MICROCAPITAL BRIEF: Indian Microfinance Institutions Shift from Lending Mostly to Women Towards Relatively Gender-Balanced Portfolio, Reports Elena Bridgers in Stanford Social Innovation Review

Elena Bridgers, a social researcher based in France, recently authored an article on the website of the US-based Stanford Social Innovation Review exploring the shift of microfinance institutions (MFIs) in India from a primarily “female client base” to a more “gender-balanced portfolio” [1]. Ms Bridgers explains that following the “microfinance crisis” that began in 2010 in the Indian state of Andhra Pradesh, MFIs are looking to shift from the group-lending model, which focused on women’s groups, to lending to individuals. This shift, Ms Bridgers notes, is “intimately linked” to an increased preference for male clients. According to Ms Bridgers, most MFIs lend to women not because they are more “secure and socially responsible investments” but because they are “docile.” She quotes a field manager of BASIX, a MFI in India, as saying that, “Women don’t stand up to you the way that men do. They are always at home, and they are easier to form into groups.” She further states that these women are not totally in control of the loans they access and are caught between the loan officers who hold them accountable for repayment of the loans and the husbands who are actually in control of the money.

Ms Bridgers reports that in her two-month study of 90 women from unspecified regions in India, 18 percent had full control over their loans and 49 percent said they were partially in control of the money. 26 percent of the women said that they wanted “nothing to do with microfinance.” Ms Bridgers says that if women in this last category are to be empowered “a convergence of many more supportive efforts, mostly outside the scope of a typical MFI” will be needed. She concludes that MFIs should make the change to a gender-balanced portfolio, so their loans to women can be limited only to women that have a “reasonable chance” to maintain control of the money they borrow.

By Nisha Koul, Research Associate

About BASIX: BASIX Group is an Indian entity whose institutional members provide poor people various services including microfinance, health insurance and agricultural and business development services. The BASIX Group operates through a holding company, Bhartiya Samruddhi Investments and Consulting Services Limited (BASICS). BASIX Group’s microfinance activities are carried out by two microfinance institutions (MFIs): Bhartiya Samruddhi Finance Limited (BSFL), a non-banking finance company (NBFC), and Krishna Bhima Samruddhi Local Area Bank Limited (KBSLAB), a rural bank. As of 2010, BASIX reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 352.4 million, a gross loan portfolio of USD 281 million, approximately 1.5 million active borrowers and operations in 17 Indian states.

Sources and Additional Resources:

[1] Stanford Social Innovation Review, “Following India’s Microfinance Crisis, A Shift to Male Clients,” http://www.ssireview.org/blog/entry/following_indias_microfinance_crisis_a_shift_to_male_clients

MicroCapital.org story, May 10, 2011, “MICROFINANCE PAPER WRAP-UP: Microfinance in India – A Crisis at the Bottom of the Pyramid; Published by Legatum Ventures,” https://www.microcapital.org/microfinance-paper-wrap-up-microfinance-in-india-a-crisis-at-the-bottom-of-the-pyramid-published-by-legatum-ventures/

MicroCapital Universe Profile: BASIX, http://microcapital.org/microfinanceuniverse/tiki-index.php?page=BASIX+Group

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