Microfinance and Gender Equality: Are We Getting There?

This paper was commissioned by the Microcredit Summit Campaign in 2006. The paper recognizes the benefits that accrue to households with the financial empowerment of women, and advocates radical approaches to fully empower women in microfinance. The paper states that:

• There is enough evidence that designing gender-sensitive products adds to the development bottom line;
• The microfinance industry is not doing well in gender equality and has to take steps to improve this situation.

The paper examines:

• The debate on empowering women through microfinance;
• Fundamental reasons why some institutions have not integrated gender issues into their financial operations. These include:
  • The need to survive as an organization,
  • The lack of training and business acumen amongst women clients,
  • Low levels of entrepreneurship and ambition amongst women,
  • Market conditions;
• Mutual compatibility between the development bottom line and the institutional bottom line;
• Gender audits in Zambia with two MFIs that aimed to:
  • Improve their internal organization,
  • Recommend adaptations to create a better working environment for both sexes;
• Issues to consider in a business case framework, such as the people, the opportunity, the context, risks and rewards.

The paper concludes by recommending that MFIs:

• Enshrine gender issues in their structural set-up;
• Differentiate product composition and delivery to meet the needs of both men and women;
• Lobby donors to find a mutually compatible focus on gender differentiation and organizational sustainability.