Women's Participation in Microfinance

Par Verónica González Aguilar,

Women's Role in Economy

All over the world, the significant of women entry into the workforce over the past three decades has produced profound transformations in the organisation of families, society, the economy, and urban life. Since the late 1950s, women's economic activities have been steadily increasing.

Women have always actively participated in their local economies. In Africa, for example, women produce 80 percent of the food and in Asia 60 percent and in Latin America 40 percent. In many cases, women not only produce the food but market it as well, which gives them a well-developed knowledge of local markets and customers.

This is a small example of the importance of women's work in society. It does not illustrate the real extent of women's contribution, especially in developing countries, not only to the labour force, but also their role as a significant income-source for the family.

For instance, in Africa all tasks related to a family's support are the responsibility of women. Due to cultural and traditional aspects, a woman's presence has been a question of survival of her family.

Women, especially poor mothers, must divide their time between work "productive role" and family "reproductive role", and balancing all the demands. Time is valuable for these women, as their livelihoods depend largely on their ability to fulfil the multiple demands of the household and the marketplace.

In spite of the remarkable importance of women's participation, their jobs have been considered as an "extra income" to family survival or simply to improve its living conditions. Moreover, microenterprises owned by women have been considered as a way to meet primary needs instead of a profitable source of income.

Unfortunately, labour markets have followed this perception and have offered less favourable conditions to women. Women workers consistently earn less than their male partners do. That is the case of Cameroon women who work, for example, up to 10 hours a day, but at the end of the month, their income is far below the Cameroon monthly minimum wage of 29000 CFA francs (US$ 60).

Women have had to fight against an adverse environment, which traditionally had been minimising and exploiting their capacities. As a consequence of this reality, in some cases, women are just satisfied with the non-financial benefits, such as the psychological satisfaction of "social contact".

Women's Micro-enterprises: Main Characteristics

Considering the entrepreneurial environment, women's activities are very interesting as they offer a great source of knowledge and innovation. For example: there is no single type of female micro-entrepreneur, they differ in social background, educational level, experience and age. Another interesting factor is their strong social coherence that allows them to maintain strong communications-channels at all levels.

One important element, and perhaps the only characteristic that men will never have, is the possibility to transfer "motherhood skills" to job. These include fostering of other people's development through guiding, monitoring, and sharing information. Women are experienced in balancing claims, in organising and pacing, and in handling difficulties.

In general terms, female-led microenterprises tend to be associated with activities that provide part-time employment. They are small in size and have loose, informal structures, require very little start-up capital, and little or no formal education. On the other hand, many women entrepreneurs in the developing world remain illiterate and live in poor rural communities.

Businesswomen in developing and countries share the following general characteristics:

• They are concentrated in market sectors that have low barriers to entry and low levels of outside communication (transfer to other markets).
• They focus on trade, services, and light manufacturing activities.
• Their businesses are smaller than others, employing less than five employees.
• The owners have relatively little previous working experience.
• They use traditional technologies.
• Most employees are family-related
• They are often home based.
• Business growth strategies are affected by household responsibilities.
• Owners tend to have lower levels of education and literacy.
• Women start their enterprises with less professional work experience and knowledge of their sector than their male counterparts.

Women and micro finance

Although men, as well as women, face difficulties in establishing an additional enterprise, women have barriers to overcome. Among them are negative socio-cultural attitudes, legal barriers, practical external barriers, lack of education and personal difficulties.

In spite of this, for women and especially for poor women, microentreprise ownership has emerged as a strategy for economical survival. One of the most essential factors contributing to success in microentrepreneurship is access to capital and financial services. For various reasons, women have had less access to these services than men.

In this context, credit for microentreprise development has been a crucial issue over the past two decades. Research has shown that investing in women offers the most effective means to improve health, nutrition, hygiene, and educational standards for families and consequently for the whole of society. Thus, a special support for women in both financial and non-financial services is necessary.

Regarding limited-access to financial services, women depend largely on their own limited cash resources or, in some cases, loans from extended family members for investment capital. Smaller amounts of investment capital effectively limit women to a narrow range of low-return activities which require minimal capital outlays, few tools and equipment and rely on farm produce or inexpensive raw materials.

