IT TEAM RESEARCH PAPER
-
Upload
aleksandra-wachowicz -
Category
Documents
-
view
82 -
download
0
Transcript of IT TEAM RESEARCH PAPER
S t . J o h n ' s U n i v e r s i t yD r . L i n d a S a m a
Microcredit and Women EmpowermentIT & Communications TeamNakeya Burnett, Brandon Hubbard, Aleksandra Wachowicz
14Fall
Table of Contents
Introduction.................................................................................................................................................3
An Overview on Microfinance.....................................................................................................................3
What is microfinance?.............................................................................................................................3
The history of modern microfinance.......................................................................................................4
Microfinance Institutions.........................................................................................................................4
Why banks do not serve poor people in developing countries................................................................5
Interest rates...........................................................................................................................................5
Women and microfinance in the developing countries...........................................................................6
Women’s World Bank..........................................................................................................................7
Type of Loans...........................................................................................................................................7
Group micro lending............................................................................................................................7
Individual micro lending......................................................................................................................8
Group micro lending and women............................................................................................................8
Grameen Bank.....................................................................................................................................9
Women’s Empowerment and Development Trust Fund.....................................................................9
Female Empowerment through Microloans..............................................................................................10
What is empowerment?........................................................................................................................10
How is female empowerment measured?.............................................................................................10
How does microfinance empower women?..........................................................................................11
Decision Making................................................................................................................................11
Self-Confidence..................................................................................................................................12
Household Status...............................................................................................................................12
Domestic Violence.............................................................................................................................13
Roles in the Community.....................................................................................................................14
Political Empowerment.....................................................................................................................15
Why should MFIs target women and why is the result of female empowerment important?..........16
GLOBE and Women Borrowers..................................................................................................................17
Conclusion.................................................................................................................................................21
Works Cited...............................................................................................................................................22
2
IntroductionWomen in the world today face a threat like no other. That is the threat of gender equality. This
is especially true in developing countries. Women face abuse, lack of education, crippling
poverty, and starvation. These are factors of inequality. When all of the power and freedom is
in a man’s hand, what can a woman do when that man is no longer able to provide for her? She
is left to fend for herself without any resources to survive. It is for this reason that women
empowerment must be encouraged, and microcredit is a sure solution to this problem
An Overview on Microfinance
What is microfinance?
Generally speaking, microfinance is a term to describe financial services, such as supply of loans
and savings to low-income individuals or to those who do not have access to typical banking
services. According to Kiva, microfinance is also the idea of helping low-income individuals to
lift themselves out of poverty after having access to the financial services (KIVA). Those
financial services involve small amounts of money (small loans, small savings, etc.), so the term
‘microfinance’ helps to differentiate these services from services provided by banks and other
financial services. Interestingly enough, the vast majority of people in the developing countries
who have been given microloans become entrepreneurs and build businesses that allowed them
to support their families and transform their communities.
3
The history of modern microfinanceThe pioneering of modern microfinance is often credited to Dr. Muhammad Yunus, a winner of
the Nobel Peace Prize. In 1970s, when visiting a village, Jorba, located in the suburbs of
Bangladesh, India, Yunus found a group of 42 women who made bamboo stools. Group of
women lacked the funds to purchase the raw materials, so they felt into a cycle of debt with local
traders, “who would lend them the money for the materials on the agreement that they would sell
the stools at a price barely higher than the raw materials” (“Story of Microcredit”). Yunus found
that the borrowing needs for 42 women equaled to $27, and simply lent them money at zero
interest rate. Therefore, women were able to break the cycle of debt, and sell the stools for a
reasonable price (“Story of Microcredit”). In 1983 he opened Grameen Bank, microfinance
organization and community development bank that now works with over eighty-thousand
villages in India with more than six million borrowers. The success of Grameen Bank proved
that the poor in developing countries could be relied on to repay their loans, even without
collateral, and hence that micro-finance was a potentially viable business.
