By Sinidu Fekadu

Women’s financial inclusion is an essential pathway to women’s economic empowerment in Ethiopia. When women can access, use, and benefit from appropriate financial services, they are better able to manage risks, build assets, invest in opportunities, grow businesses, and strengthen their economic resilience. Despite progress over the past decade, substantial gaps remain in both financial and digital inclusion.

In 2024, 42 percent of women owned an account, compared with 57 percent of men, a 15-percentage-point gender gap. The disparity is also wider in digital finance: only 13 percent women made or received digital payment, compared with 26 percent of men¹. Women were therefore only half as likely as men to participate in digital transactions. The rapid expansion of digital financial services (DFS) has helped drive account growth, but it has not benefited women and men equally. Access to DFS depends heavily on mobile-phone ownership, connectivity and digital capability.

However, women in Ethiopia are significantly less likely than men to own mobile phones, with ownership rates estimated at approximately 50 percent for women compared with 63 percent for men, a gap of about 13 percentage points. This suggests that the expansion of mobile-enabled financial services may have benefited more men, who are more likely to possess the digital tools needed to open and actively use DFS accounts. Women are also less likely to save and borrow through formal financial institutions, limiting their ability to accumulate assets, invest in productive activities, and strengthen their economic resilience.

These gaps reflect interconnected supply- and demand-side constraints: limited gender-responsive products innovation; inadequate outreach and delivery channels; weak collection and use of sex-disaggregated data, and insufficient institutional capacity to understand and serve women as a distinct and diverse customer segment. Although women-focused products are becoming increasingly common, the National Bank of Ethiopia (NBE) Women’s Financial Inclusion Scorecard found that 75 percent of banks reported fully integrating women-specific products and services.

However, product innovation remains concentrated in savings and basic account offerings. Only 13 of the 32 banks reported offering products beyond women’s savings accounts, such as digital credit, flexible collateral arrangements, or other tailored financing solutions. This imbalance is reflected in lending outcomes. Women account for 28.5 percent of traditional loans by number but receive only 17.3 percent of their total value, indicating continued  barriers in accessing larger and more growth-oriented financing. The Scorecard links these disparities to collateral requirements, business formalization, digital access, and the limited institutionalization of gender-inclusive strategies within banks. These constraints are compounded by lower asset ownership, financial and digital literacy gaps, unequal access to technology, mobility restrictions, and social norms that shape women’s economic participation, decision-making power, and access to opportunity.

Closing these gaps requires more than standalone interventions designed to bring more women into the formal financial system. It requires a market systems approach that addresses the underlying policies, regulations, institutions, infrastructure, products, services, and social norms that determine whether women an access, use, control and benefit from financial services.

At FSD Ethiopia, this systems perspective is operationalized through the Sustaining Action for Gender Equality (SAGE) initiative. SAGE seeks to embed gender considerations across programmes and institutional systems rather than treating gender as a separate workstream. FSDEthiopia integrates gender throughout the program cycle—from market analysis, intervention design to implementation, monitoring, learning, adaptation and evidence generation. By doing so, SAGE supports the development of inclusive and gender-responsive interventions that can advance women’s financial inclusion and, ultimately, women’s economic empowerment.

The central argument of this paper is that sustainable progress on women’s financial inclusionwill not come from isolated gender activities. It will come from embedding gender in how organizations understand markets, design programmes, allocate resources, make decisions, measure performance, and influence wider financial systems.

Moving Beyond Access

Global evidence and guidance, including CGAP’s “Making Finance Work for Women” and UN Women’s guidance on gender statistics in financial inclusion systems, point to a critical shift: account ownership alone is an incomplete measure of financial inclusion.

A woman may own a bank account but a little control over how it is used. She may access credit but remains unable to grow her business due to limited assets, weak market linkages, or restrictive social norms. She may use digital financial services but still lacks the confidence, information, protection or decision-making power needed to invest, accumulate assets or make independent financial decisions.

Access is therefore only the entry point. Meaningful financial inclusion must extend to regular and beneficial use. agency and outcomes. Women should be able to choose appropriate services, use them safely and affordably, control financial resources, make informed decisions, build assets, and improve their livelihoods. Financial inclusion becomes transformative only when it contributes to women’s economic empowerment.

Achieving these outcomes requires looking beyond individual women and examining whether the financial system itself—including its products, institutions, delivery channels, and policies—is designed to meet women’s needs and realities. This is where gender integration becomes critical.

Why Gender Integration Matters?

Gender integration is often misunderstood as simply increasing women’s participation in programmes or introducing a product labelled ‘for women’. In practice, it is about understanding how women and men experience the financial system differently and using those insights to design interventions that address systemic barriers and expand economic opportunities for women. It requires asking critical questions:

Understanding these dynamics is only the beginning. Achieving lasting change requires integrating gender considerations throughout the program cycle from market analysis and intervention design to implementation, monitoring, learning, and adaptation. This helps ensure that interventions not only expand women’s access to financial services but also strengthen the financial system’s ability to serve women sustainably and at scale.

Embedding Gender from Design to Delivery

Effective gender integration begins during programme design and continues through implementation, monitoring, learning, and adaptation. Through the SAGE initiative, FSDEthiopia seeks to embed gender across programme and organizational processes rather than treatit as a standalone activity.

