MICROFINANCE PUBLICATION ROUND-UP: Microfinance and Patriarchy, Connecting the World’s Poorest People to the Global Economy, “Best Practices” in Serving Small Businesses

“Microfinance and Patriarchy: A Drift Away from Serving Women;” published by Knowledge @ Wharton; 2013; 3 pages; available at: http://knowledge.wharton.upenn.edu/createpdf.cfm?articleid=3169

This report highlights the importance of gender equality in the provision of microfinance and focuses on the negative impacts of patriarchal attitudes on lending practices. The report suggests that it is easier for female loan officers than it is for male loan officers to interact optimally with women clients. “Because up to 70% of loans are made to women, access to female employees in MFIs is key.” However, female employment by microfinance institutions (MFIs) is insufficient due to the lack of education available to women in many countries. The report also highlights difficulties in reconciling various goals of microfinance. “While foreign investors may say they want to promote better lifestyles for women and families, they also expect positive financial returns. And yet the motivation for lending to women is to create social benefits by serving a population that is excluded from traditional financial channels precisely because it isn’t profitable to serve them.” The authors refer to studies that indicate MFIs focusing on lending to women are less likely to be financially self-sustainable and are less attractive as investment opportunities as a result. The report concludes, “A business-friendly economic climate will help offset some of the resource constraints that patriarchy creates for MFI foundings, but will amplify the suppression of women’s lending by creating financial inducements to lend to less-poor male clients.”

“Connecting the World’s Poorest People to the Global Economy;” published by CARE International; 2013; 43 pages; available at: http://www.careinternational.org.uk/news-and-press/latest-news-features/2293-new-report-connecting-the-worlds-poorest-people-to-the-global-economy-

This report presents an analysis of the eight pilot initiatives of CARE International, originally known as the Cooperative for American Remittances to Europe, for linking informal savings groups with banks and other financial institutions in five African countries. The authors highlight the increasing international attention to the issue of connecting the world’s poorest people to formal financial services while noting the significant barriers that still remain. In Kenya, Malawi, Rwanda, Tanzania and Uganda, CARE International has partnered with local and international banks such as Barclays of the UK, microfinance institutions (MFIs) such as Vision Finance Company of Rwanda, and mobile service providers such as Vodacom of South Africa, allowing mature village savings and loan association (VSLA) “members to save flexibly, access loans to invest in small businesses, and build a social fund to strengthen their ability to cope financially with unexpected events.” The report concludes that while the participants of CARE International’s pilots are exhibiting strong demand for the savings, credit and insurance products offered and while early data suggest these products are of benefit to the participants, “the twin issues of profitability and consumer protection remain significant challenges.” For further linkage of poor people to formal financial services, the authors recommend the institutional recognition of savings groups as a springboard to financial inclusion, the building of more public-private partnerships, the promotion and adoption of CARE International’s principles for linkage, the expansion of financial literacy and investment in further research.

“Small Business Financial Services Best Practices Benchmark Publication;” published by The Small Business Banking Network; 2013; available at: http://www.microfinancegateway.org/p/site/m/template.rc/1.1.17586/

This report highlights The Small Business Banking Network’s publication of “The Small Business Financial Services Best Practices Benchmark,” which is “designed to provide valuable information on productivity and the strategies that leading financial institutions use to achieve high performance in financing small businesses, with a specific focus on lending.” The report notes that “The Small Business Financial Services Best Practices Benchmark” presents a “strategic and operational blueprint for small business banking” with new data for twenty financial institutions from nine countries.

By Sam Allmendinger, Research Associate

Sources and Additional Resources:

“Microfinance and Patriarchy: A Drift Away from Serving Women,”
http://knowledge.wharton.upenn.edu/createpdf.cfm?articleid=3169

“Connecting the World’s Poorest People to the Global Economy,”
http://www.careinternational.org.uk/news-and-press/latest-news-features/2293-new-report-connecting-the-worlds-poorest-people-to-the-global-economy-

“Small Business Financial Services Best Practices Benchmark Publication,”
http://www.microfinancegateway.org/p/site/m/template.rc/1.1.17586/

MicroCapital Universe Profile: CARE International
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CARE+International

MIX Market: Vision Microfinance Company
http://www.mixmarket.org/mfi/vision-finance-company

MicroCapital. February 21, 2013, “MICROFINANCE PUBLICATION ROUND-UP: Banking on Change Partnership for Financial Inclusion in Africa; Findings on Financial Inclusion in Nigeria; Snapshot of Microfinance in Latin America and the Caribbean,” https://www.microcapital.org/microfinance-publication-round-up-banking-on-change-partnership-for-financial-inclusion-in-africa-findings-on-financial-inclusion-in-nigeria-snapshot-of-microfinance-in-latin-america-and-the-carib/

MicoCapital. March 17, 2013, “MICROFINANCE PUBLICATON ROUND-UP: Mapping Microfinance in Uganda, the G2P Payments Sector in Pakistan, Nepal Country Snapshot,” https://www.microcapital.org/microfinance-publicaton-round-up-mapping-microfinance-in-uganda-the-g2p-payments-sector-in-pakistan-nepal-country-snapshot/

MicroCapital. February 23, 2013, “MICROCAPITAL BRIEF: Kenyan Microfinance Institution Musoni Goes Completely Cashless,” https://www.microcapital.org/microcapital-brief-kenyan-microfinance-institution-musoni-goes-completely-cashless/

MicroCapital. February 12, 2013, “MICROCAPITAL BRIEF: Kenyan Mobile Operator Safaricom Increases Mobile Money Fees in Response to 10% Tax,” https://www.microcapital.org/microcapital-brief-kenyan-mobile-operator-safaricom-increases-mobile-money-fees-in-response-to-10-tax/

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

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