Since then, the microfinance sector saw rapid growth and the number of finance institutions
serving the poor in developing countries, has been increasing. Today, the World Bank estimates
that about 160 million people in developing countries are served by microfinance. Since then,
microfinance sector has been constantly growing and serving the poor. Today, the World Bank
estimates that about 160 million people in developing countries are served by microfinance
(“World Bank Group”).
Microfinance InstitutionsA microfinance institution (MFI) is an organization that provides microfinance services to the
poor. MFIs range from small non-profit organizations serving 100 clients to large commercial
banks serving millions of people. MFIs offerings range from basic services such as loans, saving
4
accounts, and insurance to training and education, or even specific program to combat local
issues (“Story of the microcredit”). The size, number and diversity of MFIs began to grow, many
successful MFIs that began as nongovernmental organizations (NGOs) have transformed into
for-profit financial institutions. Today, there are about 2,000 MFIs serving over 92 million
people with $70 billion in assets.
Why banks do not serve poor people in developing countriesFormal financial institutions were designed for people who already have financial assets- they
were not designed for poor people in developing countries. Although formal financial institutions
are nonexistent in developing g countries, people have other credit resources. For instance,
Credit is available from informal commercial and non-commercial money-lenders but usually at
a very high cost to borrowers. Savings services, on the other hand, are available through a
variety of informal relationships like savings clubs, rotating savings and credit associations,
which tend to be erratic and insecure (“About microfinance”).
Moreover, the majority of formal banks do not provide microfinance products in the developing
countries simply because it does not make as much profit for them. Giving out a $500,000 loan
in the developed countries is far more profitable than making a microloan worth $500 in the
developing countries. Therefore, traditional financial institutions like banks can make money
only if they serve people and provide services to those who already have money.
Interest ratesAlthough it may seem easy to give out a loan, one does not realize that are different types of
costs the MFIs have to cover when it comes to making microloans. Interest rates charges are
necessary to cover the costs of administrating microloans. The interest rates charged by
microfinance institutions are often higher than interest rates offered by traditional banking
5
institutions. As mentioned, administrative and operating costs of having many microloans in
developing countries are much higher than the costs of administrating fewer large loans in
developed countries. Furthermore, there are additional costs that interest rates must cover,
including:
The cost of funding to the MFI, which is higher in developing countries due to the fact
foreign funders require a higher return to cover the risk of lending to a microfinance
institutions.
Exchange rate risk, which is higher because currencies are volatile, illiquid, and inflation
may be high.
Risk of borrower default, which is higher in developing countries as borrowers can rarely
offer collateral, credit history, or they default due to factors like sickness.
Administrative costs, which are higher in developing countries as MFI, send field
workers to the areas where borrowers live to meet the client and collect payments.
Although operational and administrative expenses of MFIs in developing countries are very high,
MFIs should strive to be efficient and work to reduce the costs and therefore, lower the interest
rates (“Story of Microcredit”).
Women and microfinance in the developing countriesAccording to the recent statistics, 14.2 million of the world’s poorest1 women now have access
to financial services through MFIs, NGOs and other nontraditional financial institutions. These
women account for nearly 74 percent of the 19.3 million of the world’s poorest people.. Most of
these women have access to credit to invest in businesses and become entrepreneurs (Cheston,
4). A 2001 survey by the Special Unit on Microfinance of the United Nations Capital
Development Fund of 29 MFIs showed that approximately 60 percent of these institutions’
6
clients were women. Six of the 29 focused entirely on women. In the remaining 23 mixed-sex
programs, 52 percent of clients were women. (Cheston, 5).
Women’s World Bank
Women’s World Banking is the global nonprofit that provides access to the financial tools and
resources to low-income women in developing countries. The organization closely works with
34 financial institutions from 24 countries to create new credit, savings, insurance products for
women and to show them multiple benefits of investing in women as borrowers as well as
leaders. The organization provides financial institutions with market research, financial products
and customer education to meet women’s needs (“What We Do”).
