Analyzing Gender Disparity Through a Financial Inclusion Lens in Tanzania: Is Government Gender-based Policy Intervention Helpful?

1. Introduction

When one says financial inclusion literally the focus is on the availability, accessibility, and usage of financial services for individuals and businesses, which is considered as a fundamental pillar of economic development. Financial inclusion improves the livelihoods of individuals and communities by enabling individuals to save, borrow, invest, and transact as advocated by Ozili, (2020). Apart from improving the livelihood of individuals and communities, financial inclusion particularly contributes significantly to reducing poverty and economic development, playing a key role in achieving sustainable development goals (Beck et al., 2007; Nsiah et al., 2021; Ozili et al., 2022). Financial inclusion has been proven by Ma’ruf & Aryani (2019) to have significantly contributed to achieving SDGs, specifically poverty alleviation.

Meanwhile digital financial services have emerged as a crucial driver of financial inclusion, specifically for developing countries in Africa and Asia as insisted by Khera et al., (2022). Both Ozili (2018) and Kouladoum et al. (2022) consider digitalization as a pillar of financial inclusion in developing countries where digital financial services significantly improve the rate of financial inclusion in African countries. The modern technological developments and the adoption of digital financial services such as mobile money, internet banking, and electronic payment systems lowered the cost of financial transactions which ultimately improved outreach to the poor, Sahay et al. (2020). According to Nguena (2019) Africa has heavily benefited from mobile phone technology and financial innovations which have transformed the financial landscape. This has increased the financial service outreach to rural areas, where the majority of the population were previously excluded.

Gender is one of the common aspects in analyzing the financial inclusion. Unequal social relations and unequal opportunities create gender-specific barriers to financial access, which in most cases have resulted in missed opportunities for growth and persistent inequalities, Sahay et al.;(2020). In the hunt for gender equality, financial inclusion stands out as a critical frontier. Despite significant strides in various sectors, women in sub-Saharan Africa continue to face disproportionate challenges in accessing financial services, DFI, (2024). According to DFI, (2024) the digital revolution has steered in unparalleled opportunities for economic growth, connectivity, and innovation. However, it also presents challenges, particularly in ensuring that these benefits are accessible to all, regardless of gender. More precisely, empowering women through financial inclusion not only fosters gender equality but also stimulates economic growth, enhances social well-being, and leads to more resilient and inclusive societies.

The shift towards digital technology during the COVID-19 pandemic has exposed the deep digital divide and missed opportunities, particularly for unbanked women and rural populations (Agur et al. (2020). As countries continue to embrace the ‘new normal’, digital financial services will play a more prominent role as a platform for individuals and businesses to access a variety of financial products and services. Financial inclusion helps in reducing gender disparity and empowers women to save, invest, and transact through access to financial services. Women who are included in access to financial services are more active economically and contribute towards entrepreneurship and development (Bhatia & Singh, 2019; Goel & Madan, 2019; Aziz et al., 2022). Financial development has a positive effect on women's empowerment, while gender discrimination, despite financial development, has a negative impact on women's empowerment, Arshad, (2023). Despite this progress, globally, a significant gender gap in account ownership persists, though mobile money shows promise in narrowing this divide, Demirgüç-Kunt et al., (2022). In many countries, particularly in developing nations, significant disparities exist in access to financial services. Among the most notable disparities is gender inequality, with women often facing greater challenges in accessing and utilizing formal financial services compared to men (Kara et al., 2021; Tay et al., 2022).

