Climate Vulnerability and Female Entrepreneurship: Can Banking Sector Development Offset the Risks?

ABSTRACT Climate change is reshaping economic opportunities, yet researchers still understand little about its gendered consequences, especially for women entrepreneurs operating in climate‐sensitive and resource‐constrained environments. Building on this logic, this study investigates how climate vulnerability (CVI) affects female entrepreneurship (FEP) and whether banking sector development (BSD) can offset these adverse effects. The analysis employs panel data for South and Southeast Asian economies over the period of 1995 to 2023. The empirical analysis was conducted using the cross‐sectionally augmented ARDL (CS‐ARDL) model and robustness was verified through FMOLS. The results show that CVI constrains female entrepreneurial activity by increasing economic uncertainty, disrupting local markets, and intensifying household and care burdens on women. In contrast, stronger BSD supports FEP by easing financing constraints and enabling adaptive responses to shocks. Notably, BSD moderates the adverse effects of climate exposure, allowing women entrepreneurs to adjust, rebuild, and sustain business activities in climate‐stressed environments. By highlighting the climate–gender–finance nexus, the study emphasizes that climate risks can widen gender gaps in economic participation if institutional buffers are weak. Therefore, strengthening financial and governance structures can contribute to social inclusion, livelihood stability, and women's economic empowerment under climate stress. Practically, the findings suggest that climate adaptation policies should be integrated with financial inclusion strategies for women. For this, expanding access to credit, resilience‐oriented financial products, and digital banking can help women entrepreneurs cope with environmental shocks and maintain productive engagement in the economy. This study contributes novel evidence by jointly examining CVI and BSD in shaping FEP within a unified moderation framework.