In general, women need access to small loans (especially for working capital), innovative forms of collateral, frequent repayment schedules more appropriate to the cash flows of their enterprises, simpler application procedures and improved access to saving accounts.

Surveys have shown that many elements contribute to make it more difficult for women in small businesses to make a profit. These elements are:

• Lack of knowledge of the market and potential profitability, thus making the choice of business difficult.
• Inadequate bookkeeping.
• Employment of too many relatives which increases social pressure to share benefits.
• Setting prices arbitrarily.
• Lack of capital.
• High interest rates.
• Inventory and inflation accounting is never undertaken.
• Credit policies that can gradually ruin their business (many customers cannot pay cash; on the other hand, suppliers are very harsh towards women).

How to increase and support women's participation in micro-finance activities?

Both governments and donors should explore ways of developing innovative credit programmes using intermediary channels or institutions closer to the target groups such as co-operatives, women's group associations and other grassroots organisations. Savings and credit programmes should be designed in a way not to exclude women from participating.

Additionally, there is a need to examine the impact of structural adjustment policies on men and women at the family level as well as within various sub-sectors of the labour market and within the small enterprise sector itself.

In general terms, in order to facilitate the participation of women in micro and small enterprise, donors should:

• Encourage microenterprise programmes to develop specific strategies for recruiting women as clients from within their existing target groups.
• Encourage microenterprise programmes to expand their target groups to include the sizes and types of enterprise activities in which women engage and/or experiment with assistance strategies, business and technical assistance needs of these types of enterprises.
• Consider expanding support to a broader range of organisations, especially poverty-focused organisations active in rural areas. Support for these organisations should include technical assistance and training in programme planning, management and in developing teams of female staff to assist clients in business planning and management.

To increase women's access to credit, the donor community should:

• Increase the availability of working capital;
• Experiment with lending programmes that do not require conventional forms of collateral;
• Replicate and expand existing successful methodologies for delivering small working-capital loans;
• Introduce savings mobilisation components in the context of credit or other enterprise assistance programmes;
• Promote credit policies that are open to both small-scale enterprise activities and enterprises operating in trade, commerce and other small enterprise sectors where women have higher participation rates.

Technical assistance for microenterprise development should focus more on basic training in product marketing and design concepts and on transmitting skills to increase and diversify production. Governments can also directly increase the market for microenterprise products by improving rural and urban infrastructure.

Conclusions

Why should microfinance focus on women? What are the reasons for promoting women's participation in microfinance programmes?

Traditionally women have been marginalised. A high percentage of women are among the poorest of the poor. Microfinance activities can give them a means to climb out of poverty. Microfinance could be a solution to help them to extend their horizon and offer them social recognition and empowerment.

On the other hand, thank to women's capabilities to combine productive and reproductive roles in microfinance activities and society has enabled them to produce a greater impact as they will increase at the same time the quality of life of the women micro-entrepreneur and also of her family.

The question is not whether we should focus on women or men. Both female and male play a vital role in creating income and jobs. Their capacity for innovation stimulates general economic growth.

Microfinance programmes should be accessible to both of them (male and female entrepreneurs) and offer adequate policies regarding to market interchange, access to financial services, training and technical assistance.

Donor agencies should promote studies to support local women's groups in educational and promotional campaigns and launch special studies on specific policy problems related to the microenterprise sector, gender issues in microfinance activities.

Short-term assistance programmes might aim at increasing the productivity of women's labour by providing credit, technology, and skill training. Long-term objectives could emphasise eliminating institutional constraints which limit women's access to productive resources, creating social, technological, and economic mechanisms to reduce conflicts between women's productive and reproductive roles, as well as defining strategies to address traditional and legal barriers that hamper or preclude the active participation of women in the productive sectors of the economy.

The key issue for successful micro finance program focused on women should consider them in a broader context, as a family nucleus, that is vital for societal improvement and progress. Following this idea, micro finance programmes should provide women with specific adapted products through appropriate methodologies, which can offer competitiveness to their business but also well being to them and their families.