Tanzania is among the developing countries that have made outstanding progress in the increase of access to formal financial services, which increased by 13% during the last decade, the increase is largely driven by mobile money services, Finscope, (2023). The increase was reflected in both access to and use of formal financial services. However, despite the deliberate efforts to boost access to formal financial services, financial inclusion in Tanzania is gender-biased, and women still lag behind in both access to and use of formal financial services. According to Finscope, (2023) the formal financial inclusion gender gap narrowed from 10%-points in 2017 to 3%-points in 2023. In addition, there is a noted significant decrease in female exclusion from 30% in 2017 to 19.4% in 2023. Nonetheless, the banking gender gap remained more or less the same between 2017 and 2023, with about 9%-point more men being banked compared to women indicating a less deepened financial service penetration among women than among men. While Tanzania’s National Financial Inclusion Framework for 2022–2028 aims to increase access to financial services among the adult population to over 80 percent by 2028, challenges remain regarding women’s access to and use of financial services. The elimination of gender disparities in financial inclusion may be at risk or remain a mirage, partly because of unequal access to and use of digital financial channels, especially given the accelerated shift to digital financial services. There is a need for a better understanding of gender dynamics and barriers to financial inclusion in the context of everchanging dynamics in technological innovations. Gender disparities in financial inclusion have been widely studied across various regions, yet there is a scarcity of research analyzing   gender disparities in financial services in Tanzania. This paper deliberately assesses the gender gap in financial inclusion, and evaluates the regulatory interventions used in Tanzania to close the gap as reported in Finscope, (2023).

2. Relevant Literature and Hypotheses Development

Financial inclusion ensures all individuals and businesses have access to financial services, specifically vulnerable groups who are excluded from using financial services (Beck et al., 2007; Lyons & Kass-Hanna, 2019; Demirgüç-Kunt et al., 2022). Financial inclusion plays a pivotal role in fostering economic growth and poverty reduction, aligning with the global efforts to achieve the United Nations' Sustainable Development Goals (SDGs), particularly Goal 1 (No Poverty), Goal 8 (Decent Work and Economic Growth), and Goal 10 (Reduced Inequality) (Sarma & Pais, 2011; Tay et al., 2022; Ozili, 2022). Erlando et al. (2020) study the impact of financial inclusion on economic growth in Indonesia using a bivariate causality model and find that FI significantly contributes to economic growth, poverty reduction, and income inequality. Similarly, Daud (2023) finds that financial inclusion and digital technology are positively correlated with economic growth.

A large body of literature highlights that financial inclusion contributes to economic resilience by enabling individuals and businesses to better manage risks, increase investment opportunities, and improve their standard of living (Belayeth Hussain et al., 2019; Ajide, 2020; Hussain et al.,2021). For instance, Sakyi-Nyarko et al. (2022) reveal that financial inclusion significantly enhances household financial resilience, with savings and formal account ownership yielding stronger effects compared to mobile money. Urrea & Maldonado (2011) demonstrate that access to savings and credit, both formal and informal, significantly mitigates household vulnerability to income shocks. Similarly, financial inclusion enhances entrepreneurship by enabling access to capital and insurance, which are essential for starting and growing businesses (Goel & Madan, 2019; Wellalage et al., 2021). Hasan et al. (2023), using the Global Findex database, reveal that women entrepreneurs with greater digital financial literacy are more likely to use formal banking. Furthermore, digital financial services have revolutionized access, particularly in remote areas, by overcoming geographical and infrastructure barriers (Tay et al., 2022). Kamara & Yu (2024) highlight that FinTech enhances financial inclusion by improving demographic access but negatively impacts geographic reach and usage. A number of studies reveal that financial inclusion significantly reduces income inequality and improves household income (Kim, 2015; Zhang & Posso, 2017; Kling et al., 2020; Adera & Abdisa, 2023).

However, despite progress in some regions, a large segment of the global population remains excluded from formal financial services. According to Global Findex (2021), 1.4 billion adults still remain unbanked, with the vast majority living in developing countries (Demirgüç- Kunt et al.,2022). While extensive research explores the impact of financial inclusion on economic growth, poverty reduction and resilience, Tanzania remains largely absent from these discussions. Most studies focus on regions with more developed financial infrastructures, while Tanzania faces unique challenges that have not been investigated.

Access to financial services is often limited by lack of education or financial literacy (Lusardi & Mitchell, 2011; Ambarkhane et al., 2022). Kara et al. (2021) reveal that access to credit is positively influenced by higher education and financial literacy, while demographic and socio-economic factors, such as lower income, minority status, gender, and disability, significantly hinder access, leading marginalized groups to rely on high-cost fringe finance providers. Similarly, Saluja (2023) in a systematic review revealed that women’s financial inclusion is hindered by barriers such as patriarchal norms, psychological constraints, low income, limited financial literacy, restricted accessibility, and ethnic disparities, while interventions including government initiatives, microfinance, formal savings, asset transfers, self-help groups, and digital solutions have shown potential to address these challenges.

