Women entreprenurs and microfinancePresentation Transcript
Women and microfinance Net Impact IE Social Responsibility Forum 2011 Guadalupe de la Mata Innovationfor Social Change www.innovationforsocialchange.org
What is 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
How doesitwork? The availability ofSmall amounts of Short processing repeat loans in higherloans and savings periods amounts for clients who pay on time No collateral is Simple application required contrary to Short loan terms forms which are easy formal banking to complete practicesPayment schedules Easy access to thefeaturing frequent High interest rates on microfinance instalments (or credit intermediaryfrequent deposits)
Microfinance role in development
Why Target Women? Evidence that improved gender- Only 19 % of the world’s equality is a critical component of anyparliamentarians Gender and Development development strategy.- 1/3 of all women aresubjected to violence Women Are the Empowering Poorest of the women Poor - 60% of the world’s poorest - 2/3 of the world’s illiteratewomen’s repayment recordsand cooperativeness. Women Spend Efficiency and More of Their Sustainability Income on Their Families
Microfinance and women empowerment: The three ‘virtuous spirals’ SOCIAL AND POLITICAL EMPOWERMENT ECONOMIC EMPOWERMENT •greater confidence and sense of self- •start their own economic activities / worth invest more in existing activities •expanded knowledge / skills •acquire assets •formation of support networks •raise their incomes or their control of through group activity their own and household income •enhanced status / gain respect / •raise their status in household become role models economic activities through their •=> process of change in community visible capital contribution perceptions HOUSEHOLD WELL-BEING •play a more active role in household decision-making •decrease their own and household vulnerability •increase investment in family welfare
Gender-based Obstacles in Microfinance and Microenterprises Wider community/ Individual Household national context Women’s lack of assets, Mens control over cash Perception of men as controllers of money skills, knowledge, incomeFinancial experience and/or Mens expenditure patterns confidence to engage with formal financial sector Women undertake Gender division of labour Stereotypes of appropriate roles for women activities which produce Unequal access and control of in the economy low returns land, labour and inputs Women underpaid for equal workEconomic Women have a heavy Unequal control of joint Lack of access to markets for inputs and domestic work load household produce and outputs if women’s mobility is constrained income stream from this by social norms Women not literate or Limited role for women in Banks often do not view women as a educated; girls’ education household decision making potential market not prioritised Polygamy can result in Womens mobility and market access maySocial/ Women’s lack of self- conflict or competition be constrained by social normscultural worth between wives Women face disproportionate levels of Health risks associated Violence towards women physical vulnerability with pregnancy and childbirth Lack of confidence Women lack legal rights to Women lack legal rights to land (both among women to claim jointly-owned household traditional and formal) political and legal rights assets Womens legal rights to household assets arePolitical/ undefined or not useful for collateralLegal purposes Few women in policy-making or legislative positions to influence appropriate laws
Lessonslearned Involve all stakeholders Incorporate new Introduce specificparticipatory approaches Propose Actions to increase the opportunities for gender-sensitive microfinance at all levels
Stakeholderanalysis • National and local government officers Macro • Ministries: agriculture; finance; trade and commerce… level • Central Bank • International bodies and agencies; (EU; IMF; WB, UN, donors) • Informal finance sources: moneyIntermediate lenders; rotating savings and credit associations - RoSCAS, etc. • Formal finance sources: level banksMFIs, NGOS, Credit Unions, co- operatives • Women or men Field level entrepreneurs and grassroots organisations.
Proposed Actions to increase the opportunities for gender-sensitive microfinance • Analyse policy linkages to increase gender sensitivity • Encourage gender-sensitive policy implementation Macro • Ensure policy implementation is linked to entrepreneurial activities at the field level • Link policy implementation to the operation of MFIs • Facilitate networking on policy issues • Set gender-sensitive objectives • Ensure gender-sensitive MFI staff • Collect information on the needs of clients Intermediate • Evaluate programmes in terms of gender issues • Establish networking &lobbying to ensure that gender issues are considered in financial policy • Learn from best practices of other MFIs • Provide non-financial services • Hold a client stakeholder meeting to discuss their access to financial services Field • Identifying clients needs • Institutionalize participatory feedback from clients in any microfinance activity.
Incorporate new participatory approachesPractitioners should look to mainstreamempowerment approaches into microfinanceinstitutions through increasedparticipation from stakeholders PARTICIPATORY LEARNING •Methodologies for participatory learning at grassroots level •Ways of integrating empowerment into program-level monitoring and evaluation PARTICIPATORY PARTICIPATORY ACTION MANAGEMENT •Most effective methods of •Innovative structures for gender lobbying, advocacy participatory management and inter- organizational •Most effective methods of networking on gender and gender awareness training for empowerment issues men, women and staff and organization to bring about change