S t . J o h n ' s U n i v e r s i t yD r . L i n d a S a m a

Microcredit and Women EmpowermentIT & Communications TeamNakeya Burnett, Brandon Hubbard, Aleksandra Wachowicz

14Fall

Table of Contents

Introduction.................................................................................................................................................3

An Overview on Microfinance.....................................................................................................................3

What is microfinance?.............................................................................................................................3

The history of modern microfinance.......................................................................................................4

Microfinance Institutions.........................................................................................................................4

Why banks do not serve poor people in developing countries................................................................5

Interest rates...........................................................................................................................................5

Women and microfinance in the developing countries...........................................................................6

Women’s World Bank..........................................................................................................................7

Type of Loans...........................................................................................................................................7

Group micro lending............................................................................................................................7

Individual micro lending......................................................................................................................8

Group micro lending and women............................................................................................................8

Grameen Bank.....................................................................................................................................9

Women’s Empowerment and Development Trust Fund.....................................................................9

Female Empowerment through Microloans..............................................................................................10

What is empowerment?........................................................................................................................10

How is female empowerment measured?.............................................................................................10

How does microfinance empower women?..........................................................................................11

Decision Making................................................................................................................................11

Self-Confidence..................................................................................................................................12

Household Status...............................................................................................................................12

Domestic Violence.............................................................................................................................13

Roles in the Community.....................................................................................................................14

Political Empowerment.....................................................................................................................15

Why should MFIs target women and why is the result of female empowerment important?..........16

GLOBE and Women Borrowers..................................................................................................................17

Conclusion.................................................................................................................................................21

Works Cited...............................................................................................................................................22

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IntroductionWomen in the world today face a threat like no other. That is the threat of gender equality. This

is especially true in developing countries. Women face abuse, lack of education, crippling

poverty, and starvation. These are factors of inequality. When all of the power and freedom is

in a man’s hand, what can a woman do when that man is no longer able to provide for her? She

is left to fend for herself without any resources to survive. It is for this reason that women

empowerment must be encouraged, and microcredit is a sure solution to this problem

An Overview on Microfinance

What is microfinance?

Generally speaking, microfinance is a term to describe financial services, such as supply of loans

and savings to low-income individuals or to those who do not have access to typical banking

services. According to Kiva, microfinance is also the idea of helping low-income individuals to

lift themselves out of poverty after having access to the financial services (KIVA). Those

financial services involve small amounts of money (small loans, small savings, etc.), so the term

‘microfinance’ helps to differentiate these services from services provided by banks and other

financial services. Interestingly enough, the vast majority of people in the developing countries

who have been given microloans become entrepreneurs and build businesses that allowed them

to support their families and transform their communities.

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The history of modern microfinanceThe pioneering of modern microfinance is often credited to Dr. Muhammad Yunus, a winner of

the Nobel Peace Prize. In 1970s, when visiting a village, Jorba, located in the suburbs of

Bangladesh, India, Yunus found a group of 42 women who made bamboo stools. Group of

women lacked the funds to purchase the raw materials, so they felt into a cycle of debt with local

traders, “who would lend them the money for the materials on the agreement that they would sell

the stools at a price barely higher than the raw materials” (“Story of Microcredit”). Yunus found

that the borrowing needs for 42 women equaled to $27, and simply lent them money at zero

interest rate. Therefore, women were able to break the cycle of debt, and sell the stools for a

reasonable price (“Story of Microcredit”). In 1983 he opened Grameen Bank, microfinance

organization and community development bank that now works with over eighty-thousand

villages in India with more than six million borrowers. The success of Grameen Bank proved

that the poor in developing countries could be relied on to repay their loans, even without

collateral, and hence that micro-finance was a potentially viable business.

