aaaGENDER-Finance6

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ECONOMIC EMPOWERMENT OF WOMEN

THROUGH INCLUSIVE FINANCE:

ENSURING FOOD SECURITY AND

SUSTAINABLE DEVELOPMENT

Presented at the ‘Regional Rural and Agricultural Finance Thematic Conference’, under the theme ‘’Regional

experience on Knowledge Sharing and Networking in Rural and Agricultural Financing’’ organized by

AFRACA and IFAD-Africa, June 10-12, 2015, Harare, Zimbabwe, as well as, ‘Research Meets Africa’ (sub-

unit of University Meets Microfinance), under the theme ‘’Accelerating Research on Innovation for Rural

Financial Inclusion in Africa’’ organized by Planet Finance and ADA-Microfinance, June 29-July 2, 2015,

Dakar, Senegal (programme attached at the end).

by

Getaneh Gobezie1

([email protected])

Abstract: The expansion of microfinance (credit, saving, insurance, etc) in many contexts, by enhancing inclusive finance, promised to address the issue of poverty alleviation, promoting women’s empowerment and sustainable development that can benefit all. Unfortunately such interventions, often focussed only on ‘minimalist’ microcredit, and implemented without addressing gender issues in programme design, risk not attaining their stated objectives, and at times worsen existing undesirable situation. This paper undertakes a very comprehensive analysis of existing situations in various contexts, and offers some practical recommendations.

1- BACKGROUND

In developing countries, women are often the main farmers or producers. In many parts of

Sub Saharan Africa, 75 percent of agricultural producers are women (World Bank et., al,

2009), and they produce more than 80% of the food for the continent. Women are also very

active in unpaid care, which contributes to economic growth through a labour force that is fit,

productive and capable of learning and creativity. It has been estimated that if care work were

assigned a monetary value it would constitute between 10% and 39% of GDP (OECD, 2011).

Yet, women continue to have limited access to resources. At least 50% of the population,

women posses only 1% of world resources (ACCION, 2009).

1 The author has over two decades of experience in grass-root development, microenterprise, microfinance,

food security, economic empowerment; and has engaged in a number of research, capacity building, training and consultancy with international organizations including: Oxfam-Novib, IFAD, FAO, SIDA, DfID, DAI/First Consult, World Savings Bank Institute etc. He would like to thank the sponsors for funding this research:- AFRACA and IFAD’s Eastern and Souhthern Africa Rural Finance Knowledge Management, inputs from all the participants at the conference and suggestions especially from Miriam Cherogony (IFAD-Africa), Maria Hartle (IFAD) Henry Oketch (consultant), and Pekka Jamsen (AgroBig, Eth). Comments and suggestions are welcome at mail: [email protected], or [email protected]

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Gender asymmetries in access to and control over ‘assets’, access to ‘markets’, access to

‘information and organization’ dictate power asymmetries between men and women (Aslop

and Heinsohn, 2005). According to the bargaining model (which recognizes the possibility

of both cooperation and conflict of relationships), this lack of resources would mean that

within the household, women often have lower ‘fall-back position’ (or lower ‘welfare’ in the

event of a breakdown of marriage) and therefore they would be obliged to be subservient to

and accommodate the interest of their male counterparts in order to save the marriage from

breaking down (Osmani, 1998). This vulnerable position of women in the bargaining process

results in the man gaining an upper hand at her expense.

Indeed, without leverage or legal protections, disempowered women are thus very vulnerable

to abuse and exploitation. According to the United Nations Population Fund, around the

world, as many as one in every three women has been beaten, coerced into sex or abused in

some other way – most often by someone she knows, including by her husband or another

male family member (ACCION, 2009). In India, a “bride burning” is committed once every

two hours – an illegal but nonetheless widespread act of murdering the wife in a staged

kitchen fire in order to marry another for a better dowry. Many feminists recognize that poor

men are almost as powerless as poor women in access to material resources in the public

domain, but remain privileged within the patriarchal structure of the family. In some

societies, being seen by neighbours as in control of his family and wife is a key element of

men’s social prestige -- particularly in impoverished communities where men may be able to

boast of few other status symbols (Cheston, et. al 2002). In Tanzania and other parts of

Africa, especially during bad weathers – either drought or flooding – causing crop failures

leading to worsening of poverty, unproductive old women are often killed for ‘’witchcraft’’.

Families, it seems, suddenly discover that unproductive older women living with them

(usually a grandmother) is a witch, after which she gets chased away or killed by others in the

village -- a convenient way to get rid of an unproductive mouth to feed at times where

resources are very tight (Kristof and Wudunn, 2010, p. 192).

The existing unjust structure also determines the fate of the would-be women (i.e the girl

child) who are often viewed as having little prospect of leading a successful life and

supporting parents in future. As a result, it is argued that particularly poor parents, with very

few livelihoods resources and struggling for basic survival, are forced to allocate more of

their scarce household resources for children with a better earning potential (i.e the male

child) often at the expense of the girl child, including in allocation of food, paying for health,

education, etc (Armendariz and Morduch 2005). Sen (Sen, 2001, 1990) estimated that the

number of ‘missing women’ (as a result of girls who died prematurely due to parents’

neglect, or selective abortion of their female infants) in the early 1990s was over 100 million

people2 (Armendariz and Morduch, 2005). In an interview with the YES magazine (2005),

Muhamed Yunus of Grameen Bank reflected on the case of Bangladesh that ‘the moment she

is born, the family looks upon the daughter as a kind of punishment. Thus, throughout her life

the daughter lives in a very apologetic way: "Sorry I was born to be a daughter. I wish I was

not born."

2 The global statistics on the abuse of girls are numbing. It appears that more girls have been killed in the last

fifty years, precisely because they were girls, than men were killed in all the battles of the twentieth century. More girls are killed in this routine ‘’gendercide’’ in any one decade than people were slaughtered in all the genocides of the twentieth century. …. In the nineteenth century, the central moral challenge was slavery. In the twentieth century, it was the battle against totalitarianism. We believe that in this century the paramount moral challenge will be the struggle for gender equality around the world (Kristof and Wudunn, 2010).

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Some argue that women themselves often internalize and accept the prevailing norm of

discrimination3. However, increasing evidence suggest that such cultural norms seriously

constrain not only the individual and economic development of women themselves, but also

of the entire community because women continue to actively counteract in their own way.

Participatory research in rural Uganda, for example, demonstrated a distinct gender division

of tasks, roles and power, with women doing most of the cultivation work – about 70% in

coffee-producing households – and also growing food crops. But women often sold only

fruits, beans and groundnuts, and local custom has it that they have to ‘’kneel down before

their husbands to hand over all their money’’ (Farnworth and Akamandaisa, 2011). Men

typically did only a few heavy tasks, but also came back to harvest and sell the coffee beans,

often spending the proceeds on alcohol or women in town. Indeed, where husbands continue

to sell coffee without the consent of wives, the latter lost interest in taking care of coffee

quality and they also sell un-ripe coffee beans, or beans which had not been fully processed

(without husband’s knowledge!) even if they sold for less, to fulfil some cash needs.

Such inequitable distribution of benefits at household level, particularly in ways that do not

reflect the actual contribution of each household members, results in low motivation and

incentives to work, or failures in collaboration, and hampers the maximization of capacities

of household members (Sebstad and Manfre, 2011). This is because women and men

frequently pursue individual livelihood strategies that demonstrably work against each other.

A more recent IFPRI research on Pakistan, Ethiopia, etc also suggested that if an individual

believes that she has little, if any, ability to impact her own well-being, and has low ‘control’

on her life outcomes, she would have inadequate incentive, motivation, or aspiration4 to

allocate effort or resources towards achieving that goal (Kosec, et al, 2014, and Dunn, et al

1996).

Gender inequalities also inhibit households’ ability to make the best possible use of the

productive resources available to them. Both women and men can fail to take the best

economic decisions possible because gender relations can lock women and men into pre-

determined roles and responsibilities. All this hampers the development of good businesses,

lowers productivity, and can negatively affect nutrition and food security (Farnworth, et al

2013, Fletschner and Kenney, 2011).

Microfinance programmes, through expansion of financial inclusion5 of women, have been

promoted in the last couple of decades as one of the key entry points to achieve the ‘virtuous

3 For example, from a detailed study by the World Bank In Ethiopia, it was found that 85% of women believe that a husband is justified in beating his wife for at least one of the following reasons: burning food (85% agree), arguing with him (61%), going out without telling him (56%), neglecting the children (65%), refusing sexual relations (51%). Even among the highly educated, still 57% support the practice (or domestic violence): no apparent difference in attitude across the regions, with some exception on Harari, Addis Ababa, Dire Dawa (World Bank, 2005). 4 ‘’Aspirations’’ can be understood as forward-looking goals or targets (or boundary states) and a preference to

exert effort and attain or realize them. (Kosec, et al 2014) 5 There is no single accepted definition or indicator for levels of ‘financial inclusion’. But we can agree that

women‘s financial inclusion occurs when women have effective access to a range of financial products and services that cater to their multiple business and household needs and that are responsive to the socioeconomic and cultural factors that cause financial exclusion in women and men to have different characteristics (DFID, 2013). CGAP (2015) defines financial inclusion as a state where both individuals and businesses have opportunities to access, and the ability to use a diverse range of appropriate financial services that are responsibly and sustainably provided by formal financial institutions.

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spirals’ of economic growth,6 increased well-being and social and political empowerment for

women, thereby addressing goals of gender equality (Mayoux and Hartle, 2009). First,

increasing women’s access to microfinance services can lead to their economic

empowerment. Women’s roles in household financial management may improve, in some

cases enabling them to access significant amounts of money in their own right for the first

time. This might enable women to start their own economic activities, invest more in existing

activities, acquire assets or raise their status in household economic activities through their

visible capital contribution. Increased participation in economic activities may raise women’s

incomes or their control of their own and household income. This, in turn, may enable them

to increase longer-term investment and productivity of their economic activities, as well as

their engagement in the market.

Indeed, as highlighted above, one of the rational for specifically targeting women comes from

growing evidence that gender inequalities in developing societies inhibit economic growth

and development. Societies that discriminate on the basis of gender pay the cost of greater

poverty, slower economic growth, weaker governance, and a lower living standard of their

people. In 2006, a database created by the OECD demonstrated what common sense tells us:

with few exceptions, countries in which women have more economic and political power are

richer7 and more peaceful

8 than countries where women are relatively powerless. Patriarchy

is damn expensive (Marche, 2013).

Second, increasing women’s access to microfinance can increase household well-being. This

is partly the result of economic empowerment, but may occur even where women use

microfinance services for the activities of other household members, for example husbands or

children. Even where women are not directly engaged in income-earning activities,

channelling credit or savings options to households through women may enable them to play

a more active role in intra-household decision-making, decrease their own and household

vulnerability, and increase investment in family welfare. This may benefit children through

increasing expenditure on nutrition and education, particularly for girls. It can also lead to

improved well-being for women and enable them to bring about changes in gender

inequalities in the household, as a result of improved fall-back position and bargaining

power.

Third, a combination of women's increased economic activity and increased decision-making

in the household can lead to wider social and political empowerment. Women, themselves,

often value the opportunity to make a greater contribution to household well-being – giving

6 Under the standard neoclassical assumptions about production functions, if women have less access to

capital than men, (marginal) returns to capital for women should be higher than for men. Endowing women with more capital can thus be growth-enhancing in principle (Armendariz and Morduch , 2005).

7 See Stephen Marche (July/August 2013): Home Economics: The Link Between Work-Life Balance and Income

Equality http://www.theatlantic.com/magazine/archive/2013/07/the-masculine-mystique/309401/y

8 Some security experts noted that the countries that nurture terrorists are disproportionately those where

women are marginalized. The reason there are so many Muslim terrorists, they argued, has little to do with the Koran but a great deal to do with the lack of robust female participation in Islamic countries. As the Pentagon gained a deeper understanding of counterterrorism, it became increasingly interested in grassroot projects such as girls’ education. Empowering girls, some in the military argued, would disempower terrorists (Kristof and Wudunn, 2010, p. xxi).

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them greater confidence and sense of self-worth. The positive effects on women’s confidence

and skills, their expanded knowledge and the formation of support networks through group

activity and market access can lead to enhanced status for all women in a community. In

some societies where women’s mobility has been very circumscribed and women previously

had little opportunity to meet women outside their immediate family, there have been very

significant changes. Individual women who gain respect in their households may then act as

role models for others, leading to a wider process of change in community perceptions and

men’s increased willingness to accept change (Mayoux and Hartle, 2009).

Finally, women’s economic empowerment at the individual level can make potentially

significant contributions at the macro-level through increasing women’s visibility as agents

of economic growth and their voice as economic actors in policy decisions. This, together

with their greater ability to meet the needs of household well-being, in turn increases their

effectiveness as agents of poverty reduction. Microfinance groups may take collective action

to address gender inequalities within the community, including such issues as gender violence

and access to resources and local decision-making. Higher-level organization may further

reinforce these local changes, leading to wider movements for social and political change and

promotion of women’s human rights at the macro-level. Savings-and-credit groups have at

times become the basis for mobilizing women’s political participation (See Annex 1).

Moreover, these dimensions of economic empowerment, well-being and social and political

empowerment are potentially mutually reinforcing ‘virtuous spirals’, both for individual

women and at the household, community and macro-level.

2- CURRENT PRACTICE IN RURAL

MICROFINANCE

The MIX market reported that women on average constitute over 80% of global microfinance

(credit) outreach, and about 95% in the case of microfinance institutions like Grameen bank.

Nevertheless, despite the potential contribution of microfinance to women’s empowerment

and well-being, there is a long way to go before women, especially poor women, have equal

access to all financial services particularly in rural areas or are able to fully benefit. The

degree to which women are able to benefit from minimalist financial services that do not

take gender explicitly into account depends largely on context and individual situation, and

may also change over time. But what is clear is that none of the expected linkages between

women’s access to financial services and empowerment can be assumed to occur

automatically.

Among other things, financial products and service approaches, more often than not, are

poorly designed, top-down, in a ‘one-size-fits-all’ modality and little integrated with other

essential microenterprise services. Indeed, one of the great virtues of microfinance is bringing

the service nearer to where the clients, particularly poor clients, reside, as distance is one of

the most important determinants of transaction costs. Women are expected to benefit much

from this shift of approach in the banking service. However, distance is not just physical

space between service provider and potential clients! Geography, psychology, religion,

language, sex, ethnicity, culture, social class, etc also create distance between borrowers and

lenders (Gonzalez-Vega, 2003). And neither women nor men are a homogenous group –

women, for example can be widowed, single, newly married, pregnant, young girls,

unemployed, employed, rural, urban, etc. (FAO, 2002). Effective access transforms mere

(physical) access into actual usage. In other words, a financial product is likely to be used

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when it is physically accessible, when it has a clear value proposition for the user (i.e. its

utility outweighs the cost) and when the user is eligible for it (DFID (2013).

