Empowering women by microfinance!?

Against the background of an increasing feminization of poverty in the developing world, microfinance programs represent important means for promoting women’s empowerment. However, most of these programs are only focussed on individual and purely economic empowerment but do not involve full and equal participation of women in all spheres of society. In order to improve the effectiveness of microfinance programs for women, it is necessary to integrate a societal and political dimension which enables women to participate in decision-making processes above and beyond the family context.

A report by Alexandra Dobra, published in the “International Politics and Society” journal of the Friedrich Ebert Foundation, depicts important limits of microfinance programs for women:

According to the Microcredit Summit 2005, women represent 70 percent of individuals living on less than 1 us dollar a day. Not only do women represent the major part of the poorest individuals, but in addition they are also the most vulnerable.

Microfinance programs have proven to be important instruments to fight against female poverty and vulnerability in developing countries. Among the 81.9 million poor clients served by microfinance programs in 2005, 84.2 percent were women (World Bank 2005). Microfinance, by targeting women, allows not only improvements in gender equality but also effective decreases in poverty through the positive effect of gender equality on development.

                Image source: http://dgdwblog.wordpress.com

Using microfinance programs to give women access to financial services is a means of mobilizing their productive capacities for the benefit of economic development. Through access to financial resources, microfinance not only gives women access to self-employment, but also contributes to the amelioration of family life and influences the social situation of women by promoting self-confidence and the capacity to play an active role in society. Moreover, extrapolating from household expenditure by working women it appears that women are more inclined to be altruistic and spend most of their money on their families. In this way, the wellbeing of the whole family and society is improved.

Although the social dimension of microfinance enables the emergence of female empowerment, the latter is too underdeveloped. In most instances, microfinance programs only enhance personal empowerment but do not involve full and equal participation of women in all spheres of society, including decision-making and access to power. In most developing countries, women are for example still largely under-presented in politics.

In order to improve their effectiveness of the empowerment process, microfinance programs must try to enhance their contextual adaptation and the political dimension. Therefore, the preponderance of the economic dimension of microfinance has to be reduced. Policy intervention is needed especially when it comes to improve women’s societal status. Action plans should reinforce women’s rights by stepping up the fight against sexual discrimination, by accelerating the politicization of women and by tackling patriarchal norms. Hereby, increasing women’s education and wage income is an important milestone. By these means, microfinance programs can go beyond their current embryonic stage of development and promote a “mentoring” function for women with a stronger focus on long term outputs.

Source: Alexandra Dobra FES IPS publication ; blog author’s own contribution

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4 Responses to Empowering women by microfinance!?

  1. Pingback: MICROCAPITAL BRIEF: Economist Angela Luci Argues Microfinance can Empower Women in Non-Financial Arenas, Fight Discrimination

  2. Getaneh Gobezie says:

    Dear colleagues,

    Thank you for this nice summary of a great debate. I believe, given the importance and the confusion surrounding this — gender and microfinance — it need to be discussed further. On-going networks like the ‘GENFINANCE’ and WEMANetwork have been working on this for quite some time, including the recent Ugandan even on LEARNING ROUTE GENDER IN RURALFINANCE, organized by IFAD, FAO, PROCASUR (March 2011). Below is the link yo the thematic paper for that event, titled GENDER MAINSTREAMING AND EMPWERMENT OF WOMEN IN RURAL MICROFINANCE, also posted at http://www.microfinancegateway.org. Your comments and suggestions are welcome.



    Getaneh Gobezie

  3. Getaneh Gobezie says:

    Hello again,

    UN-Women Expert Group Meeting on ECONOMIC EMPOWERMENT OF WOMEN……’ in Ghana (Sep 19-23, 2011) debated at length gender + microfinance. See following link for details, and my contribution paper titled: – EMPOWERMENT OF WOMEN AND GENDER MAINSTREAMING IN RURAL MICROFINANCE:


    Your suggestion on the paper highly welcome.

    Kind Regards

    Getaneh Gobezie
    Independent Consultant
    (E-Mail: – )

  4. Adrian at World Vision Micro Loans says:

    Great and very informative. I have no problems with women having or been given micro finance to start a business. Personally as a male – it is a fact that women are more family minded and put the family 1st always. Because of this I am not surprised when I read other articles describing how many men that receive micro finance will often spend it on material objects they weren’t able to afford before. I think its just one of those things in life – that women are better at managing money and putting their families first – its not about gender its more logics. Obviously not all men would use micro finance in this way – but it is been reported.
    At World Vision we have 93% of micro loans repaid in full – and we re-donate the funds to another entrepreneurs whom is waiting funding. Visit us here to find out how the donator selects the recipient: http://microloans.worldvision.org.uk/pages/how_it_works
    We also provide the donator with updates on the recipient’s progress since receiving the micro loan and have some success stories here: http://microloans.worldvision.org.uk/pages/success_stories

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