Demirgüç-Kunt & Klapper (2012a) using the Global Findex database, reveal that limited access to formal financial institutions, reliance on informal methods, and insufficient support for high-growth enterprises highlight significant barriers to financial inclusion. Studies show that in many developing countries, cultural norms, religious beliefs, and gender biases restrict financial inclusion (Demirguc-Kunt et al., 2014; Lu et al.,2021; Kulkarni & Ghosh, 2021; Aslan, 2022). Anyangwe et al. (2022) find that cultural dimensions, such as power distance, masculinity, and uncertainty avoidance, act as barriers to financial inclusion, while individualism, long-term orientation, and indulgence positively influence formal account ownership and usage. Additionally, Demirgüç-Kunt et al. (2013) find that Gender disparities in financial inclusion are influenced by legal restrictions, discriminatory norms, and socio-cultural factors, with women in restrictive environments significantly less likely to own accounts or access savings and credit services.

Studies highlight that high cost, regulatory requirements (e.g., KYC), and distance significantly impact financial inclusion and hinder financial services usage (Allen et al., 2016; Aslan, 2022; Saluja et al., 2023). Sanderson et al. (2018) demonstrate that barriers to financial inclusion include documentation requirements and the distance to financial access points, while age, education, financial literacy, income, and internet connectivity are key enablers. Ghosh (2020) states that distance is a major barrier to using bank accounts, with both travel time and physical distance reducing financial inclusion. Demirgüç-Kunt & Klapper (2012b) reveal that barriers such as high costs, physical distance, and lack of documentation significantly limit account usage. In the same way, Ayyagari & Beck (2015) highlight that financial inclusion in developing Asia is low, with fewer than 27% of adults having a formal bank account and only 33% of enterprises having access to credit or loans. Despite superior banking sector depth in the region, significant barriers such as cost, geographic access, and lack of identification hinder broader financial inclusion. Similarly, Fungáčová & Weill (2015) reveal that lower income and education are associated with less use of formal accounts and savings. Additionally, a large body of literature highlights that higher income is positively related to the usage of financial services and financial inclusion, or vice versa (Demirgüç-Kunt & Klapper, 2012a; Park & Mercado, 2015; Sanderson et al., 2018).

Globally, women are disproportionately excluded from financial systems, reflecting broader gender inequalities. According to Global Findex 2021, the gender gap in developing economies has fallen from 9% to 6% (Demirgüç-Kunt et al., 2022). Women face more barriers to access to credit compared to men (Sandhu et al., 2012; Mascia & Rossi, 2017). Social and cultural norms restricting women's mobility, decision-making power, and access to education are major contributors to this disparity (Demirgüç-Kunt et al., 2013). Similarly, Pahlevan Sharif et al. (2013) highlight that education is a key in reducing the gender gap in financial inclusion. In addition, Ndoya & Tsala (2021) reveal that income is the largest contributor to the gender gap in access to financial products and services, while education is the primary driver of the gap in their usage. Esmaeilpour Moghadam & Karami (2023) confirm that education reduces the gender gap in financial inclusion; however, this effect is insignificant in countries with high levels of gender discrimination.