Women’s mere programme membership, numbers and size of loans and repayment data

cannot be used as indicators of actual access or proxy indicators of empowerment.

Registration of loans in women’s names does not necessarily mean participation even in

decisions about loan applications. Men may take the loans from women or directly negotiate

loans in women’s names with male credit officers, as an easier way of getting access to credit.

Women may choose to give their loans to men (husbands, fathers, sons, brothers) as the most

rational economic or social investment. Loans may be repaid from men’s earnings, through

women forgoing their own consumption, or from income or borrowing from other sources.

High demand for loans by women may be more a sign of social pressure to access outside

resources for in-laws or husbands than of empowerment.

Even where women use loans for their own activities, their choice of activity and ability to

increase their incomes are seriously constrained by: gender inequalities in access to other

complementary resources for investment; responsibility for household subsistence

expenditure; time poverty due of unpaid domestic work, related to responsibility for caring

for the family (‘reproductive tax’ on time from which men are largely exempt) (Kabeer,

2015); low levels of mobility; and vulnerability – all of which limit women’s access to

profitable markets in many cultures. The degree to which credit contributes to increased

incomes for women (as well as for men) also depends largely on how well the delivery of

credit is adapted to the economic activities being financed. Agricultural loans that arrive late

or are not large enough to pay for inputs may simply burden a woman with debt that she

cannot repay from the proceeds of the activity she wished to finance.

Most women tend to invest in existing ‘female’ activities which are low profit and insecure.

There are signs, particularly in some urban markets, that the rapid expansion of micro-finance

programmes may be contributing to market saturation in ‘female’ activities and hence

declining profits (Bateman, 2007). Indeed, not every one is successful at increasing income.

Perhaps, it is only for 5-10 percent of clients -- especially those with successful existing

businesses – that microcredit’s impact can be significant9. In many instances, given the

objective realities of poor communities, where women are almost fully engaged in household

chores and have little or no extra time or skill in business, micro-credit may not even be a

priority. In particular where such micro-credit services are not accompanied by other

essential services in business, skill development, labour-saving technologies, etc, cases have

been observed where women have been increasingly indebted10

. Studies indicated that in

some instances, inability to make on-time repayment and increased debt has been the greatest

‘source of stress’ for poor women, and there are many real cases of suicide committed by

poor women in India and elsewhere. This has been highly pronounced in 2010, especially

after the Initial Public Offering (IPO) of SKS microfinance in Andrapradesh (CGAP, 2010).

Indeed, as employment and traditional livelihood strategies for men disappear, poor women

in increasing numbers have had to make their ways to take every opportunity in the informal

sector, primarily in low paying and often menial work -- piece work, vending, petty trading,

9 See also on-line discussion at http://nextbillion.net/blogpost.aspx?blogid=5322 10 Indeed the most recent results of an impact assessment on six countries based on a Randomized Control Trials (RCT) have shown that ‘microcredit’ programmes have ‘no’ or ‘little’ but certainly no ‘transformative’ impact on clients livelihoods (Banerjee, et al, 2014) (American Economic Journal: Applied Economics https://www.aeaweb.org/articles.php?doi=10.1257/app.20140287).

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agricultural labour, collecting garbage, cleaning toilets, and factory employment. And this

sometimes includes prostitution (Kabeer, 2015). In almost every country in the World Bank

Group study (2001), both men and women reported women's greater ability to accommodate,

‘bury their pride’ and do whatever job was available to earn the money to feed the family.

Yet, the market value of women’s work may not be particularly important to women

themselves compared with other aspects of their employment which, in a given social and

cultural context, may be strongly valued at a personal level, such as modesty, respect,

acceptability to husbands and kin, job fulfilment and/or the ability to reconcile paid work

with childcare (Chant, 2003). Moreover, if income is increased at all, it may come at the cost

of depletion of other valued resources such as time, health and general well-being.

These all are among the issues that need serious consideration in programme design. Yet,

although most institutions have poverty alleviation, and women’s empowerment as their key

goals, these issues are often less well defined, are not clearly shared-goals with-in and outside

the institution, and are much less well strategized. Particularly at operational areas, branch

staff have lesser understanding of the issues, much less equipped with essential skills and

awareness as well as appropriate personal behaviour and attitude, with the result that such

issues get marginal attention in their day-to-day implementations -- particularly in most cases

where staff incentive schemes are much weighted on the business from loan. Indeed, the

contribution of financial services to women’s social and political empowerment depends very

much on factors such as staff attitudes in interacting, relating with and treating women11

, the

types and effectiveness of core training which, with more commercialization drive, are

receiving lesser weight.

There are many worrisome trends in practice. One loan officer explained that if he fails to

collect a kisti (=instalment?) the branch manager “comes with all the staff and [they] stay in

the client’s house until twelve or one at night”. In the MFI studied (Hulme and Msitrot, 2014)

over 70 percent of credit officers reported finishing repayment collection after 8pm, and just

below 50percent of those reported working up to or after 10pm (although the official office

time ends by 6pm). As another credit officer explained: “When I do not get an instalment [...]

and explain that there is a problem in this house and they cannot repay today [...] my boss

orders me to sit in that house until the clients gives the money: ‘If you have to sit there

throughout the night you will but do not come back without the instalment’ he says. So if I

leave without the kisti I face this kind of mental harassment and physical exhaustion... I feel

like quitting the job.”

Often, some microfinance institutions also rely on or collaborate with local ‘credit

committees’ to establish groups for their loan disbursement and also recollections. Without

working to challenge the traditional norm or culture, such efforts also risk replicating the

patriarchal norm, where women, especially poor women are (further) marginalized from

access12

, thus subjecting the new financial opportunity for elite capture13

.

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With more commercialization, the cases of client treatment has worsened in many circumstances. This has been highly pronounced in recent microfinance crisis in Andhra Pradesh, India, where many clients reportedly committed suicide as a result of over-indebtedness. Arunachalam (2010) has reported many instances of a typical staff-client relationship during the crisis: Client E’s Husband: “Some collection agents were really rude-after my wife committed suicide.” They came and said, “If you cannot find means to repay, then you should send out your two beautiful daughters, and get them to earn money by other means (prostitution…) and then repay to us.” One of them even said, “If you cannot do that, send them to me and I will use them and pay off your installments. They are very beautiful and would be able to earn a lot. … I wept as I heard this…” 12

There are evidences demonstrating that the very poor also exclude (or self-select) themselves from programmes. As reported by Sam Daley Harris (2003): “… The poor people see who goes to the programmes,

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Many microfinance institutions utilize the Group Guarantee Lending Model (GGLM) as

their operational modality. Groups may extend and strengthen women’s support networks

and decrease vulnerability. Groups may help develop organizational and leadership skills,

especially when they acquire experience on a small scale over time and then form larger

networks and federations. Groups may provide a forum for women to exchange information

and learn from one another. For example, successful women entrepreneurs can share

experiences with others. Sometimes women train other women on a voluntary basis, or

groups organize and pay for training. Members may pool income and assets for group

economic activity and access new markets for activities in which collaboration is

economically beneficial. Groups may provide a basis for collective action on gender and

community development issues.

But, groups may also undermine rather than strengthen networks through putting pressure on

friendships and support networks, particularly if people do not have an equal capacity to save

or repay loans. There are arguments that top-down type of organizing people, driven by bank

or MFI staff, for the purpose of preparing the poor for a group loan as undertaken by

Grameen type group loan can sometime be inconsistent with existing networks that the poor

have maintained for long. Poor people are often rushed into forming groups with people

about whom they have little information. Some authors advise that the methodology might as

well distract and crowd-out existing traditional mutual support networks, particularly in

times of repayment problems. They contend that in majority of poor communities, the rural

poor, especially women, have much less information on the behaviour of even their

immediate neighbours when it comes to ‘financial’ matters. For example, Marr (2002) in her

comprehensive study of microfinance clients in Peru found that only 4% of all participants in

groups have prior relationships based on issues of borrowing and lending. All this means that

the vast majority of participants are unfamiliar with financial issues when they first join the

programme (Collins, et al 2009, Rutherford, 2010 on-line discussion)14

. When these group

members are then confronted with an alien way of relating to one another – in this particular

case, monitoring colleagues’ loans, investments, returns, risks, and so on -- they tend to react

very strongly and may turn out to acts of intimidation, threats and even physical abuse in

order to repress information about their financial affairs.

At household level, men are often very enthusiastic about women’s savings-and-credit

programmes because their wives no longer ‘nag’ them for money. But, evidence indicates

and would just say ‘this programme is not for us; it is for those better off people’….” In an earlier ASA study of 626 respondents (drawn from a mixture of ASA staff and clients), almost all (98.8%) of respondents, and all the clients, said that lack of minimum clothing (to leave the bari and attend a public meeting) excludes the ‘hard-core poor’ (Morduch and Haley, 2002).

13 A typical expression of a local community leadership accessing a village level financial services, as reported in

the Microcredit Summit Report (2003?) is: ’’This meeting is for serious people. Here we have to be serious about business. Somebody, who is only selling few vegetables, is not serious about business.’’ 14 Stuart Rutherford (2010, an on-line discussion on ‘Portfolio of the Poor’) does not accept the idea that

'trust' is something that can be imported from pre-existing relationships (such as 'the people in this group trust each other as they are all from the same village'). But ..... trust is more of a verb than a noun. Trust is constructed out of the repeated keeping of reciprocal promises. So to construct trust and then keep it going, both partners (say a bank and its clients) have to repeatedly keep promises - promises to pay, to be on time, to conduct things fairly, and so on.

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that, in response to women’s increased incomes, men may withhold more of their

contribution to the household budget for their own luxury expenditure; or react differently

when faced with the fear of loss of power, authority and control over their wives:- some

forcefully stop them from working by threatening to chase them from the home; some allow

them to open own accounts but control the accounts on the ground that since a married

woman belongs to the husband and uses his name, the account she opens belongs to the

husband; some resort to over-controlling their wives’ businesses demanding for

accountability; some borrow the money from them and never pay it back; some allow them to

borrow but divert the loans and leave them to struggle with loan repayment; some, once the

wives start earning, stop providing for the family, resort to drinking or even marry other

wives (Regina, 2010). Some men go to the extent of following up women in groups (Kabeer,

et al 2012, Mayoux and Gobezie, 2011).

There are many evidences with in African context on some coping strategies women use.

One of these is not to disclose their financial dealings to their husbands (Fletschner and

Kenney, 2011). They avoid using SACCOs for fear that their husbands might find out. Even

when they do open accounts, they do so secretly by keeping their pass books with SACCO

staff or friends. Other women prefer to save and borrow in groups as a means of protection

against husbands’ interference. Cheston and Kuhn (2002) from their interview of loan

officers of Sinabi Aba Trust (SAT) in Ghana reported that some women hid their loans and

sometimes even their businesses from their husbands in order to protect their income and

investments from them. Although the extent to which loan hiding is a problem among SAT

clients is difficult to gauge, the follow-up research revealed that half (50%) of SAT’s clients

were hiding savings for fear that their husbands would withdraw their financial support.

Indeed, tensions in gender relationship with-in the household may increase as economically

empowered women find it difficult to co-exist with a man with traditional attitude, and who

feels un-easy and threatened with increasingly economically independent and more

demanding wife. Kabeer (2007) reported cases from some part of Africa. In West Africa,

unable to enforce ‘obedient servility’ through the sanction of withdrawing their contributions

to wives who might be earning more than them, men complained at the ‘waywardness’ of

women and the ease with which women ‘packed out’ when the going got rough15

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.

Thus, although some studies have suggested that microfinance can reduce the risk of

Intimate Partner Violence (IPV)17

, others have noted that attempting to empower women

15

Earlier evidence suggest that particularly in developed countries there has been a rise in single motherhood since the 1950s as employment and other wider livelihood opportunities gave women the freedom to leave unhappy marriages (Kabeer, 2001). 16

Two types of female-headed households are often distinguished: de jure female-headed households in which the female head is single or widowed; and de facto female-headed households in which the male partner does not permanently reside in the household, and while he can influence larger decisions, by and large he is not involved in day-to-day decisions and activities. The financial needs and constraints of women in de jure female-headed households are likely to differ from those in households that are de facto headed by women (Fletschner and Kenney, 2011). … Thus, in some cases, given ‘polygamous’ marital practices which allowed men to take another wife at any time, thereby increasing the competition for his ‘limited resources’, but given also the costs of going it alone, women were not using their incomes to leave their husbands but to build positions of ‘virtual autonomy’ (also termed ‘divorce with-in marriage’) from them (Kabeer, 2007).

17 Violence against women is defined as any act of gender-based violence that results in, or is likely to result in,

physical, sexual, or psychological harm or suffering to women, including threats of such acts, coercion, or arbitrary deprivation of liberty, whether occurring in public or in private life (Hughes, et al 2015). Violence

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can potentially exacerbate this risk by challenging established gender norms and provoking

conflict within the household. Hughes et al 2015 sighted an earlier study which highlighted

that 70 per cent of women participating in a microfinance initiative reported an increase in

violence in their households because of their involvement in the programme. In light of these

contradictory findings, the question of whether women’s empowerment more broadly, and

participation in microfinance in particular, contributes to reductions in violence has remained

an unresolved research question of central policy importance’ (DFID, 2013). Indeed, there is

increasing evidence that, at best, such services helped women to fulfil their immediate and

pressing practical needs of ensuring food security for themselves and of family members, for

example. However, gender equality advocates argue that confining the analysis of gender

inequality to these achievements alone serves to convey the impression that women’s

disempowerment is largely a matter of poverty and indeed, the impact of these services on

women’s long-term strategic needs – gender equality -- remain uncertain (Mayoux and

Hartl, 2009, Kabeer, 1999).

Some of the constraints that particularly affect women are set out in the Figure below.

Supply side constraints

• Limited physical outreach and typical bank

opening hours affect women more than men

because they are less mobile than men

• Product features: may not meet women´s

requirements (e.g. eligibilty, loan term etc.)

