Today, March 8, marks International Women’s Day. Now an official holiday in 27 countries and supported by global organizations such as the United Nations and African Development Bank, IWD has been observed since the early 1900s and provides an opportunity to celebrate the achievements of women around the world throughout history. IWD has special implications for those of us working in financial inclusion. Microloans to women fill an important niche for consumption smoothing that improves the economic well-being of borrowers and their families. Research has shown that increased gender equality has a multiplier effect on future generations through improved health and education levels of children. Additionally, improving access to finance for women is quite simply good business sense for providers working at the Bottom of the Pyramid, considering that:
- Women own 60% of microenterprises;
- At the end of 2010, 82% of the poorest microfinance clients reached were women;
- Women farmers produce 60% to 80% of the food in developing countries;
- More than half the world’s poor are women;
- Women manage the financial life cycles of households in developing countries (just one example – Fiji).
In Why Your Next Board Member Should be a Woman, the author notes that even though women make up 51% of the U.S. population and are the “power users” of many products, they make up just 15.7% of Fortune 500 boards of directors. “Savvy companies are quietly changing up their boards of directors and teams, and this is giving them better collective intelligence, more community admiration, and better financial results.”
Understanding that women make up such a huge component of potential financial services users, the same logic – that women’s empowerment is good business sense – should apply to financial services for the poor. Yet, there still remains a huge gap in women’s access to financial services. This hurts women’s potential to grow their businesses, reinforces socioeconomic gender inequality, and hinders larger development objectives by leaving half of society behind.
Recognizing that many women entrepreneurs in developing countries aren’t in their line of work by choice, but rather, out of necessity, it’s important to note the barriers they face to making their entrepreneurial endeavors more successful. Cultural barriers are a huge contributor here, including lack of education, domineering spouses and all-consuming responsibilities to children. Despite these road blocks, it is still possible for microfinance, through the form of a variety of services like credit, insurance and savings, to positively impact women’s lives and help them to manage their financial lives—and those of their households. There are many organizations out there focusing on empowering women through finance, education and technology and their impacts are easy to see. Take, for example, the following organizations:
- Women’s World Banking leverages opportunities in finance, savings and insurance to design products especially for women in its network of 39 MFIs in 27 countries. Their network has served 26 million clients, 80% of whom are women. After partnering with XacBank in Mongolia and ADOPEM in DR in 2008, 6,000 young girls have opened savings accounts and 9,000 have participated in financial education programs.
- Solar Sister is a social enterprise that focuses on a triple bottom line – people, profit and planet – to invest in women entrepreneurs and “eradicate energy poverty.” Their expertise is providing the training, tools, inventory and marketing for women to start sustainable solar businesses. So far, they are operating in three countries, have assisted 143 female entrepreneurs and as a result have brought solar light to more than 17,000 people.
- MicroFund for Women is a non-profit microfinance institution in Jordan who targets women not only as clients but also as employees – 97% of their clients are female, and 73% of the organization’s staff members are women. To date, they have distributed nearly half a million loans to entrepreneurial women in Jordan.
Behind these projects and statistics are actual people whose lives have been improved by gaining access to financial services. Work towards gender equality in the financial access realm as helped Haseena from Pakistan build savings for the first time ever, enabling her to take care of her children. After receiving microloans from Yehu Microfinance Trust to expand her business, Charity Kulola from Kenya is sending all seven of her daughters to school. And loans from the Microfund for Women helped Nadya Felah build a business so profitable that her husband now works for her.
International Women’s Day is an excellent opportunity to reflect on how efforts at financial inclusion are not only good for development, individuals and households, but may also make good business sense.