Janashakti Women’s Development Federation of Sri Lanka is one of 34 Women’s World
Banking partner. Janashakti has evolved from a grassroots organization focused on health and
nutrition to a 28,168-member institution offering loan products, savings products, and life
insurance, as well as services like training in business, health, and nutrition. Organization is build
by poor women who lead and manage it. Janashakti’s main objective is to “eradicae poverty by
developing and promoting individual and collective strength and selfreliance.” Through
participation in the leadership and management of the organization, poor women build
nontraditional technical and professional skills that allow them to go beyond their traditional
gender roles in society (Cheston, 46).
Type of Loans
Group micro lending
Group micro lending also known as solidarity lending is a lending practice where small groups
borrow collectively and group members encourage one another to repay. It encourages financial
7
responsibility where peer support leads to 99% rate of repayments. Moreover, the group of
borrowers also serves as a social network of voluntary mutual support, as members are
individually responsible for their own loans, and they are expected to voluntarily provide
assistance to their peers where needed.
Individual micro lending
Individual micro lending refers to a microloan that is given directly to an individual. As opposed
to group micro lending, individual micro lending offers a borrower more flexibility in terms of
amount, maturity and interest rates. However, most individual micro loan customers are business
owners who need larger loans and more flexible loans than what is available for group micro
lending, but still do not fall under financial services provided by traditional financial institutions.
Group micro lending and womenGroup micro lending is far more popular amongst women than individual micro lending. There
are many reasons for that practice.
1. Women prefer to spread the risk among the group in case a business or a project would
fall.
2. Group micro lending minims the work and time burden of each individual woman,
allowing one for more flexibility and at the same time ensuring continuation of income if
she becomes pregnant, gets sick or is enable to work for a period of time.
3. Women’s Empowerment and Development Trust Fund suggests, “Group activities and
investments help protect the business assets and capital from male appropriation.”
4. While working together in groups women build on each other’s skills, learn new skills
and exchange resources and knowledge.
8
5. The group loaning solves the problem of collateral that is replaced with peer pressure
from the group.
Grameen Bank
As mentioned earlier, Muhammad Yunus in Bangladesh, India, established Grameen. Grameen
bank is known for its group micro lending program. In order to take out a loan there must be five
women in a group. Two women receive the initial loan, and two more can receive the second
loan, and the fifth member is waiting for the third loan. The group selects its own members and
decides which women receive the first loans. Moreover, group loaning method practice by
Grameen Bank often includes group meetings for training, encouragement, and repayment of the
loan in a public setting.
Women’s Empowerment and Development Trust Fund
For instance, Women’s Empowerment and Development Trust Fund (WEDTF) operating on the
island of Zanzibar in Tanzania serves exclusively women. Zanzibar is an Islamic society in
which men have traditionally practiced polygamy and women have not traditionally been
involved in public or commercial activities. WEDTF operates similarly to Grameen Bank. It
lends money to women in groups of five who mutually guarantee the loan amount.
Women participate in center activities with other groups where they receive training and
Discuss issues of importance to them. A high percentage of its clients are extremely
poor women who are unable to meet their families’ daily needs. Moreover, very few women are
literate or have any business experience. Therefore, most women in the program were new to
credit and to business. Because they lacked confidence and experience, they used the group to
9
gain experience and build up confidence in their ability to manage business affairs. Illiterate
women, in particular, relied on the groups to gain the skills they need (Cheston, 53-54).
Female Empowerment through Microloans
What is empowerment?Many people have different views on what exactly empowerment is. It can be a difficult thing to
define especially since the word doesn’t even translate literally into most languages, as Susy
Cheston points out in her article, Empowerment of Women through Microfinance. Cheston
mentions that a loan officer in Ghana at Sinapi Aba Trust defined empowerment as “enabling
each person to reach his or her God-given potential.” The World Bank defines empowerment as:
“The process of increasing the capacity of individuals or groups to make choices, and to
transform those choices into desired actions and outcomes. Central to this process are
actions that build both individual and collective assets, and improve the efficiency and
fairness of the organizational and institutional context which govern the use of these
assets.”
