Net ImpactIE Social Responsibility Forum 2011

Guadalupe de la MataInnovation for Social Change

www.innovationforsocialchange.org

Women and microfinance

• The extension of small loans to entrepreneurs too poor to qualify for traditional bank loans.

• An effective and popular measure in the ongoing struggle against poverty, enabling those without access to lending institutions to borrow at bank rates, and start small business.

• The global microfinance sector has nearly reached US$30 billion in asset size reaching 130 million clients worldwide

What is microfinance?

How does it work?

Microfinance role in development

Why Target Women?

Evidence that improved gender equality is a critical component of any development strategy.

- 60% of the world’s poorest - 2/3 of the world’s illiterate

- Only 19 % of the world’s parliamentarians- 1/3 of all women are subjected to violence

women’s repayment records and cooperativeness.

Microfinance and women empowerment: The three ‘virtuous spirals’

Gender-based Obstacles in Microfinance and Microenterprises

Individual HouseholdWider community/

national context

Financial

Women’s lack of assets, skills, knowledge, experience and/or confidence to engage with formal financial sector 

Men's control over cash income

Men's expenditure patterns  

Perception of men as controllers of money

Economic

Women undertake activities which produce low returns

Women have a heavy domestic work load

Gender division of labour Unequal access and control of

land, labour and inputs  Unequal control of joint

household produce and income stream from this

Stereotypes of appropriate roles for women in the economy

Women underpaid for equal work Lack of access to markets for inputs and

outputs if women’s mobility is constrained by social norms 

Social/cultural

Women not literate or educated; girls’ education not prioritised 

Women’s lack of self-worth

Health risks associated with pregnancy and childbirth

Limited role for women in household decision making 

Polygamy can result in conflict or competition between wives  

Violence towards women

Banks often do not view women as a potential market 

Women's mobility and market access may be constrained by social norms 

Women face disproportionate levels of physical vulnerability

Political/Legal

Lack of confidence among women to claim political and legal rights

Women lack legal rights to jointly-owned household assets

Women lack legal rights to land (both traditional and formal)

Women's legal rights to household assets are undefined or not useful for collateral purposes

Few women in policy-making or legislative positions to influence appropriate laws

Source: Adapted from Johnson, undated.

Equality in access to (micro)finance?

Year: 2005 2006 20072008

All MFIs 62.6 64.4 63.4 60.0

Bank 47.6 50.2 48.5 43.5

Credit Union 44.8 51.3 45.7 45.1

NBFI 54.5 53.5 53.9 54.2

NGO 78.1 80.6 75.5 79.1

Rural Bank 46.9 68.5 70.6 45.3

Individual 51.5 51.3 49.7 46.2

Individual/ Solidarity 65.0 67.4 66.4 64.9

Solidarity 100.0 99.3 99.3 98.7

Village Banking 95.0 96.4 94.0 86.3

Africa 60.0 64.0 62.9 57.2

Asia 99.4 99.0 99.4 93.8

ECA 46.8 46.5 45.1 43.1

LAC 60.0 61.8 61.4 59.6

MENA 71.8 69.5 67.9 65.4

Table: Percent of Women Borrowers

Source: MicroBanking Bulletin 2005-2008 Benchmarks

Lessons learned

Stakeholder analysis

Proposed Actions to increase the opportunities for gender-sensitive microfinance

Incorporate new participatory approaches

Practitioners should look to mainstream empowerment approaches into microfinance institutions through increased participation from stakeholders

Thanks!

Women and microfinance