Microfinance For Women
Access to Microfinance For Women and Gender Equality
This blog will focus on how access to microfinance services can lead to gender equality.
Microfinance is a proven development tool, capable of providing a vast number of poor people, particularly women with manageable financial services. Gender equality is important because women workers throughout the world contribute to the economic growth and livelihoods of their families and communities.
Institutions
Microfinance institutions provide micro-credits to women who are struggling financially, with the goal of helping them reach financial security. These small loans result in financial inclusion for women, allowing them to be more self-sufficient, more financially stable and more prosperous. Being financially independent means that women are no longer subjected to subordination by patriarchal societies where men control everything.
gender equality
Traditionally women have been disadvantaged with regard to accessing credit and other financial services. That being said, microfinance has the potential to make a significant contribution to gender equality. The provision of financial services(in a sustainable manner and without collateral), including services like microinsurance, networking, training and peer support help women to take advantage of income generating activities and cope with risk. Their decision-making power is influenced positively and so is their overall socio-economic status.
Start businesses
Microfinance enables women to start businesses and act on ideas that they would not be able to implement without a loan. Female entrepreneurs who create successful businesses, in turn, create more jobs for other women. In countries where women receive larger incomes, poverty rates tend to be lower overall.
A recent International Monetary Fund study reported that gender equality has consistently proven to boost the economy. The global GDP would grow by 12 trillion dollars if women equally contribute to the economy (borgenproject.org). Commercial banks often focus on men and formal businesses, thereby neglecting women who make up a large and growing segment of the informal economy. On the other hand, microfinance institutions often target disadvantaged female clients exclusively. Targeting female borrowers makes sense because female clients are more vulnerable and 70% of the world’s poor are women (www.ilo.org).
Daughters of female microfinance borrowers also reap the benefits, as there is an increased likelihood of school attendance and excelling just as much as their male counterparts. Studies show that new incomes generated from micro-enterprises are frequently invested in children’s education, particularly benefitting girls. This can double or triple a young girl’s future income.
Microfinance puts credit, savings, insurance and other basic financial services within the reach of women. With this income and independence women can command and are less disadvantaged. According to borgenproject.org 74% of the clients that seek help from microfinance institutions are women. These are women who are finally able to escape income inequality. Income inequality is lower in nations with policies that support and facilitate the employment of women.
Studies have proven that microfinance is a great tool for the promotion of gender equality. When women are financially independent, their decision making power tends to be greater within their households and within society. Gender equality within households leads to women taking a more prominent stance when it comes to societal issues and discussions that men usually dominate completely.
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