• Collateral requirements exclude women who

often lack land/property rights

• Marketing messages not targeted at poor

women

• Service delivery can be patronising towards

women

• The physical infrastructure can intimidate

women and is not suited to their needs (e.g.

baby changing facilities)

• Documentation requirements: women often

lack proof of identity

• Few women in senior management positions:

women are not prioritised as a business

segment

Demand side constraints

• Women are often less well educated and

literate, affecting their financial capability

• Women have lower incomes, cash flows, than

men, because of the kind of work they do

• Constraints on mobility

• Lack of decision-making power and self-

esteem

• Poor access to information, poor social

networks and risk aversion

• Mental barriers, women’s self selection

• Loyalty to informal products (e.g. ROSCAs,

burial societies) due to their social dimension,

which may stop women from exploring

formal-sector alternatives

• Statutory formal laws, which may explicitly

inhibit women´s access to commercial credit,

owning assets (e.g inheritance law)

• Customary laws that undermine incentives to

invest

DFID (2013)

3 – TOWARDS GENDER MAINSTREAMING

AND EMPOWERMENT OF WOMEN

Reaching a common understanding on the terms like ‘gender mainstreaming’ and ‘women

empowerment’ is essential in order to design programmes for achieving these desirable goals

as well as for monitoring and evaluating them. The UN defines gender mainstreaming as

the ‘process of assessing the implications for women and men (as well as boys and girls) of

any planned action, including legislation, policies or programmes, in any area and at all

levels’ (UN, 2002). The ultimate goal is gender equality, where individual rights,

against women is a serious violation of human rights and a pervasive problem worldwide. Globally, 35 per cent of women have experienced physical or sexual violence, and rates of intimate-partner violence against women surpass 50 per cent in some countries.

11

opportunities, responsibilities, as well as resources and benefits no longer depend on whether

a person is born male or female (USAID, 2014)18

. Thus, gender mainstreaming entails

bringing the perceptions, experiences, knowledge, needs and interests of women as well as

men to bear on policy-making, planning and decision making (UN, 2002).

Yet, the mainstreaming strategy does not mean that targeted activities to support women’s

empowerment are no longer necessary. Such activities specifically target women’s priorities

and needs. Targeted initiatives focusing specifically on women are important for reducing

existing disparities, serving as a catalyst for promotion of gender equality. In the current

situation all the statistics on income levels, mortality rates, education and health show that

men have most of the power and resources in the world and enjoy much better conditions of

life. Women are disadvantaged, often suffering sexual violence, which sometimes lead to

suicide and murder (Mayoux and Hartle, 2009).

Based on basic frameworks by UN (2002) and outlined in works of Kabeer (2001) and others,

as well as on its wealth of research and work on the area, the World Bank group has provided

a more simplified and practical and widely used approach to conceptualize and measure

empowerment for analytical purposes (Aslop and Heinsohn, 2005). Accordingly,

empowerment is defined as ‘enhancing an individual’s or group’s capacity to make

(effective) ‘choices’, and transform those choices into desired actions and outcomes’ (or

‘valued ways of being and doing’, Kabeer 2001). Thus, ‘’empowerment of women’’ can be

conceptualized as the process by which women take ‘control’ and ‘ownership’ of their lives

through expansion of choices; or the process of acquiring the ability to make strategic life

choices (See Annex 3).

As the figure below illustrates, this capacity to make an effective choice is primarily

influenced by two sets of factors: agency and opportunity structure. Agency is defined as

an actor’s ability to make meaningful choices; that is, the actor is able to envisage options

and make a choice. Asset endowments act as key indicators of agency. The Sustainable

Livelihoods Framework (SLF), developed by DFID, identified five types of assets: Human:

health, nutrition, education and skills, ability to work, ability to adapt. Natural: environment

services, land, water, resources, forests, climate change adaptation. Financial: income,

savings, remittances, debt/credit, insurance, pensions. Social: status, membership of

organizations, networks, mechanisms for participation and representation, security. Physical:

infrastructure, roads, paths, water and sanitation, tools, technology, housing, livestock.

Programmes and interventions that increase and enhance a household’s different assets will

strengthen the household’s capacity to attain a sustainable livelihood (DFID, no date).

These types of assets are very relevant in determining an individual’s or group’s agency, but

they are not sufficient. The extreme poor, because of the depth and duration of their poverty

and ‘marginalization’, often lack the psychological capacity to envision choices and lack the

information to understand and appreciate their rights, entitlements and options. Therefore, in

order to really capture agency it is necessary to add to financial, human, social, natural and

physical assets, informational (access to information, such as knowledge of rights and

entitlements) and psychological (the capacity to envision, to aspire) assets (DFID, no date).

Indeed, more recent studies by IFPRI and others on aspirations (aspirations for ‘income’,

‘wealth’, ‘educational attainment’, and ‘social status’) in Pakistan and Ethiopia found that 18

According to USAID’s (2014) definition, Gender equality refers to a society in which men and women enjoy the same rights, opportunities, resources, obligations, and benefits. Gender equality does not suggest that men and women are the same, but that everyone has equal value and the right to not be discriminated against based on their gender or biological sex (USAID/LEO Brief, 2014).

12

slower ‘household’ income growth, slower average income growth of ‘neighbors’, higher

‘poverty’ as well as ‘the degree to which individuals feel able to control their life outcomes’,

and absence of ‘role models’ are all associated with lower aspirations19

and individuals

choices (Kosec et al, 2014, Bernard, et al 2014, Apparaduri, 2004)20

.

In turn, opportunity structure is defined as the formal and informal contexts, and is shaped

by the presence and operation of formal and informal institutions, or rules of the game21

such as the laws, regulatory frameworks, and norms governing people’s behavior. The

presence and operation of the formal and informal laws, regulations, norms, and customs

(e.g; familial norms, patron-client relationships, informal wage agreements, formal

contractual transactions, public sector entitlements) determine whether individuals and

groups have access to assets, and whether these people can use the assets to achieve desired

outcomes22

. Agency and opportunity structure give rise to different degree of

empowerment, which can be measured by assessing (1) whether a person has the

opportunity to make a choice (existence of choice), (2) whether a person actually uses the

opportunity to choose (use of choice), and (3) once the choice is made, whether it brings the

desired outcome (achievement of choice).

As such, empowerment is a process (see Annex 4) of change that can only be driven by

women themselves. On the other hand, although empowerment cannot be given to somebody

by someone else, the process of empowerment can be facilitated by others through

19

CHF (2007) reported a much more convincing findings of aspiration failure especially amongst the poorest, from a detailed qualitative and quantitative survey conducted in five biggest regions of Ethiopia (Tigray, Amhara, Oromia, South, and Afar) covering nine Woredas (districts), involving 144 households from each of the nine Woredas. The study strongly argues that due to ‘satisfaction’ (or ‘happiness’) with one’s circumstances, and absence of ‘role models’ in the localities, there is a widespread occurrence of aspiration failure – individuals being unwilling to make pro-active investments to better their own lives. For example, a question was asked to respondents: “… A banker came to you and offered to lend any amount of money you ask – How much would you ask for it if the loan was payable in one year, 5 years, 10 years? …” The response clearly come out that the amount that would be borrowed remain relatively small, even for a 10-year repayment period. Is the theory of ‘Backward-bending Labour Supply Curve’ at work? 20

An individual or group’s command over one asset can affect the endowment of these two assets. For example, education (human asset) often gives an actor greater access to information (asset) and can enhance his or her capacity to envision alternative choices and options (psychological asset). 21

An individual or group’s agency, their ability to make meaningful choices, can be measured by their asset endowments, but they act and interact within a social, economic and political contexts governed by formal and informal institutions and norms, these are the rules of the game. These are the laws, regulatory frameworks but also the social norms and conventions and attitudes governing people’s behaviour. The ‘rules of the game’ can constrain an individual’s ability to choose and to act. Social attitudes and social practices can result in marginalization, discrimination and exclusion (DFID, no date). 22 In some cases, social norms and customs can be more powerful than formal laws and regulations, subjecting

women (and men) to more vulnerability. This has been well illustrated in case of Ethiopia where women have equal constitutional right to land, but face divorce. As Teferi (in IFAD, 2001) noted: ‘’After the divorce a woman will have two alternatives; either to remain in the community of her husband or to go back to her natal communities (in which case she, according to Peasant Association’s Land Law – which do not provide for ‘non-residential rights’ -- would lose her land rights). If she decides to take the first option (remain in the community of her husband fighting for a share of land – not an easy task!!), she will face many problems. Among other things, she will start to feel an ‘outsider’ amidst relatives of her former husband. People might also start to treat her in that way. Therefore, the woman cannot mobilize the necessary labour, especially male labour, to get her land–share ploughed. People, including her ex-friends, will not positively reply to her calls for help for fear of being thought to take sides against her former husband .’’

13

programmes like education, capacity building, political mobilization, changes in systems of

property rights and the social and legal institutions that marginalize women. Microfinance

programmes have a huge potential to promote women’s empowerment at the grass-root level.

On the other hand, there are often misconceptions, as many men (and some women) see

women’s empowerment as a new situation where men will become small and weak, and

suffer violence from women. All power over is bad. Women’s empowerment means

transforming all power relations through giving both women and men the skills, resources

and confidence to change gender inequality (power to and power within) so that together they

have power with to work together in the interests of themselves, each other and also children,

elderly people and others in their communities and wider society (Mayoux and Hartle, 2009).

In effect, women’s empowerment leading to gender equality is a win-win, not a zero-sum-

game (See Annex 3, Annex 5).

14

Relationship between Outcomes and Correlates of Empowerment

4 -- GENDER MAINSTREAMING AND

EMPOWERMENT OF WOMEN IN RURAL-

FINANCE

Gender mainstreaming in rural finance entails more than increasing women’s access to a few

products designed specifically for women or to small savings and microinsurance

programmes. Gender mainstreaming in ruralfinance requires us to assess the implications for

women and men, as well as for girls and boys, of our planned programmes – of injecting a

new (purchasing) power into the household. Addressing gender issues will require not only

a strategy to mainstream gender equality of access, but also strategies to ensure that this

access then translates into empowerment and improved well-being, rather than merely

feminization of debt or capturing women’s savings for programme financial sustainability

(Mayoux and Hartle, 2009). Even in minimalist microfinance institutions, there are a range of

measures that can be taken to increase the contribution of microfinance services to gender

equality and women’s empowerment.

Degree of

Empowerment

Opportunity

Structure

Development

Outcomes

Agency

15

At the core is a mainstreaming of women’s needs, concerns and language, not as a

marginal concern to those of men, but as a central and equally valued and resourced element

in planning and implementation at all levels. In all types of institutions, the most cost-

effective means of maximizing contributions to gender equality and empowerment is to

develop an institutional structure and culture that is woman-friendly and empowering, and

that manifests these traits in all interactions with clients.

Vision and institutional culture: Institutional culture is expressed in the way an

organization chooses to promote itself. What sorts of messages does it send through the

images in its offices, through its advertising, and through the consistency of its gender aims

in the community with its internal gender policy? The institution’s routinely issued

promotional leaflets, calendars and advertising are a very powerful means of presenting

alternative models and challenging stereotypes. These can be made available for clients to

view while they are waiting to see staff. Organisational gender policy should ensure that the

staff of the organization, women and men, are able to interact with women on the basis of

respect and equality and to promote a vision of women’s empowerment also in interactions

with men.

Recruitment, training and promotion policies: Equal opportunities policies for staff

increases programme effectiveness in reaching and empowering women. They require

family-friendly working practices for women and men, and ensuring that women’s specific

contributions to the job are fully valued (e.g. better understanding of women, multitasking),

and their specific constraints due to contextual factors (e.g. greater vulnerability to violence)

are taken into consideration in job requirements, facilities and pay. Gender awareness and

sensitivity are criteria for recruitment, and training as essential requirements of a professional

service. Performance on gender equity is recognized in criteria for promotion.

Attracting poor women also requires careful design in financial product, approach, as well as

people, with the right attitude and behaviour towards the poor, especially at the forefront of

service delivery. Existing evidence also suggests that while male loan officers treating

women clients with respect and dignity is empowering in and of itself, yet many women

clients confirm that they can relate more easily to female loan officers, and that female loan

officers could provide a 'role model' of achievement. Female loan officers are especially

valued by women clients as role models for their daughters, showing an unplanned

'secondary impact' of the program. Yet, often there are only few female officers (about 20%

in Ethiopia), especially at field level in rural branches. A gender focal point often need to be

specifically appointed and other staff time allocated to work on gender issues.

Using forms of communication accessible to women: All information need to be accessible

in local languages, together with visual information accessible to those many women who

cannot read or write. Mainstreaming women’s language: Literally – in terms of making all

information accessible in local languages and visual forms that women are more likely to

speak and understand. Conceptually – in terms of understanding and valuing women’s

activities, strategies, priorities and challenges and mainstreaming these understandings

throughout the organization’s practice23

. This implies looking beyond the purely economic 23

In one community forum, a woman confessed that she was afraid to venture into a bank as there was always a ‘mean-looking man’ standing at the door with a big stick in his hands and she thought that was meant to keep away poor people like her away! There is need for more financial awareness and demystification of such beliefs including making financial services more user-friendly. - See more at: http://www.empowerwomen.org/en/circles/make-financial-markets-work-for-women/women-financial-literacy-and-skills#14A3EE7BB2AB4769BA11DF6833B697C9

16

and market concerns to issues of non-market work and activities, power relations and

underlying forms of social, cultural and political gender discrimination.

Products and Service Designing through Participatory Research

There have been a range of useful innovations in product design that promise to make

products both more adapted to needs and more likely to benefit clients. Recently, in

recognition of some of the risks as well as benefits of the rapid expansion of financial

services, there has been increasing emphasis on participatory market research to develop

appropriate products. It is now generally accepted that such research and ‘knowing your

clients’ is good business practice. To meet the diverse needs of women, there needs to be

adequate diversity and flexibility on products. For women, as for men, loans need to be far

more diverse than the small income generation loans which formed the bulk of loans

targeting women until very recently24

.

Flexible loan: Most loans for Grameen Bank members (over 95% women) previously had a

standard one-year term with a fixed weekly repayment schedule. Under Grameen II, loans

are now available with varying terms and schedules. They can be ‘topped up’ part-way

through the term or paid off early. There is a new flexibility in rescheduling troubled loans.

Although loans are given for business use, in practice members use them for what they wish,

which helps stabilize fragile livelihoods (Mayoux and Hartle, 2009).

