In response to my blog post, Women represent the biggest emerging market that we'll see in our lifetime, Carole1241 commented "Women are also the best recipients for micro lending because they are more likely to use the money wisely and pay it back." I instinctively agreed with Carole's comment, but I decided to do a little research to better understand the role of women in the success of micro lending.
As I'm sure many of you know, Nobel Peace Prize winner Muhammad Yunus founded the Grameen Bank in 1976 to make loans to poor Bangladeshis. Since then the Grameen Bank has issued more than $8 billion in loans to several million borrowers. To ensure repayment, the bank uses a system of "solidarity groups": small informal groups, nearly all of them exclusively female, that meet weekly in their villages to conduct business with representatives of the bank, and who support one and other's efforts at economic self-advancement. As it has grown, the Grameen Bank has also developed other systems of alternate credit that serve the poor. In addition to microcredit, it offers housing loans as well as financing for fisheries and irrigation projects, venture capital, textiles, and other activities, along with other banking services such as savings. The success of the Grameen model has inspired similar efforts throughout the developing world and even in industrialized nations including the
According to CGAP, micro lending has led to empowering women:
'Many microfinance programs target poor women. For women, money management, greater control over resources, and access to knowledge leads to more choices and a voice in family and community matters. Economic empowerment is accompanied by growth in self-esteem, self-confidence, and new opportunities. Many qualitative and quantitative studies have documented how access to financial services has improved the status of women within the family and the community. Women often become more assertive and confident. In regions where women's mobility is strictly regulated, women have often become more visible and are better able to negotiate the public sphere. Women involved in microfinance may also own assets, including land and housing, and play a stronger role in decision making. In some programs that have been active over many years, there are even reports of declining levels of violence against women."
Women for Women International serves the needs of women with the following guiding principles:
- Women reinvest 90% of their income in their families and communities, compared with men who reinvest only 30% to 40% (World Bank). Women are also more likely to use their profits to help the poor and are more likely to hire other women to work for them.
- Women for Women International specializes in this model of women-led community development work that leverages women's economic empowerment for the benefit of entire families and communities. They provide critical job skills training, business development and management education, and microfinance and other links to credit so that women can sustain an income and support their families and communities.
- Women for Women International
offers comprehensive business services designed to help women start and
manage their own microenterprises. Women for
Women International gives women access to capital and operates microcredit
and Afghanistan with an overall repayment rate of 99 percent. Bosnia and Herzegovina
In a recent interview in Newsweek magazine, Andrea Jung, CEO of Avon, spoke of the success of her company's micro lending efforts with women. "We have over 6 million representatives, the lion's share of whom are women. People say to me, "You sell lipstick, you see skin care", and I always say, "But remember: the first thing we sell is economic opportunity for women." We offer women, particularly in developing markets, the socio-economic ability to be independent. We extend more credit to women, I think, than any company in the world; our representatives don't actually pay for their products until they've delivered their first order. So in essence, we're kind of microlending, offering mini-loans so that they can start their own business."
Carole, thanks again for your great comment which prompted me to dig further into the powerful topic of women and micro lending. By the way Carole1241 happens to be my very cool cousin, Carole Maes Trout, from Richardson, TX. You can find Carole on facebook and other social networking sites where I'm sure she's raising social conscience and advocating for women.