They have more choices and influence in bargaining. They have a greater sense of self-worth and increased confidence in their abilities. Women who succeed economically also believe in their right to make decisions about their own lives. Furthermore, the improved condition of a few women benefits the larger society.
Microfinance offers women the chance to enter the public sphere as businesswomen, expanding their roles beyond housewife to breadwinner. As women participate in the economy, they also become more involved socially and politically.
Within their communities they may advocate for changes that will better their own lives and those of other girls and women. Even the power of example is important. More families will pay for their girls to attend school if they see women putting their education to use. Of course, the social status of women in various cultures can hinder their efforts to start a business. Many women are overburdened with rearing children, cooking, cleaning, and managing the household.
Many societies and families expect any business undertakings to take a backseat to domestic duties. Some cultural traditions or religious practices frown on women working outside the home and earning an income. In some cases, women have resorted to participating in microfinance secretly.
In others, though, there has been an effort to educate women about their rights and in involving men so that the microfinance process seems less alien. Some people worry that this could lead to an increase in domestic violence.
More often, however, the opposite has been true. Perhaps the biggest obstacle women face is a lack of education. Illiteracy and deficient math and accounting skills are common among women living in poverty. Organizations such as the United Nations, the World Bank, and others see education as the key to more opportunities for girls and women across the board. A study in Bangladesh found that microfinance decreased poverty rates of borrowers and raised household consumption per capita.
This contributed to wider non-group member advancement in the local economy and promoted income growth. Morduch and Haley also add to this, claiming that microfinance positively impacts on the amount of people living in absolute and extreme poverty. Although poverty alleviation can be shown to benefit some microcredit recipients, evidence suggests that many women use their loans to support pre-existing ventures within limited activities that often produce low profits.
Women who are restricted by male relatives from going to markets can have their work exploited, often because their children are sent to sell their products instead. The credit access provided to more women than men is seen as an important step to include women in the financial sector. However, the assumption that microfinance promotes empowerment simply because of access to credit has its limitations.
The assumption that providing loans mainly to women promotes empowerment is also challenged when looking at gender discrimination within MFIs. MFIs often praise women as the more reliable beneficiaries of credit, specifically when it comes to loan repayment. They note that this particularly benefits young girls. Even considering these benefits, it is important to note the concerns that microcredit loans may have an adverse impact on some women.
For one, it is possible that male family members may take control over loans. Additionally, the International Labour Office Geneva notes that microcredit loans sometimes increase the amount of work for women within families, because of the responsibility for loan repayment. These problems provide insight into the considerations microfinance institutions should keep in mind when developing future microcredit loan models for women. Overall, microcredit loans provide an innovative solution to the barriers women entrepreneurs face.
Whether these loans have the intended effect on poverty is still up for debate, but they clearly do lead to gains in the quality of life for many women. Skip to content Women entrepreneurs make significant contributions to the global economy year after year, especially through innovation, job creation, and wealth creation. Hurdles to Overcome Women entrepreneurs must grapple with multiple factors, such as lack of access to finance, cultural barriers, and complications with industry sectors.
Making a Difference Examining poverty rates with regard to income before and after microcredit loans is somewhat inconclusive. Related Content Newsroom.
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