Reinvigorating Sustainable Rural Development with Financial Inclusion: A Case of Women's Empowerment

Sustainable rural development is essential for achieving global sustainable development goals such as poverty reduction, food security, and environmental sustainability. Many rural areas, however, have limited access to financial institutions, restricting their ability to participate in economic development and impeding the formation of sustainable rural economies. Women, in particular, frequently face severe barriers to accessing financial services, perpetuating gender inequities in rural communities. This study investigates the relationship between financial inclusion, women's empowerment, and sustainable rural development, utilising advanced econometric techniques on a comprehensive dataset spanning 161 countries from 2004 to 2021. The baseline model results reveal a positive impact of financial inclusion and women's empowerment on the Sustainable Rural Development Index (SRDI). The interaction effect suggests a nuanced influence, with joint financial inclusion and women's empowerment slightly mitigating rural development. Subsequently, we employ 2SLS and GMM to control for endogeneity issues, ensuring the robustness of our empirical analysis. The results contribute valuable insights for policymakers, development practitioners, and financial service providers aiming to design effective strategies promoting gender equality and sustainable development in rural areas.