One issue has brought us to this discussion: Have women revolutionized the microfinance industry, or does the microfinance industry improve and empower women’s lives?
The microfinance revolution has changed low-income people’s access to financial services worldwide. As a result, it has become one of the most discussed developments in global development during the last few decades. Microfinance services assist in women’s empowerment through increasing women’s decision-making power and improving their overall socio-economic condition.
Why are women a target for the microfinance sector, and why are there women-specific initiatives in this industry?
Women and children account for 70% of the world’s poor. Women have had a more difficult time obtaining loans and other financial services. Commercial banks overlook women and small companies since they are focused on men and formal businesses. Women are frequently compelled to rely on informal ways to save, establish a business, increase consumption in the face of economic shifts, or insure against catastrophes because they lack access to financial services. These techniques are often risky, and people who use them have fewer options.
Microfinance, on the other hand, often, focuses on women. Females account for 85% of the lowest microfinance consumers served. As a result, focusing on female borrowers makes sense from a policy viewpoint. Focusing on female clientele has a strong commercial justification, as female clients have greater payback rates. They also devote a bigger percentage of their earnings to household spending than males. As a result, there is a compelling financial and public policy justification for focusing on female borrowers.
Over the last several decades, many MFIs and models have worked to close the gender gap in access to financial services. Women have changed the microfinance world because they are the borrowers that everyone likes. This is based on the assumption that women are more credit-conscious, can organize better as a group, and invest better in family health and education, which is how they can also influence their children’s education and health.
Women in microfinance programs are frequently required to meet weekly or monthly to repay loans and deposit funds. This allows women to bond together and provides financial security while also forming support networks. These gatherings also provide an opportunity to educate women who do not have health insurance or access to health care. The industry of microfinance not only empowers women financially but also expands opportunities for children and has a positive impact on entire communities. Providing financial stability for women and empowering young girls will help reduce gender inequality and poverty around the world.
Women and microfinance are exciting because of the positive feedback loop. When it comes to microfinance, women tend to have a special touch. Would there be as many successful microfinance businesses if women did not support and adjust them based on their needs?