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Targeting women: Tenets of Micro-credit for Poverty Reduction

Guest post by: African Development Bank

Article Overview: Is this gender consciousness?

Targeting women: Tenets of Micro-credit for Poverty Reduction

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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Article Tags: aims, better business, borrowers, business profits, business sense, clientele, credit delivery, delivery mechanisms, equity strategies, gender equity, loan amounts, mfi, mfis, micro credit, outreach, regional level, repayments, risk, sustainability



Related Forum Posts
Re: Differences between men and women entrepreneurs - Hi Jude, I looked at your website. It looks great and I agree with what you say! I think you have a great concept that will really get women's attention. I hope it helps a lot of women. I wanted to read your article, but I couldn't find a way to read it without signing up for your services. I did like what you wrote about women on your home page though! I too, have noticed women tend to be the hardest on themselves. I think most of us have heard that women usually dress for women, not men. I remember hearing about a study that said women usually scan their competition in the form of other women when they enter a room. They said most women want to know that they are the best woman in the room. That study was on a social scale, but it's still interesting to consider how it might translate to business. Hmmm... just who are women trying to impress anyway? We don't need to compete! If we just learned to accept our own unique talents and chose to see them as great assets, there's no need to impress anyone! When I finally learned this truth and took it to heart, I was freed up to really grow forward! Wishing you all the best! Tami
Male vs female networking - [quote:2zrnzg30]I could imagine at a higher level that Executives could possibly treat women different to men.[/quote:2zrnzg30] I wonder if there's an age difference between how men and women react. Men over the age of 40 are used to dealing with their "old boy network" I think, whereas younger guys have more experience dealing with women of power in the work place. And then there's women - those over 40 no how much effort was put into getting equal treatment, whereas women under 40 don't appreciate what had gone before. That's an over-generalization, I suppose, but I wonder if its true?
Re: What or Who Sparks Your Business Interest - this might be surprise to you, but poverty spark my business interest. Poverty is prevalent in Africa. And I discovered early in life that people that own their businesses are richer than anypne else. I decided to get out of the poverty level and business provided a way of escape.
Re: Help Make my business a Million Dollar Business- Update - Let me be the first to say Wow! What a fantastic idea! The underepresentation of women in boardrooms across the world is a startling fact. It is also depressing that women make 73 cents per every dollar made by men. This pay inequality is also discouraging to young, aspiring, and talented women entrepreneurs. Is there a way to volunteer for the cause beyond nominating or signing up?
More thoughts on respect - [quote:11qfn2yn]Everyone deserves to be treated decently, but I don't think anyone has a right to expect respect just because of the position they have. [/quote:11qfn2yn] Another problem for women - less so in the US at the moment, but in middle eastern countries - is of course dealing with people whose religions state that women are no more than dirt. If they've been brought up that way from the get go, I guess it's kind of hard for them to break the habit of thinking a woman can do anything they can do - if she's not held down by an oppressive religion or government. The thing to do, in my opinion, is for each businesswoman to consider herself a standard bearer for professionalism. Being great at your job won't convince a prejudiced guy that all women are great, but not being up to snuff will certainly convince him that [i:11qfn2yn]all [/i:11qfn2yn]women aren't up to snuff... And it must not be forgotten that there are women, also, who don't give other women the respect they deserve. Many's the woman I've heard say that she'd never work for a woman...apparently men have the right to tell them what to do, but women are just too "bossy."


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