Alternative collateral: Indeed, the poor are not necessarily with out any asset. But often the

assets they posses are without title deeds, and cannot serve as collateral for loans from formal

sources. Successful experiments in expanding women’s access to credit accept non-

traditional forms of collateral – assets that women are more likely to have than land or

houses. The most innovative of these is the SEWA Bank’s secured loan programme which

accepts a variety of collateral substitutes such as jewellery, fixed deposits, or mortgages. Its

women clients most commonly use jewellery, which is one of the few assets owned by

women of all classes in India. The bank retains a goldsmith who comes in once a week to

weigh and value applicants’ jewellery. Clients can obtain loan up to 60 percent of the value

of the jewellery offered for security. The bank keeps the jewellery in a safe deposit box until

the loan is repaid (UN-INSTRAW, 1995). Other institutions use household assets such as

refrigerators, sofas, etc using their own stamps as a sign that the asset is pledged for a loan.

Other MFIs in Ethiopia and elsewhere also have experience of providing individual lending

using informal collateral:- house (not formally registered at municipality); household

equipment, tree plantations, college diplomas, certificate of membership in some informal

groups (e.g Equeb), etc.

24

The most important challenge in this respect, of course, is the ability (and commitment) to develop products based on the needs and circumstances of the target people. Robert Chambers, the undisputed dean of participatory development, elaborates the most challenging exercise in the power to empower, to listen, respect, trust, inspire, coach, mentor and give responsibilities -- many behaviours from the PRA (Participatory Rural Appraisal) tradition: Sit down, listen, learn; Facilitate; Hand over the stick (or marker pen, chalk, microphone, even megaphone (with large groups); Ask them! – as an upper, ask lowers what they know, their priorities, their ideas, advice and views, often they come up with ideas new to the upper; Shut up! The empowering power of silence – surprisingly hard to practice – ‘suffering the silence’ but worth a try: http://www.oxfamblogs.org/fp2p/?p=12489

17

Warehouse Receipts System, also known as inventory credits, can facilitate credit for

inventory or products held in storage. These receipts, sometimes known as warrants, when

backed by legal provisions that guarantee quality, provide a secure system whereby stored

agricultural commodities can serve as collateral, be sold, traded or used for delivery against

financial instruments including futures contracts. These receipts are documents that state the

ownership of specific quantity of products with specific characteristics and stored in a

specific warehouse. Such a warehouse receipts system has the benefits of: mobilizing credit

to agriculture by creating secure collateral for the farmer, processor, and trader, smoothing

market prices by facilitating sales throughout the year rather than just after harvests, reducing

risk in the agricultural markets, improving food security and credit access in rural areas,

increasing market power of small holders by enabling them to choose at what point in the

price cycle to sell their crops. More important, this system would enable the poor to take

‘individual loans’ without having to form into groups.

Loan Guarantees: USAID’s DCA provides partial credit-risk guarantees to private-sector

lenders to encourage them to provide credit to financially viable businesses and projects that

contribute to development goals. The programme provide a guarantee of up to 50 percent to

one or more lenders’ portfolio of loans to borrowers in a predetermined ‘underserved market

segments or sector, such as agribusiness, or businesses owned and managed by women, and

reduce onerous borrower collateral requirements . By limiting all guarantees to no more than

50 percent, the mechanism ensures that the financial institution retains at least an equal stake

in the risk, which should encourage good investment assessments, decisions, monitoring, and

collections efforts. The hope is that after the initial demonstration that such sectors are not as

risky as the financial institution believed, they will then be willing to continue offering

services to clients without the guarantee. By combining the DCA with technical assistance,

banks in Uganda and Ethiopia moved away from relying solely on collateral-based lending

toward cash flow analysis and other methods to determine creditworthiness (USAID/FS

SHARE, 2010, Kipnis, 2013)

Leasing arrangements: Leasing is a financing tool that provides a very good opportunity for

those who cannot easily form groups, or afford to offer material collateral that many

institution require particularly for larger loans. In leasing, the provider (lessor) owns the

equipment and permits the client (lessee) to use the equipment in exchange for periodic lease

payments. For most rural enterprises, leases are also a means of acquiring equipment (and not

just its use) and ownership is transferred to the lessee at the end of the lease period. Leasing

offers several advantages over loans, both to the lessee and to the lessor25

.

25

‘’Financial lease’’ means a type of leasing by which a lessor provides a lessee against payment of mutually agreed instalments over a specified period with the use of specified capital goods which is: a) either already acquired by the lessor; or b) purchased by the lessor from a third party, known as the supplier, chosen and specified by the lessee; and under which the lessor shall retain full ownership right on the capital goods during the period of the lease agreement, and subject to agreement between the two parties, the lessee may have an option to purchase the capital good outright after the termination of the lease period at an agreed price. ‘’Hire purchase’’ means a type of leasing by which a lessor provides a lessee with the use of a specified capital goods, against payment of mutually agreed instalments over a specified period under which, with each lease payment, an equal percentage of the ownership is transferred to the lessee and, upon effecting of the last payment, the ownership of the capital goods shall automatically be transferred to the lessee; ‘’Operating lease’’ means a type of leasing for a period of time not exceeding two years, by which a lessor provides a lessee against payment of mutually agreed rent with the use of specified capital goods that the lessor has at hand (Federal Democratic Republic of Ethiopia, Negarit Gazeta, 4

th Year No 27, 5

th March, 1998, Addis Ababa).

18

Consumption loans to avoid resorting to moneylenders in slack and ‘hungry’ seasons. Other

than being needed in themselves, these loans may free up significant amounts of money spent

on high-interest payments to moneylenders for investment in production at other times of the

year. Providing such loans to men as well as women would reduce the worrying trend of men

taking less responsibility for household well-being when they perceive that women have

access to additional cash. Such loans are needed, and could be paid for, in households that

sell their agricultural labour, as well as farming households. In particular when consumption

levels are already precariously low, such arrangements may rescue the poor from eating less

or cheaper food with lower nutritional value, cancel or postpone profitable investments or sell

valuable assets, at a substantial and permanent lose, to meet irreducible consumption needs.

Loans for assets registered in women’s names: The Grameen Bank offers large, longer-

term loans to buy housing and land. House sites and land must be registered in women’s

names, both as security for the loan and to increase women’s control of assets. This gives

women much more security, improves repayment rates, and also decreases divorce and

abandonment of women (Mayoux and Hartle, 2009). Some organizations, like Women World

Banking (WWB), have explored and developed pro-poor, pro-women micro-insurance

products such as maternity health coverage, coverage for spouse and children as

beneficiaries, and divorce and ‘abandonment’ insurance (Global Asset Project, 2007).

Services for adolescent girls: BRAC started a ‘safe spaces’ programme for girls, providing a

location or building where girls could further develop reading skills and socialise. This

progressed into a space for providing livelihood and life skills, leading BRAC to eventually

incorporate financial services. Despite much resistance from communities, which do not see

girls as able to cope with money, the programme started with savings accounts. Through the

savings programme, and by spending a lot of time in the communities, BRAC was gradually

able to provide credit services to girls. Parents have to be present and sign off credit

agreements. When groups convene for credit and savings services, BRAC staff give talks on

issues relevant to adolescent girls, such as sexual and reproductive health rights, dowries,

etc. It is important to combine both the social and the financial elements, as girls have less

decision-making power and ability (DFID, 2013). Some organizations involved in the Credit

and Savings Household Enterprise (CASHE) project in India also decided to pilot a loan

product for adolescent girls. The loan, available for both parents, enables the girls to purchase

a productive asset to help them earn an income, delay marriage, bring the asset to their in-

laws’ house when they do marry, and reduce the dowry required.

Supporting activities that facilitate women engagement in business

In subsistence economies, water does not flow from a tap, daycare services are largely

nonexistent, and feeding the family is a constant struggle. Access to grain mills, roads, or

energy saving devices is extremely limited. Much of the world still sees domestic work as

"women's work," which can include collecting water, caring for the children, or harvesting a

field. These many hours of hard labor are unpaid, and if a woman should seek income it will

likely be through informal employment with small returns. As a result, the majority of the

world's poor are women, and they have fewer opportunities to become economically self-

sufficient (ACCION, 2009). Some innovative, complementary services demonstrate potential

for replications.

Loans for services benefiting women: Members of the women’s centres developed by

PASED’s Learning for Empowerment Against Poverty (LEAP, Sudan) project identify their

19

needs for services and are encouraged to set up viable businesses that can benefit other

women, such as day-care centres. Loans have also been given for smokeless stoves, which

have health, labour-saving and environmental benefits. The financial services provider is

required to seek out potentially profitable services and assets for which viable repayment

schedules can be devised; once that is done, the loan products are financially sustainable

(Mayoux and Hartle, 2009). Other examples include loans to midwives and health

practitioners to buy equipment to provide better service, or loans to set up waste

management services on a commercial basis (DFID, 2013).

Water point developments: FINIDDA programme in Ethiopia have initiated a programme

that combines microfinance with water point development in rural areas. The idea is that

‘groups’ of people who are already organized for the purpose of loan and saving can

collaborate on development of water points that can supply clean water for drinking as well

as for cattle, and small irrigation schemes. While the main equipment can be subsidized by

the donor, the members can finance maintenance and pay for guards. Such contributions can

be saved at the microfinance institutions. If the group want to replace the water equipment,

they can access loan from the microfinance. The monthly or weekly group and centre

meetings can serve to facilitate discussions on improvement of the water points, and any

other issues.

Credit with Education

The key challenge to delivering development interventions, particularly to rural communities

of developing countries, is the fact that the population lives in a scattered geography, where

the infrastructure, particularly the road network and other communication facility is poor,

making service delivery very costly. Much of the cost of education is in bringing sufficient

numbers of people together with an educator at set times and places, which is already

achieved by the microfinance operations (UNFPA, 2006). Unfortunately, directing credit to

poor women alone may be unable to lead to empowerment, unless several requirements are

met jointly. Women need credit. But women’s improved access to credit will have to be

accompanied by a number of additional measures, such as non-formal education, skill up-

grading, and social and political consciousness-raising to challenge the patriarchal social

structure (USAID/FS SHARE, 2010).

There are now growing efforts to integrate services like reproductive health and microfinance

with a view that the poor, especially the poorest, are unlikely to access reproductive health

education and services without the incentive of immediate benefit, which the offer of

affordable credit can provide. The prospect of getting a loan can draw people to a programme

that offers them additional services. Certain features of group-based microfinance

programmes can make them ideal for integration of reproductive health education (UNFPA,

2006): 1) Group-based microfinance brings poor women together on a regular basis over

periods of months and years to repay loans and deposit savings. These meetings are also

opportunities to provide reproductive health education (and other other topics) over extended

periods. Services can be provided to mothers and also younger women who would not

normally be reached by reproductive health education. 2) Increased income and assets due to

microfinance should enable women clients to put what they learn from reproductive health

education into practice, and to increase their consumption of primary health services and

contraceptive 3) Microfinance services empower women, enhance their roles as decision-

makers within the family, and pave the way for behaviour change. 4) Microfinance

programmes often achieve financial self-sufficiency through interest paid on loans. They can

generate sufficient income to sustain not only the financial services but also additional

20

reproductive health education services offered by the same staff26

. Freedom From hunger

(2012) reports of many positive impacts of such programmes in many developing countries.

Supporting the Vulnerable into Sustainable Livelihoods: BRAC’s Income Generation for

Vulnerable Groups Development (IGVGD) Programme has helped nearly 10 million destitute

rural women make the transition from absolute poverty to economic independence. The

programme begins with an 18-month commitment of free food to those at greatest immediate

risk. Participants learn the skills to pursue such income-generating activities as poultry

production and silkworm-rearing. The very poorest participants also gain access to BRAC’s

Essential Health Care services to break the vicious cycle of poor productivity and poor

health. During this period, BRAC helps participants learn to build an economic ‘nest egg’ for

future investment and protection. Most participants then progress to individual income-

earning activities, using the new livelihood skills they have learned. Within two years of

starting this process, about 80 per cent of participants make the transition – through their

small income-earning activities and accumulated savings – into BRAC’s mainstream

microfinance programme as borrowers. The progression of support services – from grants,

through training, to saving and self-employment – appears sufficient to break down the

barriers of extreme poverty, social isolation, lack of productive skills, and poor self-esteem

that previously kept this population from self-employment. The IGVGD Programme is an

excellent example of what can be done to help destitute rural women raise themselves out of

poverty (DFID, 2013).

Financial Literacy: The microfinance industry is giving more attention to building their

customers’ financial capabilities, designing products that respond to their needs and

preferences, and ensuring their protection as consumers. Consumers with low levels of

financial literacy lack the information and tools necessary to make informed decisions.

Financial education is the process of building knowledge and skills to enable people to make

more effective financial decisions while changing behaviors to build confidence in financial

empowerment. The core of a financial-education agenda includes budgeting, saving, and

managing debt. It also involves managing financial products such as insurance or remittances

and making use of bank services (IFPRI, 2010) (See Annex 7).

The Gender Action Learning System (GALS)

The key premise in GALS is that microfinance can take the lead role, serve as entry point, in

promoting gender issues at grass root level. The microfinance sector has a relatively powerful

leverage to encourage and/or enforce implementation of improved practices27

because it

26

There are three potential scenarios for integration: Unified, Parallel and Linked. Under the Unified modality, same staff delivers both microfinance and other services. Under the Parallel service delivery, the services are provided by two or more programs of the same organization operating in the same area. Under the Linked service delivery by two or more independent organizations operating in the same area, financial services are offered by a specialist microfinance institution at the same time as non financial services (possibly for health and other services) are offered by one or more independent specialist or generalist organizations -- to the same people in need (Freedom From Hunger, 2012). 27 Broadly, financial systems serve the primary function of facilitating the allocation of resources across space and time in an uncertain environment. This primary function is broken into five basic functions: facilitate the trading, hedging, diversifying, and pooling of risk; allocate resources; monitor managers and exert corporate control; mobilizing savings; and facilitate the exchange of goods and services. These financial functions are expected to affect economic growth through capital accumulation and technological innovations (e.g by identifying and funding the most innovative entrepreneurs). Defined in this way, these functions help to justify the view that the financial sector operates like the ‘’brain of the economy’’ (Meyer, 2003, p.2).

