The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?

Evaluating the promise of female empowerment in the global microfinance expansion

This paper discusses about the potential and limits of microfinance. It also tries to understand how insights from research and practice can help reform the industry's current products, policies, and future developments. It focuses on three primary services: credit, savings, and insurance and evaluates the changing reputation of microfinance, the need for reliable evidence, and the importance of rigorous evaluations. The paper states that although more than 80% of the poorest clients are women, but even now only 37% of women worldwide have access to formal financial services. This barrier inhibits women's ability to participate in self-employment opportunities. Conclusions include:

  • Microfinance products have the potential to make a large positive impact for women;
  • Collaborations between leaders of research and practice in the microfinance industry have large potential to push the effectiveness of different microfinance services to new levels;
  • Changing small features of the products can have important impacts on both the social impact and the financial viability of microfinance products;
  • Overall trends on the gender gap are promising with marked improvements, particularly in the areas of political empowerment, economic participation, and opportunities.

About this Publication

By Pomeranz, D.