11:18 AM Jan 29, 1997


London/Dhaka, Jan 24 (PANOS) - Microfinance institutions (MFIs), praised as the key to meeting the aspirations of poor women in developing countries, could be missing their target -- despite huge advances, there are doubts over how much control women exercise over income generate d by them from small loans.

The need for poverty-alleviation schemes which target women and children has long been a priority for the development community around the world, and with good reason: women earn only 10 percent of the world's income and own less than 10 percent of its property.

Of the estimated 1.3 billion poor people living on less than one dollar a day worldwide -- a condition of 'absolute poverty' -- over 900 million are women and girls.

The situation in South Asia is particularly critical -- the region has the largest number of poor people in the world, according to the United Nations figures.

There is little doubt that women have been the focus of MFIs in the region. In Bangladesh, they account for 94 percent of the 1.8 million people served by the Grameen Bank every month. The pioneering rural credit programme lends 30 million dollars monthly, proving that poor women are certainly worth investing in.

In neighbouring India, some 2,700 self-help credit groups are taking part in a pilot project by the National Bank for Agricultural and Rural Development (NABARD) involving 26 commercial banks and 46 Regional Rural Banks, run in part by the state. About one million dollars of microcredit have been disbursed under the project since 1992.

In Sri Lanka, SANASA (Federation of Thrift and Credit Cooperative Societies) has 70,000 borrowers and several delegations from Pakistan have been to Bangladesh to study microfinance models.

But there is another side to this story: recent studies by a number of development academics have shown that loans taken by women often end up being controlled by men in the family.

Some state-run MFIs specifically discourage the empowerment of women.

For instance, a Bangladeshi state-run MFI called TRDEP was so worried about the breakdown of traditional rural family life, it limited borrowing groups to people from the same family. The use of loan was controlled by men in order to enforce traditional roles.

A study of microfinance schemes worldwide showed none of them generated sufficient income for more than a handful of poor borrowers to build up an asset-base that could generate a pension in old age. The absence of a pension further disempowers women.

Another study in Bangladesh showed women exercised only limited control over 53 percent of loans provided to them by Grameen Bank, another MFI called BRAC and two women's nongovernmental organisations.

Such findings have led some experts to argue that MFI s may be increasing women's workload and responsibilities without enhancing their control over income and expenditure.

"The credit-giving NGOs may simply have off-loaded some of [their] debt collection task onto the backs of long-suffering women," Anne Marie Goetz and Rina Sen Gupta speculate in a paper published by the Institute of Development Studies in Sussex, Britain.

Even when women retain full or significant control over their loans, they commonly use them to provide for traditional women's activities, such as raising livestock and poultry, rather than new uses.

While the founder of Grameen, Prof. Muhammad Yunus, and his team refused to comment on the criticism, many borrowers who wished to remain anonymous said they wanted to see a gender balance introduced into the bank's day-to-day running.

Grameen's 12,500 administrative and field staff are predominantly male, charged with the task of door-to-door supervision and ensuring that the loan money is used as per the bank's rules.

However, some experts say that finding out about who controls the use of loans is a complex task. Microfinance has to be analyzed within a given socio-economic and cultural context, they say: involvement in a microfinance scheme can still empower women in ways they find relevant, even in cases when they hand over the entire loan to their husbands.

Bangladeshi women who gave their loans to husbands still had an 'empowerment rating' of 36 percent, compared to only nine percent for women who were not involved in MFIs and those who had no credit programme in their village, according to one study.

Said Salma, a resident of Chandkhali village, 85 km from Dhaka: "I control the money that I borrow. My husband Muhammad Hussain drives a rickshaw van which I bought with my loan money. I am no longer half starved or insecure. I manage the baby and the money while my husband ferries passengers in the rickshaw."

There is agreement among development workers that the extent to which women can improve their standard of living through microfinance is limited by macro-economic policies.

The lack of welfare provisions increases the time women spend on unpaid domestic work and limits the time they are available for paid work. Similarly, the lack of education can wreck training programmes.

Some MFIs adopt a specific gender focus.

"All our managers are women," says Ela Bhatt of the Self-Employed Women's Association (SEWA) of India. "We are women-led."

Women who recover land from money-lenders through SEWA debt-redemption loans must register the land under their own names, with their husbands named second.

Microfinance is only one of SEWA's many programmes -- others include health, childcare, housing, legal aid, job training and unionising women in the unorganised sector. "We take an integrated approach," says Bhatt. "Demanding the rights of women is our main goal."

In spite of their different approaches, Bhatt feels that taken together, South Asian MFIs have made a noteworthy contribution.

"Grameen's successes are its large outreach and well-implemented programme," she says, adding: "With the rich countries of the North facing their own problems of increasing poverty, it is quite a turnaround that they are looking to us in Asia for guidance."