MICROCREDIT AND JOB CREATION PRESENTATION AT THE GLOBAL

MICROCREDIT SUMIMIT BY

DR. JENNIFER N. RIRIA, PHD, MBS,

ICON / HP

NOV 14TH - 16TH 2011

PRE – AMBLE

“Financial services to low income people may as

well be the single most effective means to tackle

poverty and create broad – based economic growth.

Financial services increase their assets, their living

standards, and their roles in shaping society”.

Nancy Barry, 1995, 2011.

The ultimate goal of microfinance is to create

wealth, assets and employment . J. Riria 2011

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3

0

5

10

15

20

25

30

35

40

45

AFR EAP ECA LAC MNA SAR

Where women work

( population)

Sh

are

of

fem

ale

popula

tion

Source: National household surveys, most recent year 2000 - 2010

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KEY Mean of Employer

Mean of self-

employed

Mean of wage

earner Mean of unpaid worker

Mean of

Agriculture Mean of NonLF

0

5

10

15

20

25

30

35

40

45

AFR EAP ECA LAC MNA SAR

Where men work

( population)

Sh

are

of

male

popula

tion

Source: National household surveys, most recent year 2000 - 2010

3

KEY Mean of Employer Mean of self-employed Mean of wage earner Mean of unpaid worker Mean of Agriculture Mean of NonLF

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.

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• 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.

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• HOW CAN MICROCREDIT CHANGE ALL THAT AND CREATE JOBS?

• WHAT DOES MICROFINANCE SEEK TO ACHIEVE AS FAR AS JOB CREATION IS CONCERNED?

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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.

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• 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.

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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.

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• 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.

EXPERIENCE FROM KENYA WOMEN FINANCE GROUP

(Continued)

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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.

• 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

EXPERIENCE FROM KENYA WOMEN FINANCE GROUP

(Continued)

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1. FDA Kenya, Gender Responsive Budgeting in Kenya

2. FIDA, 2009/2010

3. 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.

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References

THANK YOU

DR. JENNIFER N. RIRIA, PHD, MBS, ICON/HP