Since then, the microfinance sector saw rapid growth and the number of finance institutions

serving the poor in developing countries, has been increasing. Today, the World Bank estimates

that about 160 million people in developing countries are served by microfinance. Since then,

microfinance sector has been constantly growing and serving the poor. Today, the World Bank

estimates that about 160 million people in developing countries are served by microfinance

(“World Bank Group”).

Microfinance InstitutionsA microfinance institution (MFI) is an organization that provides microfinance services to the

poor. MFIs range from small non-profit organizations serving 100 clients to large commercial

banks serving millions of people. MFIs offerings range from basic services such as loans, saving

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accounts, and insurance to training and education, or even specific program to combat local

issues (“Story of the microcredit”). The size, number and diversity of MFIs began to grow, many

successful MFIs that began as nongovernmental organizations (NGOs) have transformed into

for-profit financial institutions. Today, there are about 2,000 MFIs serving over 92 million

people with $70 billion in assets.

Why banks do not serve poor people in developing countriesFormal financial institutions were designed for people who already have financial assets- they

were not designed for poor people in developing countries. Although formal financial institutions

are nonexistent in developing g countries, people have other credit resources. For instance,

Credit is available from informal commercial and non-commercial money-lenders but usually at

a very high cost to borrowers. Savings services, on the other hand, are available through a

variety of informal relationships like savings clubs, rotating savings and credit associations,

which tend to be erratic and insecure (“About microfinance”).

Moreover, the majority of formal banks do not provide microfinance products in the developing

countries simply because it does not make as much profit for them. Giving out a $500,000 loan

in the developed countries is far more profitable than making a microloan worth $500 in the

developing countries. Therefore, traditional financial institutions like banks can make money

only if they serve people and provide services to those who already have money.

Interest ratesAlthough it may seem easy to give out a loan, one does not realize that are different types of

costs the MFIs have to cover when it comes to making microloans. Interest rates charges are

necessary to cover the costs of administrating microloans. The interest rates charged by

microfinance institutions are often higher than interest rates offered by traditional banking

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institutions. As mentioned, administrative and operating costs of having many microloans in

developing countries are much higher than the costs of administrating fewer large loans in

developed countries. Furthermore, there are additional costs that interest rates must cover,

including:

The cost of funding to the MFI, which is higher in developing countries due to the fact

foreign funders require a higher return to cover the risk of lending to a microfinance

institutions.

Exchange rate risk, which is higher because currencies are volatile, illiquid, and inflation

may be high.

Risk of borrower default, which is higher in developing countries as borrowers can rarely

offer collateral, credit history, or they default due to factors like sickness.

Administrative costs, which are higher in developing countries as MFI, send field

workers to the areas where borrowers live to meet the client and collect payments.

Although operational and administrative expenses of MFIs in developing countries are very high,

MFIs should strive to be efficient and work to reduce the costs and therefore, lower the interest

rates (“Story of Microcredit”).

Women and microfinance in the developing countriesAccording to the recent statistics, 14.2 million of the world’s poorest1 women now have access

to financial services through MFIs, NGOs and other nontraditional financial institutions. These

women account for nearly 74 percent of the 19.3 million of the world’s poorest people.. Most of

these women have access to credit to invest in businesses and become entrepreneurs (Cheston,

4). A 2001 survey by the Special Unit on Microfinance of the United Nations Capital

Development Fund of 29 MFIs showed that approximately 60 percent of these institutions’

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clients were women. Six of the 29 focused entirely on women. In the remaining 23 mixed-sex

programs, 52 percent of clients were women. (Cheston, 5).

Women’s World Bank

Women’s World Banking is the global nonprofit that provides access to the financial tools and

resources to low-income women in developing countries. The organization closely works with

34 financial institutions from 24 countries to create new credit, savings, insurance products for

women and to show them multiple benefits of investing in women as borrowers as well as

leaders. The organization provides financial institutions with market research, financial products

and customer education to meet women’s needs (“What We Do”).

