The following is a guest post by Sheethal Shobowale, Kiva Fellow at MFIs Asociación Arariwa in Cusco, Peru and Emprenderin La Paz, Bolivia starting in January.

Interested in learning about microfinance? Follow our biweekly Twitter discussion group #mifimon (because Microfinance Mondays was too long for Twitter’s 140-character limit). Our aim is to host an exchange of ideas about issues relevant to the microfinance industry. You’re welcome to lend your voice, whether you’re a practitioner in the field or a newbie just learning the basics. Just end your messages with the hashtag #mifimon!

I was honored and excited to take part in this week’s #MifiMon discussion about women and microfinance.

Panelists:

• @rarenaud – vice president of women’s philanthropy and interactive marketing, Opportunity International
• @sevenbar – Lee Carlton, social media lead for Seven Bar Foundation, a nonprofit that raises funds for microfinance through fashion shows and cause marketing campaigns
• @lethalsheethal, @Kiva – fellow at MFIs Asociación Arariwa in Cusco, Peru, and Emprender in La Paz, Bolivia, starting in January.

Moderator

@JulieSof – online community manager, @ACCION_USA, a direct microlending organization in the U.S.

Participants

@mix_market, @sonjkelly, @SeaMoMicro, @zyozyfounder, @mortgagelead, @VillageBanking, @sprungpr, @scotteverett, @ValbonaBushi, @IanScottHaisley, @seeingchange, @ACCION_USA, @AJRenold, @CFI_ACCION, @CIPEglobal, @OptINnow @adkoehler, @zimana_, @ShalynHockey, @mifos, @lifeofjenn, @CARE, @pigtailpals, @isfan, @socialresponse, @oasanchez,, @akhilak, @wonderwebby, @LisaHinAustin, @socialresponse, @louwhiteman, @chantellebaxter, @newtagdefs, @keithkall, @padschicago

What are the most prominent reasons that most microfinance is directed towards women?

Women tend to be much more responsible with their loans, using the money to send kids to school, pay rent, buy a house, reinvest their profits from their businesses.  For every $1 a woman in the developing world earns, $0.80 is reinvested in her family. They also default less than men. Women comprise 70% of the poorest of the poor.

Do MFIs actively seek women clients?

You can get an idea of outreach by looking at the number of women borrowers in MFIs on MIX Market, for example in Peru. Asociación Arariwa, for example, allows lending to both genders, but targets women.  More than 70% of its entrepreneurs are women.  Opportunity serves men and women clients in 27 countries, but in India, the organization focuses exclusively on women in Trust Groups.  A Trust Group consists  of 10-30 clients, typically women, who come together and co-guarantee each other’s loans. They meet weekly during the 16-week loan cycle to repay loans and to receive weekly training on business skills & social issues. Trust Groups often build self-confidence among #women members, promote leadership and community support. 

How do you feel about #microfinance focusing on women? Is this effective? Is it fair?

Loans need to be spent appropriately and eventually repaid. This is less likely with males.  Opportunity is proud that 85% of clients are women, which reflects the goal of meeting the needs of the unbanked & underserved, which typically equals #women.  Sparse property rights for women equals no collateral.  Hence, their only financing options are #mifi or ROSCA/ASCA/other informal means.  Women are poorer and socially excluded, but also men are more likely to spend on alcohol & cigarettes.

Do organizations track the long-term results of self-confidence increase and leadership in women resulting from group lending?  What changes in a woman’s life and family situation happen w/ an increase in confidence, leadership, and financing?

Tracking gender statistics and long-term results are challenging. Women Advancing Microfinance (WAM) & CGAP advocate for this type of research.  But changes can obviously be great. There are many documented cases of women starting lucrative businesses off microfinance loans, such as this recent study about benefits of women receiving loans, with examples from the Opportunity Rwanda bank.  Many organizations do look at long-term results for women, like the @CARE Strategic Impact Inquiry.  Also, here is a link to a Social Performance Indicators Blog entry focusing on gender in microfinance. Through experience with lending groups in Nicaragua, for example, women are more active and visible in community and were more respected in and out of household.  However, many of the loans are more short term in effect, but provide a better quality of life over a short time.

How often do MFIs find that their women clients “graduate” into the formal economy?

The Next 4 Billion study emphasized bringing #BoP into formal economy.  Microfinance may be doing that for women.

How do equal opportunity lending laws in various countries affect regulated financial orgs focusing on one gender?

