Financial inclusion, women empowerment and the role of active banking behaviour

Purpose Financial inclusion is widely promoted as a tool for empowering women, yet its actual effectiveness in achieving this goal remains unclear. This study addresses this critical gap by investigating whether increased access to financial services translates into genuine financial empowerment for women. Design/methodology/approach The study employs nationally representative survey data from India, covering over 23,700 women. Statistical analyses such as ordinary least squares regression, coarsened exact matching, propensity score matching, instrumental variable regression and mediation analysis were conducted to assess the relationship between financial inclusion and women’s financial empowerment. Findings The results indicate that financial inclusion significantly enhances the financial empowerment status of women. This empowerment manifests in various dimensions, including enhancement in resource endowments and financial agency reflecting the transformative potential of financial inclusion initiatives. The results also imply that the relationship between women’s financial inclusion and financial empowerment is partially mediated by active banking behaviour. Practical implications The findings underscore the importance of fostering financial inclusion to empower women economically, offering policymakers actionable insights to design gender-sensitive financial policies and programs. Social implications Improved financial inclusion among women can drive broader societal benefits, including greater gender equity and enhanced economic development. It highlights the role of financial inclusion as a tool for social transformation in developing countries. Originality/value This study contributes original empirical evidence to the discourse on financial inclusion and women’s financial empowerment in developing countries, providing a robust basis for informed policy formulation.