Roy & Patro (2022) in a structured systematic literature review of 75 peer-reviewed articles (2000–2021) revealed that gendered financial inclusion is primarily influenced by demand-side factors, alongside socio-economic and cultural barriers. Studies highlight that digital financial services and FinTech help reducing gender gap (Esmaeilpour Moghadam & Karami, 2023; Mabrouk et al., 2023; Yeyouomo et al., 2023). For instance, Yeyouomo et al. (2023) in a study Sub-Saharan Africa reveal that fintech helps reduce the gender gap in access to and use of financial services. In contrast, Johnen & Mußhoff (2023) find that formal digital credit has unexpectedly widened the gender gap in financial inclusion, primarily due to socio- economic disparities and uniform contract terms. Bala & Singhal (2018) also confirm this and state that this is primarily driven by exclusion from basic technological skills, social norms, and financial constraints. Ashoer et al. (2024) find that men are more likely than women to benefit from mobile fintech services. The digital gender divide limits women's access to ICTs, skills, and leadership, potentially worsening gender inequalities (Kuroda et al., 2019). Fowowe (2025) further find that financial inclusion significantly enhances agricultural productivity in Mali, while gender gaps persist, with women's productivity notably lower than men.

Following these discussions, one may come up with a general understanding that men are more included in formal financial services than women, and that women are more included in informal financial services while more women are financially excluded than men. Therefore, the following hypotheses are proposed;

H1: There is a significant gender difference in formal financial service usage among Tanzanian adults

H2: There is a significant gender difference in informal financial service usage among Tanzanian adults

H3: There is a significant gender difference in financial exclusion among Tanzanian adults

3. Approach and Data

3.1 Data

This study benefited from Tanzania’s FinScope surveys data. The FinScope surveys are national surveys representative of individuals aged sixteen years or older which are conducted after every 5 years, and the study uses the data collected in 2009, 2013, 2017 and 2023. The FinScope surveys use four ‘access strands’ to denote respondents’ levels of financial inclusion: (i) use banks; (ii) use non-bank formal products; (iii) use only informal mechanisms; (iv) are excluded. Respondents are ranked according to their highest level of usage. According to the survey, formal bank institutions are those supervised by a financial services regulator, the Bank of Tanzania (BOT). Non-bank formal financial institutions are those with some formal supervision, but not by a financial services regulator. This category includes savings and credit cooperative societies, microfinance institutions, remittance companies, and mobile money. The informal segment includes small, usually community-based organizations, such as saving or credit groups (SACCOS). The totally unserved or excluded category covers everyone else and includes people who may use non-monetary means to save, borrow, or transfer money, that is, friends and family, or saving at home or in-kind.

3.2 Descriptive Statistics

Table 1 shows the usage of formal financial services, informal financial services and complete exclusion from any financial service by gender, while Fig. 1 visualises these disparities. The usage of formal financial service shows the largest and most consistent gap, increased significantly between 2009 and 2013 before it fell in 2017 and picked up slightly again in 2023. The usage of informal financial services notably dropped between 2009 and 2013, and this reflects the increase in usage of formal financial services, which may be due to some intervention by the Government to improve financial sector attracting more women to participate in the sector. This may also be observed by a slight drop in financial exclusion gap between 2009 and 2013. The possible reason may be due to the facts that between 2009 and 2023, Tanzania made remarkable progress in expanding the opportunities for adults to access financial services. Various government- sponsored studies were conducted to better understand the challenges, and this resulted in a national agenda that prioritized financial inclusion, particularly the inclusion of women and vulnerable groups. The launch of Tanzania’s first National Financial Inclusion Strategy in 2014, combined with the introduction of technology for mobile phone financial services, led to female’ formal financial inclusion rising from around 15% in 2009 to 61% in 2023 (Figure 1 and 2).  Reliance on informal financial services by women declined from 30% in 2009 to 9% 2023; and the financially excluded women were slashed down from 55% in 2009 to 30% in 2023.

Table 1. Descriptive summary of financial services utilization by gender (2009-2023)

Figure 1: Financial Services Utilization and gender gap (2009-2023)

Figure 2: Uptake of Financial Services by gender

4. Analytical Results

The Kruskal-Wallis test was conducted to assess gender differences in the usage of financial services and financial exclusion, and whenever the test indicated significant differences a Dunn’s post-hoc test was performed for significant variables to determine which specific groups (male or female) differed significantly within those parameters, Dunn, (1964).