Many, if not most MFIs are not registered as financial orgs, but as NGOs, which is known to be a bump in the road ahead.  Gender neutral, Acción USA supports entrepreneurs of all backgrounds and genders in the U.S.  All borrowers grow their businesses with pride and take care of their families in country and with remittances.  There are also examples of husband and wife entrepreneurs working together.

For those in the field (past or present) can we get some stories about real life examples of women borrowers?

• Nuestra Capital Semilla (Our Seed Money) from Kiva Fellow @lethalsheethal
•  “Ok. Next question…” from @MQwightC, Kiva Fellow, Philippines
• Using Microfinance to Combat Human Trafficking: Spotlight on Katie Davis (KF7) by James Han, Kiva Fellow, Cambodia
• A Sierra Leonean Pick-Me-Up by Stephanie Meyer, Kiva Fellow, Sierra Leone
• Women borrowers stories from FINCA
• Portfolios of the Poor

What are some best practices for reaching out and bringing women into microfinance?

Local staff (loan officers) and word-of-mouth marketing draw many women to MFIs.  For example, Celina, a loan officer at Arariwa, has 3 lending groups in the Cusco potato wholesaler’s market, based on word-of-mouth.  However, the issue may be less about empowering women and more about knowing that women have a higher ROI in microfinance.  In actuality, the whole community needs empowerment.  We can’t address exclusion of women by excluding men.

Some Women Leaders in Microfinance

Many top MFIs are run by visionary women. Women in MFI leadership positions inspire younger women.

For example:

• Essma Ben Hamida of Enda in Tunisia
• Ingrid Munro of Jamii Bora in Kenya
• Tabinda Jaffrey of Asasah
• 70% of ACCION_USA’s executive team and program directors are women
• Most loan officers and accountants at Arariwa and some of the supervisors and board of directors are women
• Information Technology managers such as Polly Najori at Jitegemea in Kenya
• Khadija Shamte leads IT Firm, Adept are women
• Within the @mifos community, women play vital role in #technology ecosystem
• @ProMujer  – https://promujer.org/
• Women Advancing Microfinance (WAM) – chapters in NYC, D.C, Chicago, Atlanta, Northern CA, other cities worldwide. A group of women leaders in the microfinance field.

What are some of the challenges for women to participate in microfinance? How do organizations address these challenges?

Some challenges include not having enough time for group meetings, which take away from the business day. To address this issue, loan officers visit them at their place of business.  However, in some cultures women can’t leave the home alone, so just being able to travel to group meeting is big social change.  Women encounter profound travel safety issues affecting everything from education to business to health care access.

Are there particular products that women gravitate toward? For example, group loans versus individual loans, savings, etc?

The loans are typically disbursed to groups.  It is difficult to get an independent loan.  Group loans are typical entry point for #women clients. Savings accounts are one of Opportunity’s fastest growing products for women.  Arariwa does mostly group loans and group savings.  However, Accion International specializes in consulting w/organizations that do individual lending.

How can individuals support women entrepreneurs?

• Consider making a @Kiva loan to women entrepreneurs – you can lend internationally or domestically.
• Consider giving an OptINnow gift card as a Christmas present.
• People in the U.S. can choose local, women owned businesses to support entrepreneurs in their own community through Acción loans.
• Consider supporting @sevenbar’s Kiss away poverty campaign (in partnership with @sephora and @fusion_beauty)

Key Takeaways from this week’s #mifimon

@lethalsheethal – Empowering women = Empowering families

@rarenaud – Focus on women is key to eradicating poverty. They hold the key to caring for families, promote education of children.

@zyozyfounder – If you want to help the world’s poor, you have to invest in them, rather than just giving them money.  People seek dignity not dependence. Charity meets immediate needs but fails to enable people to solve own problems. There is a growing belief that the best solution to eradication of poverty is entrepreneurship and small business economics.  When passions and expertise are channeled to address real problems, absolutely anything is possible.  ”Girl + Education = Loan, Business, Community Development, Gender Equality.”

@CIPEglobal – There is no silver bullet for gender inequality, but women entrepreneurs are organizing to take aim.

How we can share #mifimon links and resources?

People join #mifimon facebook page.  Look for future topics, articles & longer explanations, etc. #mifimon is sometimes hosted on Facebook because it is less restrictive on text length.

Thanks to @JulieSof for moderating today’s #mifimon topic on #women and microfinance. We are grateful to have so many talented people and organizations involved in our discussions.