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FINA1049: Micro-Finance In Intl Dev (15) Essay A Marr

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BU/PG 50.00% 23/03/2011

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Tahmina Aktar

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Title Gender and empowerment in microfinance: A critical assessment of the impact of microfinance

Introduction Microfinance is defining as the financial services like give somebody a credit, a savings and deposits of money, insurance, repay services, transfers of money etc to reduce poverty. It is now very successful in the developing earth especially in the developing countries. It is worldwide accepted because it is a sustainable solution to reduce global poverty. It is a financial service for poorer or less-income people or people who are never get a chance in banking related services and it is providing the poor people as the services as they can get from the bank. It has an ability to save money, access capital and manage the risk exposures of various kinds as life, property through insurance, for their economic and social development. The basic financial services are developed the skills and opportunities for poor people who are currently out of any financial services. Microfinance has the ability to change the poor people life when the poor people will use microfinance in proper ways.

Critical discussion According to 2006 Microfinance Summit Campaign report, women are more clients for microfinance than men like only three men are microfinance clients out of ten, that means seven clients are women. But the more income of women can increase the physical condition and education of all household members, its called the women-empowerment effect and the more income of men can increase the health and education of all household members but women lose their supportive role in family, its called the women-disempowerment effect. Women-disempowerment effect has no impact on health and education but sometimes it brings very worse negative impact on health and education (Sundaresan, 2008).

Microfinance and gender is a development framework for estimating the impact of microfinance. A potential bias is identifying and estimating to overall potential of microfinance on poverty reduction. This bias is now influences women in recent microfinance initiatives. Many of organizations as consultative group to assist the poor (CGAP), World Bank have priority to give loan directly to women (Pitt and Khandker, 1998). There are lots of case studies which describe gender empowerment in microfinance. In Mexico, the OPORTUNIDADES programme gave the food stamps directly to women rather
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than men because they thought that men may be sell the food stamps and may be spend the capital in a wrong ways, most probability spend money on tobacco, alcohol and gambling. If men do like the above then it can bring worse impact on microfinance. So, they gave the loan directly on women. The OPORTUNIDADES project success in Mexico, the women in rural Mexico brought the social improvements and poverty reduces ten percent in Mexico (Emmanuel, 2001). Other case studies in Brazil said that child health which measures as survival probabilities, height for age and weight for height increases if the income is in the hands of women rather than men. Women can keep safe twenty times more of their income rather than men. By increasing the power of women in Brazil, women can increase the family budget that spent on health, education and also child health (Thomas, 1990). Case studies in Kenya, many women are joining Rotating Savings and Credit Associations (ROSCA) to save money and to reduce their poverty and also the main reasons that to keep away their money from their husbands and also the savings motives are apply to womens participation in microfinance (Anderson and Baland, 2002). Innovations for Poverty Action (IPA) researchers are able to identify some sample of borrowers that including five geological areas which are very long distance from each other. These studies shows that most of the decisions concerning about investment and the expenditures from returns realized from micro-loans are taken by men heads of the family, not by women of the family, in the bank branch with the highest percentage of original population. But the Grameen Trust Chiapas and other group lending institutions is serving borrowers in this areas for a long time. If microfinance to women had not already empowered them in such traditional societies and supercilious the head of family relationship is basically resistances as wives systematically defer decision-making to their husbands, it is difficult to visualize what an involvement of the genus in that region could actually bring about in terms of changes in behavioural patterns (Sundaresan, 2008). The main reasons for the empowerment in microfinance as to provide women with loan in sufficient amount that may be useful. Microfinance can remove the problems of poverty by give the women a chance to inputs and marketing facilities. One the other hand, field level microfinance officer thought that women are the better customers for loans compared with men because women are more trustful and more risk adverse to repayment the loans compares with men. The women are getting less pressure and threat of public embarrassment with regards to failure in repayment of the loans. Most of the rural women are getting fewer

