Gender Perspective in Building Resilience Through Financial Inclusion
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Date
2022
Authors
Mesfin, Hiwot
Ahmed, Musa Hasen
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
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 household welfare through the lens of the 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 that remittances decrease following climate shock, both on average and for female-headed households, but such reduction does not have a significant adverse effect on the households' 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.