Even the United Nations Development Fund for Women (UNIFEM) has its own definition of
empowerment. They believe that it is multidimensional and includes elements such as “gaining
the ability to generate choices and exercise bargaining power,” “developing a sense of self-
worth,” and “belief in one’s ability to secure desired changes, and the right to control one’s life.”
Although different people and different organizations have their own versions of what
empowerment actually means, we all have an idea of what it is when we see it.
How is female empowerment measured?Just as empowerment is difficult to define, it can also be difficult to measure. In 1995, the United
Nations Development Program (UNDP) created the Gender Development Index (GDI) and the
10
Gender Empowerment Measure (GEM), both of which were intended to measure female
empowerment. The GDI addresses gender-gaps in life expectancy, education and incomes. The
GEM measures “whether women are able to actively participate in economic and political life
and take part in decision making.” However, there have been debates about these indices over
whether or not they actually promote gender-sensitive development. Professor Stephan Klasen of
the University of Göttingen discusses some major critiques of both systems in his book UNDP’s
Gender-Related Measures: Some Conceptual Problems and Possible Solutions. According to
Klasen, people argue that methods are difficult to interpret, they do not provide accurate
comparisons across countries, and they try to combine too many development factors into a
single measure. Getaneh Gobezie, author of Empowerment of Women in Rural Ethiopia: A
Review of Two Microfinance Models, feels that “measurement methodology should be
participatory, since no one can better define how empowered subjects feel than the subjects
themselves.” Most scholars seem to agree with this statement and use key methods such as
quantitative surveys, ethnographic investigations, focus group discussions and case studies to
measure empowerment as opposed to the GDI and the GEM.
How does microfinance empower women?While the process of empowerment differs from culture to culture, there are some elements of
the process that are seen as relevant in a wide range of societies (Cheston 2002):
Decision Making
Most MFIs consider women’s ability to influence or make decisions that affect their lives to be
one of the main components of empowerment. Women are more able to “decide on spending
their own income” as indicated by the field studies conducted under the International Fund for
Agricultural Development (IFAD) gender mainstreaming review. Reports from the Centre for
11
Self-Help Development (CSD) in Nepal show that “women were able to make small purchases
of necessary items like groceries independently” (Cheston 2002). URWEGO, a World Relief
partner in Rwanda, reported an increase in their clients’ ability to control or inspire business
decisions; a 54 percent increase to be exact, which they found through profound interviews with
13 of their clients. At the time of these interviews, URWEGO was only 18 months old, proving
that their impact was quite significant. This area of empowering women is not completely
perfect, however. Some female borrowers still consult their husbands when spending their own
income, especially for larger and more personal purchases such as jewelry. But MFIs are still
moving in the right direction towards gender equality.
Self-Confidence
Cheston states that self-confidence relates “to both women’s perception of their capabilities and
their actual level of skills and capabilities.” It can be a tricky component of empowerment to
measure but it is also an essential area of change and there has been evidence of microfinance
contributing to this change. URWEGO reported that 69 percent of its clients testified to an
increase in their self-esteem, making this factor URWEGO’s greatest impact of its program on
empowerment. Cheston goes on to mention that knowledge can boost women’s self-confidence
too. “Fifty-four percent of URWEGO clients [also] reported an increase in their level of
knowledge about issues that affect themselves and their families,” she writes, “and 38 percent of
clients reported an increase in business knowledge.” A study of the Women’s Empowerment
Project in Nepal is another case that reported an increase in self-confidence as one of the top
changes reported by sampled groups.
Household Status
12
Mainly in developing countries, men’s domination of women is strongest within the household.
