What microfinance really needs: women's lib
I saw Muhammad Yunus speak a few years ago, and the thing that struck me most in his speech was his insistence on the power of microfinance to help increase the opportunities available to women. That's why the findings from a recent evaluation of microfinance in Sri Lanka in which female enterprises gained little from access to finance were troubling. A new study discussed in the most recent edition of the FPD Impact newsletter tries to explain why female-owned enterprises have such low returns to capital.
The long and short of it? Finance isn't enough - women need women's lib. The study's authors propose two explanations for why female-owned enterprises saw zero or negative returns to capital:
How to fix this? David McKenzie, the author of the newsletter (and one of the authors of the study) points out that you could "include messages and activities to increase empowerment among women" as part of microfinance services. But why not go a step further? If women aren't free to make the most of their skills and available capital, isn't it high time to make women's lib part of the PSD agenda?
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Mr. McKenzie is being naive if he thinks women empowerment can be achieved by "including messages and activities to increase empowerment among women" as part of microfinance services. It is a long and complex process. MFIs have to send strong signals and help change the norm. This is what Professor Yunus did. Grameen borrowers came up with their own charter known as Sixteen Decisions. In addition, he put women on the Board of Grameen Bank. Grameen Bank is the only bank in the world that has majority female board members: 9 out of 13 members are directly elected by the borrowers themselves and they are all women. One of the female board members received the Nobel Prize on behalf of the bank. When Grameen Bank first introduced cell phones they were given to women so that men in the village have to go to her house to make the phone call. The bank created special scholarships for the female children of the borrowers. Others in the country and the government of Bangladesh also have come up with initiatives that enabled the country to make tremendous progress on gender relations. The progress is celebrated in the World Bank report "Whispers to Voices: Gender and Social Transformation in Bangladesh." http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/SOUTHASIAEXT/0,,contentMDK:21685068~pagePK:146736~piPK:146830~theSitePK:223547,00.html
Despite tremendous progress, women still face mobility restrictions so that they have to use their husbands and sons as their eyes and legs for high-value added business enterprises that entail dealing with men in the public market place.
Posted by: Asif Dowla | Apr 10, 2009 10:06:10 PM
Hi, this is Ashley. That's a good article on microfinance. I would like to tell u about a microfinance company in India called Moksha-yug. MYA is a rural supply chain management company. It launched operations in April 2006 with an initial focus on building a microfinance base. MYA is now leveraging on the microfinance platform to shape its business model - the Last Mile Supply Chain Management (SCM) - that critical point at which a range of product/services makes contact with the customer.
Posted by: ashley alfred | Apr 13, 2009 9:07:12 AM
Finance is usually not enough for women (or men) borrowers of micro-loans. In the microenterprise development field, it has long been understood that non-financial services are a pre-requisite for business growth. These services can be basic business skills, market information, logistical support and so on.
More recently, in the microenterprise field, we have focused on value chain work that integrates large numbers of independent producers (farmers, handicraft makers, small scale manufacturers) into viable market systems. Great success has been realized with such programs that facilitate the participation of women and men in effective market opportunities. This generally requires capacity building, market linkages, group creation for negotiating and bulking, etc., and in more advanced situations competitiveness strategies and association development. I have contributed to programs for women (and men) in Africa and Asia so I speak from some experience.
I wouldn't personally call this women's lib - but it is definitely economic empowerment.
(Linda Jones, sustainable enterprise / value chain development consultant)
Posted by: Linda Jones | Apr 14, 2009 5:27:19 PM
This is a very interesting topic. Micro Finance and women. In Uganda, a study done by the Council for Economic Empowerment in Women of Africa of which I am a member of the Expert Group on Finance, revealed that women had not benefitted from MFIs in real terms, they had remained in the vicious circle of poverty borrowing to pay back loans. Women had not invested in tangible assets because they are still burdened with household responsibilities - they carry the burden of all the family. Gender inequaity in societies make it difficult for women to break through the cycle of poverty despite the hard work they put in. Linda's input sounds very interesting. Linda, please, is it possible to get more information about value chains, how does it work?
I am very passionate about Micro Finance as an avenue to alleviate women's poverty. I belong to a Savings and Credit Cooperative Society whose mission is to access affordable credit to women.
Thanks,
Pauline
Posted by: Ofong Pauline | Apr 16, 2009 12:01:43 PM
Pauline,
I read a similar study. Gender inequality is a major issue.
I'm conducting feminist research on how American foreign policy affects popular support for terrorism. I’m particularly interested in incorporating the views of women, non-whites, and people living outside of America and Western Europe, but all responses are invited and welcome. The survey can be accessed at
http://www.johnmaszka.com/SURVEY.html
I would really value your opinion and the opinion of your readers.
Thank you,
John Maszka
Posted by: John Maszka | Apr 20, 2009 12:25:50 PM