Jennifer Riria, Microcredit and Job Creation

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Jennifer Riria, Microcredit and Job Creation

  1. 1. MICROCREDIT AND JOB CREATION PRESENTATION AT THE GLOBAL MICROCREDIT SUMIMIT BYDR. JENNIFER N. RIRIA, PHD, MBS, ICON / HP NOV 14TH - 16TH 2011
  2. 2. PRE – AMBLE“Financial services to low income people may aswell be the single most effective means to tacklepoverty and create broad – based economic growth.Financial services increase their assets, their livingstandards, and their roles in shaping society”.Nancy Barry, 1995, 2011.The ultimate goal of microfinance is to createwealth, assets and employment . J. Riria 2011 1
  3. 3. Where women work KEY ( population) Mean of 45 Employer 40 Mean of self- 35 employedShare of female 30 population Mean of wage 25 earner 20 Mean of unpaid 15 worker 10 Mean of Agriculture 5 Mean of NonLF 0 AFR EAP ECA LAC MNA SAR Source: National household surveys, most recent year 2000 - 2010 3 2
  4. 4. Where men work ( population) KEY 45 Mean of Employer 40 Mean of self- 35 employedShare of male population 30 Mean of wage earner 25 Mean of unpaid 20 worker Mean of 15 Agriculture 10 Mean of NonLF 5 0 AFR EAP ECA LAC MNA SAR Source: National household surveys, most recent year 2000 - 2010 3
  5. 5. FACTS• The poor are mostly engaged in subsistence economy and forced to use the bulk of their resources just to survive. Majority are women.• Business knowledge, particularly skill training is designed and delivered for literate audience – majority exclusion.• Geographically isolated – tends to prohibit access to markets and hinder lateral learning. 4
  6. 6. • They also are uninformed about what is legally, economically and politically available to them as a right.• Without power, they are rarely consulted by the authorities and hence their needs remain unheard and unaddressed – no control of interventions.• This is even more true of women majority of who are socially, economically, politically and geographically isolated.• Poverty disempowers – hindering gradual development of individual and collective capacities for self-determination, making choices and informed decisions. 5
  7. 7. • HOW CAN MICROCREDIT CHANGE ALL THAT AND CREATE JOBS?• WHAT DOES MICROFINANCE SEEK TO ACHIEVE AS FAR AS JOB CREATION IS CONCERNED? 6
  8. 8. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP• Kenya women supports the view that “poverty targeting strategy provides a clear link between economic empowerment and social empowerment.• This constitutes Broad – Based development. Unfortunately, Broad –based development cannot be achieved unless poverty is reduced. 7
  9. 9. • Poverty can only be reduced through provision of access to resources that enhance wealth and asset creation.• Microfinance provides the approach, outreach and delivery mechanism that provides access to resources for the poor hence facilitating development. 8
  10. 10. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP (Continued )• With development self and formal employment thrives. For example, Kenya Women delivery mechanisms demand intensive human resource involvement. It employs about 2000 staff. It is one of the major private sector employers. (Kenya Women is an equal opportunity employer)• Microfinance through targeting strategy provides opportunities from major outreach to other needy people at times encouraging to start their own business, hence creating employment as per employing family members and others. This capacity for major outreach removes constraints that deter the poor and especially women from using financial services e.g type of loans, repayment loans, interest rates, involvement etc. 9
  11. 11. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP (Continued)• Majority of women are excluded from the financial sector, and hence rendered unproductive. In sub-Saharan Africa, less than one in five households have access to productive resources. Women are the most excluded. Microfinance provides access. Kenya Women Clients, who have access over five years, have not only created employment for themselves but for other people as well. 10
  12. 12. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP (Continued)• Women are excluded from the modern sector (only 30%), while presenting 47.8% in informal sector and 54.5% in the Agricultural sector. The last two sectors are characterized by small holdings that do not attract big investors. Although in some economies, these sectors are the mainstay of economies they do not attract major investments (because they offer lower returns). Microfinance provides the most needed financing hence creating livelihoods especially in rural areas. 11
  13. 13. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP (Continued)• Microfinance institutions emphasize the importance of developing savings culture. Savings mobilization which is central to Microfinance operations is a basis for a developed financial market. A developed financial market creates jobs.• Gender responsive Budgeting, 200/2010. Pp17 12
  14. 14. References1. FDA Kenya, Gender Responsive Budgeting in Kenya2. FIDA, 2009/20103. Removing barriers to economic inclusion World Bank Report 2011.4. Marc Gurgand, etalpe, outreach and sustainability of six rural finance institutions in Sub-Saharan Africa 1994.5. C Gap “Reach the poorest-; Lessons from Graduation model, march 2011. 13
  15. 15. THANK YOUDR. JENNIFER N. RIRIA, PHD, MBS, ICON/HP

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