INTEGRATING A GENDER PERSPECTIVE IN |
MICROFINANCE IN ACP COUNTRIES
Helen M BINNS
Tel/Fax (32 2) 771 5031
Social and Human development, women and development
Abbreviations and acronyms
- 1. WHY THIS STUDY?
- 1.1 The GAD Council Resolution
- 1.2 Likely growth in EC support to micro-finance
- 1.3 Summary regarding the attitude of EC officials vis-ŕ-vis gender and microfinance
- 2. MICROFINANCE
- 2.1 What is microfinance?
- 2.2 Microfinance customers
- 2.2.1 Who are microfinance customers?
- 2.2.2 How do men and women entrepreneurs compare?
- 2.2.3 Do the poorest benefit from microfinance?
- 2.3 Who provides microfinance?
- 3. GENDER AND DEVELOPMENT
- 3.1 What does GAD mean?
- 3.2 What are the goals of GAD?
- 3.3 Does microfinance meet GAD objectives?
- 4. GENDERING MICROFINANCE
- 4.1 What is gendered microfinance?
- 4.2 What are the gendered issues to be addressed?
- 4.2.1 At the identification stage
- 4.2.2 At the formulation stage
- 4.2.3 At the implementation stage
- 4.2.4 At the evaluation stage
- 4.3 The need for training
- 4.4 Institutional aspects
- 5. FORTHCOMING DOCUMENTS
- Table 1: Checklist of gendered issues to be addressed
- Table 2: Types of institutions involved in microfinance
- Annex 1: Bibliography
The author wishes to warmly thank all those who helped me in preparing this report. Every contribution was valuable.
Particular thanks to Arne Ström (European Commission, DG VIII Gender and development Desk Officer) and to Mary Braithwaite (KIT coordinator on EC gender studies) for entrusting me with this report and for their guidance throughout its development.
Also many thanks to Richard Boulter (DFID, Zimbabwe) for his inspiration, support and critical comments on the draft report.
The contents of this report do not necessarily represent the views of the European Commission. While every effort has been made to ensure the accuracy of the information contained in the report, neither the European Commission nor the author accepts any responsibility for errors or omissions.
This report may be reproduced unaltered without authorisation on condition that the source is indicated and that is it not for commercial purpose.
In 1997 the Gender and Development Desk of the European Commission Directorate-General for Development commissioned a short study from KIT, the Royal Tropical Institute of the Netherlands, on the gender aspects of microfinance. This study formed part of a wider programme of studies and country missions on the integration of gender in EC development co-operation in ACP states.
Undertaken by Helen Binns, an expert on SME and microfinance, the desk study collected and synthesised existing documentation and guidelines on the subject of women and gender in microfinance. The study report - of which this is a shorter version for dissemination outside the European Commission - summarises what is considered by experts in the field to be "best practice" in the integration of gender in microfinance projects. The report is intended for administrators and implementors of microfinance interventions. A French version of the report is also available.
The report does not provide a recipe for achieving best practice but rather identifies the key issues to be addressed at the different stages of the project cycle to ensure that all aspects of reality in the field are addressed. It therefore contains a checklist with examples illustrating the need to address these issues.
It is hoped that the report will be useful in better integrating gender in microfinance. Your comments, experience and any relevant documents which could help to improve this report would be most welcome.
Please contact the Gender and Development Desk in DG VIII :
DG VIII/A.2 - GAD Desk
Rue de Genčve 12
Fax: +32 2 296 71 40
Abbreviations and acronyms
The acronyms of an institution is used in the text when it is better known by its acronym. The full names, however, are listed below.