Microfinance, however, has been allowing women to play a larger role in their homes. Tulay sa
Pag-unlad, Inc. (TSPI), a MFI in the Philippines, reported a dramatic increase in women’s role as
funds managers, from 33 to 51 percent. Naila Kabeer, a social economist from Bangladesh,
discovered cases of sole decision-making on the part of the woman, or joint decision-making
between a woman and her husband, but either case is a huge step up from having no say at all.
Kabeer also noted that other studies provided further evidence into the effects of female loan
holders in terms of intra-household relations. For example, members of the Professional
Assistance for Development Action (PRADAN) “have reported less pressure to bear sons and
are more likely to keep back part of their income to dispose of.” In Towards Women’s
Empowerment and Poverty Reduction: Lessons from the participatory impact assessment of
South Asian Poverty Alleviation Programme [SAPAP] in Andhra Pradesh, India, Rajani Murthy
et al reported a higher percent of women being given the freedom to visit and invite their parents
and siblings over as well.
Domestic Violence
Women’s contribution to their households can help reduce domestic abuse or help them escape
abusive relationships as a whole. The Working Women’s Forum found that out of its members
who had experienced domestic violence, 40.9 percent of them put a stop to it because of their
personal empowerment, and 28.7 percent were able to prevent it through group action. A
specific case of a decrease in abuse comes from a client of the Small Enterprise Development
Project (SEDP) as quoted by Kabeer:
“He gives me more value since the loan. I know, because now he hands all his earnings to
me. If I had not gone to the meeting, not taken a loan, not learnt the work, I would not get
13
the value I have, I would have to continue to ask my husband for every taka I needed…
Before, my husband used to beat me when I asked him for money, now, even if he
doesn’t earn enough every day, I can work, we don’t have to suffer.”
Another specific example is a woman named Balbina, a client of ASPIRE in the Dominican
Republic with whom Cheston had a personal interview with. Balbina and her husband felt so
frustrated about living in poverty and “their inability to work productively to change their
situation.” They were constantly fighting since her husband was unemployed and they didn’t
have anything to do. But things started to improve when she invested her loan in her business of
making and selling chicharrones (pork rind snacks). “Now we work together,” Balbina said,
speaking about her husband, “and each of us has something productive to do and a way to direct
our energies.”
Roles in the Community
In addition to being empowered in the private domain as a result of microfinance, women have
been empowered in other spaces, mainly in their communities. For instance, purdah is an Islamic
custom “that involves the seclusion of women from public observation by means of concealing
clothing.” In CSD communities in Nepal, a large amount of women are treated with a sense of
respect and are accepted without purdah in public spaces (Kulkarni 2011). Even young women in
microfinance communities have been treated with higher value. Adolescent daughters have been
shown to obtain as much freedom as their brothers. They are also more likely to attend school.
Grameen Bank, for example, found that a 1 percent increase in loans to women borrowers
increased the probability of school enrollment by 1.9 percent for girl, as Shahidur Khandker
noted in his book Fighting Poverty with Microcredit: Experience in Bangladesh. Additionally,
14
Kabeer found that girls’ schooling was reported to be increasing by 8 percent in villages with the
presence of the Bangladesh Rural Advancement Committee (BRAC).
On top of gaining respect, women borrowers are also more involved in the activities of their
communities. Women from one of the credit groups of the Women’s Entrepreneurship
Development Trust Fund (WEDTF) in Tanzia have been proof of this. Cheston quotes one of
their clients, Halima Juma Hamadi:
“Before the credit support we never even went to the market. We were solely dependent
on our husbands. Now group activities and the intensive training from the scheme have
opened our eyes. We now know that we are better in business than men. We were the
only women selling kerosene in the village. The whole community admired our
determination.”
Hamadi also mentioned that they’ve inspired other women to start their own income-generating
activities. Donna Perry, author of Microcredit and Women Moneylenders: The Shifting Terrain
of Credit in Rural Senegal, can attest to this. “They recycle their capital as high-interest loans to
other farmers, becoming cash patrons to their kin and neighbors,” Perry stated, speaking
specifically of Senegalese women. “Although only 19 percent of women interviewed outright
admitted to doing this (it is against the rules set forth by the donor agency), most women
proclaimed that moneylending is the most popular way for other women to invest in their loans.”
