Bridging the Gender Gap in Financial Literacy

The entrepreneurial landscape of Punjab is undergoing a positive transformation, marked by the increasing participation of women who are entering the business world with resilience, creativity, and ambition. From small-scale agri-enterprises to digital startups and service-based ventures, women are contributing significantly to the region’s socio-economic fabric. However, while the momentum is encouraging, female entrepreneurs continue to face deeply rooted structural barriers that limit their potential and impact.

One of the most critical challenges is financial literacy. Many women lack basic knowledge of budgeting, saving, and managing credit, which restricts their ability to make informed business decisions. This is compounded by limited digital financial literacy (DFL), which hinders their use of online banking, mobile wallets, and e-commerce platforms tools that are becoming indispensable in today’s economy. In a digital age, the inability to leverage technology for financial transactions and market outreach puts women-owned businesses at a competitive disadvantage.

Moreover, access to financial services remains unequal. Women often face difficulties in opening bank accounts, securing loans, or qualifying for government support due to lack of collateral, documentation, or awareness. Societal norms and mobility constraints further exacerbate these issues, particularly in rural areas. The digital gender divides where fewer women have access to smartphones and internet connectivity also restricts their engagement with digital markets and financial tools.

Addressing these challenges requires an integrated approach that combines targeted financial literacy programs, gender-responsive banking practices, and community-level digital skills training. Initiatives such as women-focused financial inclusion schemes, mobile-based learning platforms, and support from microfinance institutions can help bridge these gaps. Empowering women with the tools and knowledge to manage their finances and navigate the digital economy will not only uplift individual entrepreneurs but also contribute to broader goals of inclusive economic development and gender equity in Punjab.

Bridging the Gender Divide in Financial Literacy and Inclusion

The persistent gender gap in financial literacy continues to constrain the economic potential of women entrepreneurs in Punjab. A recent RASTA-PIDE funded survey involving 237 entrepreneurs across the province revealed stark disparities in both financial and digital financial literacy (DFL). While 86% of all respondents fell into the low-to-moderate financial literacy range, women fared significantly worse than their male counterparts. Male entrepreneurs scored an average of 54 out of 100, while female entrepreneurs averaged only 42 (PIDE, 2023), highlighting a critical barrier to effective financial decision-making among women.

The disparities were even more severe in digital financial literacy, an increasingly essential competency in today’s tech-driven economy. Men scored an average of 67 out of 100, but women trailed far behind at 34. Alarmingly, not a single woman in the study fell within the "high DFL" bracket. This gap limits women’s ability to use digital financial tools such as mobile banking, e-wallets, and online transactions, which are vital for accessing markets, managing business operations, and securing finance.

Importantly, the study also emphasized the transformative role of DFL in achieving financial inclusion. Logistic regression analysis showed that each one-point increase in a woman’s DFL score raised the likelihood of financial inclusion by 12% (PIDE, 2023). Yet, despite this strong correlation, women in Punjab remain five times more likely than men to be financially excluded (State Bank of Pakistan, 2023). This exclusion not only affects individual women but also undermines broader economic development by sidelining a substantial segment of entrepreneurial talent.

The data underscores an urgent policy imperative: enhancing financial and digital financial literacy among women must become a cornerstone of financial inclusion strategies. Tailored training programs, women-centric fintech solutions, and community-based digital education campaigns can serve as powerful levers for change. Bridging this gender gap is not just a matter of equality, it is essential for building an inclusive and resilient economic future.

Unlocking Punjab’s Economic Potential Through Gender-Inclusive Finance

Gender equality is not only a matter of social justice, it is a powerful driver of economic growth. In Punjab, closing the gender gap in financial literacy and inclusion could significantly enhance economic resilience by empowering women to participate more fully in entrepreneurial activities. According to the World Bank (2023), increased female entrepreneurship correlates strongly with higher employment rates, increased investment, and innovation-led growth. Yet, the full economic potential of women entrepreneurs remains untapped due to structural and institutional barriers that must be urgently addressed.

At the heart of this exclusion are deep-rooted challenges: women’s limited access to collateral due to property ownership disparities, discriminatory lending practices favoring men, cultural norms discouraging formal financial engagement, and an overreliance on informal borrowing. While well-intentioned microfinance programs exist, many fail to address foundational issues like digital illiteracy, lack of trust in financial systems, and gender-insensitive policies (UNDP, 2022).

To enable a transformative shift, Punjab must take a multi-pronged, evidence-based approach. Enhancing financial and digital financial literacy through practical, visual, and localized training can bridge essential knowledge gaps. Collaborating with fintech firms to co-design mobile apps and digital content tailored to women’s needs is key.

Expanding access to digital financial services such as QR payments and mobile banking will democratize finance. Simplified, collateral-free loans with streamlined onboarding processes will enable women with limited documentation to participate. Equally important is gender-sensitizing the financial sector by training bankers and establishing women-only service desks or branches to build trust.

Educational institutions must embed financial literacy into school and vocational curricula, particularly targeting young women in rural areas. Finally, fostering peer mentorship through women-led business networks and community training hubs can build entrepreneurial confidence and knowledge-sharing ecosystems. Punjab stands at a pivotal juncture. With the right policy actions and public-private collaboration, gender-inclusive finance can be the catalyst for inclusive, sustainable economic growth across the province.

Conclusion

Bridging the gender gap in financial and digital financial literacy is both a moral imperative and a strategic opportunity for Punjab’s economic future. Despite rising participation of women in entrepreneurial activities, systemic barriers continue to impede their full inclusion especially in access to finance, digital tools, and decision-making capacities. The data from the RASTA-PIDE study and national statistics point to a critical and widening divide that demands immediate, targeted intervention.

Empowering women with practical financial knowledge and digital competencies will not only enhance their individual business outcomes but also ripple outward to generate broader socio-economic gains. When women are financially literate and digitally included, they invest in their families, communities, and enterprises, driving sustainable development at every level.

To truly unlock this potential, Punjab must embrace a multi-pronged approach: integrating financial literacy into educational curricula, fostering gender-responsive fintech solutions, training financial service providers in inclusive practices, and supporting peer networks for women entrepreneurs. These actions, supported by strong public-private partnerships, can transform the economic landscape by enabling women to become equal participants in the province’s growth story. The path forward is clear. By prioritizing gender-inclusive financial policies today, Punjab can secure a more equitable, innovative, and prosperous future for generations to come.

References: PIDE; State Bank of Pakistan; UNDP; World Bank

Please note that the views expressed in this article are of the author and do not necessarily reflect the views or policies of any organization.

The writers are affiliated with the Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad, Pakistan. For correspondence please contact tahira.sadaf@uaf.edu.pk

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