Table 2 below presents   the   Kruskal-Wallis   test   which shows significant gender differences in formal financial services usage   with   p-values 0.01.   These findings suggest that gender plays   a crucial role   in determining access to and usage of formal financial services in Tanzania. This finding aligns with  Antonijević et al; (2022) who found a significant gender gap in access and usage of financial services across the globe using the Global Findex database 2017. Furthermore, the Kruskal-Wallis test also shows a significant gender difference in usage of non-financial services with p-value 0.03. Some studies are consistent with the findings presented in this paper, for instance, Pahlevan Sharif et al; (2013) who analysed the gender gap in financial inclusion in low-income economies found significant differences with men using the services at a higher rate. Similarly, Aziz et al; (2022) found that women are less likely to use financial services, especially in countries with religious restrictions Finally, the test shows a significant gender difference in financial exclusion with p-value 0.04. While Table 2 provides only the presence of significant gender differences in all three variables-formal financial services, informal financial services and financially excluded, the nature of these differences are analyzed using Dunn’s test. The results indicate that women are relatively less likely to access formal financial services compared to men. These results were obtained without controlling for a variety of factors such as education, income, marital status and employment. However, the impact of education on the likelihood of accessing financial services is notable suggesting that the relative significance of education in the utilization of traditional formal financial services. Furthermore, factors such as income, mobile phone ownership, and formal employment, in which women rank lower, significantly increase financial inclusion, and this ultimately places further constraints on their access to both formal and informal financial services

Table 2: Results of the Kruskal-Wallis test

Kruskal-Wallis test only detects the presence of differences but does not specify which groups differ. In this case Dunn’s test with Bonferroni correction was applied to adjust for multiple comparisons (Dinno, 2015). Table 3 below explores the specific nature of gender differences. The test confirmed significant gender differences in usage of formal financial services, with men being significantly more likely to own use formal financial services than women (Z = -2.44, p = 0.01).  Similarly, women were found to have significantly higher rates of using informal financial services compared to their counterpart men (Z = -2.25, p = 0.02). Regarding financial exclusion   the test shows that women are excluded from financial services significantly more than men (Z = -1.99, p = 0.04). This test provides further clarity, confirming significant gender differences in the services identified as significant in the Kruskal-Wallis test, with men consistently exhibiting higher usage rates, aligning with previous studies on the gender gap in financial inclusion (Antonijević et al., 2022; Demirgüç-Kunt et al., 2013; Mani, 2016;  Kuroda et al., 2019; Aziz et al., 2022; Demirgüç-Kunt et al., 2022; Roy & Patro, 2022).

Fungáčová & Weill (2015) found that lack of income and education are associated with less use of formal accounts and savings. Additional barriers, such as distance, procedural requirements, and cultural norms, exacerbate exclusion, particularly for women, aligning with the findings of Anyangwe et al. (2022), Demirgüç-Kunt et al. (2013), Allen et al. (2016), and Saluja et al. (2023). For instance, Anyangwe et al. (2022) highlight that cultural factors like power distance and masculinity hinder financial inclusion, while individualism and long-term orientation promote formal account usage. Mani (2018) finds that a significant gender gap persists in South Asian countries, with women in Afghanistan and Pakistan facing greater exclusion due to socio-cultural barriers and limited financial literacy. Similarly, Demirgüç- Kunt et al. (2013) find that legal restrictions, discriminatory norms, and socio-cultural factors significantly limit women's access to financial services.

Table 3: Results of Dunn’s Post-Hoc test

5. Influence of Government Interventions on Gender Gap Reduction

Results from this study show a consistent improvement of women engagement in financial inclusion significantly from 2017 in Tanzania. This may not be a surprise due to intentional efforts put forth by the Government towards women empowerments and categorically focusing on gender-based interventions. Such efforts are earmarked below;

5.1 Setting women’s financial inclusion as an explicit policy objective with quantitative targets

Tanzania’s 2013-2016 Financial Inclusion Framework gave priority to poor rural households and their enterprises, including low-income women and youth, without specifying gender targets. Following the high-level conference on women’s financial inclusion held in Yamoussoukro in August 2015 and the 7th AFI Global Policy Forum (GPF) held in Maputo in September 2015, the Bank of Tanzania decided to introduce gender targets and indicators in the revised measurement framework, with the possibility of integrating gender issues into the Financial Inclusion National Framework itself, and the implementation of the proposal started in 2016. This effort saw an immediate increase in women’s formal financial service usage by 10% in 2017 (from 51% in 2013 to 61% in 2017) although the usage rate slightly dropped to 60.5% in 2023.