Political Empowerment
Political advancements can be a major indicator of female empowerment. A number of studies
have reported women gaining access to government services as well as political participation,
protests and campaigns, all attributable to microfinance. According to Cheston, women clients of
the Opportunity Microfinance Bank in the Philippines have acquired leadership experience and
15
self-assurance as leaders of their Trust Banks, and have gone on to be elected as leaders within
their barangays – a community-level political unit. Cheston also found that the World Wildlife
Fund (WWF) has successfully trained and mobilized women to take civic action to support
women’s rights and to fight against social problems. Kabeer noted that “members [of the
SAPAP] were far more likely than non-members to report decisions about a range of
‘reproductive rights’ issues, particularly the decision to have an abortion, but also the nature of
the contraception, how many children to have, and the age of marriage for their daughter.” Also,
the CSD program in Nepal resulted in 96 women being elected to village and district
development committees.
Why should MFIs target women and why is the result of female empowerment important?
Despite all of the evidence shown for women feeling empowered through microfinance, some
MFIs are still fearful of making empowerment their main focus. Granted, empowerment does not
occur overnight, and there can be some challenges to the process such as cultural or cost-
effective hardships. However, focusing on female empowerment is important.
According to the International Labor Office (ILO), “commercial banks often focus on men and
formal businesses, neglecting the women who make up a large and growing segment of the
informal economy.” Seventy percent of the world’s poor are women; therefore, it is great that
microfinance targets this tremendous portion of the population that has been at a disadvantage in
terms of receiving credit and other financial services. The business of loaning to women is
sensible since women borrowers have been proven to show higher repayment rates than men, as
discussed earlier. Also, there are “empowering approaches” that aren’t too expensive. For
example, a study of Sinapi Aba Trust in 1997 “found that the most empowering aspect of its
16
various programs was the respect with which clients were treated by people at all levels of the
organization” (Cheston 2002). Banco ADOPEM in the Dominican Republic provides more than
just loans to its clients. They also training in a range of areas, including business, democratic
processes and civil society participation, all intended to encourage women’s empowerment and
leadership. Additionally, empowerment is essential because women are the powerhouse of
developing countries and they can help decrease gender inequalities and discrimination. Some
examples were discussed earlier and further examples entail MFIs successfully organizing
women to fight for issues such as women’s rights, higher wages and releasing children from
bondage.
GLOBE and Women BorrowersIn order for our borrowers to be successful we need to understand the economic and
social environment in which these women are coming from. With our microloans, women are
able to break through the social and economic barriers that hold them back from achieving
equality.
In The Democratic Republic of The Congo, women have a low place in society. A man
has the full power and control over a women’s free will. For instance, “A married woman must
have her husband's permission to open a bank account, accept a job, obtain a commercial license,
or rent or sell real estate.”(The Republic Congo) This is a difficult environment for a woman to
thrive in when her spouse dictates any action she wants to take. When women are given an
opportunity to pursue their interests in The Democratic Republic of The Congo, they are able to
accomplish many feats for their families. Our borrower Siska Ombolo is married with 8
children. She took out a loan to start up her fish trading business. With this loan she started her
business she is able to help provide for her family and get education for her children.
17
In Kenya, the social and economic conditions are vastly different than The Democratic
Republic of The Congo. Women do not have to necessarily have permission from a male to
reach their goals. Women in Kenya actually have a big role in the economic environment. The
agriculture and food industry is held afloat by the women in these sectors. Women shoulder
majority of the workload. A sad reality of this is that, “they earn only a fraction of the income
generated and own a nominal percentage of assets. Only 29 percent of those earning a formal
wage throughout the country are women, leaving a huge percentage of women to work in the
informal sector without any federal support.” This goes unjustified, it is an absolute injustice
those producing most of the work receive the lowest portion of the earnings. When women are
proven to handle family financials better than men, how are they not being fairly compensated
for their efforts? Empowering these women will this country a chance at really beating poverty.
