girls

Microfinance and Women’s Empowerment: is it really helping them?

by Kim Croucher, WAM UK Steering Committee

Source: US AID, Flikr Creative Commons

Source: US AID, Flickr Creative Commons

It’s a question that has occurred to many of us who work in women’s financial inclusion and  increasingly  pertinent as the industry has developed and changed; whilst data and research has oftentimes been disappointing in providing a clear link, we ask, is microfinance – as a tool to empower women – really working?

In June, Ernst & Young hosted WAM and the Microfinance Club UK to debate this hot topic – aided by three highly qualified speakers on the subject:

  • Mary Ellen Iskenderian, President and CEO of Women’s World Banking, the global nonprofit devoted to giving more low-income women access to the financial tools and resources they require to achieve security and prosperity.
  • Sevi Simavi, Chief Executive Officer of the Cherie Blair Foundation for Women,a charitable foundation that develops programmes to provide women with the skills, technology, networks and access to capital that they need to become successful small business owners.
  • Justina Alders-Sheya, Senior Manager, EY, specializing in Financial Inclusion & Microfinance and Wealth & Asset Management.

Justina showcased the work that EY has been doing to investigate this topic, to offer better advice to its clients in this space (microfinance institutions and investors).  According to her, there are various broad themes that may help the microfinance industry to understand its impact on women better, but more importantly may help the industry serve women more effectively.

The first is technology, which has the potential to boost financial inclusion for women in a way that was not possible before.  Some of the basic barriers that used to exist for poor women to access finance – safety of carrying cash in public, the ability to travel long distances to reach a bank branch, confidence to walk into a bank and speak to a male member of staff – all this is blown away with mobile banking. Of the 2 billion unbanked individuals in the world today, 1 billion have mobile phones and mobile accounts are now available in 61% of developing markets.  The potential to reach the previously unreachable is huge.

Mainstream financial institutions are entering the space faster than ever and this could enable microfinance to further extend its reach. With this entry may also come increasing regulation, which could mean better customer protection and potentially harmonizing standards across countries and regions.

Impact measurement has been a focus for years, but is still key to understanding whether microfinance is helping women.  Measuring the impact of having access to finance is important, but the answers rely on long-term research. Leading on from this is a topic that is relatively new – but receiving a lot of attention – and that is looking at behavioural insights when lending.

The understanding of psychological, social and cultural influences on decision making and behaviour can really help providers in delivering a service that leads to the best outcomes. But the very reason why it is attracting attention, might lead to the mainstreaming of microfinance – since behavioural insights would make it easier for commercial financial institutions to know how they can offer services to this segment of the market and still make a profit.

Sevi Simavi presented how the Cherie Blair Foundation realized very quickly when they set-up that access to capital was key to empowering female entrepreneurs. When the organisation first started, a lot of women they worked with still kept their cash under the mattress.  Having a bank account is critical from an empowerment perspective, without this, a woman rarely has control over her money – the cash ends up going to husbands or fathers.

In a recent report by the World Bank on Financial Inclusion, it quotes findings that the number of unbanked individuals has fallen by 20% between 2011 and 2014 (that amounts to 62% of adults who have a bank account vs. 51% in 2011) – which reveals some improvement in access to banking services.  However, there continues to be a gender gap in account ownership – the gap varied depending on the region, but overall only 58% of women worldwide are banked vs. 65% of men.

So while there may not yet be the hard evidence to point to the empowerment effect that microfinance is having on women around the world – there is most certainly a need for increasing financial services made available and accessible to women.  But to benefit from these services, Sevi made the interesting point that female entrepreneurs also needed to be given knowledge and capabilities (the ability to manage an account, to know the difference between profit and loss, basic book-keeping skills). Financial literacy training is therefore key.  Here technology can also have a part to play – delivery of training through a mobile phone can be fast, efficient and can reach those who were previously unreachable.

