Indian Microfinance Women

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, as well as pro-poor development and civil society strengthening. Through their contribution to women’s ability to earn an income these 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.

Targeting women became a major plank of donor poverty alleviation and gender strategies in the 1990s. This was the result of a number of factors:

• women's human rights: official commitments to gender equity and gender mainstreaming on the part of most governments, donor agencies, NGOs and the Microcredit Summit Campaign itself.
  

• poverty reduction: increasing evidence that not only are women overrepresented amongst the poorest people, but are also more likely than men to spend their incomes on the welfare of children and dependents. Therefore poverty reduction programmes which target women are likely to be more effective.
  
• financial sustainability: increasing evidence in micro-finance of much higher repayment and savings discipline among women than men.
  

Donor funding for micro finance has generally been conditional on compliance with some variant of CGAP’s Guidelines for Best Practice aiming at financial sustainability. Although gender equality and women's empowerment can significantly contribute to financial sustainability, gender impact has not been a consideration in choosing between the different policy options for financial sustainability. Worryingly also, funding for programmes which place prime emphasis on women’s empowerment continues to decrease.

There is evidence of significant potential for micro-finance to enable women to challenge and change gender inequalities at all levels if there is a strategic gender focus. There have also been many important recent innovations in products and services to enable women to better benefit. Nevertheless benefits cannot be assumed and even financially sustainable micro-finance if it is gender blind may seriously disempower women and increase inequality. It is clear that most micro finance programmes have a long way to go before they make their full potential contribution to gender equality and empowerment. Many of the strategies promoted for financial sustainability may exacerbate the negative impacts of debt, because of overrapid expansion, rigid product design inappropriate to women’s economic activities, cutting of necessary support services and lack of attention to local economic contexts