One of our borrowers Helen Aiyanai, “has worked her whole life in the shamba (a
garden) and feels she is getting old for this back-breaking work. She would like to use the loan
money to open a general kiosk where she can sell bread, vegetables, eggs, and other food
items.”(GLOBE) This is the kind of work that is being done without reasonable compensation.
The only option to continue being able to put food on the table is to start her own business. Back
breaking labor is tough on its own, getting nothing in return is a whole different beast.
Our final African country Nigeria is one of the hardest environments for a woman to be
successful on her own merit. Economic opportunities are slim to none for a woman. This is due
to the excessively large gap in equality between men and women. The harsh realities of this
include, “discriminatory practices, amplified by extremist groups, subject women and girls to
dangers, including forced early marriage and the possibility they will face violence for going to
school.” (Women For Women) All that can be seen here is a system of limits, a system that
18
limits ambition and freedom. By limiting the possibility of a bright future for a woman, this
country is limiting its ability to provide a bright future for itself. This system is neglecting to
accept a reality where woman have an equal opportunity to provide for the economy. Poverty is
a factor of limits and the more a country limits its people, the harder it will be for them to escape
the vicious cycle of poverty.
We have a borrower from Nigeria by the name of Emela. She is a widowed woman with
six children. She sought our help and, “In March 2009, Emela borrowed N 20,000 (130 USD) to
start a petty trade business in her village in Nigeria. She used the loan to buy dry fish, crayfish,
dry meat and palm oil from a big market in the city and resell them to consumers in the village
and community market. In October 2009, a little over six months from the date she borrowed the
loan, Emela was able to repay the full amount.”(GLOBE) Emela was quoted saying, “I am
grateful to St. John’s Global Micro Loan Program, they have helped me and other widows in
finding a means of livelihood” (GLOBE). This is a powerful point to consider. In a country
where women have barely any economic freedom and education is rare, what happens when the
patriarch of their family passes away? Women are left without a means to provide for
themselves, let alone their children. This is a major reason why females need to be empowered,
and exactly why microfinance should be encouraged.
Women in Nicaragua are in a similar situation as women in Kenya. For instance,
“women are largely in charge of labor intensive tasks for maintaining the household—carrying
water, collecting fuel wood, caring for children, producing agriculture, and working in the
market.”( fsdinternational) These tasks that provide key necessities for a nation aren’t seen as
respectable jobs, and a brushed off by the males in society. This is intriguing because this
country would starve without women burdening these jobs, and yet they still receive no credit.
19
Therefore microfinance should be given to women as a tool to branch out from these positions,
so that they can receive the crudity that they deserve.
Our borrower Maria del Socorro Robleto Madriz was able to start a school supplies and
craft store with our microloan. She “has a positive outlook on her new business, because there’s
no competing supply store near the school, and business expansion is possible.”(GLOBE) This
is a perfect example of a woman being able to branch out from the norm. She started a business
that has no competitors in sight and she is providing supplies that with help educate children in
her country. This is a highly respectable job that is providing for the future of her country and
empowering other women to rise above expectations of a male dominated society.
In Vietnam, women also face an issue with equality. What may appear to be a society
that gives a little more freedom to its woman, is actually a society that could be holding them
back in the worst ways possible. If we take a look at the economic and social environment for
women in Vietnam we can see that, “Local credit associations do not feel secure giving loans to
single mothers, which has resulted in a poverty increase for households that are led by a
woman. There is a gender gap in education, as males are more likely to attend school-and stay in
school- than females. Women and men tend to be segregated into different jobs, with more
women serving in educational, communications, and public services than men.”(Wiki) The
education levels for women are low, women rarely seen in business, and single mothers are
neglected for loans. We fall in to the same trap here when there is no patriarch in the family.