Our main takeaway from Mary Ellen’s speech was the idea that to serve the poor most efficiently, one has to address women,  and this means thinking about the services that women need, because they will be different to men’s.

Empowering women is crucial to serving the poor and developing economies, because women make up a far larger proportion of the poor, because a woman is far more likely to make investments back into her community and her children if she earns money – and one aspect of empowerment is through financial inclusion, so that women are increasingly in control of their money and their own decision making and futures.  Yet women are facing greater financial exclusion in every geography and across every income level.

The key to Mary Ellen’s message was that in order to support women’s empowerment – we need to make financial services better tailored to women.  Her point was that it was becoming clear that women wanted different things to men when it came to financial services.

For example, women want convenience, they greatly value confidentiality, they want more security, they want to trust the organization they are dealing with. Technology can go some way towards addressing these needs – but building trust may mean offering a lot more information to potential female customers because that is what they require to make a decision, it may mean explaining things in a more transparent way and it may mean having female agents.

In Tanzania for example, women are opening bank accounts at the same rate as men, but the main feedback from women there is that it is too easy to spend the money in the accounts – instead they would like restrictions on withdrawing money and incentives to save towards a goal – again a different way of thinking and different needs.

Mary Ellen was also optimistic about digital banking due to the convenience it offers women, the new markets it represents for banks and customer stickiness it offers the mobile operators – many reasons why she thinks digital banking may be a game-changer for financial inclusion.

Given all the talk over the evening about the coming revolution of digital/mobile banking, a question from the audience was put to the panel on whether mobile phones would destroy the support dynamic that can come from more traditional group savings and loan arrangements.  The panel felt there was a way to use mobile phones in microfinance (distributing loans, repayments) that would work either on an individual or group level – so it did not necessarily threaten the group model.  But they added that eventually individuals, especially entrepreneurs, needed loans that were specific to their own needs and so having this ability to tailor a product to individuals is advantageous to all involved.

If the conclusion the room was coming to during the evening was that financial inclusion is really key to women’s economic empowerment – even if the evidence isn’t there to directly link this progression yet – why then is there still a gap?  What about discrimination in this space – did the panel think that this was a more serious hurdle than the microfinance community are currently expressing and does the language around discrimination need to be ramped up in order to change the attitude of providers?  The panel felt there certainly is discrimination – but not always on the part of the players in the industry – it is a wider issue involving governments and communities. The fact that women can’t open a bank account in many countries, or face significantly more hurdles than men do when trying.  In Bangladesh, women need a birth certificate to open a bank account, but many poor women weren’t registered at birth – ID issues are a huge challenge for the poor.  Ownership of property that can act as collateral is another common problem for women, which also makes it more difficult to access capital.

Summing up – do all these developments mean that microfinance can help increase gender equality?  The panel were optimistic.  Sevi put it so well when she said that for all those who work tirelessly in this space and who care about women’s empowerment – it should be about progress and not perfection.

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Women for Women Intl: Stronger Women, Stronger Communities

by Kim Croucher, WAM UK Steering Committee

“I never believed that I had rights, but I learned through the programme that I was born with all my rights.  The next time he hit me, I did not apologize to him.”

WfW

Statements like the above had shocked me. However after visiting one of Women for Women International’s programmes three years ago in Rwanda, meeting some of the women attending the programme in-person, and through reading more about women’s experiences around the world– I came to the slow realization that statements like the above revealed a level of violence-endured and discrimination that was not unusual for many women around the world.   The same statement also shows me how Women for Women International, a leading global charity, is changing the lives of the women they work with in conflict-torn countries through knowledge and growing their self-belief.

On a cold evening in late February this year, WAM was proud to host Women for Women International’s Country Director for Nigeria, Ngozi Eze, at one of our signature dinner discussions with our network members. It was certainly a thought-provoking evening.