Janashakti Women’s Development Federation of Sri Lanka is one of 34 Women’s World

Banking partner. Janashakti has evolved from a grassroots organization focused on health and

nutrition to a 28,168-member institution offering loan products, savings products, and life

insurance, as well as services like training in business, health, and nutrition. Organization is build

by poor women who lead and manage it. Janashakti’s main objective is to “eradicae poverty by

developing and promoting individual and collective strength and selfreliance.” Through

participation in the leadership and management of the organization, poor women build

nontraditional technical and professional skills that allow them to go beyond their traditional

gender roles in society (Cheston, 46).

Type of Loans

Group micro lending

Group micro lending also known as solidarity lending is a lending practice where small groups

borrow collectively and group members encourage one another to repay. It encourages financial

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responsibility where peer support leads to 99% rate of repayments. Moreover, the group of

borrowers also serves as a social network of voluntary mutual support, as members are

individually responsible for their own loans, and they are expected to voluntarily provide

assistance to their peers where needed.

Individual micro lending

Individual micro lending refers to a microloan that is given directly to an individual. As opposed

to group micro lending, individual micro lending offers a borrower more flexibility in terms of

amount, maturity and interest rates. However, most individual micro loan customers are business

owners who need larger loans and more flexible loans than what is available for group micro

lending, but still do not fall under financial services provided by traditional financial institutions.

Group micro lending and womenGroup micro lending is far more popular amongst women than individual micro lending. There

are many reasons for that practice.

1. Women prefer to spread the risk among the group in case a business or a project would

fall.

2. Group micro lending minims the work and time burden of each individual woman,

allowing one for more flexibility and at the same time ensuring continuation of income if

she becomes pregnant, gets sick or is enable to work for a period of time.

3. Women’s Empowerment and Development Trust Fund suggests, “Group activities and

investments help protect the business assets and capital from male appropriation.”

4. While working together in groups women build on each other’s skills, learn new skills

and exchange resources and knowledge.

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5. The group loaning solves the problem of collateral that is replaced with peer pressure

from the group.

Grameen Bank

As mentioned earlier, Muhammad Yunus in Bangladesh, India, established Grameen. Grameen

bank is known for its group micro lending program. In order to take out a loan there must be five

women in a group. Two women receive the initial loan, and two more can receive the second

loan, and the fifth member is waiting for the third loan. The group selects its own members and

decides which women receive the first loans. Moreover, group loaning method practice by

Grameen Bank often includes group meetings for training, encouragement, and repayment of the

loan in a public setting.

Women’s Empowerment and Development Trust Fund

For instance, Women’s Empowerment and Development Trust Fund (WEDTF) operating on the

island of Zanzibar in Tanzania serves exclusively women. Zanzibar is an Islamic society in

which men have traditionally practiced polygamy and women have not traditionally been

involved in public or commercial activities. WEDTF operates similarly to Grameen Bank. It

lends money to women in groups of five who mutually guarantee the loan amount.

Women participate in center activities with other groups where they receive training and

Discuss issues of importance to them. A high percentage of its clients are extremely

poor women who are unable to meet their families’ daily needs. Moreover, very few women are

literate or have any business experience. Therefore, most women in the program were new to

credit and to business. Because they lacked confidence and experience, they used the group to

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gain experience and build up confidence in their ability to manage business affairs. Illiterate

women, in particular, relied on the groups to gain the skills they need (Cheston, 53-54).

Female Empowerment through Microloans

What is empowerment?Many people have different views on what exactly empowerment is. It can be a difficult thing to

define especially since the word doesn’t even translate literally into most languages, as Susy

Cheston points out in her article, Empowerment of Women through Microfinance. Cheston

mentions that a loan officer in Ghana at Sinapi Aba Trust defined empowerment as “enabling

each person to reach his or her God-given potential.” The World Bank defines empowerment as:

“The process of increasing the capacity of individuals or groups to make choices, and to

transform those choices into desired actions and outcomes. Central to this process are

actions that build both individual and collective assets, and improve the efficiency and

fairness of the organizational and institutional context which govern the use of these

assets.”

