Financial Inclusion and Self-Efficacy Among Low-Income Women: Evidence from a Community Intervention in Central Mozambique

Background: Financial inclusion interventions have been implemented broadly in developing countries as an anti-poverty strategy. Including low-income families in mainstream financial services could promote asset building and improve health and quality of life. However, few studies have examined the benefits of community-based financial inclusion interventions on low-income women’s self-efficacy in Mozambique. To address this knowledge gap, the study proposed Village Savings and Loan Group (VSLG) as an informal community-based financial inclusion strategy that could have positive impacts on low-income women’s self-efficacy, in addition to its potential impacts on increasing family income and assets.

Methods: The study used program evaluation data from Mozambique and applied a posttest-only comparison group quasi-experimental design. Female VSLG participants and non-participants were sampled from three sub-villages in the Sofala province. A multi-stage sampling technique was employed, and 205 women were randomly selected to participate in the study, including 105 VSLG participants and 100 non-participants. Participation status was the focal independent variable (1= Yes and 0 =No). Self-efficacy was measured by a standardized scale (5-20) consisting of five Liker Likert items (e.g., “can manage to solve difficult problems” and “can find a way to get done what she wants”); the internal consistence consistency measure of the scale is 0.71. Multiple linear regression model was performed to examine the impacts of the VSLG participation on low-income women’s self-efficacy, controlling for demographic and socioeconomic characteristics.

Results: The mean self-efficacy score is 16.02 (SD = 1.48) for the VSLG participants and 13.08 (SD = 2.48) for the non-participants. VSLG participation is positively and statistically associated with women’s self-efficacy in the multiple regression model (b = 2.32, p<.001). Controlling for demographic and socioeconomic characteristics, VSLG participants have a self-efficacy score 2.32 points higher than non-participants. The effect size is about half of a standard deviation (0.49).

Conclusion: The study provides evidence from Mozambique in promoting community-based financial inclusion interventions. The result showed a strong and positive association between VSLG participation and women’s self-efficacy, which could have important impacts on household management, family economic development, and individual health and well-being. Policymakers and development experts should consider VSLG as a potential strategy for enhancing financial well-being, health, and the quality of life. Further research could explore the impacts of VSLG across homogeneous and heterogeneous urban low-income communities in Mozambique.