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Financial sustainability pressure to cut costs to a minimum
has led many programmes to
drastically cut non-financial
services. In the past some
support services in some programmes,
including business training
and gender awareness, have
been expensive and have had
minimal impact. However this
does not mean that non-financial
services are not needed or
would not make a substantial
contribution to all aspects
of empowerment (and also to
repayment rates) if they were
better designed.
Non-financial services for
empowerment
The types of non-financial
services needed by women and
to enable women
to increase benefits from micro-finance
include:
• integration of
gender awareness into all training
programmes and design of all
complementary services for
women and men
• gender specific
services for women, for example, training/mutual
learning for women to increase
organizational as well as business
skills, legal aid support.
• services for
both women and men: services
to reduce the burden of unpaid
domestic work, including childcare.
The
challenge of sustainability
and effectiveness
The question for
any programme is how to ensure
that these services are delivered
in the most cost-efficient
and also sustainable way to
ensure sustainability of the
benefits for women. There
are a range of ways in which
costs could be reduced whilst
increasing effectiveness:
• fully integrating
gender concerns into client\member
and staff training would entail
costs in the short term to
redesign courses but these
costs would be minimal in the
longer term
• mutual learning
and self-expansion by women's
groups
• cross-subsidy
from charging better-off clients
for some services, particularly
business services, registration
etc.
• inter-organisational
collaboration between micro-finance
programmes and specialist providers
of other types of service.
This could take the form of
advertising availability of
other services, for example, advice and
information about legal rights
from local women's movements,
referring clients or programme/group/
individual payment for particular
services. It could also take
the form of sharing costs of
developing innovations or research.
From fragmentation to joined-up
delivery
There is also a need to rethink
current orthodoxy on the separation
of micro-finance from other
interventions.
This has largely been driven
by accounting needs to separate
out the costs to calculate
the financial sustainability
of the micro-finance services.
In many contexts and programmes
it is both more cost-efficient
and developmentally effective
to integrate some non-financial
services with micro-finance
delivery. This is particularly
the case where micro-finance
products have inbuilt incentives
to ensure client discipline.
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