Even the United Nations Development Fund for Women (UNIFEM) has its own definition of

empowerment. They believe that it is multidimensional and includes elements such as “gaining

the ability to generate choices and exercise bargaining power,” “developing a sense of self-

worth,” and “belief in one’s ability to secure desired changes, and the right to control one’s life.”

Although different people and different organizations have their own versions of what

empowerment actually means, we all have an idea of what it is when we see it.

How is female empowerment measured?Just as empowerment is difficult to define, it can also be difficult to measure. In 1995, the United

Nations Development Program (UNDP) created the Gender Development Index (GDI) and the

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Gender Empowerment Measure (GEM), both of which were intended to measure female

empowerment. The GDI addresses gender-gaps in life expectancy, education and incomes. The

GEM measures “whether women are able to actively participate in economic and political life

and take part in decision making.” However, there have been debates about these indices over

whether or not they actually promote gender-sensitive development. Professor Stephan Klasen of

the University of Göttingen discusses some major critiques of both systems in his book UNDP’s

Gender-Related Measures: Some Conceptual Problems and Possible Solutions. According to

Klasen, people argue that methods are difficult to interpret, they do not provide accurate

comparisons across countries, and they try to combine too many development factors into a

single measure. Getaneh Gobezie, author of Empowerment of Women in Rural Ethiopia: A

Review of Two Microfinance Models, feels that “measurement methodology should be

participatory, since no one can better define how empowered subjects feel than the subjects

themselves.” Most scholars seem to agree with this statement and use key methods such as

quantitative surveys, ethnographic investigations, focus group discussions and case studies to

measure empowerment as opposed to the GDI and the GEM.

How does microfinance empower women?While the process of empowerment differs from culture to culture, there are some elements of

the process that are seen as relevant in a wide range of societies (Cheston 2002):

Decision Making

Most MFIs consider women’s ability to influence or make decisions that affect their lives to be

one of the main components of empowerment. Women are more able to “decide on spending

their own income” as indicated by the field studies conducted under the International Fund for

Agricultural Development (IFAD) gender mainstreaming review. Reports from the Centre for

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Self-Help Development (CSD) in Nepal show that “women were able to make small purchases

of necessary items like groceries independently” (Cheston 2002). URWEGO, a World Relief

partner in Rwanda, reported an increase in their clients’ ability to control or inspire business

decisions; a 54 percent increase to be exact, which they found through profound interviews with

13 of their clients. At the time of these interviews, URWEGO was only 18 months old, proving

that their impact was quite significant. This area of empowering women is not completely

perfect, however. Some female borrowers still consult their husbands when spending their own

income, especially for larger and more personal purchases such as jewelry. But MFIs are still

moving in the right direction towards gender equality.

Self-Confidence

Cheston states that self-confidence relates “to both women’s perception of their capabilities and

their actual level of skills and capabilities.” It can be a tricky component of empowerment to

measure but it is also an essential area of change and there has been evidence of microfinance

contributing to this change. URWEGO reported that 69 percent of its clients testified to an

increase in their self-esteem, making this factor URWEGO’s greatest impact of its program on

empowerment. Cheston goes on to mention that knowledge can boost women’s self-confidence

too. “Fifty-four percent of URWEGO clients [also] reported an increase in their level of

knowledge about issues that affect themselves and their families,” she writes, “and 38 percent of

clients reported an increase in business knowledge.” A study of the Women’s Empowerment

Project in Nepal is another case that reported an increase in self-confidence as one of the top

changes reported by sampled groups.

Household Status

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Mainly in developing countries, men’s domination of women is strongest within the household.

Microfinance, however, has been allowing women to play a larger role in their homes. Tulay sa

Pag-unlad, Inc. (TSPI), a MFI in the Philippines, reported a dramatic increase in women’s role as

funds managers, from 33 to 51 percent. Naila Kabeer, a social economist from Bangladesh,

discovered cases of sole decision-making on the part of the woman, or joint decision-making

between a woman and her husband, but either case is a huge step up from having no say at all.