Ngozi spoke specifically about the programme Women for Women International run in Nigeria, where the organization has been present since 2000. Since then, it has put 52,000 of some of the most marginalized women through a yearlong programme to educate them on health, family planning, financial literacy, legal rights and empowerment.  The women participants are also offered vocational skills training relevant to their local market, so that, upon graduation, they can start earning an independent income and begin to build their self-sufficiency.

To contextualize this achievement, what are some of the challenges that women in Nigeria face?  Approximately 54% of Nigerian women are illiterate[1] and 28% would not have completed primary education. In Northern Nigeria, women have increasingly experienced forced early marriage and there is much skepticism about family planning – overall 20% of Nigerian women are married by the age of 15 and 39% by the age of 18[2], only 18% of women in a union between the ages of 15-49 practice contraception[3], the average woman will give birth to 6 children during her lifetime[4], and a woman will die in childbirth for every 178 live births[5].  According to a 2014 UN report on the State of the World’s Children, 46% of Nigerian women believe that a husband beating his wife is justifiable[6].  The report also confirms relatively widespread practices of female genital mutilation.

Ngozi spoke about the holistic nature of their programme. It is not enough to give the women vocational skills. The women needed help to understand how to look after themselves and their children in terms of sanitation and nutrition, they needed skills in saving and financial planning, but more importantly they needed to understand their rights and the channels through which they can speak out for themselves and their needs.  Only if all these elements fall together could the vocational skills translate into long-term economic stability for the women.

A key to the success of Women for Women’s programmes, both in Nigeria and other countries where they work, is the emphasis on the networks women build during the programme, something they come to rely on time and time again.

Ngozi gave an example of how a woman, who was being beaten by her husband, experienced the power of her network when her classmates came to her house one morning, stood outside and began publicly berating her husband for his behaviour.  The women report many instances when such a network has been critical, from when one of them experience poor health and needs help with childcare, or requires assistance with her business.  Women are encouraged after the programme to form co-operatives since many of them would have learnt similar vocational skills and would benefit from pooling their labour and skills together, providing each other support and assistance beyond the initial year long programme.

What about the role of men?  Ngozi’s office was one of the first in Women for Women International’s network of offices to start a men’s engagement programme.  This involved speaking to and engaging with men from diverse backgrounds across the country, but mainly men who had an influence on communities, such as traditional rulers in local communities, religious leaders to men in the military.  Religious and community leaders have tremendous sway over group behaviour and cultural views.  Ngozi told us that in their experience, many men they’ve engaged with understand the benefits of economically stronger women and the related positive impacts on children’s welfare, education and the wider community.

During our dinner, we asked about the threat from Boko Haram and how this might be affecting women on the programmes.  My sense from the discussion was that while organisations like Boko Haram are definitely a threat to the safety of many women in the regions where Women for Women International operates and was certainly making the international headlines – the challenges faced by women in Nigeria are so much wider.  As alluded to through statistics quoted at the start of this blog many women will be trapped in a quagmire of chronic poverty, lack of education, discriminatory customs and norms, and gender-based violence is more pervasive than headline grabbing terrorism.

Leading on from the discussion, we heard about the peace-building capacity of the programme.  Christian and Muslim women are often brought together during the training and while there can often be mutual suspicion at the outset, fueled by societal divisions, many of the women quickly come to realize how similar their experiences were and that they faced the same issues. One of the charity’s beliefs is that when they empower women in post-conflict societies, they are much more likely to work to build bridges between previously opposing groups – and this has been borne out in some situations.

A member of the Women for Women’s International UK team was also present to discuss the organizations global operations.  Development work like this and its effects on societies may take years to make itself visible to the outside world, but there are now clear signs of impact that they can point to.  In terms of enhancing income generation capabilities amongst women – in the case of Nigeria, upon entering the programme the average earnings of attendees was £0.19 per day and two years after graduating this has risen to £1.90.  In terms of their health and well-being, 10% of women report practicing family planning upon enrollment compared with 60% two years after graduating.   The ripple effects of the programme are also evident as 87% of women report educating other women about her rights two years after graduating compared with 7% on enrollment.  The impact results that can be measured in other countries where the organization work have proven similar, places such as Iraq, Afghanistan, Rwanda, Democratic Republic of Congo, South Sudan, Bosnia & Herzegovina, Kosovo.