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opportunities to access the alternative sources of money than men, which turns as moral hazard. Microfinance can reduce this kind of moral hazard (Christopher, 1996). So, it can be seen that in microfinance, women are the more choice and effective than the men, excluding men from microfinance are not important or they never give the microfinance institutions an important detrimental outcomes. On the other hand, there are some problems with male but not the all men and keeping out of male from microfinance can lead to harmful results for women who join any financial services, their loans may be hijacked and may be occurs some unexpected situations which women never can faced herself. Case studies from Bangladesh and Africa said that microfinance does not increase women negotiating power because 40% of women borrowers are returned their 90% of loans which handled and repayments by their husbands help. So, the empowerments of womens are dependent on inflexible social norms and traditional (Mayoux, 1999). The women have power to improved control over their labour and also control over their savings, credit and income by microfinance. Women enhanced their freedom to move and cooperate with the officials aspects. Thus, this improvement of women regards to the dimension of empowerment. The women are capable to handle some of the issues relating to their lives without help of men. That means, dimension of empowerment of women is Economic and Political impacted due to participation in financial services.

The main target of Microfinance programmes are women. There are strapping proofs that, Microfinance programmes help to contribute women empowerment. Microfinance programmes are now increased women power about their decision making in the areas of family development, children's marriage, selling and buying of properties. The members of microfinance institutions are able to prevent familial violent behaviour due to individual empowerment and throughout grouping action.

Microfinance helped women to reduce their addiction on local moneylenders. The local moneylenders take more than enough interest rates but in microcredit sector decline the interest rates. In the developing countries, the interest rates are usually failing down over time due to the penetration of microfinance system in the rural economies. Microfinance institutions give women loans and helped women to meet up their expenditure as well as their daily needs and also production needs. Women invested the loan that obtained from microfinance intuitions in a new financial activities or increasing the old financial activities.
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These types of non-agricultural performances carry out by the women can helped the family to acquire more income from low risk. So, poverty may reduce and the quality of income of the family is going up and these all point out that the incomes of the poor people is increased and as a consequence the intensity of poverty come down. In rural areas children health, nutrition and education status is improved by the activities of women. The reduction of gender differences may be seen here and also the empowerment of women are increased to some level (Galab and Chandrasekhara, 2003). In the microfinance programme in Bangladesh study, 63 percent of women loan holders surveyed in Bangladesh by loan use. Economic organization using by women credit holders in Bangladesh are more than male and the wives of male credit holders were found to use the least levels of economic organization. Women headed family are increased because of changing labour needs, increasing urbanization and the breakup of comprehensive family structures. Women are the main source of income in some male dominant family now (Kabeer, 2005). The relationship between microfinance and the gender development and empowerment are very important. Empowerments of women are increased today by microfinance which is able to them to extent business and earn more money so that their husband gives them better value. They also give the family better education and good health. Today nearly 20 million poor women of Bangladesh are empowered all the way through microfinance and participate to the development of the country. Microfinance not only contributes to reduce poverty and financial services but also contribute economic empowerment, political and social empowerment for women. The main aims of economic empowerment, social and political empowerment for women are gender equality and empowerment. Because in rural women never get gender equality and empowerment themselves. Womens admittance to financial services may change their financial empowerment as the roles of women in family financial situations may improve and they may use significant amounts of money in their own choice. This power may allow women to start their own financial performances and increase more in live performances to obtain assets by using their loans. By contribution of women in financial activities may increase their incomes or their own family income. The result of economic empowerment, the women use microfinance services for their family members as husbands or children. Normally women are not allow in rural areas to directly occupied in income earning activities, credit or savings options for family, they cant do make any financial decisions without asking their husband. They may
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able to participate a more active role in family decision-making by help of microfinance. This participation may bring advantage for their children through rising expenses on their nutrition and education and their cultural activities. It may changes in gender inequalities in the family through the family members. It is also bring profit for men as increased family income and remove the men financial tensions. The economic empowerment of women's may go ahead to social and political empowerment and they may get the opportunity to build a superior position not only in family but also in society. The positive impact for womens that they may build up their confidence, skills, knowledge for group activity and they may open their own business with a community. In some societies, women are got less opportunity to meet their immediate needs for family but now this scenario has been changes. Individual women can meet their own and may do something as role models for others and some men are help the women to change them (Mayoux, 1999). In the microfinance programmes of the Community Development Centre (CODEC) in Bangladesh and the Cameroon Gatsby Trust (CGT), they are supported to women in organizational gender policy as equal demonstration in leadership at the partnership level. The mens and womens group leaders are met together and then present any important cases for discussion to mitigate that problem. The gender empowerment is highly controversial that imposing the financial sustainability approach as if women can get the opportunity of financial services then a significantly amount of incomes will be gone in womens own activities rather than repayments of loans, some women can use this as a power rather than improvements in their welfare within the family. But womens empowerment may potentially participate at the overall level by increasing economic growth in their policy decisions. To reduce poverty, the all empowerment together can bring a greater ability to meet the needs of family and reduction of poverty. Microfinance guiding principles may take group exploit to remove gender differentiation within the society, including gender violent behaviour and admittance to income and local decision making processes. Microfinance is not only the solution of poverty but also the higher-level organization may support gender inequalities, some collective and political modify and support women to get them human rights at the worldwide level. Many organizations are used microfinance advantageously for social and political enlistment of women around gender empowerment (Mayoux, 1999 and Kabeer, 1999).

