The Impact of Financial Inclusion on Social and Political Empowerment: Mediating Role of Economic Empowerment

The primary purpose of this paper is to examine the impact of financial inclusion on women's social and political empowerment through the mediation of economic empowerment. A multidimensional index is created, using methodology by UNDP, to measure financial inclusion. Women's empowerment is measured through economic, social, and political dimensions. The data collected from 545 women in slums through a structured schedule on a 5-point Likert scale. Exploratory and confirmatory factor analysis was performed to measure the construct. Multivariate statistical techniques such as regression were used to test the relationship between financial inclusion and women empowerment. The findings underscore a discernibly modest representation of women attaining high financial inclusion in slum settings. It is essential to recognise the pivotal role of economic empowerment as a partial mediator within the intricate interplay linking financial inclusion to social and political empowerment. This investigation is grounded in an examination of urban slums but has the potential for broader applicability, encompassing rural regions and locales proximate to financial centers within metropolitan areas to formulate a comprehensive framework for the empowerment of women. The findings underscore the impact of socio-economic and politico-economic factors on the incorporation of marginalized communities into the formal financial system. The current investigation results have implications for policymakers in developing countries that can serve as a valuable resource to enhance women's participation in the formal financial system.