Access to Digital Financial Services and Women Empowerment: Evidence from Rural Rwanda

This study investigated the extent to which access to digital financial services empowers women to engage in more high value activities within the household. The study used the 2020 Rwanda FinScope Survey data, a nationally representative data set covering 12,480 individual respondents from all the districts in the country. Using a control function (CF) instrumental variable technique, the study found that mobile money increased womens ability to make decisions about the management of household income on their own or jointly with their partner (agency). The results further indicate that mobile money increased female access to credit. Usage of mobile money had a positive and significant effect on agency for women residing in rural Rwanda. Although females residing in female-headed households experienced an increase in agency and access to credit, the rate of change for females residing in male-headed households were comparatively higher. The results provide evidence of incremental agency benefits that digital financial inclusion has for women whose baseline decision-making power is low, especially in patriarchal societies where women have been historically disenfranchised in household decision-making. Thus, mobile money could be used as a tool for poverty reduction and service providers; can invest in developing services that deepen household savings and credit through mobile money to further contribute to improvement of household welfare.