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MENA Watch: Almost 60% of women are financially illiterate, despite gains

We must recognise MENA women's tendencies as we look ahead to the next decade

The rise of women investors and wealth accumulation is noteworthy. Their wealth is growing faster than men’s and might reach 35% by 2025. This represents a 5.7% yearly increase, compared to 5.2% for men.

We must recognise MENA (the Middle East and North Africa region) women’s tendencies as we look ahead to the next decade. Identifying financial inclusion, entrepreneurial aspirations, and business education advances can empower women and boost regional economic growth.

Despite their rapid income rise in this part of the world, 54% of women in the region believe they understand investments poorly, according to a UBS study.

UBS Poll Findings

The Women and Investing in MENA survey found that 38% of women in the region had medium investment expertise and 7.5% had high knowledge. Based on a survey of over 600 women from the region, the paper suggests promoting investment literacy among Middle Eastern women. It shows that 62% of respondents want to invest more.

The Boston Consulting Group predicts a 9% CAGR for Middle Eastern women’s wealth, which was USD 786 billion in 2020. The research predicts USD 1 trillion by 2023. Middle Eastern women’s wealth growth raises questions.

Economic Empowerment: Regional women are gaining economic power and financial independence due to growth. This can improve their well-being and economic contribution.

Social Norms: The pattern suggests a shift in attitudes toward women’s financial control. This may advance gender equality in the region.

Investment Opportunities: The rapid expansion offers the financial services sector a chance to meet the demands and goals of its female clients.

The overall results are positive, but the distribution of wealth among Middle Eastern countries and economic categories is important. Do the advances benefit only wealthier women, or are they widespread?

Importantly, it raises questions like: What barriers prevent women from accessing and managing their wealth? This may include inheritance laws, financial education restrictions, and cultural attitudes that prevent women from financial decision-making.

UBS Global Wealth Management’s head of women’s wealth, Emma Wheeler, said, “Women in the MENA region need communication, education, and institutional assistance to better engage in finance, investment, and entrepreneurship. To improve information accessibility and harness the economic potential diversity and inclusion provide to all, the sector needs clear intentions, guidance, encouragement, and continuity.”

Women’s Financial Influence

BCG found that women own 32% of the world’s wealth, emphasising its importance. This statistic shows women’s global economic power and influence. The consultancy expects this to grow 5.7% annually to USD 97 trillion by 2024.

The global average is 32%, but regional differences occur. Women control more money in developed countries than in poor countries. The rise of women in the workforce, higher educational attainment, and gender-equitable inheritance rules all contribute to this expansion.

Women still struggle to achieve financial equality despite progress. These include gender pay gaps, financial restrictions, and social conventions that limit their economic potential.

The growing gender financial gap is worrisome. The World Economic Forum predicted pay parity would take 257 years, 55 years longer than 2018’s 202 years. The growing pay gap is troubling, highlighting the need to address it.

The previous UBS analysis found that a 10% gender salary disparity can lead to a 40% wealth gap and an 85% gap at 20%. According to UBS, 55% of women in Mena regarded their personal finance knowledge, including budgeting, as moderate, while 28% ranked it as “strong.”

Only 29% of respondents rated their financial information handling skills as high, while 53% rated it as medium. They also found that UAE women are better at handling financial information than Syrian women.

The UBS survey found that 47.8% of Mena women were unfamiliar with investment information, 42% were medium, and 10% were high. The majority of women in the region were unfamiliar with investment tools including stocks and bonds, while 25% were medium and 4.5% were high.

Urgent Need For Financial Literacy

Early education and financial literacy are crucial to women’s long-term business success, according to UBS.

Early education gives girls the skills, confidence, and knowledge they need for academic and vocational success. Business requires critical thinking, problem-solving, and communication abilities.

Financial literacy allows women to understand personal finance, make smart financial decisions, and manage their money. Starting a business, managing investments, and achieving financial security require this knowledge. Girls may avoid business occupations due to stereotypes and social conventions. Early financial education and successful female role models can break down these obstacles and inspire girls to pursue business leadership.

The report states, “Achieving lasting effect demands changes in attitudes and approach as women collaborate across industries and cultures. Understanding the cultural demands, barriers, and opportunities of women with wealth to manage and those striving to create it unlocks this influence.”

Economic empowerment requires financial capability and education. The report recognised economic resources (ability and money) and economic education (knowledge and confidence) as key drivers of economic empowerment for women. These components interact intricately in this complex topic. Dig deeper:

Access to finance, income, and other resources allows women to start enterprises, invest in education and properties, and work in the formal economy. However, a lack of funds can limit their ability to take risks or make independent judgements.

Understanding budgeting, saving, investing, and debt management helps women make smart financial decisions. This helps people navigate the financial system, avoid predators, and secure their finances. Financial literacy builds confidence in managing money, negotiating pay, and campaigning for financial rights. It helps women overcome fear and participate in financial decisions.

UBS also stressed the relevance of gender perspectives in investing, using money to promote gender equality. Women-owned firms, companies employing women across all tiers, and enterprises producing products and services that benefit women can be considered via a gender lens, the report said.

Eliminating the gender gap in economic participation might boost global GDP by trillions. Gender-smart investments can meet individual demands, enabling women to be consumers, entrepreneurs, and investors. Countries and localities may help create a more equitable and sustainable financial system that serves everyone by adopting a gender-lens investing approach.

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