- Africa, Caribbean, Pacific
- Asociación para el Desarrollo de Microempresas (Dominican Republic) (Association for the development of MSEs)
- Assessing the Impact of Microenterprise Services
- Banco Solidario (Bolivia)
- Bangladesh Rural Advancement Committee
- Bank Rakyat Indonesia
- Briefings on development and gender
- Consultative Group to Assist the Poorest
- Development Assistance Committee (OECD)
- Department for International Development (UK)
- European Commission
- European Development Fund
- European Investment Bank
- Gender and Development
- International Fund for Agricultural Development
- International Research Training Institute for the Advancement of Women
- Institut de Recherches et d'Applications des Méthodes de Développment (F) (The Institute of research and use of development met
- Foundation for International Community Assistance
- Growth and Equity through Microenterprise Investments and Institutions (USA)
- Gesellschaft für Technische Zuzammenarbeit (German technical assistance agency)
- Koninklijk Instituut voor de Tropen (NL) (Royal Tropical Institute)
- Kenya Rural Enterprise Programme
- Kenya Women Finance Trust
- Master of Business Administration
- Microfinance Institution
- Micro and Small Enterprises
- Non-Governmental Organisation
- National Indicative Programme
- Organisation for Economic Co-operation and Development
- Fundación para la Promoción y Desarrollo de la Micro Empresa (Bolivia) (Foudation for the promotion and development of MSEs)
- Rural Investment Overseas
- Rotating Savings and Credit Association
- United Nations Development Fund for Women
- United Nations Research Institute for Social Development
- United States Agency for International Development
- Women in Development
- Women's World Banking
Following the December 1995 Council Resolution regarding the integration of gender into all development instruments, the Gender and Development desk of the European Commission Directorate-General for Development (DG VIII) has commissioned a number of studies on the integration of gender issues in development cooperation (managed by The Royal Tropical Institute, KIT in Amsterdam).
This report is one of these studies and is concerned with integrating a gender perspective into microfinance. Microfinance is increasingly recognised as one of the pillars of action to relieve poverty and thus an area of EC intervention which is likely to grow substantially in coming years.
The main findings of the interviews within the EC are that:
TABLE 1: CHECKLIST OF GENDERED ISSUES TO BE ADDRESSED
Gender-sensitive microfinance takes into account the needs and constraints of both men and women when designing and delivering finance.
AT THE IDENTIFICATION STAGE
The two main areas to be analysed at this stage are the potential customers and the existing financial services (formal and informal) the target group has access to. This can be done through a brief workshop with, or survey of, potential customers carried out in a gender-sensitive way.
AT THE FORMULATION STAGE
- Loan use and eligibility criteria
- Do the loan use and eligibility criteria meet the credit needs of poor men and women, who may need to utilise their loans for a variety of purposes (consumption and investment) rather than for a specific targeted use?
- Interest rate
- Does the interest rate cover costs and eventually enable the institution to achieve sustainability?
- Loan size
- Are loan sizes, repeat loan and loan graduation systems appropriate for both poor people seeking credit at low levels and the MFI aiming to achieve sustainability?
- Loan duration
- Does the loan duration reflect the type of business of poor men and women?
- Loan collateral and confidentiality
- Is the MFI imposing conditions that women and men can fulfil in terms of collateral and ensuring confidentiality in respect of customer's partners and relatives?
- Approval time
- Can management approve loans in a time-frame that meets the needs of both men and women?
- Repayment terms
- Are the repayment terms suited to the needs of customers i.e. frequent and regular repayments, convenience of collection, and flexibility for larger loans and more experienced customers?
- Does the range of savings products meet the needs of both men and women?
- Forced savings
- Will the level of forced savings required not exclude many of the targeted customers and is it reasonably easy to withdraw savings?
- Other financial products
- Is it intended to provide specific products which will address gender differences in the context of needs for financial services?
AT THE IMPLEMENTATION STAGE
- Group formation
- Have both men and women equal opportunity to take decision-making positions in a group and do the group's formation rules take into account local traditions?
- Is the intermediary accessible in terms of location, convenience and safety, as well as opening hours and transport cost, by both men and women?
- Attitude of finance officers
- Are the finance officers acceptable culturally (are female customers comfortable, and allowed to do business, with male credit officers and would women officers be accepted by male customers) and professionally (are women and poor people treated with respect)?
- Customers' literacy level
- Are application forms and finance officers intellectually sensitive to the needs related to the literacy level of male and female customers?
- Lending method
- Is the lending method (group versus individual lending) acceptable to customers and does it continue to be reconsidered throughout the life of the intermediary?
- Advertising financial products
- Will the channels selected to advertise financial services reach both women and men?
AT THE EVALUATION STAGE
- Institutional performance
- Are the data collected by the MFI broken down by gender?
- Customer satisfaction
- Does the MFI assess regularly (once a year?) whether customers are satisfied and how its services can be more gender sensitive?
- Socio-economic impact
- An EC strategy should be developed in coordination with other donors to define the way forward on this.
As a general rule evaluations should be carried out by donors, as MFIs have neither the time nor the expertise to do this. However, what is proposed should be discussed and agreed with the MFI.
The report also lists forthcoming events and documents of interest (section 5), and includes a selected bibliography (annex 1).
Hari Srinivas - firstname.lastname@example.org
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