Underlying concept

Micro-finance programmes not only give women and men access to savings and credit, but reach millions of people worldwide bringing them together regularly in organised groups.  Although no ‘magic bullet’, they are potentially a very significant contribution to gender equality and women's empowerment.

Through their contribution to women’s ability to earn an income programmes have potential to initiate a series of ‘virtuous spirals’ of economic empowerment, increased well-being for women and their families and wider social and political empowerment. Micro finance services and groups involving men also have potential to question and significantly change men's attitudes and behaviours as an essential component of achieving gender equality. Gender equality and women’s empowerment in turn are an essential and integral component of pro-poor development and civil society strengthening.

Donor funding for micro finance has generally been conditional on compliance with some variant of CGAP’s Guidelines for Best Practice aiming at short term financial sustainability. Although financial sustainability is desirable as far as possible in order to enable access to financial services on a sufficient scale to meet demand, these programmes can only be part of a solution to poverty reduction and empowerment. This is now recognised in relation to poverty targeting. An increasing number of programs are now developing and implementing subsidised components or services for the very poor.

Funding for programmes which place prime emphasis on women’s empowerment however continues to decrease. Despite some successes, evidence indicates that even in financially sustainable programmes, benefits for women cannot be assumed. Many programmes report serious constraints on their ability to ensure that women benefit following introduction of policies to increase financial sustainability. Women’s empowerment is not addressed even in the new poverty agenda for inclusive micro-finance.

It is clear from evidence to date that if micro-finance programmes are to make a significant contribution to pro-poor development and civil society strengthening, they need to develop explicit gender strategies to address the needs of women. These gender strategies need to look beyond just increasing women’s access to savings and credit and organising self-help groups to look strategically at how programmes can actively promote gender equality and women's empowerment.

Moreover the focus should be on developing a diversified micro-finance sector where different types of organisation: NGOs, MFIs and formal sector banks all have gender policies adapted to the needs of their particular target groups/institutional role and capacities. But where all collaborate and work together as part of an inclusive financial sector to make a significant contribution to gender equality and pro-poor development.

The current point in time is potentially favourable to bringing together elements of Best  Gender Practice strategies for different types of institution. On the one hand there is now more experience and awareness of the issues and possible strategies. On the other hand the earlier somewhat dogmatic promotion of one-size fits all financial sustainability is now being convincingly challenged in relation to poverty targeting – a major theme at the forthcoming MicroCredit Summit in Halifax in November. This will provide a key opening for now paying more attention to gender issues – the second official goal of the campaign being not only ‘reaching’ but also ‘empowering’ women.

Nevertheless ensuring that the micro-finance sector continues to move forward in relation to gender equality and women’s empowerment will require a long-term strategic process of the same order as the one in relation to poverty if gender is not to continue to ‘evaporate’ in a combination of complacency and resistance within donor agencies and the micro-finance sector. This will involve:

• ongoing exchange of experience and innovation between practitioners
• constant awareness and questioning of ‘bad practice’
• lobbying donors for sufficient funding for empowerment strategies
• bringing together the different players in the sector to develop coherent policies and for gender advocacy.

Aims of the workshop

India is the country where such a collaborative model between banks, NGOs, MFIs and women’s organizations is furthest advanced. It therefore serves as a good starting point to look at what we know so far about ‘Best Practice’ in relation to micro-finance for women’s empowerment and how different institutions can work together.

The aims of the international mutual learning workshop were to:

• Identify, document and disseminate current and potential program-level innovations in making micro-finance more empowering: products, non-financial services, group functions and structures, internal gender policy.
•  Identify the challenges in implementing these innovations at program level , within funding agencies and at the level of international debates on ‘Best Practice’ and how these challenges can be addressed.

 The workshop aimed to have the following outputs:

• Practical gender action plans for the participating organisations.

•  A series of detailed illustrative Case Studies of program experience and innovation to be posted on the genfinance website as an international resource.

•  A collective position document on sustainable micro-finance for women’s empowerment to feed into Microcredit Summit in Halifax.

•  All the above to be posted on an updated genfinance website as an international resource and on CD-Rom for dissemination to key actors in the micro-finance community in India and internationally.

•  A strong network which will continue to develop, implement and disseminate innovation in empowerment strategies for micro-finance through the genfinance listserve.