User:Safabsr/Microfinance

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Through my contributions, I plan to add information from a case study supporting the notion that microfinance opportunities have the potential to expand female autonomy and further empower women. I will also add information regarding the Kashf foundation if deemed fit.

Women [edit]

Microfinance provides women around the world with financial and non-financial services, especially in the most rural areas that do not have access to traditional banking and other basic financial infrastructure. It creates opportunities for women to start-up and build their businesses using their own skills and talents.

Utilizing savings, credit, and microinsurance, Microfinance helps families create income-generating activities and better cope with risk. Women particularly benefit from microfinance as many microfinance institutions (MFIs) target female clients. Most microfinance institutions (MFIs) partner with other organizations like Water.org and Habitat for Humanity to provide additional services for their clients.

Microfinance is a sustainable process that creates real jobs, opens opportunities for future investments and helps the women clients provide for the education to their children. Microfinance generally agree that women should be the primary focus of service delivery. Evidence shows that they are less likely to default on their loans than men. Industry data from 2006 for 704 MFIs reaching 52 million borrowers includes MFIs using the solidarity lending methodology (99.3% female clients) and MFIs using individual lending (51% female clients). The delinquency rate for solidarity lending was 0.9% after 30 days (individual lending—3.1%), while 0.3% of loans were written off (individual lending—0.9%). Because operating margins become tighter the smaller the loans delivered, many MFIs consider the risk of lending to men to be too high. This focus on women is questioned sometimes, however a recent study of microentrepreneurs from Sri Lanka published by the World Bank found that the return on capital for male-owned businesses (half of the sample) averaged 11%, whereas the return for women-owned businesses was 0% or slightly negative. Supporting economists and social reformers argue that microcredit can expand female autonomy, as it pushes them to challenge existing cultural norms through the production of capital, expanding their importance in society . Gaining access to these loans expands their bandwidth in household decision-making processes, provides access to new markets and resources, providing the means to pursue nontraditional activities and venture out of the domestic sector. However, it is important to note that personal familial structure, relations with spouses, and education levels greatly influence these outcomes. A 2012 case study on Pakistan’s Bahawalpur District’s sector’s effectiveness in expanding female empowerment through micro credit revealed that firms should “not only should increase the amount of the loan but it should also be checked that whether the amount is utilized by the woman, or other members of the family,” as loans handled by husbands or other family members have higher failure and nonpayment rates compared to those solely managed by female borrowers themselves.

Microfinance's emphasis on female-oriented lending is the subject of controversy, as it is claimed that microfinance improves the status of women through an alleviation of poverty. It is argued that by providing women with initial capital, they will be able to support themselves independent of men, in a manner which would encourage sustainable growth of enterprise and eventual self-sufficiency. This claim has yet to be proven in any substantial form. Moreover, the attraction of women as a potential investment base is precisely because they are constrained by socio-cultural norms regarding such concepts of obedience, familial duty, household maintenance and passivity. The result of these norms is that while micro-lending may enable women to improve their daily subsistence to a more steady pace, they will not be able to engage in market-oriented business practice beyond a limited scope of low-skilled, low-earning, informal work. Part of this is a lack of permissivity in the society; part a reflection of the added burdens of household maintenance that women shoulder alone as a result of microfinancial empowerment; and part a lack of training and education surrounding gendered conceptions of economics. In particular, the shift in norms such that women continue to be responsible for all the domestic private sphere labour as well as undertaking public economic support for their families, independent of male aid increases rather than decreases burdens on already limited persons. Women of Malawi posing with their savings box If there were to be an exchange of labour, or if women's income were supplemental rather than essential to household maintenance, there might be some truth to claims of establishing long-term businesses; however when so constrained it is impossible for women to do more than pay off a current loan only to take on another in a cyclic pattern which is beneficial to the financier but hardly to the borrower. This gender essentializing crosses over from institutionalized lenders such as the Grameen Bank into interpersonal direct lending through charitable crowd-funding operations, such as Kiva. More recently, the popularity of non-profit global online lending has grown, suggesting that a redress of gender norms might be instituted through individual selection fomented by the processes of such programs, but the reality is as yet uncertain. Studies have noted that the likelihood of lending to women, individually or in groups, is 38% higher than rates of lending to men.

This is also due to a general trend for interpersonal microfinance relations to be conducted on grounds of similarity and internal/external recognition: lenders want to see something familiar, something supportable in potential borrowers, so an emphasis on family, goals of education and health, and a commitment to community all achieve positive results from prospective financiers. Unfortunately, these labels disproportionately align with women rather than men, particularly in the developing world. The result is that microfinance continues to rely on restrictive gender norms rather than seek to subvert them through economic redress in terms of foundation change: training, business management and financial education are all elements which might be included in parameters of female-aimed loans and until they are the fundamental reality of women as a disadvantaged section of societies in developing states will go untested.

Organizations supporting this work[edit]

• ADA
• Khushhali Microfinance Bank Limited Pakistan
• FINCA
• NWTF
• akhuwat Foundation Pakistan
• Alkhidmat Foundation Pakistan
• Whole Planet Foundation
• Kiva
• MCPI
• Women's World Banking
• Social aid for Common Humanitarian - SACH
• Kashf Foundation

References

Rana, Ejaz Ali Khan, and Noreen, Sara. "Microfinance and women empowerment: A case study of District Bahawalpur (Pakistan)." African Journal of Business Management 6, no. 12 (2012): 4514-4521.

JAMAL, Nagina. "Impact Analysis of Microfinance on Women Empowerment and Poverty Alleviation: A Case Study of MFIs in Gujranwala & Lahore Districts of Pakistan." (2016).