Poverty Reduction and Financial Literacy for Women in Indonesia

Abstract

This article aims to discuss financial literacy as an integral part of poverty alleviation programs through women's economic participation. Financial literacy is a supporter in increasing economic participation. Financial literacy is a set of information that refers to an individual's ability to effectively assess and decide the use and management of money. The method used in this study is a literature review of several articles related to the research topic as well as other report documents and relevant case studies. Economic participation is a medium for women in an effort to reduce poverty in the economic sector. Women have an important role in the poverty reduction agenda through economic participation. Women's economic participation will not function properly without good financial literacy. In other words, financial literacy strongly supports women's economic participation because in the knowledge of such participation, the use and management of finances is very much needed. In Indonesia, financial literacy has only reached 38%, and the level of community economic participation is demonstrated through the labor force participation rate of more or less 50%. However, women's financial literacy is reportedly still low, reaching only 25%. This has implications for the achievement of women's economic participation, which is also below the standard, only reaching 36.62%. Thus, financial literacy for women is an alternative public policy for poverty reduction programs.

Financial literacy and community empowerment: A review of volunteer accounting initiatives in low-income areas

“…Research has demonstrated that financial literacy influences household behavior, investment decisions, and poverty reduction across different regions and demographics(Setyorini et al, 2021;Hussain et al, 2022;Wardhono & Nasir, 2022). Additionally, financial literacy has been identified as a key factor in improving financial inclusion and reducing poverty, particularly for women and youth(Arini et al, 2020;Zhu & Chou, 2018).…”