Many of us understand the plight women have faced throughout history. While those in most countries and cultures today have the right to vote, drive, marry, divorce, work, and even run companies, there are still some hurdles that remain. Women continue to be paid less for the same work and— as the coronavirus pandemic has shown — feel the impacts of financial hardship more closely. In part, that is because caring for their children and parents still generally falls on women. They continue to work in lower paying jobs in lower paying industries. And minority women still face more difficulties than their male, or white, counterparts.
The Introduction of Microfinancing
Microfinancing is believed to have begun as far back as the 1700s with the Irish Loan Fund, a system developed to offer financial assistance to poor citizens. Fast forward a couple centuries and its resurgence is prominent in Bangladesh in the 1970s. The Grameen Bank and its founder even won the Nobel Peace Prize in the 2000s for helping to improve the lives of impoverished individuals. It not only loaned money, but emphasized the importance of such basic necessities as sanitary water and forgoing marriage dowries. SKS Microfinance in India is now one of the largest global operations of its kind.
How Microfinancing Empowers Women
Supporting people of all backgrounds (approximately 500 million individuals, especially women in third-world countries), microfinancing provides an effective alternative for those who are denied or with no access to other financial services. The system works similarly to traditional loans with mandatory interest rates and repayment plans. However, it is often accompanied by the provision of bank accounts, micro-insurance, and business education to encourage financial independence and safe and ethical small businesses support. Since women have been marginalized around the world for centuries, recognizing the need for aid is incredibly important—and necessary.
Programs Helping Female-Owned Small Businesses
Over the years, there have been numerous microfinancing enterprises aimed at helping women grow their small businesses. CAUSE Canada has helped more than 3,000 borrowers with small loans in three main areas of Guatemala, Honduras, and the northern district of Sierra Leone around Kabala, its capital. Rather than just professional-level training, however, they seek to assist in improving income for women and creating jobs for additional community members. The organization partners with the Butterfly Effects Microcredit Foundation for loans without collateral, for a period of three months to a year.
The Women’s Microfinance Initiative is focused on providing loans, training and additional support for women in impoverished rural areas of East Africa. It aims to help these individuals develop small businesses, ultimately earning a greater income for themselves and their families, improving their standard—and reality—of living. In 13 years, the organization has provided 62,000 loans to women in over 1,500 villages, recycling loan funds and transitioning borrowers to use institutional banking within two years.
Acción contra el Hambre (Action Against Hunger Spain) provides small business loans to female entrepreneurs, interviewing candidates to assess their “economic feasibility”—such as motivation and commitment—teaching about expenditures, income, liability, and decision-making. The program also provides training workshops, technical and financial advice, and three years of micro-credit monitoring and business consolidation. Beneficiaries lead tutorials to review business plans before helping to fund prospective enterprises.
Potential Drawbacks of Microfinancing
Some schools of thought argue that microfinancing is not enough to empower women, and that business and financial responsibilities only add to the domestic and familial responsibilities that continue to fall on their shoulders. As women become more powerful in their professional lives, male compliance and understanding is required, in accepting the progress being made outside traditional gender roles. While we can ascertain this should be inevitable within the 21st century, many individuals currently in the workforce have grown up with parents of the 1940s and ’50s and grandparents of the ’20s and ’30s.
Empowering women only through economics has actually been shown to lead to significant conflict, such as domestic violence. Some cultures outside western society also continue to keep women down. Accompanying education to alter “the power dynamics and other cultural factors that repress women” is crucial for the complete success of their empowerment. While microfinancing certainly has its benefits, it does not always address the cause of poverty, inequality among genders, and “women’s lack of control over their own lives.” We must make changes to the entire structural system that will trickle down into the way in which individual families operate.
Microfinancing Summed Up
Like most systems in our modern world that set out to help people, microfinancing may very well not hit every mark in helping to empower women on a global scale. Few charitable programs operate with no conflicts or controversy, after all. Sadly, women continue to face inequalities in many parts of the world—even in North America and Europe. While microfinancing can be perceived as a good start to helping impoverished individuals on an economic level, these systems need to further emphasize prevention of female marginalization and help to change the problematic structure in the first place.
Robyn Karmazyn | Contributing Writer