Global Resources

Gender and Microfinance Services: Outlining Some Outstanding Issues

Author: G. Gobezie
Publication Date: Jun 2009
There is growing evidence that gender inequalities in developing societies inhibit economic growth and development. There are different models of reaching poor women through microfinance services. With a focus on Ethiopia, this paper highlights two of the major approaches, namely the Grameen type of approach and self-help groups. The Grameen approach is explained as a top-down style of organizing people, for the purpose of preparing the poor for a group loan, utilized by most microfinance institutions but which can sometime be inconsistent with existing networks that the poor maintained for long periods. The alternative are Community Managed Loan Funds which take existing local social networks as platform for delivery of financial services, particularly to very poor women. The author outlines how delivery models depend on the socio-economic situation of the target area. The document argues that empowerment cannot be expected to materialize only by delivering microenterprise services like microfinance. Women's improved access to credit will have to be accompanied by a number of additional measures, such as non-formal education, skill up-gradation, and social and political consciousness-raising to challenge the patriarchal social structure if credit access is to facilitate women's empowerment. The challenge needs to be tackled with a coordinated effort of all stakeholders that are involved in rural development. Patriarchal systems at community level, and male domination within the household are centuries old in many societies, and may not be amenable to be tackled with few years of microenterprise intervention. It needs sustained effort.

Summary adapted from source.