21

can establish stronger link with clients, not only because there is still a huge demand for

valuable financial services in many circumstances, but also because financial services (more

so than other sectors, e.g agricultural extension, health, etc) demand that there be close

communication, monitoring and frequent interaction between service provider and clients

(Freedom From Hunger, 2012, Magner, 2007). That is, on the one hand service providers

have their money in the hands of the poor which they have to monitor regularly, and poor

people also need to check on the performance of the other group members which they co-

guarantee, as well as check the safety of their savings with the institution. Contacts are thus

so regular, can be daily, and often weekly and monthly meetings are a must. In particular, the

fact that clients come in groups means that the cost of having to visit individual client (or

‘beneficiaries’, as the case may be) for service delivery, particularly in remote areas with

difficult infrastructure, and lower population density, is reduced hugely28

.

Capacity buildings are thus managed at group forums and mainly utilizes clients’ ‘waiting-

time’ -- the time when clients gather for savings and credit operations and are waiting for

their turns for loan disbursements or savings collection. Discussions are facilitated, by

creating the opportunity for participants, women and men, to openly debate differences and

similarities on perception on gender equality, in terms of individual ‘rights’, ‘responsibilities’

and ‘opportunities’, by invoking such key issues like ‘what and why they like/dislike being of

a particular sex, potentially leading to a consensus or new agreement on many of the gender

issues between the two sexes. The GALS is fundamentally a capacity development

methodology and focuses upon improving the agency of women and men (Mayoux and

Hartle, 2009) (See Annex 2).

The debate would lead participant members to analyze their current situation, relationships,

opportunities and challenges, reflect upon it, envision their individual and household life and

livelihood circumstances, and plan strategies and actions how they can change it, as well as

track and monitor. While normally microfinance clients’ business plan is expected to

incorporate the cost of micro-project, expected benefit, market availability, etc, such

‘business plan’ is expanded to include specific gender issues, for example how, and by

whom, the loan and resulting increased income would be used, how increased responsibility

due to the new business would be shared among household members, etc. Importantly,

communication with participants, majority of whom cannot read and write, is facilitated

through use of pictorials, graphics and simple drawings instead of written forms. Symbols

and colours are also important communications tools in GALS participatory methodology

(Gobezie, 2013). Such plan remains with participants, and thus is accessible to all members

in the household (including children) for viewing and reviewing any time, providing an on-

going participatory space, thus promoting confidence and sense of ownership. Microfinance

programmes like Bukonzo Joint Microfinance Cooperative in Uganda not only does

training on various topics, but also does ‘monitoring’ at least monthly if families have been

doing on their livelihood plans.

Evaluation studies evidence some real positive changes towards gender equality: increased

respect to wives, lesser violence, increased sharing of household responsibility between

28

The few available studies on the additional costs of using such ‘group forums’ as platform for complementary awareness creation and/or service delivery indicate that this is only about 6-10% of existing microfinance operating cost in Bolivia, Burkina-Faso, Mali, Togo (Morduch and Haley, 2002), and in the range of 0.12-3 USD per client per year in India (Freedom From Hunger, 2012).

22

spouses, ‘joint land ownership,’ etc (Farnworth and Akamandisa, 2011). Field assessment

using AIMS/USAID tool demonstrated that 36% of households in the GALS programme has

joint land agreements between husband and wife (compared to only 8% in control group) and

in 43% cases husbands share household responsibility previously considered ‘women’s

activity’ (compared to 24 % in control group) (Gobezie, 2013). The changed men also

reports feeling of greater happiness and sense of fulfilment as fathers and husbands who are

now much more loved, better ‘bedroom’’ and generally a greater sense of self-worth

(Mayoux and Gobezie, 2011). Studies demonstrated conclusively that the GALS is

remarkably powerful in unseating powerful cultural norms that have existed for

generations. It was clear though that given the local context, gender equality, and even such

issues as coming to a status of agreeing on ‘joint land ownership’ does not materialize so

easily, and would essentially take some time, years of negotiation and bargaining. Respect to

women and collaboration develops gradually as women continue to develop the self-esteem.

Kabeer (2007) reported this same issue from various contexts. According to her study, ‘in

some cases, the shift in decision-making was from ‘norm-governed’ to ‘negotiated’ decision-

making, in others from male-dominated to joint or female dominated decision-making’. In the

Bangladesh context, where microfinance has been in operation for some decades (with a

major focus on women), ‘bargaining between spouses is characterized by non-cooperative

behavior within marriage (Dowla and Barua, 2006).

Involving Men?

Gender systems and social roles of women and men are established in different socio-cultural

contexts, which determine what is expected, allowed and valued in a woman/man and

girl/boy in these specific contexts (UN 2002). Indeed, economic empowerment of women can

be a source of concern to men in respect of them maintaining a position of pre-eminence or

final arbiter status within the family power structure. Thus, safeguarding this final arbiter

status can lead to both overt and covert means of resistance. Normally, resistance is sustained

if the outcome of the project intervention initiates a marked deviation or departure from the

equilibrium of family power relations, or the accepted role of women from both the

cultural and religious perspectives (Kassey, 2005). This implies that empowerment of women

and gender equality cannot be achieved in a vacuum; men must be brought along in the

process of change.

Local context matters. Dominant cultural norms and values in developing countries like

South Asia stress male responsibility for providing for household members, and construct

women as their lifelong dependants. Men are therefore expected to shoulder the burden of the

breadwinning role, are given authority within the household and prior claim to its resources.

Women, on the other hand, can expect to be provided for, but are assigned a subordinate

status within their households (and in society at large). Devalued by the prevailing culture,

denied equal access to resources, and their physical mobility often restricted by cultural

norms, women’s dependent status leaves them open to what some sociologists termed

‘patriarchal risk’ (Kabeer, et al, 2012). This is the likelihood of abrupt declines in their

economic welfare and social status should they find themselves bereft of male guardianship.

For poorer men, the failure to fulfil social expectations about their breadwinning roles can

lead to considerable stress and demoralisation. This often results in domestic violence, high

levels of alcoholism, and abandonment of their families and responsibilities.

Indeed, what is called "culture" can sometimes be more accurately understood as the ideas

and practices valued by the dominant group, often men (United Nations Population

Information Network, POPIN, 2010). Under such situations, men are often caught between

23

the patriarchal and rigidly hierarchical notions of masculinity that they are taught from

boyhood, and a changing social and economic fabric that threatens on a daily basis to

undermine that role. When interventions to promote women’s empowerment do not offer

men opportunities to redefine their own identities, they can contribute to a deep crisis of

masculinity. In the absence of opportunities for their own positive engagement and growth,

psychological support for developing alternative self images, men can express that crisis

through withdrawal, depression, suicide, resistance, subversion, or physical or psychological

violence (Martinez, 2006).

Role Models?

Role models, or ‘positive deviants’ from the accepted norm, can play a critical role. In

general, poor people often do not make investments, even when returns are high. One

possible explanation is that they have low aspirations and form mental models which ignore

some options for investment. More recent research experiments, including that of IFRPI

(Bernard et al, 2014) demonstrated that ‘aspirations’ can be influenced with effective

interventions. Individuals who watched documentaries (for two hours) about peer group ‘role

model’ people from similar communities who had succeeded in agriculture or small business,

have, after six months, higher aspirations or forward-looking behaviour on savings and credit

behaviour, children’s school enrolment, and were induced for more work and less leisure.

The role models all took slightly different courses of action to those around them, such as

starting or expanding a small business, diversifying their source of income, improving their

farming practices, or acting outside cultural norms or by adopting non-traditional divisions of

household responsibility between spouses. Also, spouses featured in the documentaries

highlighted the personal qualities of the subjects, such as perseverance, determination and

reliability. The subjects also emphasised the importance of setting goals and working towards

them (Bernard et al, 2014, Kosec, 2014).

Building on Microfinance Groups?

Even when access to financial services have increased to reach the poorest women, goals that

are set in ‘action plans’ of individuals or groups can be heavily influenced by the values of

the society in which poor clients live, and so may sometimes replicate rather than

challenge the structures of injustice. For example, women’s expenditure patterns may

replicate rather than counter existing gender inequalities, and continue to disadvantage girls.

In the extreme, status considerations can lead to cultures where female infanticide and

foeticide, female circumcision, and widow immolation all become ‘rational’ responses to

social norms (Kabeer, 2001). The influence of society and culture over the range and exercise

of choice mean that if we seek to promote empowerment, we must also consider factors

affecting women’s status and rights as a group (Kabeer, 2005). To the extent that group

lending in microfinance entails peer monitoring by other borrowers in the same group,

microfinance is likely to provide protection to women within their household, and violent acts

and abuse by men against women can now be subject to third party scrutiny. This, in turn,

should act as a deterrent against domestic violence, and more generally, as an instrument for

women to promote their group rights and improve their bargaining power vis-à-vis their

husbands or other male family members. With some support and group facilitation, groups of

economically empowered women can also take steps to address the cultural and legal barriers

that limit their social and political empowerment.

Grameen Groups Vs. SGH Groups: Worth further investigation is ‘which type of groups’?.

As we move away from high population density areas into remote and less densely populated

24

rural areas where the majority poor reside, increasing evidence suggest that among financial

service providers, banks are the most centralized, focussing on cities and urban areas while

MFIs, SACCOs and ROSCAs/ASCAs29

are increasingly decentralized models. In

decentralised models clients have a greater role in organisational decision making. They

argue that decentralized models have inherent advantages in reaching remoter and poorer

people, although they face significant challenges in terms of their long-term effectiveness and

sustainability.

Compared to Banks and MFIs the cost structure of SACCOs is different. First, funds can be

raised at low cost because they are mobilized among a group, which often has a common

bond or purpose. Second, the interest on these funds is usually in the form of a dividend that

is calculated as a residual rather than a committed cost at the outset. Third, when SACCOs

start, they usually do so in low-cost offices with low overheads and voluntary labour or low

salaries (especially compared to bank staff). In terms of default, the costs of recovery can also

be kept low because of guarantees based on a member’s own shares and guarantees from

other members. ROSCAs and ASCAs manifest similar features with very minor variations.

SACCOs, ASCAs and ROSCAs as user-owned and managed models offer additional features

that appeal to poor people, especially poor women. First, these organizations’ survival

depends on the degree to which they respond to their members’ needs for financial services.

Second, there is a high degree of client ownership and participation: users have a direct

influence in determining the financial services that are provided, including the interest rates,

and they are able to renegotiate the repayment schedule when they face genuine financial

difficulties (Johnson, et al, 2005). After all, people are there to assist one another and offer

social support. This flexibility means that members are not as ‘frightened’ of taking loans

from these systems as they would be from others. Moreover, unlike the case of MFI group-

solidarity systems, other members of a group are not forced to make repayments on the

defaulter’s behalf30

.

Apart from the poverty and population density justifications highlighted above, others

provide socio-cultural reasoning related to the sustainability of each one of the models in

different contexts, as well as the relative potential for reaching the poorest, especially women,

and empowering the community. Harper (2002) highlighted why the Grameen model is

popular in Bangladesh while Self Help Groups (SHGs) are more common in India. He

argued, among other things, that Bangladesh village communities are more generally socio-

economically homogenous, and less divided by caste (as well as more disciplined and less

individualistic) than their Hindu equivalents in India. It may therefore be easier in

29

While banks and MFIs are relatively familiar types of institutions, it is important to briefly explain how ROSCAs, ASCAs and SACCOs operate. ROSCAs are the simplest form of financial intermediation: a number of people form a group and contribute an agreed amount on a regular basis. The fund is usually given to one person who takes all of the money, until everyone in the group has received the money in turn. The system has a very high degree of flexibility, with the participants determining the amount to be saved; the number of people involved; the frequency of contributions; the number of people receiving the payout; and how funds can be used. ASCAs build on this basic model by introducing a central fund into which the contributions are deposited. Instead of the fund being automatically distributed to each member in turn, members can take loans at an agreed interest rate. The nature of guarantees and collateral required will also be agreed. SACCOs are essentially a formalized version of an ASCA, which allows for legal registration and hence greater scale of operations. The essential organizational principle of a SACCO is one member- one vote rather than one share one vote as in a company so that all members have an equal role in governance (Johnson et.al, 2005). 30

There is increasing evidence (CGAP, 2006) suggesting that externally funded community finance programmes risk failing, as they tend to face high level of default, as the injected money tend to be considered by members as ‘cold money’.

25

Bangladesh to persuade people to form Grameen-type groups, which follow a 'standardized'

system. The more flexible SHGs may be more appropriate for the Indian situation where the

difference between and within states is often higher. The Table below outlines some of the

key differences between Grameen groups and SHG groups. Programmes which tend to

‘copy’ either model should consider if the modality is appropriate to their context.

Table: Grameen Groups Vs. SGH Groups

Features Grameen Groups SHG Groups

Financial

Intermediation

Undertaken by MFIs Undertaken by Community

Flexibility Less Flexible: Regular meetings;

group size; terms and conditions;

repayment rhythm; interest rates

Highly Flexible: Determined by

the group

Reaching the

poorest?

Difficulty to reach the poorest? Reach marginalized (but can be

exclusionary; ‘hijacking by elites’

Cost to clients Higher because of overhead costs Lower: because they (often) use

local staff; ‘voluntary labour’

Empowerment Members dependent on MFI

terms and conditions

Group determine conditionality

Sustainability High sustainability – advantage of

economies of scale; stronger

(educated) management, etc

If not supported in capacity –

fragile social entities; weak

governance, internal control

Popularity Bangladesh (homogeneous,

disciplined, ‘group’ formation..)

India (heterogeneous, divided by

caste, ‘democratized’)

Source: Harper, 2002

Saving services

Microfinance programmes worldwide generally tend to be overwhelmingly focussed on

microcredit, to the neglect of saving, insurance, and other services. Saving increasingly

proved to be one of the most valuable service to the poor. Indeed, if there is one thing those

with too little have too much of, it is the awareness that even the kind of life they have is far

from guaranteed. Small things can upset the applecart. An unexpected illness can push a poor

family deeper into poverty. For many in the lower middle class, such emergencies can push

them right back into the ranks of the very poor (Grameen Foundation, 2014). So for the poor,

it is especially important that one manage money well and self-ensure, and managing money

well begins with hanging on to what one has (Rutherford, 1999). For the poor, particularly

those with low, irregular and unreliable income, saving is therefore critical.

Indeed, the poor tend to save fixed amounts of money regardless of income31

, varying their

consumption according to income. In other words, poor people do not save according to the

equation Savings = Income – Fixed Consumption, but according to the equation,

Consumption = Income – Fixed Savings32

. Their decision to save is, therefore, not an

income-surplus function, but rather a reserve. Global experience suggests that there is a huge

demand for a convenient, safe and reliable saving services among the poor. Just as the

31

This is mainly because tomorrow’s income is unreliable, can be even worse, as it is vulnerable to many externalities, market, prices, rainfall, etc (Collins, et al, 2009) 32

There are debates on the need to ‘’teach’’ the poor on savings. Those arguing in favour relate the issue of mismatch between people’s ‘needs’ and ‘wants’. Not everyone makes a wise use of money, people’s immediate ‘demand’ does not prove their benefit, people may ‘want’ cigarettes (or other ‘temptation goods’, like alcohol, gambling, etc) but they may not ‘need’ them (instead they may need ‘milk’).

