Where Angels Prey

Where Angels Prey is a novel by Ramesh S Arunachalam. Please refer to www.whereangelsprey.com for more information

Thursday, February 17, 2011

The Feminisation of Poverty and Gender in Micro-Finance: Some Unanswered Issues…

Ramesh S Arunachalam
Rural Finance Practitioner


Poverty has always had a gender dimension. Hence, any serious attempt to tackle poverty must be holistic and address the gender aspects. Mere provision of credit cannot tackle poverty in the absence of ensuring that women really hold custody of the income that they earn. There are too many instances of women earning the money and men using the same for alcohol etc.

While ‘women’ have been extremely good to micro-finance and MFIs as clients, borrowers and members, it is UNCLEAR on whether micro-finance has been good for women in terms of financial, social and personal empowerment and other impact.

As a writer remarked, “But the evidence on microcredit and women's empowerment is ambiguous. Access to credit is not the sole determinant of women's power and autonomy. Credit may, for example, increase women's dual burden of market and household labor. It may also increase conflict within the household if men, rather than women, control how loan moneys are used. Moreover, the group pressure over repayment in Grameen's loan circles can just as easily create conflict among women as build solidarity[i]”.

Several key issues require attention here in the Indian context and they are listed below:

·         What is the small, medium, and long term impact of micro-finance on women in terms of various aspects like burden of poverty reduction and indebtedness, economic stress, working roles/hours, (within family/outside), decision making authority, custody of earnings/income, status within the family/society, asset ownership/creation, enterprise management, piece rate work, working conditions etc?
·         To what extent are, financial products/services needed by women, met by the Microfinance Sector?
·         What are the unmet needs for women (e.g., health insurance, maternity etc)? Are their special products that meet the risks and vulnerability of women?
·         Another question here is whether the delivery mechanisms are convenient to the special needs of women?
·         A related issue here is the aspect of how men field officers/loan officers/others actually treat women (as clients/members) and how do women perceive the way they are (being) treated? This is an issue that has been repeatedly brought up in Indian including Andhra Pradesh.
·         Are Microfinance institutions concerned about women’s empowerment? How many of them actually include gender aspects, women’s empowerment and related issues as part of their mission? How many include these in their mission statements and actually translate these into action?
·         What critical lessons can be learned from the Microfinance sector in India on using women as entry points for various development /economic services? What are the pros and cons of using women as entry points for delivery of various financial services? Are we imposing the burden of poverty reduction and livelihood security primarily on women?
·         One needs to understand the impact of targeting women as primary builders of household livelihood and food security. Specifically, this aspect has to be explored in the context of how their own food and nutrition security is affected even while ensuring the same for the household?
·         What is the impact of enhanced work, by women in enterprises, on other women in the household? (e.g., Girl children help with domestic chores or older women do the same)
·         Assuming that Microfinance enhances income, what is the net observable impact on women’s food and nutrition security, women’s autonomy and decision making capacity, Women’s access to intra-household resources, Women’s ability to acquire/retain assets etc.?
·         How do MFIs that perform well on indicators such as Return on Assets, Financial Self Sufficiency, SDI etc perform in respect of above aspects?
·         Given a specific context, is there a trade-off between (a) pursuing enhanced financial sustainability and expanded outreach and (b) Positive Impact on Women’s Empowerment in a social and personal sense
·         Are there certain legal forms (e.g., like Cooperatives, Credit Unions etc) which perform better on social and gender indicators?
·         What are the key gender indicators to evaluate impact of micro-finance? Which of these would be acceptable to both financial and gender experts?

1.      All of these are relevant areas/aspects that require attention of various stakeholders and need to be explored in a programmatic fashion through action research, field research, workshops and the like – with a balanced development perspective.
2.      Here, one could involve the larger civil society, gender experts, microfinance experts in this so that there is objectivity to examining these issues in the wider context
3.      Further, one could also compare/contrast MFIs, govt programs and other types of Microfinance programs and examine the question of whether a focus on expanding outreach and enhancing sustainability has a trade off in terms of having a positive impact on economic, social and personal empowerment of women? In other words, we need to classify MFIs in terms of performance (outreach and sustainability) and examine whether good or poor financial performance is associated with high or low women’s empowerment? Again, causality may be difficult to ascertain…
4.      Also, one would also need to examine and document products/innovations that can specially serve to address the risks and vulnerability that women face in their daily struggle for survival
5.      Although micro-finance has strong roots in the gender movement and over 99% of the clients tend to be women (at least in India), it is strange that gender related inputs have been rather minimal by comparison. There are several actions that the Indian micro-finance industry and its various stakeholders (including MFIs, investors and donors) can do to incentivise and enhance gender inputs in microfinance:
a)      Set up a fund to provide scholarships to enhance the skills/capacities of women field workers/loan officers
b)      Create an accredited gender certification program for loan officers of all MFIs, who have >60/70% women as clients, and
c)      Incentivise MFIs (through various means) for the greater use of ‘women’ loan officers. Much of the field level interaction problems cited (during the AP crisis) between male loan officers and female clients would be mitigated by this

It is about time that gender inputs into micro-finance become commensurate with the ground situation in India…where an overwhelming majority of micro-finance clients are indeed women…


Have a Nice Day

[i] Source: “Microcredit and Women's Poverty” - by Susan Feiner Drucilla Barker


  1. Ramesh -- when it comes to women as loan officers, you say that there aren't many, but don't actually mention the numbers. Well, they are abysmal. According to MIX, only 3% of SKS LOs are women, while Bandhan is slightly better at 6%. As for the remaining large players (Spandana, Asmitha, Share), they don't even bother to report.

    Clearly, Indian MFIs have a long way to go before they can seriously talk about empowering women. Maybe they should think about actually formalizing and training some of those agents they deny working with? Or for that matter, hire some of them outright? Now that would be real empowerment.

  2. Dear Daniel

    Thanks for the numbers and they tell the real story. Thanks again for the valuable inputs and I agree, it is about time the MFIs come clean and regulaise agents and bring them under a proper framework, rather than denying their existence. It would help empower these women too as you say

    Cheers and regards