savings. He said if they had access to insurance, the flood would not have cost them as much. Ultimately, addressing structural inequalities is needed to minimize climate vulnerability, allowing households to absorb shocks without falling into poverty.