The support networks that Women for Women International emphasizes for their graduates aren’t limited to the networks that form between women who’ve graduated together or women in the same local communities (although these groups clearly have a unique ability to help each other).  The charity encourages women and men from all over the world to sign up to be a sister (or sponsor) to the women in the programme – and this doesn’t mean just donating the money for them to take part in the course, but also writing to the women to show moral support and understanding.

Learning about this initiative, I have personally sponsored women on the programme in various countries. I always find it interesting to make a connection with a woman in another country. A woman who is probably going through very different experiences to myself and yet, many of her concerns and challenges will be similar to those of many women around the world – to look after her family, to do the best for her children, to stand up for her rights and in sadly too many cases, to stand-up to violence. My current sister has eight children and lives in Afghanistan; she has told me how the programme has helped her to help her children and it has been a real pleasure to correspond with her and hear about her life and to tell her about mine, as part of the wider Women for Women International network.

Sponsoring a woman on the programme costs £22 a month. To sponsor a sister and support the programme please click here.

Click here for a video on Women for Women International’s Work

[1] “The Demographic and Health Surveys Program: Nigeria.” USAID.

http://dhsprogram.com/Where-We-Work/Country-Main.cfm?ctry_id=30&c=Nigeria&Country=Nigeria&cn=&r=1

[2] “Table 9: Child Protection.” The State of the World’s Children 2014 in Numbers. UNICEF. Page 81. http://www.unicef.org/sowc2014/numbers/documents/english/SOWC2014_In%20Numbers_28%20Jan.pdf

[3] “Contraceptive Prevalence (percent of women ages 15-49).” The World Bank Data. http://data.worldbank.org/indicator/SP.DYN.CONU.ZS

[4] “Maternal Mortality Ratio (modeled estimate, per 100,000 live births).” The World Bank. http://data.worldbank.org/indicator/SH.STA.MMRT

[5] “Maternal Mortality Ratio (modeled estimate, per 100,000 live births).” The World Bank. http://data.worldbank.org/indicator/SH.STA.MMRT

[6] “The State of the World’s Children 2014.” United Nations Children’s Fund. http://www.unicef.org/sowc2014/numbers/documents/english/SOWC2014_In%20Numbers_28%20Jan.pdf

Empowering Women in Fragile States With Progressio

by Monika Jonusauskiene, WAM UK Steering Committee Member

progressio

Hot off the heels of International Woman’s Day, on March 17th, WAM UK held a joint workshop with Progressio, a leading international development charity, on women empowerment in fragile post-conflict states, such as Zimbabwe, Somalia and Yemen. Progressio supports poor and marginalised people, especially women, to empower themselves in some of the world’s most challenging situations, with over 70 years of experience. If you missed the event, fear not – we have summarised the workshop in this blog.

Hosted by Baroness Ruth Lister of Burtersett, the senior leadership of Progressio showcased their most impactful work  to a  wide ranging audience, including WAM members, in the illustrious settings of the House of Lords in London. The event was designed to welcome active participation and suggestion for Progressio on its strategic focus and to highlight development solutions, reflective of the charity’s inclusive approach to development and knowledge sharing.

The event was the first of many to mark the 75th year of Progressio’s important work in some of the world’s most fragile and challenging areas. On the evening, Mark Lister, the CEO of Progressio, shared several impactful stories and case studies of women in Zimbabwe, Somalia and Yemen. Inspiring examples of women in vulnerable settings working with Progressio to influence local policy were told. He shared the example of a group of women who, against the odds, successfully organised themselves to lobby local municipalities to cover a well known hazard of dangerous well-holes. Lister’s account not only highlighted a practical solution to a community problem, it also showcased an example that, with the right support, even some of the most marginalised women’s’ voices can be heard, and bring about meaningful change.