What is supposed to happen to the family of a single mother who can’t receive any loans and
can’t take part in the economy? More than likely the answer is that her family will starve. This
is an outcome that can be easily avoided if women are given more economic freedom,
particularly through microfinance.
20
In Vietnam we have a borrower whose husband cannot consistently work, her name is
Pham Thi Men. “Pham Thi Men is currently a vegetable vendor residing in Ho Chi Minh City.
Her husband has a job as a Honda conductor, but is unable to consistently work due to his
precarious health. The amount requested will be used to further expand her current business as a
vegetable vendor through the purchase of additional inventory.”(GLOBE) Now imagine what
this woman would have done without our loan. There are many more women like here who need
this kind of assistance. When women are not coming from a place of equality, it is near
impossible for a family to survive if the patriarch loses the ability to work. Women need
equality, equality that is attainable through microfinance.
ConclusionAs showed by excessive research done by the Technology and Communications Team, we can
conclude that in fact, microcredit empowers women in the developing countries, which therefore,
leads to gender equality and creating a better world. We created the following table that
summarizes the impact that microfinance and microcredit has on women’s, their families and
communities.
Decision-making Women’s ability to influence or make
decisions that affect their lives such as how to
manage their own income.
Self-Confidence Women’s perception of their capabilities and
their actual level of skills and capabilities.
Household Status Although men’s domination of women is
strongest within the household, female
21
borrowers are gaining more of a voice.
Domestic Violence Stress caused by poverty can be eased with
microfinance and lead to lowers levels of
domestic violence.
Roles in the Community Women increasingly participate in the
activities of their communities and encourage
other women to do the same.
Political Empowerment Women are more active in political issues,
especially ones that target their own rights.
Works Cited
"About Microfinance | Kiva." About Microfinance | Kiva. N.p., n.d. Web. 7 Dec. 2014. <http://www.kiva.org/about/microfinance>.
22
Cheston, Susy. Empowering Women through Microfinance. New Delhi: Discovery Pub. House, 2012. Web. 10 Dec. 2014. <http://storage.globalcitizen.net/data/topic/knowledge/uploads/201101311419705.pdf>.
Gobezie, Getaneh (2010). Empowerment of Women in Rural Ethiopia: A Review of Two Microfinance Models <http://fletcher.tufts.edu/Praxis/Archives/~/media/1A8A90F262D3449BBC8B389F0A979961.pdf >
International Labour Office – Geneva. Small Change, Big Changes: Women and Microfinance. <http://www.ilo.org/wcmsp5/groups/public/@dgreports/@gender/documents/meetingdocument/wcms_091581.pdf >
Kabeer, Naila (2005). Is Microfinance a ‘Magic Bullet’ for Women’s Empowerment? Analysis of Findings from South Asia. <http://www.lse.ac.uk/genderInstitute/about/resourcesNailaKabeer/kabeerNoMagicBullets.pdf>
Kulkarni, Vani S. (2011) Women’s Empowerment and Microfinance< http://www.ifad.org/operations/projects/regions/pi/paper/13.pdf>
Murthy, Ranjani K, K. Raju and Amitha Kamath. Towards Women’s Empowerment and Poverty Reduction, Lessons from the Participatory Impact Assessment of South Asian Poverty Alleviation Programme in Andhra Pradesh, India <http://siteresources.worldbank.org/INTEMPOWERMENT/Resources/13338_murthy_etal.pdf>
"Story of the Microcredit." Story of the Microcredit. N.p., n.d. Web. 10 Dec. 2014. <http://www.microworld.org/en/about-microworld/about-microcredit>.
"What We Do." Women's World Banking. N.p., n.d. Web. 10 Dec. 2014. <https://www.womensworldbanking.org/about-us/what-we-do/>.
"World Bank Group." World Bank Group. N.p., n.d. Web. 8 Dec. 2014. <http://web.worldbank.org/>.
23