Contribution of microfinance on women empowerment case study of Vision Finance company ltd Nyaruguru
par Albert RUTAYISIRE
Protestant institute of arts and social sciences - Bachelor's degree in Business studies with education 2016
According to UN Report (2000), Microfinance is a type of banking service which provides access to financial and non-financial services to low income or unemployed people. Microfinance is a powerful tool to self-empower the poor people especially women at world level and especially in developing countries. Microfinance activities can give them a means to climb out of poverty. From early 1970's women movement in number of countries has been increasing to alleviate poverty through microfinance programs. The problem less access to credit by women was given a particular attention at First International Women Conference in Mexico in 1975.
Microfinance services lead to women empowerment by positively influencing women's decision making power at household level and their overall socioeconomic status. By the end of 2000, microfinance services had reached over 79318million of the poorest of the world (Women and Men). As such microfinance has the potential to make a significant contribution to gender equality and promote sustainable livelihood and better working condition for women. (ILO Geneva report 2007)
It has been well documented that an increase in women resources or better approach for credit facilities results in increased well being of the family especially children. ( Maoux, 1997; Kabeer, 2001).
FinScope survey Rwanda, released in 2016, indicates that 87 %of women have access to financial services compared to 68 % in 2012. Although women are considered to be good managers, the financial inclusion in Rwanda 2016 by Access to Finance Rwanda shows that only 24 % of women are banked, while 39 % use other forms of banking, an average of 24 % of women uses informal banking while 13 % totally excluded. The large portion covered by MFIs.
Based on ILO Geneva report (2007), by the end of 2000, microfinance services had reached over 79 million of the poorest of the world. As such microfinance has the potential to make a significant contribution to gender equality and promote sustainable livelihood and better working condition for women. (ILO Geneva) It has been well documented that an increase in women resources or better approach for credit facilities results in increased wellbeing of the family especially children. Presently, in most of the developing countries like Rwanda higher emphasis is being laid upon the development of women as an entrepreneurs and their active participation in the development process of their country. Women can be successful and better entrepreneurs if given the much needed conducive environment and provided with enough resources most importantly the required amount of capital. The studies of rural women have proved their business excellence. They have been found to be better in credit utilization than men but because of lack of access to assets they are often more vulnerable to poverty than males.
From early 1970's women movement in number of countries increasing to alleviate poverty through microfinance programs. The problem of women less access to credit was given a particular concentration at First International Women Conference in Mexico in 1975.
Really the user-owned financial cooperatives that offer savings, credit and other financial services to their members are easy to establish and are based on a common bond, a linkage shared by savers and borrowers that can be based on a community, organizational, religious or employee affiliation. They provide members the chance to own their own financial institution and help Microfinance services lead to women empowerment by positively influencing women's decision making power at household level and their overall socioeconomic status.
The focus on women's empowerment in the context of microfinance brings to light the significance of gender relations in policy development circles more prominently than ever before. Role of women in the development of today's growing word can never be forgotten. For this her empowerment is very important, so that she can participate in the today's competitive atmosphere. Asim (2008) evaluates the impact of micro credit program on indicators of women empowerment in urban slums of Lahore district, Pakistan. The author has chosen specialized institutions with women focusing models.
In another view Hunt and Kasynathan (2002) describes that microfinance programs for women have positive impact on economic growth by improving women income generating activities. The data used was collected from three NGO's in Bangladesh and one state from India. Most of women receiving credit have no control over their loans due to low access to markets. The author finds that the impact of Micro credit on female male education, marriage practice, mobility, violence against women and self-respect. Moreover, microfinance which is designed for the poorest, actually not reached to the poorest people. So donors and NGO's must concentrate on the access of credit to the poorest people.
«All efforts at improving an MFI's impact on women boil down to really understanding a woman's needs her predicament and what she dreams of. Even before all the questions can be answered, the basic question that must first be answered is who she is?» (Noni S. Ayo). This quote sums up a major concern and challenge that emerges in the context of microfinance and women's empowerment. In exploring such empowerment, it is important to have a clear understanding not only of the concept of empowerment but also of the category of woman. In an effort to empower women through microfinance, caution needs to be exercised that an excessive focus on `women' may come at the cost of empowerment of a `woman'.
Although a woman's personal empowerment may not be effective without collective empowerment tool. But treating women as a homogeneous category may be an equally naïve approach. Listening to clients and carefully evaluating their resource bases, strengths and vulnerabilities is important if microfinance programmes are to realize the goal of women's empowerment (Cheston and Kuhn 2002). Finally, this gender analysis of microfinance includes an understanding of the empowerment impact of MFIs:
(i) On women as an exclusive category; and
(ii) On women in relation to men. In other words, it addresses the question of how much is the effect of MFIs on women due to the fact that they are women.
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