Authors: Joga Harikrishna, Bhabya Singh
Abstract: Financial literacy has emerged as a crucial determinant of women's empowerment, particularly in rural economies where access to formal financial systems, education, and economic opportunities remains constrained. In the Indian context, rural women often face multiple socio-economic barriers that limit their participation in financial decision-making and income- generating activities. This study empirically examines the role of financial literacy in promoting women's empowerment in rural India, with special reference to the Sagar District of Madhya Pradesh. The research is based on primary data collected from 120 rural women selected from different villages of the district through a structured questionnaire and personal interviews. Financial literacy is assessed using indicators such as awareness of savings instruments, banking services, credit facilities, insurance, and digital financial tools, while women's empowerment is measured through economic, social, and decision-making dimensions. The findings of the study reveal that rural women with higher levels of financial literacy exhibit greater economic independence, enhanced participation in household financial decisions, improved savings behavior, and increased confidence in interacting with formal financial institutions. Participation in self-help groups and access to banking services were found to significantly influence financial awareness and empowerment outcomes. The study also highlights that despite improvements in basic financial knowledge, awareness of insurance products, investments, and digital financial services remains relatively low among rural women. A positive and significant relationship between financial literacy and women’s empowerment is observed, indicating that financial knowledge acts as a catalyst for improving women’s socio-economic status. This study contributes to the existing literature by providing localized empirical evidence from an under-researched region of central India, employing rigorous quantitative methods to establish causal linkages, examining mediating mechanisms and heterogeneous effects, and offering practical recommendations grounded in ground-level realities. The research underscores that financial literacy is a necessary but not sufficient condition for women's empowerment, and that comprehensive approaches addressing knowledge, access, agency, and structural constraints are required to achieve sustainable and transformative change in rural women's economic and social status.
DOI: https://doi.org/10.5281/zenodo.18426658