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Conclusion At present, the degree of gender empowerment is in a good position but some important things as some expenditure in household, region specific and inflexible are exceedingly difficult to change. Empowering gender is an additional tool that gives the right to gladly invite their partners to change the social norms. This is proved more difficult in poorer regions where family heads seem mostly preference to be men. In this situation, women are responsible to repayment the loan but the men never give them power over about their business, health and education for their family. Some women do certainly benefit significantly from some microfinance programme and increasing their incomes and using this to increase their negotiating power in the family and their rank in the society. So, it can seen that an important balance between financial services and gender empowerment which is very important issues for microfinance. Final results on acquire up as well as possible changes from the gender should further illuminate the questions and shack glow on allegation of microfinance structures around the exceptionally important issues of gender in the field of microfinance ,development and empowerment (Sundaresan, 2008).

Bibliography Anderson, S. and Baland, J. (2002)." The economics of ROSCAs and intrahousehold allocation", Quarterly Journal of Economics, 117(3), 983-95. Christopher, U. (1996)."Gender, agricultural production and the theory of the household", Journal of Political Economy, 104(5), 1010-46. Galab, S. and Chandrasekhara, N. (2003). Women's Self-Help Groups, Poverty Alleviation and Empowerment, Economic and Political Weekly, Vol. 38, No. 12/13, pp. 12741283. Available at: www.jstor.org/stable/4413378. Accessed on: 19/03/2011 17:40 Kabeer, N. (2005). Is Microfinance a 'Magic Bullet' for Women's Empowerment? Analysis of Findings from South Asia, Economic and Political Weekly, Vol. 40, No. 44/45, pp. 4709-4718. Available at: www.jstor.org/stable/4417357. Accessed on: 19/03/2011 17:39 Mayoux, L. (1999)."Questioning virtuous spirals: microfinance and womens empowerment in Africa", Journal of International Development, 11(7), 957-84.

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Pitt, M. and Khandker, S. (1998)."The impact of group-based credit programs on poor households in Bangladesh: does the gender of participants matter?", Journal of political Economy, 106(5), 958-96. Sundaresan, S. (2008). Microfinance: Emerging Trends and Challenges, Edward Elgar Publishing, USA. Thomas, D. (1990)."Intrahousehold allocation: an inferential approach", Journal of Human Resources, 25(4), 635-64. www.thedailystar.net/newDesign/news-details.php?nid=176578 (Accessed on: 20-03-2011) www.genfinance.info (Accessed on: 21-03-2011)

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