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Presentation by Progressio, photo courtesy of WAM UK

As Progressio highlights, 50% of the world’s poor already live in fragile states and fragile states can make people poor – reinforcing a negative cycle. Moreover, women living in fragile states are some of the most disempowered and poorest of the poor and hence Progressio believes that supporting women in fragile states tackles poverty where it is most needed. Supporting women can help achieve deep-seated social change, transforming fragile states into stronger societies via active civil participation.

The event also discussed some of the key barriers to empowering women in fragile states drawing upon audience experience. WAM members and other members of the audience shared their perception of issues facing women empowerment, globally and at home. In small groups, attendees also discussed how they could individually use their experience and knowledge to help design and implement women empowerment solutions. Bernie Morgan of Progressio described her observation that women often refer to their family members when asked to give an example of a role-model and explained that Progressio was using that knowledge to build development solutions that draw upon the strength of women’s social and familial networks. On the night we also brainstormed various social enterprise ideas to help fundraising at Progressio.

On the night we covered a lot of ground in terms of pressing topics in women’s international development and also how attendees can help support Progressio’s efforts. We would like to take the opportunity to thank all the WAM Members that joined us for this hands-on workshop– it is your very enthusiasm and brain-power that made this event such a success! We invite those who couldn’t attend to learn more about Progressio’s ground breaking work via their website particularly on promoting women’s rights and participation in fragile states.

More about the people behind the event

Mark Lister is CEO of Progressio, having been appointed in 2012. He worked for the charity previously some 20 years ago as a fundraiser. His passion is grass roots international development and ensuring that the voices of the most marginalized are heard at the highest level.

Bernie Morgan is Progressio’s Business Development Manager. When she was CEO of the Community Development Finance Association she was involved in the early days of WAM. Her passion is working for a fairer society for all.

Baroness Ruth Lister is a supporter of Progressio. She was appointed to the Lords in 2011. She is Professor of Social Policy at Loughborough University specializing in poverty, social security and women’s citizenship.

What I Talk About When I Talk About Money

by Lisa Wong, WAM UK

james

“Money is never just about money” argues a leading financial services designer, James Moed, over a dinner attended by financial inclusion professionals hosted by Women Advancing Microfinance UK. “Instead”, he explains, “it’s pretty much always about something else”. In conversation with James, who has over 11 years of experience in helping innovation leaders and design teams understand people’s complex behaviours around money, we learnt how we can use Human Centered Design (HCD) to promote global financial inclusion – an issue particularly pertinent to the world’s women.  According to the UNDP, 6 out of 10 of the world’s poorest people are women; women may comprise more than 50% of the world’s population but only own 1% of the world’s wealth. Some 75% of the world’s women are without access to bank loans as they have unpaid or insecure jobs and are not entitled to property ownership.

This blog will share some of the insights from James’ experiences having advised companies, governments, startups, and social enterprises, most recently as the Director for Financial Service Design at the London office of IDEO – a global innovation consultancy.

First, what is human-centered design (HCD)?

HCD applies the design process to create innovative solutions based on observations on humans. The HCD process begins by examining the needs, dreams and behaviours of people relevant to a prospective solution. A solution can be a product, a service, an environment, an organization or a mode of interaction. HCD focuses on desirability (what do people desire?), feasibility (what is technically and organizationally feasible?) and viability (what is financially possible?). It is an iterative process – borrowing from the designer who observes, prototypes, tests and then repeats until an appropriate solution is reached. James describes the approach as “building to learn”, creating imperfect examples of solutions to be tested by user experience instead of aiming to launch the perfectly formed solution straightaway.

How can HCD help promote women in financial inclusion?

