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One of the important aims of MFIs is to reach women, and allow them access to resources which
will empower them. Empowerment, however, is an elusive concept and also relative, which cannot
be proven to exist in a standardised monitoring format (Pitamber, 1999). On the other hand it is
true that many of the MFIs do reach women, but this is not a direct targeting strategy.
Recent data from discussions and interviews of MFIs in Ethiopia (field discussions July 2002)
have revealed that many MFIs have above 50% female clientele. Although at the regional level
female outreach is still weak, these figures for MFI performance are impressive. However, further
investigation revealed that the high female clientele was not a direct targeting strategy in the
interests of gender equity. Discussions revealed that women were simply better clients than men.
Credit officers from the interviewed MFIs explained that firstly women did not demand high loan
amounts, and therefore this did not pose a great risk for the MFI itself. Secondly, these women
borrowers being normally risk averse were always punctual with their repayments. Thirdly, because
the women were aware that they will need to borrow in the future from the same source they were
very alert of the fact that they should maintain a good record with the MFI. Therefore, for MFIs
and other micro-credit delivery mechanisms focusing on women as clients made better business
sense and contributed to business profits and sustainability.
As mentioned earlier, MFIs are not necessarily welfare oriented and therefore they will promote
those products which fit the needs of their “best customers”. Women in this case have proven to
be very good customers and therefore those MFIs which have a majority female clientele do so
not out of gender sensitive and equity promoting mind-set. From a gender analytical framework,
not all the MFIs or their staff are always capable of pursuing gender equity strategies in their
operations. Furthermore, the fact that more and more women are being targeted for micro-finance
outreach within existing standardised operations procedures and policy, may indicate that poverty
amongst women is likely to increase disproportionately, more so because of poverty implication
of loan amounts, interest rates, repayments, etc. as mentioned above.

ECONOMIC RESEARCH PAPERS
NO 74
(January 2003)
Factors Impeding the Poverty Reduction Capacity of Micro-credit: Some Field Observations from Malawi and Ethiopia
by
Sunita Pitamber

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