R zafar mcs-2011_presentation


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R zafar mcs-2011_presentation

  1. 1. FROM MICRO TO SMALL AND MEDIUM ENTERPRISE: CATERING TO THE EVOLVING NEEDS OF FEMALE CLIENTS - Roshaneh Zafar, Managing Director Kashf Foundation For the 2011 Global Microcredit Summit November 14-17, 2011 – Valladolid, Spain
  2. 2. The Need for Women’s Participation in the Economy      The losses of not involving women in the economy translate into billions of dollars in lost opportunities Economic growth would have been 37% higher if women had been fully engaged in the financial sector Economic agency of women catalyzes intergenerational benefits, i.e. increase in the average age at marriage, lower fertility rates etc. Economic Participation diminishes the triple burdens of reproductive, productive, and social responsibilities for women. An increase in the contribution by women towards household income increases access to/control over household resources and decision-making power.
  3. 3. The Role of Microfinance in Women’s Economic Participation (1/2) Individual Household MF Strategies to address these constraints • Designing pro women strategies that reflect the concept of agency and removes the need for physical collateral. • Building group mechanisms that allow procuring loans in proximity to the community • Promoting and providing affordable and accessible savings Financial Barriers Women lack access to banks/ financial services in own right Men control cash income, men have specific expenditure patterns Economic Barriers Women undertake activities which produce low returns; Women have a heavy domestic workload Gender division of labor, • Introducing graduated lending schemes that involve a unequal access and feel-good approach and also cater to conflicting control of land, labor demands on women’s time and inputs unequal • Providing business development services control of joint • Helping create value chains household produce and income stream (from the produce)
  4. 4. The Role of Microfinance in Women’s Economic Participation (2/2) Individual Household MF Strategies to address these constraints Social/ Cultural Barriers Women not literate or educated; girls education not prioritized Limited role for • The group lending approach overcomes women in many of these aspects by coalescing household associative strength. decision making; • Broadening the suite of products being violence towards offered to female clients especially savings women and financial education. Political/ Legal Barriers Women lack confidence to claim political/legal rights Women lack legal • Linking products to women’s rights to rights to jointly property e.g. housing loans. owned • Savings products especially designed to household target women assets.
  5. 5. Gender Significant Outcomes    At the end of 2009 there were around 128.2 million microfinance users around the world, 81.7 percent or 104.7 million out of which were women. The growth in the number of very poor women reached has gone from 10.3 million at the end of 1999 to 104.7 million at the end of 2009. There has been a 919 percent increase in the number of poorest women covered in microfinance programs from December 31, 1999 to December 31, 2009.
  6. 6. Targeting & Retaining Women under a For-Profit Paradigm   The Issue: While transformation is primarily meant to induce growth at the institutional level, in a majority of cases it is leading to reduction in the retention of female clients The Influencing Factors: Commercialization demands that MFPs expand their existing portfolios by increasing loan size and penetrating industries/entrepreneurs with higher credit absorption capacity. Both these factors put pressure to diverge away from small scale enterprise (predominantly female) with low debt absorption capacities towards medium enterprises with higher debt absorption capacities.
  7. 7. Learning from CARD MRI (Philippines) & Kashf Microfinance Bank Limited (Pakistan) CARD MRI has been able to successfully prevent mission drift, post transformation, in terms of reduced female exits from the program via:     Ensuring product optimization to client needs Establishing mutually re-enforcing institutions catering to the holistic needs of the client base Incorporating feedback of clients into the policies of the company via concerted and sustained linkages with the client base Maintaining representation from the former NGO board after transformation. Kashf Microfinance Bank has been able to successfully develop a strategy for targeting female clients after transformation through:    Making front-end investments to create and market a savings culture Optimizing a pro-woman savings strategy and piloting a branchless banking model Continuing mission orientation and good governance through the Board of Directors.
  8. 8. Lessons Learnt for Women's Inclusion under the For-Profit Paradigm     Clarifying the overarching vision for transformation and ensuring it is completely and fully embedded in all aspects of the transformation process is key to retaining women post transformation A continued focus on sustainability and affordability is pivotal so that the institution can demonstrate a strong business case for investing in women’s enterprise and financial development. Continuous and on-going research and development for product design and understanding women’s needs is vital in formulating strategies and action-plans that prevent mission drift. The role of the board in maintaining a focus on women’s retention is another very important aspect.
  9. 9. Conclusions and a TO-DO list for Women's Inclusion (1/2)       UNDERSTANDING the dynamic context of women’s economic participation that needs to be contextualized to different societies KNOWING that there is no one path to transformation and hybrid and innovative solutions can work in strengthening the mission and vision of retaining female clients ARTICULATING a clear rationale and vision for the need to transform and conducting stress tests of it in light of retaining female clients BUILDING buy-in at the board level for promoting women’s access and retaining women clients DEMONSTRATING a model that is scalable, replicable and profitable while being women led EMBEDDING the concept of front end investments to promote women’s economic empowerment through financial education, enterprise development etc.
  10. 10. Conclusions and a TO-DO list for Women's Inclusion (2/2)        LEARNING that women’s empowerment is a long term strategy and that women require products beyond credit ENGAGING with female clients at all levels through a continuous research and development process SELECTING investors that are committed to promoting women’s access and ensuring that the original NGO (parent) is involved in governance structures ENSURING lessons learnt in the past by the NGO (parent) a key driving force for the transition process. BUILDING a team that believes and espouses a commitment to retaining and sustaining female clients SEGMENTING the women’s market to highlight the needs of female clients and offer solutions that address these needs LEVERAGING on networks and building collaborations with other entities to retain female clients.
  11. 11. Thank you!