It Pays to Lend to Poor Women
This paper explores the performance and impact of micro credit programs which have poor women as clients. It draws upon the experiences of successful microfinance institutions (MFIs) such as Share, ASA, Card and Sewa Bank in the countries of India, Bangladesh and the Philippines.
These MFIs cater to the financial needs of poor women who find it difficult to access formal banking services because:
- They have no collaterals to put up for their loans;
- Their household chores and work often restrict them from observing normal banking hours.
However, the MFIs have a very encouraging experience with women clients. The paper states that the top performing MFIs in the region have an average repayment rate of over 98%, primarily as:
- Women display high repayments;
- They are also good savers;
- They are willing to borrow again.
The paper establishes that MFIs in the region have helped many women in overcoming poverty.