5.2 Disaggregating financial inclusion data by gender

One of the key gender-based intervention in (2013-2016) Financial Inclusion Framework is intentionally aiming at narrowing the gender gap in access to financial services. Perhaps most notably, Tanzania’s internationally recognized mobile money framework and the establishment of interoperability have provided a major impetus to women’s financial inclusion. The impact of implantation of this framework has been seen in 2017 where the migration from using informal financial services formal financial services was noted, as usage of informal financial services dropped from 17% in 2013 to 5% in 2017 and slightly dropped to 4.6% in 2023, while usage of formal financial services improved from 51% in 2013 to 61% in 2017 and slightly dropped to 60.5% in 2023. As mobile money receives growing attention for bringing women into the formal financial system, Tanzania’s conducive policy environment for mobile money stands out as a success. The explanation for slight droppage of usage of formal financial services between 2018 and 2023 is the introduction of mobile money taxation which generally discouraged the usage of mobile money transactions.

5.3 Financial education and financial literacy programs

A financial capability survey was conducted in Tanzania in 2014, with results presented in a 2015 report. The framework informed that women are left behind in financial education, and hence in 2016 the education program was developed to serve as a special program for women, and largely rolled out to women entrepreneurs/women at home and rural poor/“survivalists” as targets for financial education interventions. It is believed that the financial education intervention rolled out in 2016 contributed significantly to the improvement of financial inclusion for women between 2013 to 2017 as previously analysed

6. A Concluding Remark and Policy Implication

This study examined gender disparities in financial services utilization in Tanzania using FinScope database. The findings reveal significant gender differences in formal financial services usage, informal financial services usage and complete financial exclusion. The results show that women are left behind by men in usage of formal financial services throughout the period examined, while rate of women using informal financial services is reported to be higher than that of their men counterparts as compared to their men counterparts. It was further found that a greater percentage of women are completely financially excluded as compared to men. These results underscore the need for targeted policies to promote financial inclusion and reduce gender-based financial inequalities in Tanzania. The study proposes policymakers to prioritize targeted interventions to address gender disparities in financial service usage. Initiatives such as gender-responsive financial products, financial literacy programs and streamlined account- opening processes can help bridge the gap. Efforts should also aim to reduce cultural and procedural barriers that disproportionately affect women, ensuring equitable access to financial services.

Since the access to financial services is overwhelmed by the use of digital technologies, and as the country continues to embrace digital transformation, it is crucial to put in place policies, measures, and strategies that are inclusive and gender-sensitive, so that digitally constrained population groups including women can effectively participate and benefit fully. Thus, the promotion of equal access to and usability of digital financial facilities, including mobile phones and smartphones is critical not only for enhancing financial inclusion and closing the gender gap, but also for enhancing the resilience of households and businesses. Furthermore, there is a need for enhancing financial literacy, especially among women. Policies to promote financial inclusion should also be cognizant of gender differences in preferences. For instance, policies and initiatives to increase financial inclusion and the use of formal financial services by women should be geared towards promoting saving groups to reach out to more women, as bank-based products and initiatives largely benefit men. The provision of safety nets for extremely needy cases should be considered.

This study does not explore regional or urban- rural disparities, which may reveal even greater gender gaps in financial inclusion. Future research should focus on these dimensions to provide a more nuanced understanding of financial exclusion across Tanzania. Additionally, qualitative studies could investigate socio-cultural factors in greater depth, complementing quantitative findings.

Author Contributions: All authors contributed to this research.

Funding: Not applicable.

Conflict of Interest: The authors declare no conflict of interest.

Informed Consent Statement/Ethics Approval: Not applicable.

Declaration of Generative AI and AI-assisted Technologies: This study has not used any generative AI tools or technologies in the preparation of this manuscript.