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Green Microfinance and Women’s Empowerment: Why Does Financial Literacy Matter?

Author

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  • Cheng-Wen Lee

    (Department of International Business, College of Business, Chung Yuan Christian University, 200 Zhong Bei Rd, Taoyuan 32023, Taiwan)

  • Andrian Dolfriandra Huruta

    (Ph.D. Program in Business, College of Business, Chung Yuan Christian University, 200 Zhong Bei Rd, Taoyuan 32023, Taiwan
    Department of Economics, Faculty of Economics and Business, Satya Wacana Christian University, 52-60 Diponegoro Rd, Salatiga 50711, Indonesia)

Abstract

This study investigated the role of financial literacy in the relationship between women’s empowerment and green microfinance. We set a conceptual model with green microfinance as an outcome variable, financial literacy as a mediating variable, and women’s empowerment as an exposure variable. Variance-based SEM was employed for analysis. The results show that the exposure and mediating variables have a significant direct and indirect impact on the outcome variable. The relationship between women’s empowerment and green microfinance is partially mediated by financial literacy. Local wisdom-based financial literacy is found to be an alternative for mainstreaming women’s empowerment in local development. In addition, gender-targeted programs need to consider pro-literacy policies for achieving green microfinance sustainability. By using financial literacy as a mediating variable, this study contributes to the current literature on the relationship between women’s empowerment and green microfinance.

Suggested Citation

  • Cheng-Wen Lee & Andrian Dolfriandra Huruta, 2022. "Green Microfinance and Women’s Empowerment: Why Does Financial Literacy Matter?," Sustainability, MDPI, vol. 14(5), pages 1-13, March.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:5:p:3130-:d:766030
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    References listed on IDEAS

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