In accordance with FSD Ethiopia’s Gender Integration Strategy, all projects are required to meet at least a gender-intentional standard and, where feasible, pursue gender-transformative outcomes. This starts with understanding how women experience financial systems and identifying the barriers that affect their access to and use of financial services. Gender analysis and gender-responsive planning tools such as Gender Action Plans, help promote more intentional approaches to women’s financial inclusion and interventions are responsive to the different needs and realities of women and men.

In practice, this approach has contributed to efforts across FSD Ethiopia’s portfolio to expand women’s participation in agent networks, strengthen women-focused digital and financial solutions, improve access to insurance including agricultural and health and financing opportunities, and encourage financial institutions and partners to adopt gender-responsive approaches to service delivery.

Implementation is supported by continuous learning, and systematic use of sex-disaggregated data through tools such as the Gender Market Tool and Gender Mainstreaming Checklists. Theseenable programs to identify emerging barriers, respond to changing dynamics, and strengthen institutional capacity to deliver more gender-responsive interventions that increase women’s access to financial services.

The approach is also supported through capacity building, evidence generation, and engagement with market actors, helping partners and institutions better understand women’s financial needs and incorporate those insights into program design and product development.

Gender is therefore not treated as an add-on but as a core design principle that shapes how interventions are developed, implemented, and measured.

Applying a Market Systems Development Lens

FSD Ethiopia recognizes that women’s financial inclusion is shaped by the broader financial system, not only by women’s ability to demand financial services, but also by the rules, policies, institutions, market infrastructure, products, information, and incentives that determine how those services are designed and delivered. Gender integration therefore goes beyond increasing women’s participation; it seeks to strengthen these market system functions, so they better respond to women’s needs and create more inclusive financial markets. This is not only a social imperative but also a significant economic and commercial opportunity. According to World Bank estimates, closing key gender gaps in economic participation, including access to finance, could increase Ethiopia’s GDP by up to US$3.7 billion annually. Evidence also shows that women represent a strong business case for financial institutions.

Borrowers participating in Ethiopia’s Women Entrepreneurship Development Project (WEDP) achieved a 99.6 percent loan repayment rate, while reporting 30 percent higher profits and 50percent employment growth, demonstrating that women are exceptionally low-risk, high-return clients. Failure to intentionally serve women therefore represents not only a missed inclusion opportunity but also a missed market opportunity for financial institutions. To translate this system-level perspective into practice, the SAGE initiative promotes gender integration across key components of the financial system:

Policy and Regulatory Environment: Promoting gender-responsive policies, regulations, and institutional practices that create an enabling environment for women’s financial inclusion.

Market Infrastructure: Strengthening inclusive market infrastructure including agent networks, digital platforms, and supporting systems to improve women’s access to and use of financial services.

Products and Services: Supporting the development of financial products and services that are accessible, relevant, and responsive to women’s diverse needs and economic realities. This includes encouraging customer-centric approaches that take account of women’s financial behaviors, economic activities, risk profiles, and constraints.

Ecosystem Coordination, Market Influence, and Institutional Capacity: Strengthening advocacy, partnerships, research, and market coordination to accelerate women’s financial inclusion and economic empowerment, while building the capacity of financial service providers and ecosystem actors to recognize the business case for serving women, and integrate gender considerations into product design, service delivery, institutional decision-making, and broader market development efforts.

Socio-Cultural Norms: Financial systems are also shaped by social norms and institutional practices that can unintentionally exclude women. FSD Ethiopia promotes community awareness and strengthening the capacity of financial institutions to better understand and address gender norms that influence women’s participation in the financial system.

Leadership and Representation: Promoting women’s participation in leadership and decision-making to help shape more inclusive financial institutions and markets.

Gender-Disaggregated Data: Strengthening the collection and use of gender-disaggregated data to make women more visible within financial systems, inform decision-making, improve product design, and monitor progress toward more inclusive financial systems.

Access to Finance for Women-Owned Enterprises: Strengthening pathways for women-owned and women-led enterprises to access appropriate financing through credit, guarantees, asset-based financing, and other financial solutions that address the barriers women face in accessing capital for business growth and economic participation.

Looking Ahead

Women’s financial exclusion is not caused by a single barrier. It is produced by multiple, interconnected constraints embedded across the financial system. Addressing these challenges requires sustained attention to how policies, institutions, products, delivery channels, data systems, and market practices respond to women’s needs and realities.

FSD Ethiopia’s experience through the SAGE initiative demonstrates that meaningful progress is achieved when gender is integrated throughout the programme cycle and embedded within organizational systems, rather than treated as a separate workstream. This approach has strengthened programme design, informed evidence generation, enhanced institutional capacity, and influenced market actors to develop more inclusive products, services, and practices.

For market development practitioners, the key lesson is clear: lasting change depends on strengthening the systems that shape women’s opportunities, not simply increasing women’s participation within existing systems. Embedding gender in how financial markets are analyzed, designed, and supported create stronger institutions, more responsive markets, and more sustainable pathways to women’s financial inclusion and economic empowerment.