Bibliography

• Small Enterprise Development, An International Journal Vol 9 No.3, September 98, 1998,72p.
• Balancing the double day: Women as managers of microenterprises, Eliana Restrepo Chebair y Rebecca Reichmann, ACCION Internacional, Monograph Series No.10, Colombia, 1995, 84p.
• Women in Micro-and Small-scale enterprise Development, Louise Dignard and José Havet, IT Publications, USA, 1995, 282p.
• Women entrepreneurs, catalysts for transformation, Diane Chamberlin Starcher, Leith Editorial Services, Great Britain, 1996, 30p.

Le rôle des femmes dans la vie économique

Résumé français par Mia Adams

Depuis des décennies, la participation des femmes dans la vie économique ne cesse d'augmenter. Ceci provoque des changements profonds dans l'organisation de la famille, de la société et du marché du travail.

Dans les pays en développement, les femmes assurent une bonne partie de la production alimentaire. Leurs activités économiques rentables consti-tuent une source importante de revenu supplémentaire pour la famille. La participation de la femme à la vie économique la soumet à un double rôle, notamment, celui de "productrice de biens et services" et celui de "reproductrice" en tant que mère de famille.

Par ailleurs, dans les pays en développement, le travail féminin est plutôt considéré comme un moyen de survie de la famille plutôt que comme revenu réel supplémentaire. Le marché du travail offre aux femmes des conditions moins favorables qu'aux hommes avec les mêmes qualifications. Une série d'obstacles qui rendent leur accès au marché du travail difficile :

• Obstacles légaux.
• Obstacles juridiques, sociales et pratiques.
• Lois traditionnelles.
• Manque de scolarité.

A cause d'une grande diversité dans leur niveau d'éducation, leur classe sociale, leur âge, leur situation géographique (milieu rural ou urbain), les femmes micro-entrepreneurs présentent une image diversifiée.

En général, elles partagent pourtant les caractéristiques suivantes :

• Leurs activités sont concentrées dans les secteurs économiques à faible rentabilité, présentant moins d'obstacles d'entrée.
• Leurs activités concernent principalement les services, le commerce, les activités agricoles.
• Leurs entreprises sont de petite taille. Elles emploient généralement moins de cinq personnes.
• Elles ont peu de qualification professionnelle.
• Elles utilisent une technologie traditionnelle.
• Leurs entreprises sont principalement familiales.
• L'activité entrepreneuriale se déroule sur le lieu d'habitation.
• Elles ont un niveau très faible de scolarité.
• Elles ont peu d'expérience et aucune connaissance du marché. Elles ont un faible pouvoir de négociation avec les fournisseurs de matières premières d'une part, et leur clientèle d'autre part.
• Une cohésion sociale très forte favorise la transmission d'expériences et d'informations.

Femmes et micro-finance

Malgré les nombreuses difficultés à surmonter, l'accès des femmes aux activités de micro-entreprises s'est révélé d'une importance stratégique pour la vie de la famille et l'économie en général, des expériences montrent que l'accès des femmes au secteur de la micro-entreprise a considérablement amélioré le niveau de la santé, de l'éducation et de la nutrition de la famille.

Dans ce contexte, l'accès des femmes aux services financiers adaptés à leurs besoins se révèle d'une importance cruciale.

Comment faciliter l'accès des femmes aux activités de micro-financement ?

• Les donateurs et le Gouvernement devraient être attentifs à la participation des femmes à la micro-finance.
• Les systèmes d'épargne et de crédit qu'ils soutiennent devraient favoriser l'entrée des femmes.
• Les donateurs devraient financer des études mesurant l'impact des programmes de micro-financement sur les femmes et leurs familles.
• Les programmes d'appui à la micro-finance devraient promouvoir la formation, la professionnalisation de la femme par des formations et programmes d'appui adaptés.
• Il faudrait développer des mécanismes, des produits financiers mieux adaptés aux besoins des femmes leurs permettant d'assumer efficacement leur double rôle dans la société.
• Parmi les objectifs à long terme devraient figurer l'abolition de contraintes juridiques, administratives et pratiques qui jusqu'à présent compliquent l'accès des femmes à la vie économique.

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Horizon Local 1997
http://www.globenet.org/horizon-local/