Gender Perspective in Building Resilience Through Financial Inclusion

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Mesfin, Hiwot
Ahmed, Musa Hasen
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African Economic Research Consortium
The effects of climate shocks on welfare and households’ coping mechanisms has been extensively addressed in the literature. However, there is a dearth of evidence on how climate shocks impacts on fragile societies especially in Africa. Due to this knowledge gap, in this study, we examine an African context, specifically Somalia in a postconflict era,to understand householdwelfare through the lens ofthe interactions between climate shock and financial inclusion. Our results show that female-headed households are more likely to fall below the poverty line, have a larger poverty depth, and shift their diet due to climate shock than male-headed households. Interestingly, we find thatremittances decrease following climate shock,bothonaverageandforfemale-headedhouseholds, but suchreductiondoesnothaveasignificantadverseeffectonthehouseholds' coping ability. Additionally, we find that mobile money improves households’ coping ability. Policymakers need to consider: 1)the gender variations in climate vulnerability when designing interventions; 2) further investigating the reasons behind the reduction in remittances following shocks; and 3) expanding mobile money infrastructure to reap its benefits of improving coping abilities of the vulnerable.