Kabeer also noted that other studies provided further evidence into the effects of female loan

holders in terms of intra-household relations. For example, members of the Professional

Assistance for Development Action (PRADAN) “have reported less pressure to bear sons and

are more likely to keep back part of their income to dispose of.” In Towards Women’s

Empowerment and Poverty Reduction: Lessons from the participatory impact assessment of

South Asian Poverty Alleviation Programme [SAPAP] in Andhra Pradesh, India, Rajani Murthy

et al reported a higher percent of women being given the freedom to visit and invite their parents

and siblings over as well.

Domestic Violence

Women’s contribution to their households can help reduce domestic abuse or help them escape

abusive relationships as a whole. The Working Women’s Forum found that out of its members

who had experienced domestic violence, 40.9 percent of them put a stop to it because of their

personal empowerment, and 28.7 percent were able to prevent it through group action. A

specific case of a decrease in abuse comes from a client of the Small Enterprise Development

Project (SEDP) as quoted by Kabeer:

“He gives me more value since the loan. I know, because now he hands all his earnings to

me. If I had not gone to the meeting, not taken a loan, not learnt the work, I would not get

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the value I have, I would have to continue to ask my husband for every taka I needed…

Before, my husband used to beat me when I asked him for money, now, even if he

doesn’t earn enough every day, I can work, we don’t have to suffer.”

Another specific example is a woman named Balbina, a client of ASPIRE in the Dominican

Republic with whom Cheston had a personal interview with. Balbina and her husband felt so

frustrated about living in poverty and “their inability to work productively to change their

situation.” They were constantly fighting since her husband was unemployed and they didn’t

have anything to do. But things started to improve when she invested her loan in her business of

making and selling chicharrones (pork rind snacks). “Now we work together,” Balbina said,

speaking about her husband, “and each of us has something productive to do and a way to direct

our energies.”

Roles in the Community

In addition to being empowered in the private domain as a result of microfinance, women have

been empowered in other spaces, mainly in their communities. For instance, purdah is an Islamic

custom “that involves the seclusion of women from public observation by means of concealing

clothing.” In CSD communities in Nepal, a large amount of women are treated with a sense of

respect and are accepted without purdah in public spaces (Kulkarni 2011). Even young women in

microfinance communities have been treated with higher value. Adolescent daughters have been

shown to obtain as much freedom as their brothers. They are also more likely to attend school.

Grameen Bank, for example, found that a 1 percent increase in loans to women borrowers

increased the probability of school enrollment by 1.9 percent for girl, as Shahidur Khandker

noted in his book Fighting Poverty with Microcredit: Experience in Bangladesh. Additionally,

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Kabeer found that girls’ schooling was reported to be increasing by 8 percent in villages with the

presence of the Bangladesh Rural Advancement Committee (BRAC).

On top of gaining respect, women borrowers are also more involved in the activities of their

communities. Women from one of the credit groups of the Women’s Entrepreneurship

Development Trust Fund (WEDTF) in Tanzia have been proof of this. Cheston quotes one of

their clients, Halima Juma Hamadi:

“Before the credit support we never even went to the market. We were solely dependent

on our husbands. Now group activities and the intensive training from the scheme have

opened our eyes. We now know that we are better in business than men. We were the

only women selling kerosene in the village. The whole community admired our

determination.”

Hamadi also mentioned that they’ve inspired other women to start their own income-generating

activities. Donna Perry, author of Microcredit and Women Moneylenders: The Shifting Terrain

of Credit in Rural Senegal, can attest to this. “They recycle their capital as high-interest loans to

other farmers, becoming cash patrons to their kin and neighbors,” Perry stated, speaking

specifically of Senegalese women. “Although only 19 percent of women interviewed outright

admitted to doing this (it is against the rules set forth by the donor agency), most women

proclaimed that moneylending is the most popular way for other women to invest in their loans.”