26

existence of moneylenders indicates a demand for credit among the poor, the widespread use

of informal savings mechanisms may signal demand for formal deposit services (CGAP,

2006 b). But in many contexts, the poor, especially women, have limited access to such

services, thus facing serious challenges in money management.

It is estimated that eight out of every ten microfinance clients (80%) are women (DFID,

2013). However, it has become increasingly recognised that the rigidities of microfinance can

be limiting for women, especially because microfinance has tended to be credit-led, rather

than providing the broader range of services that poor women (and men) need, notably

savings. Savings vehicles are important for women to build security and decrease

vulnerability to shocks. Such savings, however small, can help women meet small

expenditure for themselves and their children without having to look for the husband's

permission. Many studies have identified that for many women, the status of being a

supplicant in relation to men is galling and humiliating, particularly as in contexts of scarcity,

where they have to literally plead for every penny to meet basic foods and other needs

(Kabeer, 1999). Moreover, a woman’s individual savings can also play the most critical role

of securing her by enhancing her bargaining power, to resist (and perhaps leave) a bad

relationship -- particularly if a woman can keep savings under her control (and is anonymous)

(Vonderlack and Schreiner, 2001). It also enables them to plan and to invest. Unfortunately,

while there has been some effort to support the development of mechanisms to help very poor

people save in small amounts, much less attention has been paid to the development of

appropriate long-term savings products (e.g. for housing, education and pensions), which

benefit the economy of a country (by creating a source of long-term funds that can support

the development of capital markets) as well as the saver (DFID (2013).

There are now some innovations on saving mobilization in the microfinance sector:

Learning from the informal ‘daily collectors’: Informal daily collectors are now very

popular in many developing countries, especially in high density, business areas. Known in

Ghana and other western African countries as ‘Susu collectors’, these business people are

providing a saving service highly demanded by clients. They move around to business

premises or houses of their clients to collect a fixed, pre-determined amount of money

every day through out the month. At the end of the month (or a month and half) the collector

give the accumulated sum -- less on day’s collection -- back to the saver. There is no interest

on saving. In effect, the collector charges the client a service fee (the one day collection),

which can translate into a 3% fee, or negative interest rate of 7% (CGAP, 2006 b). There is a

big demand for the service by clients mainly because they do not spend time for saving, and

because it allows them to put aside money earned every day before they spend it on some

trivial expenditures. Some microfinance institutions, including those supported by Action Aid

are trying to mimic these experience into their mainstream microfinance saving operations.

Commitment Savings: A focus on ‘’money management’’ does not shut out more ambitious

aspirations such as improving health, education, and farming practices. On the contrary, it

can help to realize them. A striking example was found in a study of fertilizer adoption in

western Kenya. The biggest difficulty farmers adopting new technologies faced was not in

‘understanding’ the methods and their benefits, but in timing savings in order to purchase the

fertilizer when they needed it. When financial tools were provided that solved this problem –

cash proceeds collected from farmers at ‘time of crop sale’ and put in a ‘commitment saving’

account at a local bank -- fertilizer use and production increased. This was made possible by

getting the fundamentals right – by making it easier for poor people to get a ‘’grip on time

27

and money’’ and supporting them in their effort for better attention and self-control, so that

income earned in the past and income anticipated in the future can be tapped in the amounts

required at the time most needed. Basic money management tools are the very foundation of

aspirations of a broader nature. At an aggregate level, studies of economic growth also point

to the fundamental contribution of improved financial access (Collins, et al 2009, Rutherford,

1999).

Matched Savings Account: Women World Banking (WWB) has created a number of

innovative products targeted at asset accumulation, control, and protection in order to meet

the priorities of women. An example is a matched savings account programme in Jordan that

allows women to save for the school fees required for their children’s education. Such

programmes encourage financing of some critical expenditure important for the long-term

welfare which would otherwise not be prioritized by beneficiaries, including expenditure for

children education, health, etc. Typically, the targeted beneficiaries are encouraged to save

regularly for a targeted expenditure, which would be equally matched by the grant.

Withdrawal of such a resource would only be approved if it would be utilized for the agreed

expenditure (Global Asset Project (2007). Under the Children’s savings card in Mexico,

parents typically give allowances to children at the beginning of each week. Integrated

Services to Women Entrepreneurs (Servicios Integrales a Mujeres Emprendedoras –

SIEMBRA) has introduced a stored value card to encourage a culture of saving among

children, including girls. Funds may be withdrawn only at the beginning of the school year

and Christmas, and usually are used to meet school needs.

Saving for House? Housing is one of the problem among dwellers both in urban rural

Ethiopia, and this has been more so for the poorest section of the population, especially

women. Low cost housing programmes have been supported by some donors, but to a limited

scale particularly for dwellers in the capital. More recently, this has been scaled up to all

major cities. Government sponsored ‘condominium housing’ programme has therefore been

on-going for the past few years. Beneficiaries are encouraged to save in-order to pay up-front

some 10%, 20% and 40% (depending on the type of the house), and the rest can be a soft loan

from the Government Commercial Bank of Ethiopia, payable over some 10 years (?).

Beneficiaries are expected to be from the lower and middle income earners. Many poor have

become owners of their own house.

Long-term Savings and Micropensions: Pensions are generally under stood as a regular flow of

receipts from retirement to death. They became common in the rich world as industrialization

advanced and formal employment replaced casual or self-employment as the main source of

income for most people. But in many developing countries, formal employment is not the norm.

Most poor villagers and slum dwellers patch their livelihoods together from a mix of self-

employment, casual employment, or low-grade formal employment. To them, the idea of

“retirement” is foreign (Hirschland, 2005). Local community clubs or self help groups often

provide informal insurance mechanism, especially at times of death of family members. In

some cases such groups also cater to meet the special needs of their fellow members in extremely

difficult situations, e.g lose of house to fire, lose of significant livestock, sickness of bread-

winner. They often pool their financial and other resources for such emergencies, providing small

loans (financial as well as in-kind) to members most in need. But the support from such informal

mechanism often fall short of meeting the full needs of the poor, and cannot go beyond the

short-term. Moreover, utilization of such resources operate under prevailing power structure,

28

where the poor, especially women, do not have much of a voice33

, risky (James, 2015, p8) and

often are subject to ‘elite capture’ whereby those in power take advantage of such resources at

the expense of the less powerful34

. Indeed, external interventions on local ‘financial

intermediation’ sometimes face resistance from local power as they are perceived to impact on

the status-qoe, as observed in many contexts especially when microfinance institutions start to

operate35

. The regular question the poor raise about their old age is thus “what happens when I

can no longer support myself?” A poor rural resident was asked about his long term plans. ‘’….

You ask us ‘what do we do when we are too old to work? I’ll tell you what the answer is – we

pray to die. Quarrymen like us have no savings or pension schemes’.

Of all the novelties of Grameen II – the new collection of products that have replaced the classic

version of Grameen in all its branches – the new savings products, are among the most popular.

Members like the new weekly savings, which accepts voluntary in addition to compulsory

deposits and allows almost unlimited withdrawals on demand. But pride of place goes to

‘’Grameen Pension Savings’’, a contractual savings scheme with monthly deposits and a five-

year or ten-year term. Grameen’s pension scheme requires all borrowers with loans greater than

US$130 to contribute US$0.80 monthly. For a ten-year term Grameen pays interest at 12 percent

a year so that deposits almost double by the end of the term. At the end of the term savers will be

able to take the accumulated deposits and interest as a lump sum or as monthly income. The

savings scheme is so attractive that many borrowers save multiples of the required minimum

monthly or open more than one account. They are popular among members with a loan of less

than US$130. Indeed, some clients see payments into the scheme as a better use of available

resources than paying down Grameen loans, and many remark: ‘’Grameen should have done this

years ago.’’ In the first thirty-two months, Grameen mobilized pension deposits totalling

US$37.2 million.

These products are even more popular for women. In Bangladesh, wives are customarily younger

than their husbands, and women tend to live longer than men. Women must anticipate a long

widowhood, a cause of much anxiety. They hope that their children (especially their sons) will

33 Although characterized as informal, Community Based Organizations like Iddir (in Ethiopia) have some level

of organization and leadership. Who organizes and leads CBOs? CBOs tend to be “conservative” and “elitist” organizations, with leadership dominated by men and “respected” local authority figures (IFAD, 2001).

34 An interesting case has been shared to a research team in Iteya area of Central Oromia (Ethiopia) (July 2015) where the treasurer of an Iddir (burial society) used to lend out the pooled money to non-members (at individual money lenders’ rate) to his own advantage. By the time members, in really difficult situation, came seeking for some small loans, he unfortunately has already exhausted all the resource and could not afford any. Unable to face the loss of face -- as he has made a serious betrayal of members who entrusted with him their key assets -- he hanged and killed himself. 35 The microfinance sector in many developing countries has gone through several challenges. ‘’Not everyone has been pleased with the prospect of better financial services for the poor. Islamic fundamentalists have bombed branches of Grameen in Bangladesh and attacked loan officers of other institutions in India. Maoists have looted microfinance offices in Nepal. The head of a microfinance effort in Afghanistan was murdered, possibly by drug traders. To drug lords in Afghanistan, the availability of credit is unwelcome because it gives a choice to farmers who were previously forced to grow poppies for want of other ways to finance their crops. For the elites in closed markets running inefficient monopolies, credit raises the prospect of future challenges from entrepreneurs. For radical Muslims, it means that women (who in many countries make up the bulk of microfinance borrowers) are able to run viable business and become independent. And for everyone in poor countries, credit can mean social upheaval as merit and enterprise replace inheritance, family ties and position. (The Economist, Nov. 3rd, 2005).

29

care for them, but are often not confident in such an outcome36

. If they could save up some

money for old age, even sums as low as US$300, or accumulate assets such as land, their widow

hood could be more dignified37

(Churchill and Frankiewicz, 2011, Hirschland, 2005).

Deepening Outreach – The ‘Piggy Bank’ case of ACSI: The Amhara Credit and Savings

Institution (ACSI) in Northern Ethiopia works in an environment where the infrastructural set up

is extremely poor. ACSI started operation in 1995/6, and currently it is serving over a million

(loan and saving) clients. Given the geography, the scattered living style of the population and

the poor physical infrastructure, particularly the road-network, operations in the region,

especially in rural areas, is very problematic. Indeed, the fact that rural villages are in a very

scattered areas, and often very far from offices, meant that poor people often have difficulty

frequently coming to offices and put small amounts of money (often as small as $1 or less per

transaction) in savings. Even for those who can come to offices, it was clear that they often feel

ashamed of coming with only small amounts.

This information has been coming in from the field both from staff as well as from occasional

field research managed by the Head office. Cognizant of these facts, the concept of a Piggy Bank

model has been designed. The idea behind the new product is that any individual can buy the

Piggy Bank, a small (locked) box, keep it at home, and put whatever small amount of money,

even cents, any time. At any time, clients can come with their boxes to offices (where keys are

kept) and unlock, to take money out of it, or to formally save at the Institution. Indeed, the

additional incentive for the poor to bring their boxes to the Institution and formally save is that in

their home their savings cannot generate interest; and this aspect has been actively

communicated.

A small scale interview of sample clients and potential clients as well as branch staff has

confirmed that there is a real demand. Sample boxes have therefore been produced for testing at

some near-by Sub branches. With positive feed backs received from these pilot tests, it has been

further developed and adopted to local areas, and distributed at a cost. Major improvements has

been on the quality of the metal it is made of, and the size of the box. In some areas, smaller size

is preferred, while in other areas larger size is demanded, so that customers can also put inside

the box other valuables including women’s jewellery, etc. The name of the box has to be adopted

to local situation, and therefore has been re-named ‘Muday-Bank’. ‘Muday’ is a small apparatus

36 Some argue that saving facilities for the poor serve very important social objective. They argue that children

in developing countries are produced partly to provide informal social security. In situations with overcrowding and in cases in which parents do not take into account the negative externalities imposed by their children (through congestion, and environmental degradation, for instance), social welfare may be enhanced by shifting to alternative social security programmes. For example, establishing secure, convenient savings programmes may allow households to reduce the number of children they have without undermining their ability to cope with less income in old age and can provide a second round of benefits to the community through reductions in negative population-related externalities (Morduch, 1999).

37 Similar programmes are being piloted in other countries. In Mexico CONSAR is piloting a convenient ‘pension

scheme’ that can reach the majority. The pension regulator teamed up with 7/11 ‘retail stores’ and ‘Telecomm’ to create channels for people to contribute to pensions, whether they receive an income within the formal labor market or not. CONSAR is considering ways to analyze the behavior of clients as they interact with their long-term savings to create better incentives, ways to diversify the channels for contributions, ways to educate people on their pensions, and ways to nudge people to contribute, like having cashiers ask customers if they would like to contribute to their pension when they pay. The funds would enjoy a 10 percent return over three years — a higher rate than savings accounts in Mexico offer — enabling them to double within 20 years. [See recent blog at the Centre for Financial Inclusion, ACCION at http://cfi-blog.org/2015/05/27/would-you-like-a-pension-with-that/#comment-126359]

30

(a small box) produced by women from local materials (normally grass), for keeping money and

other valuables (including silver, gold, etc). This is the most liked initiative for clients,

particularly women, who have difficulty travelling from remote rural villages to offices

frequently. The institutional saving collection has been growing steadily due to this very

convenient modality. With less than one year, more than 2,500 boxes have been sold. In three

years time, Institutional volume of ‘voluntary saving’ was planned to increase at least by 50%

(Churchill and Frankiewicz, 2011, p. 86).

Branchless Banking: Donors are now strongly encouraging branchless banking, which uses

correspondents or agents (such as post offices, small shops and petrol stations) as an alternative

and much cheaper distribution channel to a full bank branch network. Since expensive branch

infrastructure is not required, financial service institutions and mobile phone operators can

deliver services at a lower cost, bringing formal financial services within reach of those

previously excluded (DFID, 2013).

