Access to finance ‘strengthens climate resilience’ among sub-Saharan women

Empowering women through greater access to finance could “strengthen” households’ resilience to “climate shocks”, according to a new study.  

Published in Climate Risk Management, it analyses the impact of financial access on “women-headed households” in sub-Saharan Africa. 

The study finds that where women had formal financial access – such as through owning a bank account – households were more able to withstand short-term shocks.

It adds that “climate shocks”, such as extreme weather events and the impacts of climate change, can cause economic crises, which destabilise communities and households. 

However, the authors say that in order to protect households from long-term climate vulnerabilities – including “droughts, floods and sea-level rise” – financial access would need to be paired with wider efforts to tackle gender inequality. 

They add that the findings could have important implications for policy in sub-Saharan Africa, where many countries and households are vulnerable to climate disasters. 

Financial inclusion 

The study highlights that entrenched gender disparities mean many women still have unequal access to financial services in sub-Saharan Africa

For example, women are still less likely to have their own bank accounts and instead are often dependent on male relatives for access to finance. 

The number of women with access to an account in the region had risen to 52% as of 2024, according to data from World Bank Group.

However, as shown in the chart below, the gap between men and women has also increased, rising from just under 5 percentage points in 2011 to 12 in 2024. 

Using survey data from Afrobarometer, the new study analyses 25,511 women-headed households across 37 sub-Saharan countries. 

The authors use the Organisation for Economic Co-operation and Development’s (OECD) framework to measure “financial inclusion”. This looks at factors such as having a bank account, owning a mobile phone and having internet access. 

Francis Anaisie, a co-author on the study, tells Carbon Brief the researchers were motivated by the UN’s sustainable development goals (SDGs). Anaisie, an economist at the University of Cape Coast, Ghana, says the study specifically looked at SDGs five and 13, on gender equality and addressing climate issues. He adds: 

“Financial inclusion is one of the key policy tools for empowering women or for empowerment. But as to whether this actually translates into better climate outcomes for women is not known or is limited; this study seeks to address that gap.”

The study finds households with higher levels of financial access for women had higher levels of women’s empowerment, when this is defined as the ability to make choices and have control over economic and social outcomes. 

This was checked by cross-comparing financial access against different measures of women’s empowerment, such as financial security, voting rights and connection to communities.

In particular, the study found that “financially included” women had greater political and economic empowerment, such as financial security and voting rights. On some measures of social empowerment, however, the link was weaker – financial access alone was not enough to erase cultural and social barriers to gender equality. 

Women and climate change 

It has been well documented that women are more vulnerable to the impacts of climate change than men. 

Environmental shocks affect women disproportionately due to a range of factors. These include income disparities, higher rates of displacement and unequal access to land.

Financial inequality and barriers to economic resources, such as needing internet access to make digital payments, play a key role in climate vulnerability, says Tracy Kajumba. She is director for the Least Developed Countries initiative for Effective Adaptation and Resilience (LIFE-AR) interim secretariat at the International Institute for Environment and Development (IIED). 

Kajumba, who was not involved in the study, explains to Carbon Brief:

“Women are on the front line doing farming, planting, harvesting and these things that are all impacted [by climate change]. If they don’t have the income to invest either in drought-resistant crops or water-saving technologies, it becomes difficult for households to adapt.”

Calculating climate resilience 

The new study measures the impact of financial inclusion on women’s empowerment and, in turn, on climate resilience.  

It evaluates a household’s ability to withstand and recover from “shocks and stressors” by using a UN Food and Agriculture Organization metric for “resilience index measurement and analysis” (RIMA). 

For example, questionnaires are used to gather information about households in certain areas. The data is then used, together with key indicators, to quantify a household’s resilience to food insecurity, climate variability and economic crisis, amongst other risks. 

The 25,511 households surveyed across sub-Saharan Africa were found to be relatively resilient overall and had a high capacity to bounce back from climate shocks. However, they had much lower ability to adapt, in order to build protective capacity in advance of extreme events.

In addition, the study finds that women’s financial empowerment had a positive impact on a household’s ability to “absorb” a climate shock, suggesting that financial access is critical for responding to climate change. 

Increased empowerment through financial access enables women to make decisions about planting crops, to access credit in emergencies and to buy or sell food at a better price, the study notes. 

For example, it says increased financial access and women’s empowerment help households to deal with the immediate consequences of an extreme weather event, such as a drought. This could be through building community mutual-support networks and by enabling access to savings, to keep the household running. 

Anaisie says the study shows women’s empowerment has a significant impact on climate resilience. He tells Carbon Brief: 

“If we include women in the financial system, in the case of any climate issue they can save, they can be independent, they can rely on investment to absorb these shocks. This empowerment will help them to be more resilient to climate shocks…We can make progress because SDG goals are all about inclusiveness. It’s all about inclusive growth.”

However, the study notes that financial access does not necessarily create long-term change, which would make the household less vulnerable to extreme weather in the first place. 

The authors suggest that lasting structural and cultural change is important for bringing about long-term resilience. They say that policies to address gender inequalities would help bring this about.

They say such policies could include gender-sensitive agricultural credit schemes, subsidised climate insurance for women farmers in drought-prone regions, joint land-titling programmes and quotas for women in local climate-adaptation committees. 

Such policies would have helped women impacted by recent severe floods in Ghana to protect their savings, Anaisie explains. He tells Carbon Brief: 

“Women are engaged in economic activities, especially informal activities. They have resources and money, but when the flood came in, many women lost that. If they had access to insurance, this flood wouldn’t have cost them that much. 

“So, if the government comes out with financial initiatives, training, civic education and gender-focused initiatives, leadership training, women will be empowered and this will translate into their resilience with regards to climate change.”

Addressing climate vulnerability in sub-Saharan Africa 

The study could have policy implications for sub-Saharan Africa, a region particularly vulnerable to the effects of climate change. The region faces increasingly extreme weather, heatwaves, droughts, wildfires and floods, as well as food scarcity and threats to crops. 

The study suggests that policies to address structural and cultural barriers to women’s financial autonomy could be a key way to build climate resilience across the region. 

However, it recognises that even where financial access is expanded, gender norms and cultural constraints continue to shape women’s social empowerment. This, in turn, affects their ability to adapt to climate change in the long term. 

Ultimately, addressing structural inequalities is needed to minimise climate vulnerability, says Kajumba. She adds that supporting adaptation with financial access can allow households to absorb shocks without falling into poverty – and to rebuild after climate impacts. 

Kajumba says that supporting adaptation with women’s financial access can allow households to absorb shocks without falling into poverty – and to rebuild after climate impacts. She adds:

“When they are supported [with] microloans, savings and all that, you will see change in income, change in households, change in health and education for the children as well.”

However, Kajumba notes that structural inequalities still “amplify” women’s vulnerability to climate impacts and make it harder for them to exercise agency and leadership. She adds:

“The tools that are being used are not always favourable for women…When we look at women in leadership and participation, you cannot lead or you cannot participate unless you have some level of income.”

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