HCD depends on human observation and often women and girls have been ignored in the design of financial products and services. Even if they haven’t been explicitly ignored, then perhaps not enough nuance to their culture could have supported their financial exclusion. Such as failing to pay attention to what women and girls feel like they can and cannot say in interviews and surveys. Moreover, there is a big difference between what people say they will do, and what they actually do – especially when it comes to money. HCD promotes user insight, so adopting an approach to always consider gender in the target user group is vital and can be extremely telling. Designing solutions with women’s behaviours, aspirations and needs specifically in mind can lead to women-inclusive financial solutions.

What kind of HCD insights on women do we have?

Investing in women has a multiplier effect

One of the major observations in microfinance – the provision of financial service to the under and unbanked – is based on gender. Women’s World Banking found that “when a woman generates her own income—and this holds true no matter what the  country—she re-invests her profits in ways that  can make long-term, inter-generational change: the  education of her children, health care for her family and improving the quality of her family’s housing”. As James highlighted in our conversation, time and time again in his fieldwork he saw that for women “finances are less about her own interests, but for others”. Financial inclusion for women does not only empower the woman user, but often has positive impact on her wider community.

For some women illiquidity is attractive

Mind boggling at first, especially when we consider the gender discrimination that has led to three quarters of the world’s women unbanked, women may actually prefer access to financial services with features of illiquidity in some circumstances. Liquid cash could be dangerous to a woman’s wealth if socially she is obligated to financially help out family members and friends if they ask. It may be hard for a woman to not hand over her cash to her husband for example or her friend in financial difficulty – it could bring stigma, perhaps attack if she says no. However a savings account with fixed non-withdrawal periods, or other features to lock funds away, could provide a socially acceptable excuse. In providing illiquidity in formal financial services, it could attract women who otherwise would prefer to store their wealth in more illiquid forms such as gold and livestock or hidden away in difficult to reach places. Illiquidity could not only protect wealth from the saver’s own impulses, and the demands of those around her.

Women experience high emotional return for good financial management

A recurring theme in James’ work saw that the rewards for good financial management were beyond financial for women – this applies to women across the economic spectrum. Juntos Finazas, which was borne out of a class project from the Stanford Design School, helps Spanish speakers save via SMS. The founders saw that SMS was the right technology to help low-income Latinos as they tend to use mobile devices more than other groups and are substantial SMS users. 72% of successful Juntos Finazas savers said at sign up that they had never saved successfully before. Importantly, in feedback, users cite that using the tool to help them save has made them feel like better mothers, better daughters – the return is more than extra money leftover in an account.

In consultation with IDEO, the successful Keep the Change savings program from Bank of America originated from the observation that women were more satisfied by the act of saving than the interest rates offered on savings itself. The program was therefore designed to emphasise the action of saving rather than focusing on the potential reward. Keep the Change automatically rounds up purchases on the Bank of America debit card and transfers the difference to a savings account, building up a savings balance subtly over time. Since its launch in 2005, the program has led to 12 million new customers building up an additional $3.1 billion of savings.

Financial planning can save lives

Having a financial plan in place affords protection for life’s shocks, and in some cases can make the difference between life and death. Although still imperfect, there are now maternity saving programs to help women save money over time to access skilled maternal care. In Kenya, where only 43% of births occur in health facilities and many Kenyans still lack access to basic maternity care and health insurance, medical payment can be a life-threatening barrier for mother and child. Changamka, established in 2008, developed a smartcard program which allows women to set saving goals and save via the mobile payments service, M-PESA. The program is a dedicated maternal savings program which locks the deposited funds for maternity expenses only. USAID has written up a case study on this project, which can be accessed here.

With financial technology advancing globally the practice of HCD puts people back in the center of experience to build lasting solutions. With 75% of women worldwide without access to financial services – and importantly the lack of understanding and emphasis upon their needs as cause and effect of their exclusion – HCD can provide an attractive framework to unlock their considerable potential.

For more information on the topic connect with @jamesmoed on twitter.

Other interesting links on HCD and financial inclusion include:

This blog first appeared on the Global Fund for Women Blog, Her Blueprint