Mobile money, where money is sent using a mobile phone, is another form of branchless

banking, although it is increasingly mobile phone companies (like M-Pesa in Kenya) and not

banks that are promoting the service. Following its launch in 2007, M-PESA, the mobile phone

based money transfer service, has grown at astonishing rates. By July 2012, it had gained 12

million registered users in Kenya alone, corresponding to well over half the country’s adult

population and three times the number of people with a bank account (DFID, 2013). M-PESA is

not just about person-to-person payments. By September 2010, almost 350 businesses had signed

up to M-PESA, allowing business-to-person payments (such as salary payments) and person-to-

business payments (such as bill payments) on a substantial scale. Recently Safaricom announced

agreements with two supermarket chains whereby M-PESA can be used to pay for supermarket

purchases (IFPRI, 2010). Mobile money is hugely promising, however challenges remain, not

least in how to appropriately regulate the industry and ensure compliance with Know Your

Customer (KYC) requirements. This digital linkage can also negatively affects a financial

intermediary’s relationship with the client -- which traditionally has been based on human

interaction38

. This is especially pertinent for women, as women are less likely than men to be

able to fulfil KYC requirements given they often lack formal documentation (DFID, 2013,

IFPRI, 2010).

5 – INSTITUTIONALIZING MONITORING

SYSTEMS FOR EFFECTIVENESS AND

EFFICIENCY

Making sure that gender and empowerment indicators are integrated into existing programme

management information systems is critical. Gender disaggregation and gender analysis need to

38 The staff at frontline constitute a very important link between the institutions financial products and clients. Given the local contexts where majority are illiterate, the effective ‘relationship’ that these staff can create with clients determines the market for both savings and credit. Several Focus Group Discussions demonstrate that the support, regular encouragement, trust and treatment from staff is what they most value. …. The words of Uruguay’s former president Jose Alberto Mujica at the 2010 Foromic opening ceremony come to mind: “… Deep down, (micro)credit is a fight against loneliness… it is a struggle to get help.” Some argue that even though automating the process of microfinance services has great potential for reducing costs, this digital linkage can negatively affects a financial intermediary’s relationship with the client - which traditionally has been based on human interaction. [See SEEP Network blog by Fermin Vivanco on May 20, 2015: http://www.seepnetwork.org/blog/visits-microentrepreneur]

31

be systematised into the regular analysis and reporting, and it is also important to incorporate

gender indicators into information systems, so that institutions are aware of the status of gender

equality in access and benefits (Mayoux and Hartle, 2009).

Institutions need to ensure female participation on the board and that all board members have a

clear vision of the project and are behind the mission, providing effective oversight and

governance. The project lead should check for board gender compliance on a regular basis. The

board should provide strategic leadership for monitoring within the organisation. Also important

is involving the intended beneficiaries of the programme in the monitoring process. These could

be customers of a financial institution receiving support from the programme, a civil society

organisation that speaks for women’s consumer rights, or government stakeholders. Consistent

with institutional vision and mission, products and services need to be adequate for the target

group. The monitoring system should check, through client data and participant monitoring,

financial institutions’ commitment to gender equality and women’s empowerment. Management

systems and staff appraisal should be aligned to the project and should include incentives to

ensure women’s empowerment and gender equality are central to the mission and purpose of

staff and management. Management systems and staff appraisal should be checked for quality

and results to ensure they are working as an internal monitoring tool.

For example, at staff Level, what is the percentage of board and senior staff who are women (and

gender-aware); existence of a written gender policy produced through a participatory process

with staff; staff aware of its contents and mechanisms for implementation. At client Level,

percentage of women clients who know and understand the terms of the microfinance

institutions’ financial services (including range of products available, cost of credit (interest rate),

in mixed-sex programmes, percentage of women accessing larger loans and higher-level

services; percentage of women in leadership positions; percentage of women clients with

enterprise loans who are themselves working in the economic activity for which the credit is used

(by themselves or jointly with husband in a household enterprise – disaggregated), percentage of

households where women have more decision-making power, etc.

Regarding client level measurement, many authors strongly advise that it should follow a

participatory process. For example, Kabeer (2001) as well as Chambers (1997, 1992) warn

against efforts to generalize on types of ‘achievements’, given that it is highly unlikely that all

members of a given society will give equal value to different possible ways of functionings

(valued ways of ‘being and doing’). One way of getting around the problem for measurement

purposes would be to focus on certain universally-shared, and universally valued functionings,

those which relate to the basic fundamentals of survival and well-being, regardless of context

(e.g:- proper nourishment, good health, adequate shelter, reasonable clothing and clean water,

etc). However, some strongly argue that confining the analysis of gender inequality to these

achievements alone serves to convey the impression that women’s disempowerment is largely a

matter of poverty (Kabeer, 2001). On the other hand, while there are sound reasons to move the

measurement of achievements beyond such very basic functioning (such as life expectancy and

nutritional status) to more complex achievements (such as education and political representation)

such measurements, quite apart from their empirical shortcomings, entail the movement away

from the criteria of women’s choices, or even the values of the communities in which they live,

to a definition of ‘achievement’ which represents the values of those who are doing the

measuring39

(See Annex 4).

39 For example, the interviewed clients (in Majoor, et al 2009) listed a number of characteristics that they

attributed to an empowered woman. When asked about ‘appearance’, only one mentioned “well dressed”,

32

Some suggestions, and questions, on possible indicators related to the on-going global effort by

the micofinance Social Performance Task Force are outlined in the Annex (See Annex 6, 8).

Conclusion

Empowerment is a difficult concept. It cannot be given away, but should come from the

subject themselves. Poor people's endeavour to enhance empowerment, however, can be

facilitated and supported. One means toward that is microfinance. Such programmes need to

be well designed with a view to meeting the real needs and circumstance of the targeted poor.

Which delivery model to choose depends on the socio-economic situation of the target area as

outlined in the main body of the paper. It is evident, however, that the success of such

services very much depend on the level to which they can build approaches and

methodologies on ways that best facilitate poor people’s and communities’ ongoing

endeavour to enhance their own empowerment. On the other hand, empowerment cannot be

expected to materialize only by delivering microenterprise services like microfinance. It can

also not be achieved if men are not involved – indeed, both sexes are victims of culture.

Deep as the problem facing the poor are, the challenge needs to be tackled with a coordinated

effort of all stakeholders that are involved in rural development. Indeed, culture dies hard.

Patriarchal system at community level and male domination within the household are indeed

centuries old in many societies, and may not be easily tackled in few years of microenterprise

intervention. It needs sustained effort. While making such efforts, sustainability should

always be kept in mind in any intervention programmes with a view to reaching many very

poor people, both now and also in future.

while the others mentioned characteristics like hardworking, inspiring, confident, courageous, a role model, charismatic, generous, active, powerful, happy and self assured. Apparently, an empowered woman is someone to be envied. Empowered women were seen as not corrupt and able to perform any job, even men’s jobs, on a regular basis as long as she could earn a decent income from it. The income of an empowered woman should be at least reasonable, but most interviewees mentioned “good”. In the relationship with her husband and family, she is no longer a burden; she is independent. She is happy and there is mutual respect between her and all family members. She is communicative and there is total equality. In the community, she is respected and serves as a role model. She gives support and charity, teaches and guides the community members. She is popular and sociable and the community entrusts her with responsibilities. …. Bartlett (2004) captured the challenges of defining ‘empowerment’ as follows: ‘Empowerment is like the taste of mango, or the scent of jasmine, or the sound of waves on the shore; almost everybody will recognize these things for what they are, but almost nobody can describe them. How can we measure the height of a person’s confidence, or the weight of their laughter? How can we compare one person’s suffering with that of another? How can we put a value on the strength that is required to stand up and challenge age-old customs?’ (Bartlett, 2004, CARE Bangladesh).

33

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The AIMS Team (2001): Conceptual Framework for Assessing the Impact of

Microenterprise Services (Submitted to: Monique Cohen, Ph.D)

The Economist (2012): Hope springs a trap: An absence of optimism plays a large role

in keeping people trapped in poverty, May 12th

2012

http://www.economist.com/node/21554506?fsrc=scn/ln_ec/hope_springs

_a_trap&goback=.gde_1795011_member_118043578

-------------------- (2005): The Hidden Wealth of the Poor, Nov 3rd

, 2005

http://www.economist.com/node/5079324

UN (2002): Gender Mainstreaming: An Overview, New York

UNFPA (2006): From Microfinance to Macro Change: Integrating Health Education and

Microfinance to Empower Women and Reduce Poverty, New York

UN-INSTRAW (1995): Credit for Women: Why is it So Important? United Nations

International Research and Training Institute for Advancement of Women.

United Nations Population Information Network (POPIN) (2010): Guidelines on

Women's Empowerment, for the UN Resident coordinator system, UN

Population Division, Department of Economic and Social Affairs.

USAID (2014): Women’s Economic Empowerment: Pushing the Frontiers of Inclusive

Market Development, USAID, LEO Brief

USAID/FS SHARE (2010): Rural and Agricultural Finance for Food Security, FS

Series #8

Vonderlack, Rebecca and Mark Schreiner (2001): Women, Microfinance, and Savings:

Lessons and Proposals, Center for Social Development, Washington

University in St. Louis

World Bank (2012): World Development Report 2012: Gender Equality and

Development, The International Bank for Reconstruction and

Development/World Bank, Washington DC.

----------------- (2005): Ethiopia – Well-being and poverty in Ethiopia: The Role of

Agriculture and Agency, Report No. 29468-ET

World Bank Group (2001): Poverty Trends and Voices of the Poor: Poverty Reduction

and Economic Management, Human Development, Development

Economics. Fourth edition.

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World Bank, FAO and IFAD (2009): Gender in Agriculture Source Book, World Bank,

FAO and IFAD.

YES! Magazine (2005): Getting Free! The End of Poverty (An interview with

Muhammad Yunus by Sarah van Gelder), YES Magazine, Issue Beta 1.

Yunus, Mohamed (2003): Grameen Bank II: Designed to Open New Possibilities

GRAMEEN FOUNDATION USA

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ANNEX 1

Rural Micro-finance and empowerment: Potential virtuous spirals

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ANNEX 2

The GALS Methodology

The Gender Action Learning System (GALS) is conducted in four stages, all of which are participatory and depend on the use of visual, rather than written, material to work with. The underlying framework is depicted below. The framework aims to achieve a positive orientation by encouraging participants to develop individual and then household level visions for their future (step 1) before establishing their current situation (step 2). In order to promote a sense of achievement and to help them identify cause-effect linkages, the participants are asked to consider where they have come from (step 3). Next, participants identify the opportunities and constraints that will affect the realization of their vision (step 4). Step 5 focuses upon enabling participants to identify their objectives, and finally, step 6 asks participants to set milestones on the road towards the achievements of their overall vision.

The GALS has adapted simple diagramming tools to enable full participation by illiterate, as well as formally educated, stakeholders in the four-stages process.

At organizational level, a number of stages are set in motion.

Stage 1: Preliminary mapping of the main chain activities, stakeholders, value distribution, governance and gender inequalities.

Stage 2: Participatory action research with different stakeholder groups (and where feasible more powerful stakeholders) to identify the poverty and gender issues at each level, identify immediate short term change strategies and strengthen collaboration and peer sharing.

Stage 3: The identification, planning and negotiation of multi-stakeholder win-win strategies. At this stage, the more powerful stakeholders are involved through value chain multi-stakeholder events.

Stage 4: The promotion of sustainable action learning process including monitoring change through the integration of individual and group level learning into management information system, peer up-scaling, integration of learning in planning process and policy advocacy, participatory process for on-going change planning in Annual General Meetings, value chain fairs and local government.

Figure 1: Underlying Road Journey Framework of the GALS

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Source: Oxfam-Novib (2011)

Step 5:

SMART

Objectives

Gender

Justice

Diamond

Step 2:

Where

am I now

Step 3:

Where

did I

start

Empowerm

ent/

Relationship

Map

STEP 1: Vision: Personal Household Economic Social/Political

Challenge

Action

Tree

Step 6: Stages in the road

Step 4a: Opportunities

Step 4b: Constraints

GALS Tool underlying

framework

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Annex 3

Glossary

Agency is the ability to define one’s goals and act upon them, and the sense of agency is the ‘internal aspect of feeling capable of acting’ upon one’s goals, and as such constitutes the potential for action. It is the processes of decision-making, negotiation, and manipulation required for women to effectively use resources.

Co-operative conflict model:

perceived contribution: the degree to which actual contribution is valued

perceived interest: the degree to which these take account of a person’s own well-being

breakdown position: how well each person can do without any co-operation.

Gender Refers to the social differences between men and women. Gender identifies the socially, culturally, politically and economically determined relations between women and men. Gender relations vary from place to place and over time; they change in response to altering circumstances. Sex, by contrast, identifies the biological difference between women and men, which remains a constant.

‘’…. Gender describes the socially constructed characteristics of women and men in a given society or culture. Through interaction, socialization, and work and family roles, women and men learn to be different in behaviour and attitudes. Gender is learned, dynamic, and changes over time. (Sebstad and Manfre, 2011: Behaviour change perspective on gender…)

Gender Analysis: the systematic assessment of policy and practice on women and men respectively and on the social and economic relationships between the two. The application of a gender perspective to the development issue which is being addressed requires: an analysis of the gender division of labour, the identification of the needs and priorities of women and men, the identification of existing opportunities and constraints to the achievement of development objectives, and the choice of an intervention strategy to address these. [AfDB]

Gender equality A situation in which women and men enjoy equal rights and opportunities, in a way that the behaviour, aspirations, wishes and needs of women and men are equally valued and favoured. Gender equity is about outcomes. It means that the exercise of these rights and entitlements leads to outcomes that are fair and just. The term gender equity denotes the equivalence of outcomes in the lives of men and women, recognising their different needs and interests and consequently requiring a redistribution of power and resources. In that sense gender equity moves beyond equality of opportunity, because it requires transformative change. That is why gender equity goals are often seen as being more political than gender equality goals [GMLT].

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Gender Mainstreaming The process of assessing the implications for women and men of any planned action, including legislation, policies or programmes, in any area and at all levels. Gender mainstreaming is a strategy for making the concerns and experiences of women, as well as those of men, an integral part of the design, implementation, monitoring and evaluation of policies and programmes in all political, economic and societal spheres, so that women and men can benefit equally, and inequality is not perpetuated. It is not an end in itself. The ultimate goal of mainstreaming is to achieve gender equality (definition of the United Nations Economic and Social Council – ECOSOC , July 1997).

