2.3. ROLE OF MICROFINANCE IN WOMEN EMPOWERMENT
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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