Political Empowerment

Political advancements can be a major indicator of female empowerment. A number of studies

have reported women gaining access to government services as well as political participation,

protests and campaigns, all attributable to microfinance. According to Cheston, women clients of

the Opportunity Microfinance Bank in the Philippines have acquired leadership experience and

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self-assurance as leaders of their Trust Banks, and have gone on to be elected as leaders within

their barangays – a community-level political unit. Cheston also found that the World Wildlife

Fund (WWF) has successfully trained and mobilized women to take civic action to support

women’s rights and to fight against social problems. Kabeer noted that “members [of the

SAPAP] were far more likely than non-members to report decisions about a range of

‘reproductive rights’ issues, particularly the decision to have an abortion, but also the nature of

the contraception, how many children to have, and the age of marriage for their daughter.” Also,

the CSD program in Nepal resulted in 96 women being elected to village and district

development committees.

Why should MFIs target women and why is the result of female empowerment important?

Despite all of the evidence shown for women feeling empowered through microfinance, some

MFIs are still fearful of making empowerment their main focus. Granted, empowerment does not

occur overnight, and there can be some challenges to the process such as cultural or cost-

effective hardships. However, focusing on female empowerment is important.

According to the International Labor Office (ILO), “commercial banks often focus on men and

formal businesses, neglecting the women who make up a large and growing segment of the

informal economy.” Seventy percent of the world’s poor are women; therefore, it is great that

microfinance targets this tremendous portion of the population that has been at a disadvantage in

terms of receiving credit and other financial services. The business of loaning to women is

sensible since women borrowers have been proven to show higher repayment rates than men, as

discussed earlier. Also, there are “empowering approaches” that aren’t too expensive. For

example, a study of Sinapi Aba Trust in 1997 “found that the most empowering aspect of its

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various programs was the respect with which clients were treated by people at all levels of the

organization” (Cheston 2002). Banco ADOPEM in the Dominican Republic provides more than

just loans to its clients. They also training in a range of areas, including business, democratic

processes and civil society participation, all intended to encourage women’s empowerment and

leadership. Additionally, empowerment is essential because women are the powerhouse of

developing countries and they can help decrease gender inequalities and discrimination. Some

examples were discussed earlier and further examples entail MFIs successfully organizing

women to fight for issues such as women’s rights, higher wages and releasing children from

bondage.

GLOBE and Women BorrowersIn order for our borrowers to be successful we need to understand the economic and

social environment in which these women are coming from. With our microloans, women are

able to break through the social and economic barriers that hold them back from achieving

equality.

In The Democratic Republic of The Congo, women have a low place in society. A man

has the full power and control over a women’s free will. For instance, “A married woman must

have her husband's permission to open a bank account, accept a job, obtain a commercial license,

or rent or sell real estate.”(The Republic Congo) This is a difficult environment for a woman to

thrive in when her spouse dictates any action she wants to take. When women are given an

opportunity to pursue their interests in The Democratic Republic of The Congo, they are able to

accomplish many feats for their families. Our borrower Siska Ombolo is married with 8

children. She took out a loan to start up her fish trading business. With this loan she started her

business she is able to help provide for her family and get education for her children.

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In Kenya, the social and economic conditions are vastly different than The Democratic

Republic of The Congo. Women do not have to necessarily have permission from a male to

reach their goals. Women in Kenya actually have a big role in the economic environment. The

agriculture and food industry is held afloat by the women in these sectors. Women shoulder

majority of the workload. A sad reality of this is that, “they earn only a fraction of the income

generated and own a nominal percentage of assets. Only 29 percent of those earning a formal

wage throughout the country are women, leaving a huge percentage of women to work in the

informal sector without any federal support.” This goes unjustified, it is an absolute injustice

those producing most of the work receive the lowest portion of the earnings. When women are

proven to handle family financials better than men, how are they not being fairly compensated

for their efforts? Empowering these women will this country a chance at really beating poverty.