Gender Needs: these needs arise out of the relative positioning of women (and men) in relation to the Gender Division of labour. They are usually different for men and women. For example there are two types of gender needs for women:

Practical needs: are the needs of women arising from the traditional gender division of labour which are unique to particular groups of women. Practical gender needs refer to immediate perceived necessity such as (food, shelter, income) and are context specific. Project addressing these needs include credit schemes, small income generating schemes, grain mills, health services, water and sanitation. They involve women as beneficiaries/participants and affect the condition of women.

Strategic needs: these are long term and challenge the gender division of labour and the lack of gender equality. Projects that address these needs include legal rights, skills and leadership training. They involve women as active agents and have impact on the position of women relative to men. [AfDB]

Power Dimensions

power from within: individual changes in confidence and consciousness power to: increase in skills, abilities including earning an income, access to markets and networks power over: changes in power relations within households, communities and at macro-level power with: organisation of the powerless to enhance individual abilities and\or ability to challenge and change power relations.

Women Empowerment The process by which women take control and ownership of their lives through expansion of their choices. Thus, it is the process of acquiring the ability to make strategic life choices in a context where this ability has previously been denied.

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Annex 4 Major difficulties in evaluating empowerment: Empowerment involves qualitative changes. Precise numerical measurements of the kind that are used to capture changes in production, consumption and income, cannot be applied to the changes that take place as a result of empowerment. Empowerment involves a process that is undertaken by an individual or a group, leading to a change in the degree of control they have over certain assets, plus a change in the relationship they have with other people. We can certainly describe these things in ways that allow us to make comparisons over time and between different places. But the more we try to simplify and aggregate our observations, the less useful those observations are likely to be. Empowerment involves a process. Some transformations can take place within the space of a few hours, but other may take years. Although we can easily identify empowerment taking place in the case of the women who demand and receive a Vulnerable Group Development (VGD) card after learning about their entitlements, it is far less easy in the case of women who are gradually gaining respect from their fathers and husbands because of the knowledge they have acquired in an Farmer Field School (FFS). Although this second group of women are steadily making a greater contribution to household decision making, it could be a long time before the respect given by men translates into action taken by women. Empowerment is situation specific. What might be considered evidence of agency or increased control of assets in one situation, can be ‘business as usual’ in another place, or with a different social group, or at a different period of time. For example: it may be empowering for a land-owners wife to be able to visit the local market with cash in her hand, but for her neighbour who is a landless labourer this kind of mobility is quite normal. Similarly, the change that takes place when a group of poor farmers in a remote area gain access to livestock vaccinations for the first time is very different from what happens when a livestock officer visits his regular clients close to town. Consequently, the simple fact that a person goes to market, or that a group has access to a service, is not an indicator of empowerment. A detailed examination of the context is needed before a conclusion can be reached Empowerment is often subjective. Although it is possible to observe the process of empowerment as it takes place, it is more likely that we will find ourselves assessing changes that have already occurred. Consequently we will often depend on the memory of people who were involved in – and possibly changed by – that process. For example: a Field Trainer organises an FFS while members of the group participate in different ways, and other members of the community observe what happens from a number of social viewpoints. Not surprisingly, there may be more than one version of events. In particular, it may not always be clear who the agents were when key decisions took place. Empowerment often takes place behind closed doors. It is particularly difficult to observe changes in household decision-making that might indicate empowerment of women vis-à-vis their husbands. If we reflect on our own households, and those of our colleagues and friends, we will appreciate that information about issues such as financial decision-making, child-rearing and domestic violence is usually a closely guarded secret. It seems unreasonable, therefore, to expect other women and men, those who are the object of our studies, to provide accurate answers to strangers bearing questionnaires, notebooks and cameras. (CARE, 2004).

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ANNEX -- 5

Commonly used dimensions of women’s empowerment

(Malhotra, Schuler and Boender, 2002) Dimension

Household Community Broader Arenas

Economic

Women’s control over income; relative contribution to family support; access to and control of family resources

Women’s access to employment; ownership of assets and land; access to credit; involvement /or representation in local trade associations; access to markets

Women’s representation in high paying jobs; women CEO’s; representation of women’s economic interests in macro-economic policies, state and federal budgets

Socio -Cultural

Women’s freedom of movement; lack of discrimination against daughters; commitment to educating daughters

Women’s visibility in and access to social spaces; access to modern transportation; participation in extra-familial groups and social networks; shift in patriarchal norms (such as son preference); representation of the female in myth and ritual

Women’s literacy and access to a broad range of educational options; Positive media images of women, their roles and contributions

Familial/ Interpersonal

Participation in domestic decision-making; control over sexual relations; ability to make childbearing decisions, use contraception, obtain abortion; control over spouse selection and marriage timing; freedom from violence

Shifts in marriage and kinship systems indicating greater value and autonomy for women (e.g. later marriages, self selection of spouses, reduction in the practice of dowry; acceptability of divorce); local campaigns against domestic violence

Regional/national trends in timing of marriage, options for divorce; political, legal, religious support for (or lack of active opposition to) such shifts; systems providing easy access to contraception, safe abortion, reproductive health services

Legal

Knowledge of legal rights; domestic support for exercising rights

Community mobilization for rights; campaigns for rights awareness; effective local enforcement of legal rights

Laws supporting women’s rights, access to resources and options; Advocacy for rights and legislation; use of judicial system to redress rights violations

Political

Knowledge of political system and means of access to it; domestic support for political engagement; exercising right to vote

Women’s involvement or mobilization in the local political system/campaigns; support for specific candidates or legislation; representation in local government

Women’s representation in regional and national government; strength as a voting bloc; representation of women’s interests in effective lobbies and interest groups

Psychological Self-esteem; self-efficacy; psychological well-being

Collective awareness of injustice, potential of mobilization

Women’s sense of inclusion and entitlement; systemic acceptance of women’s entitlement and inclusion

Source: Bartlett, Andrew (2004): entry points for empowerment, CARE Bangladesh (p. 16)

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Annex 6

Standards, Indicators and Criteria of Evaluation of the Seal of Gender

SEAL OF GENDER

STANDARDS FORMULA LEVEL OF REFERENCE FOR EVALUATION

REACH AND FOCALIZATION

Focalization Women

The institution prioritizes attention in its intervention to women clients, making sure to monitor its outreach to women in conditions of poverty and/or vulnerability

Does the institution prioritize the financial inclusion of women? Does it ensure this access in balanced conditions?

a) outreach to poor women b)Women’s saving c) Women’s credit d) Ratio average amount

a) Greater than or equal to 70% b) Greater than or equal to 50% c) Greater than or equal to 50% d) Greater than or equal to 10%

Does the institution prioritize the financial inclusion of poor women?

Outreach to poor women

Greater than or equal to 30%

Does the institution prioritize the financial inclusion of women who did not complete their school education?

Outreach to women who did not complete school education

Greater than or equal to 40%

Does the institution prioritize the creation and sustainability of women’s economic enterprises?

Attention to self-employed women

Greater than or equal to 10%

CLIENT SATISFACTION

Retention of women clients

The institution manages the retention of clients as a proxy indicator of the periodical monitoring of satisfaction

Does the institution strengthens the loyalty of its clients?

Retention of women clients

Greater than institutional rate

Quality of service

The institution makes an effort to satisfy its women clients through the opportunity, cost and adaptation of financial and non-financial services

Does the institution provide services for its clients at a fair cost? Does the institution ensures that its clients know and understand the effective price they are paying for its services?

a) Fair cost of credit b) transparent cost of credit

a) Rank defined by sector average (standard deviation) b) higher than 80%

Access to non financial services for women

The institution facilitates the access to non financial services that reduce vulnerability of their clients and promote their development

Does the institution ensure that its female clients have access to non-financial educational services that promote their social empowerment and leadership?

Access and use of non-financial educational services

Greater than or equal to 60%

Does the institution ensure that its female clients have access to non-financial educational services that promote their social empowerment and

Access and use of financial educational services

Greater than or equal to 60%

Client satisfaction

The institution monitors the degree of satisfaction of its clients with respect to its financial and non-financial services and respect in treatment of clients

Does the institution satisfy the financial and non-financial needs of women?

Index of client satisfaction

Greater than or equal to 70%

RESULTS IN CLIENTS’ SOCIAL AND ECONOMIC DEVELOPMENT

Overcoming of poverty

The institution monitors results of its financial services in overcoming the poverty of women

Have the institution’s clients overcome their level of poverty?

Overcoming poverty 5%, 10%, 15%

Patrimony The institution monitors results of its financial

Have the institution’s female clients’ patrimony increased?

Growth of patrimony 10%, 30%, 50%

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services in patrimony, demonstrating positive tendencies in this respect

Savings The institution monitors results of its services in the increase in its women clients’ savings and makes an effort to achieve positive tendencies

Have female clients increased their savings?

Increase in savings 10%, 30%, 50%

Autonomy The institution monitors results of its services in the empowerment of women through monitoring changes in their autonomy to adopt enterprenurial decisions

Do female clients have greater autonomy in decision relative to the use and aims of credit? Do femal clients have greater autonomy in decision relative to the use and aims of income?

a) use and aims of credit b) use and aims of income

10%, 30%, 50%

Personal The institution monitors results of its service in personal development of women

Do female clients show improvements in personal development?

Improvements in personal development (participation and leadership, financial autonomy, vision of the future, social capital, affective development and self-esteem and management of business

10%, 30%, 50%

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Annex 7

Examples of Financial Education Topics

Basic Principles of money management Assessing your financial situation Setting financial goals Distinguishing between needs and wants Assessing your financial ‘personality’ or ‘style’

Managing cash flow Making a financial plan Developing budget Following a budget Spending wisely – stretching your money

Building assets Housing, land, property, and other physical assets Investing in a business Protecting assets

Dealing with life cycle events Marriage Household formation Birth of children Children’s education Retirement/old age Death

‘Interfacing’ with formal and informal financial institutions

Saving – opening a saving account; setting saving goals; participating in ROSCAs Borrowing – when to (and not to) borrow; risk associated with borrowing money; comparing loan terms and conditions; calculating interest; how to manage debt Insurance – understanding what it is and can do

Dealing with special challenges Illness of family members Death of family members Own illness Extending help to other families Divorce or family breakdown Job loss Natural disasters/calamities

Financial decision making process Joint decisions Independent decisions

Planning ahead for the future Investment Old age/retirement Death

Earning money Money making ideas Looking foe a job (paid employment) Starting and managing your own business Career planning

SOURCE: Sebstad, Jennefer and Monique Cohen (2003): Financial Education for the Poor, Microfinance Opportunities, www.microfinanceopportunities.org

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Annex: 8

Client Empowerment Tool – Menu of Categorical Questions

(Individual, Business, Family/Household, Community)

Individual

o What kind of person you used to be? o If I had been with you before you joined the program, what would I have seen you

doing? o How did you feel about yourself before joining the program?

o Self esteem since joining the program o What kinds of dreams/goals did you have for you life? (Your personal self)

o Ability to save (iqub or iddr) o Freedom to use the savings for personal purposes

o What kind of clothes and accessories you wear? o How was your confidence level to deal with newcomers or new issues?

o Confidence and ability to make decisions about their own lives and personal assets (Whether to buy clothes, jewellery, etc) without feeling the need to seek permission.

o What types of actions did you take/NOT take to fulfil those dreams/goals? o When you left your home, how did you look at the world? (as a set of problems, a set of

opportunities, or a set of challenges you could overcome) o Negotiate with others

o As you moved around the community, what did people say about you? (Were you good at problem solving, being knowledgeable and leading others?)

o Their social acceptance (joining any associations, kebele level associations church groups etc)

Business

o Did you have a business before joining the program? If so, please explain. o What kind of person did you use to be in your business? (Self worth and esteem) o What kind of dreams/goals did you have for you business? o How did you manage the business?

o Labour, cash management, access to technology and inputs, business training, etc

o How did you feel about yourself as a business operator/manager? About how your business was doing? Why?

o Ability to negotiate with suppliers, middle men, creditors and customers? o Ability to negotiate with landlords and government officials?

o What kinds of decisions did you make/NOT make about your business? What types of decisions were difficult for you? What kinds of decisions did you defer to other people? Who and Why?

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o Have made the decisions regarding when to take loan and how to use the loan money

o Have made the decisions regarding where and when to sell and at what price o Have made the decisions regarding what and when to buy o Have made the decisions regarding the type and time to employ labor. o Have you provided employment to others in your enterprise. Who are they

and for how much time?

o What kinds of obstacles or constraints did you see to operating this business successfully? What were they? Did you overcome them? How? (availability of credit, inputs & technology)

o What did you customers say about you and you entrepreneurship.

Family/Household

o What kind of person were you in your family/ household? o Focus on her role, duties and daily activities

o What did your family/household members say about you (then and now)? o Focus on perceptions of other family members especially husband and

extended family members. o How did you feel about yourself as a member of the family/household? About how your

family/household was doing? (Problems, successes and failures as a family and how that has impacted her)

o What kind of dreams/goals did you have for your family/household? (children education, marriage and house, assets, savings, insurance etc)

o Have achieved food security o Children in schools (secondary and high school) o Pay for needed medicine or medical services o Able to buy clothes or footwear o Improvements to house/new construction o Household assets/furniture(type) o Transportation(type)

o What kind of problems did have in your family/household? o Ability to negotiate with family members (respect, recognition, sharing of

responsibilities, more participation in decision making) o Children get married only after attaining 18 years age. o Children to be in school until they finish HS education at least. o Girl child circumcision. o Domestic violence. o Issues with extended family members. o Husband taking a second wife. o Problems with children.

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o What Kind of decisions did you make/NOT make about your family/household? What types of decisions did you defer to other members of the household? Why?

Children’s education/marriage

Acquiring of HH assets/improvements

Ability to save and reasons for saving – Any Voluntary savings opened (joint account)

Could you save in the last three loan cycles? And approximately how much was it?

Community

o What kind of person were you in the community? o What types of relationship did you have in your community? Who were the most

significant people in the community that you were used to deal with? o Were you a member of any religious group in your community (Church or any other

group) o How did you feel about yourself as a member of this group? o Before joining the program, what activities did you participate in within this group

(church or other religious activities, volunteer activities, kebele elections, contributing labor to community activities)

o What kind of integrated services are you using now? (health, education etc). What is your opinion about the ACSI integrated services?

o Have you been invited for the family gatherings or any such festivities? o Have you ever invited others to celebrate such festivities in your house? o What is your perception about other members of your group? Would they come to

help you in need? o What kind of problems/constraints did you observe in your community? o How did you try to resolve these problems/constraints?

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