On April 28–29, the World Economic Forum convened a special summit in Riyadh on global collaboration, growth, and energy for development. Days after Saudi Arabia presented its midway annual report on “Vision 2030,” its ambitious thirteen-year economic reform and diversification agenda, the Kingdom’s goal is pretty simple here: create new jobs and investment possibilities for major and small businesses.
Women’s status has been a key indicator of development and success for eight years. Women’s labour force participation now stands around 35%, thus exceeding the initial aim. And the credit goes to the reformed labour-market policies and new regulations.
Photos of women and men working across sectors in the Vision 2030 midway annual report show their role in economic growth. Women own 45% of over one million business registrations and have 43.7% of leadership roles. Government authorities and pundits have been appreciating the Gulf nation’s leadership for this great momentum.
These advancements are welcome and worthy of celebration, but women must have the financial know-how to grow in their careers and manage their new ventures to achieve sustainable empowerment. Women who start their businesses and balance work with other obligations need financial awareness. However, women on the margins of the formal economy can encounter challenges to inclusion.
Financial inclusion helps those who need finances access them and ensures that funds are available, boosting liquidity and reducing poverty and public support. Economic advances since “Vision 2030” have encouraged women to be more financially independent. Social welfare reforms replaced blanket subsidies with tailored support and a new labour market, social insurance, and social assistance policies, creating more paths out of poverty.
These adjustments will initially benefit younger, more tech-savvy people. E-government and anti-corruption have linked all payments to bank accounts, including salary and alimony. Small enterprises must issue e-invoices, and economic expansion is squeezing out smaller commercial outlets that serve those without bank accounts. Up to 6.9 million persons, or 28% of the Kingdom’s adult population, were “unbanked,” and 56% were women.
According to 2018 King Khaled Foundation research, Sharia law guarantees women property ownership, so they can open bank accounts. Alsharq al-Awsat reported in 2019 that 20% of bank deposits, about USD 53 billion, went to women. Thus, a lack of financial literacy leaves women with lesser education and socioeconomic status behind, forcing them to save through informal channels and unaware of the benefits of money management.
The Kingdom’s macroeconomic reforms address economic shocks and promote sustainability and growth. At the local level, financial literacy helps people handle emergencies and income shocks. Citizens can save more and spend less to build wealth and boost the economy. Economic growth and global competitiveness drive financial literacy improvements. Saudi Arabia’s National Savings and Financial Literacy Strategy emphasises financial literacy and addresses the 1.6% household savings rate. The global minimum for long-term financial independence is 10%.
National motivations may include economic expansion, but international groups are establishing initiatives to empower individuals. Through targeted national programmes, the International Monetary Fund and World Bank have improved population financial literacy, and the OECD has developed guidelines to help participating countries improve financial literacy.
Alongside economic reforms, the Kingdom has used more financial tools. Financial literacy programmes target women and minorities since they have poorer financial literacy globally, frequently due to factors like low education and socioeconomic status. Successful initiatives, like Al-Nahdha’s Khazna programme in Riyadh, consider such attitudes and obstacles.
Khazna, launched in 2017, targets low-income women who make financial decisions for their households to improve financial literacy. The curriculum emphasises saving, budgeting, reducing consumption, and reducing debt. Khazna has grown through feedback loops after each cohort trains. It works because it addresses community family systems, the stigma of women-led families, and cultural expectations of generosity and giving. Other programmes by banks and government agencies target women of various socioeconomic backgrounds.
Financial literacy is a key to social inclusion. Khazna is developing to give entrepreneurial training, from business basics to a market-filling business strategy with a community focus to ensure support.
As more Saudi women enter the formal economy, programmes must avoid global wage inequalities, male-dominated decision-making and unconscious prejudices that favour men. This can happen if programmes start early as part of a national curriculum cooperative effort and through community efforts that bring together industry leaders and educators for lifelong literacy.
Khazna is an example, but supporting more programmes that meet National Savings and Financial Literacy Strategy goals is crucial. Beyond budgeting, financial literacy must encompass financial security, house ownership, and financial products with long- and short-term savings and investment options.
Programmes must also include women’s various backgrounds and money management psychological hurdles. True empowerment comes from improved agency and decision-making; working Saudi women need financial freedom. Any successful programme must cater to all types of women so everyone can benefit from development.