One of our borrowers Helen Aiyanai, “has worked her whole life in the shamba (a

garden) and feels she is getting old for this back-breaking work. She would like to use the loan

money to open a general kiosk where she can sell bread, vegetables, eggs, and other food

items.”(GLOBE) This is the kind of work that is being done without reasonable compensation.

The only option to continue being able to put food on the table is to start her own business. Back

breaking labor is tough on its own, getting nothing in return is a whole different beast.

Our final African country Nigeria is one of the hardest environments for a woman to be

successful on her own merit. Economic opportunities are slim to none for a woman. This is due

to the excessively large gap in equality between men and women. The harsh realities of this

include, “discriminatory practices, amplified by extremist groups, subject women and girls to

dangers, including forced early marriage and the possibility they will face violence for going to

school.” (Women For Women) All that can be seen here is a system of limits, a system that

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limits ambition and freedom. By limiting the possibility of a bright future for a woman, this

country is limiting its ability to provide a bright future for itself. This system is neglecting to

accept a reality where woman have an equal opportunity to provide for the economy. Poverty is

a factor of limits and the more a country limits its people, the harder it will be for them to escape

the vicious cycle of poverty.

We have a borrower from Nigeria by the name of Emela. She is a widowed woman with

six children. She sought our help and, “In March 2009, Emela borrowed N 20,000 (130 USD) to

start a petty trade business in her village in Nigeria. She used the loan to buy dry fish, crayfish,

dry meat and palm oil from a big market in the city and resell them to consumers in the village

and community market. In October 2009, a little over six months from the date she borrowed the

loan, Emela was able to repay the full amount.”(GLOBE) Emela was quoted saying, “I am

grateful to St. John’s Global Micro Loan Program, they have helped me and other widows in

finding a means of livelihood” (GLOBE). This is a powerful point to consider. In a country

where women have barely any economic freedom and education is rare, what happens when the

patriarch of their family passes away? Women are left without a means to provide for

themselves, let alone their children. This is a major reason why females need to be empowered,

and exactly why microfinance should be encouraged.

Women in Nicaragua are in a similar situation as women in Kenya. For instance,

“women are largely in charge of labor intensive tasks for maintaining the household—carrying

water, collecting fuel wood, caring for children, producing agriculture, and working in the

market.”( fsdinternational) These tasks that provide key necessities for a nation aren’t seen as

respectable jobs, and a brushed off by the males in society. This is intriguing because this

country would starve without women burdening these jobs, and yet they still receive no credit.

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Therefore microfinance should be given to women as a tool to branch out from these positions,

so that they can receive the crudity that they deserve.

Our borrower Maria del Socorro Robleto Madriz was able to start a school supplies and

craft store with our microloan. She “has a positive outlook on her new business, because there’s

no competing supply store near the school, and business expansion is possible.”(GLOBE) This

is a perfect example of a woman being able to branch out from the norm. She started a business

that has no competitors in sight and she is providing supplies that with help educate children in

her country. This is a highly respectable job that is providing for the future of her country and

empowering other women to rise above expectations of a male dominated society.

In Vietnam, women also face an issue with equality. What may appear to be a society

that gives a little more freedom to its woman, is actually a society that could be holding them

back in the worst ways possible. If we take a look at the economic and social environment for

women in Vietnam we can see that, “Local credit associations do not feel secure giving loans to

single mothers, which has resulted in a poverty increase for households that are led by a

woman. There is a gender gap in education, as males are more likely to attend school-and stay in

school- than females. Women and men tend to be segregated into different jobs, with more

women serving in educational, communications, and public services than men.”(Wiki) The

education levels for women are low, women rarely seen in business, and single mothers are

neglected for loans. We fall in to the same trap here when there is no patriarch in the family.

