VisionFund International on drive to tailor the provision of its microfinance services to women

By Annalisa Plachesi and Miranda Barham, WAM Steering CommitteeJacqueline CEO

WAM UK hosted a very engaging discussion with special guest, Johanna Ryan, VisionFund International’s Social Performance Director.  Johanna took us through the journey that the VisionFund International has been on since 2003, when it was set up to provide small loans to business owners to help them to grow and expand sustainable businesses in the developing world.

VisionFund brings financial access to the entrepreneurial poor in areas that other microfinance providers find too costly to reach. Working with farmers and small businesses in predominantly rural areas, the organisation strives to unlock the economic potential in their communities that can lift whole villages out of poverty. Mission-driven, VisionFund is focused on impacting the lives of children living in poverty. Across a network of over 30 microfinance institutions, most of VisionFund’s clients are women as they are shown to be more likely to invest surplus income into their children’s nutritional, health and educational needs. Their clients are mainly mothers or grandmothers with dependent children or women who employ others with children.

Johanna opened the event by introducing two women, Donatila and Claudine. Donatila, 60 years old from Rwanda looks after seven children. After the sudden death of her first husband, she remarried but her second husband left her.

“When talking to Donatila, I remember her describing her sorrow as she had nothing and – in her own words – she was ‘just an old woman without a husband with no means to provide for the children,’” Johanna explained. Donatila was then introduced to VisionFund and managed to get a $45 loan to trade sorghum in her local market. With her profits she managed to buy salt and onions to feed her family and to cover school fees for her children.

Claudine, who is 25 years old and also from Rwanda, took out a $300 loan and started to sell milk and manure. She made enough money to have her floor cemented, and to purchase clothing. “Claudine has a dream,” Johanna continued, “and it is to see her children grow up to be mayors, governors and members of parliament, whether they are boys or girls.”

Forty-two percent of women globally are outside the formal financial system.[1]  Forty percent of the global agricultural labour force is female and this rises to 50% in Africa and Asia.[2] Of 780 million illiterate people, two-thirds are women.[3] It is these statistics combined with the ambition described by women like Claudine that have driven VisionFund to launch the Women’s Empowerment Fund, a new initiative to empower two million women by 2021.

The Fund is a bold vision to raise $25 million to financially empower two million women and create brighter futures for six million children annually by 2021. VisionFund will achieve this by:

(1) Strengthening links to savings for women. Savings provide a safety net to deal with emergencies as well as family events like births and deaths.

(2) Developing insurance products that specifically protect women. Microinsurance helps protect clients, their investments and businesses against untimely and unexpected shocks. To respond to some of the specific challenges facing women, VisionFund is developing products available for the first time in the market such as health insurance with maternity coverage, crop insurance for women without land titles, and life insurance for spouses and children.

(3) Bringing mobile banking to rural areas, which are often hard to reach and costly to serve. For women, this investment will mean increased personal safety as they will not have to travel with relatively large amounts of cash. It will mean confidentiality as they will not be seen in the branches, which is an issue for women because otherwise they are likely to be asked for money from other members of the community. Also, it gives them greater control over their finances as they can manage them from their home. For some women, depending on the cultural context, it is not easy for them to move around freely. It also provides VisionFund with convenient delivery channels and the opportunity to collect and analyse data, which will be used to improve their products and services.

(4) Expanding access to financial education for women – whilst nearly 33 percent of VisionFund’s clients received financial education in 2016, with a new delivery system for financial education, VisionFund plans to reach 75 percent by 2021.

(5) Creating family-friendly branches which allow mothers to care for their children while they wait in line without, for example, being under searing sun, and developing practical guidelines for improving outreach and service to women, especially mothers, prioritizing women’s needs for confidentiality, privacy, and respect.

(6) Developing financial products tailored for women to ensure they adequately serve the needs of all VisionFund’s clients, with a focus on the needs of women and mothers. This will be represented in the development of new products that focus on fuel-efficient cook stoves, household water filters, latrine construction, solar energy products, and children’s education.

One of the ways that VisionFund will pivot its services to be more women-friendly is by recruiting older women, from the communities it works in, to become loan officers. These women will automatically understand the challenges and local context that VisionFund’s female clients face and will therefore be able to provide services in a more sensitive and sympathetic manner.

“Many older women don’t necessarily feel comfortable speaking with a 25 year-old male loan officer,” explained Johanna. “It can be a barrier to them opening up and giving us the real picture of their lives.” This matters for VisionFund as their fundamental rule of client protection is, ‘we do no harm,’ and they adhere to other strict client protection principles. Taking the time to get a full and honest picture of the client’s financial, business and familial situation is critical to understanding how the client can benefit from a loan or other financial services product and how it can be tailored to individual requirements.

Understanding and improving the impact of their work on women and families is very important for VisionFund. It plans to use rigorous academic and professional research to further understand how it impacts its clients, and will focus on adjusting existing services to better meet the specific requirements of women in their local context, as well as introducing unique products to help more women and their families climb up the economic ladder.

”For women like Donatila and Claudine,” Johanna added, ”empowerment means living a better life than what they experienced before.” With access to financial services and training, along with encouragement from their communities, women with few other resources can change their world and the future of their children. Starting with today’s women, for the women of tomorrow.

If you would like to support VisionFund International to raise funding in support of women taking their first step in business, please donate here. For further information on the Women’s Empowerment Fund, please visit http://www.visionfund.org. “Together, we can transform lives. One loan at a time.”

[1] Pubdocs.worldbank.org/en/789211483986823152/N9gender.pdf
[2] Fao.org/docrep/013/am307e/am307e00.pdf
[3] En.unesco.org/gem-report/sites/gem-report/files/girls-factsheet-en.pdf

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