The Interaction of Customary Law and Microfinance: Women’s Entry into the World Economy

This note enquires into how customary law may help or hinder women run microbusinesses. Using case studies from Morocco and the Dominican Republic, the note examines how the laws of Shariah and customery laws interact with microfinance loans. It states that microfinance programs specifically target women and use women's traditional groups to ensure success. However, customary laws can hinder microfinance ventures because of the restrictions they place on women’s roles and responsibilities. The note studies Grameen Bank’s social program and its impact on successfully changing customary laws over the past thirty years in Bangladesh. It also investigates the effect of microfinance programs on the changes in customs and traditional power distribution in families and communities. The note covers the following sections in detail:

• Overview and evolution of the microfinance industry;
• Impact of Shariah law on women’s microbusinesses in Morocco;
• Impact of machismo rules on women’s microbusinesses in the Dominican Republic;
• Customary law as a catalyst for success;
• Microfinance as an agent of change in women’s lives;
• Summary of findings from the study.