What is supposed to happen to the family of a single mother who can’t receive any loans and

can’t take part in the economy? More than likely the answer is that her family will starve. This

is an outcome that can be easily avoided if women are given more economic freedom,

particularly through microfinance.

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In Vietnam we have a borrower whose husband cannot consistently work, her name is

Pham Thi Men. “Pham Thi Men is currently a vegetable vendor residing in Ho Chi Minh City.

Her husband has a job as a Honda conductor, but is unable to consistently work due to his

precarious health. The amount requested will be used to further expand her current business as a

vegetable vendor through the purchase of additional inventory.”(GLOBE) Now imagine what

this woman would have done without our loan. There are many more women like here who need

this kind of assistance. When women are not coming from a place of equality, it is near

impossible for a family to survive if the patriarch loses the ability to work. Women need

equality, equality that is attainable through microfinance.

ConclusionAs showed by excessive research done by the Technology and Communications Team, we can

conclude that in fact, microcredit empowers women in the developing countries, which therefore,

leads to gender equality and creating a better world. We created the following table that

summarizes the impact that microfinance and microcredit has on women’s, their families and

communities.

Decision-making Women’s ability to influence or make

decisions that affect their lives such as how to

manage their own income.

Self-Confidence Women’s perception of their capabilities and

their actual level of skills and capabilities.

Household Status Although men’s domination of women is

strongest within the household, female

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borrowers are gaining more of a voice.

Domestic Violence Stress caused by poverty can be eased with

microfinance and lead to lowers levels of

domestic violence.

Roles in the Community Women increasingly participate in the

activities of their communities and encourage

other women to do the same.

Political Empowerment Women are more active in political issues,

especially ones that target their own rights.

Works Cited

"About Microfinance | Kiva." About Microfinance | Kiva. N.p., n.d. Web. 7 Dec. 2014. <http://www.kiva.org/about/microfinance>.

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Cheston, Susy. Empowering Women through Microfinance. New Delhi: Discovery Pub. House, 2012. Web. 10 Dec. 2014. <http://storage.globalcitizen.net/data/topic/knowledge/uploads/201101311419705.pdf>.

Gobezie, Getaneh (2010). Empowerment of Women in Rural Ethiopia: A Review of Two Microfinance Models <http://fletcher.tufts.edu/Praxis/Archives/~/media/1A8A90F262D3449BBC8B389F0A979961.pdf >

International Labour Office – Geneva. Small Change, Big Changes: Women and Microfinance. <http://www.ilo.org/wcmsp5/groups/public/@dgreports/@gender/documents/meetingdocument/wcms_091581.pdf >

Kabeer, Naila (2005). Is Microfinance a ‘Magic Bullet’ for Women’s Empowerment? Analysis of Findings from South Asia. <http://www.lse.ac.uk/genderInstitute/about/resourcesNailaKabeer/kabeerNoMagicBullets.pdf>

Kulkarni, Vani S. (2011) Women’s Empowerment and Microfinance< http://www.ifad.org/operations/projects/regions/pi/paper/13.pdf>

Murthy, Ranjani K, K. Raju and Amitha Kamath. Towards Women’s Empowerment and Poverty Reduction, Lessons from the Participatory Impact Assessment of South Asian Poverty Alleviation Programme in Andhra Pradesh, India <http://siteresources.worldbank.org/INTEMPOWERMENT/Resources/13338_murthy_etal.pdf>

"Story of the Microcredit." Story of the Microcredit. N.p., n.d. Web. 10 Dec. 2014. <http://www.microworld.org/en/about-microworld/about-microcredit>.

"What We Do." Women's World Banking. N.p., n.d. Web. 10 Dec. 2014. <https://www.womensworldbanking.org/about-us/what-we-do/>.

"World Bank Group." World Bank Group. N.p., n.d. Web. 8 Dec. 2014. <http://web.worldbank.org/>.

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