WOMEN EMPOWERMENT THROUGH DELIVERY OF MICROFINANCE SERVICES IN
By
Kejela
Gemtessa (M.Sc. in Agricultural Economics)
Abstract
The
study on women empowerment through delivery of microfinance services in
The study
revealed that women have a strong hold in deciding on issues related to saving,
credit receiving, repayment and utilization. Moreover, consultation (joint
decision) with husbands improved on such matters.
Participation
in the microfinance services has improved the women clients’ income because
they launched new ventures and also expanded their economic activities
horizontally and vertically.
Women clients have also created
assets, including controlling land, due to
the improved decision making on receiving credit, savings, and improved income
as a result of the microfinance services. Women clients’ dependence on their
husbands has also reduced the increased income has led women clients to self
reliance and economic empowerment.
Microfinance also contributed significantly to women clients’ self-esteem and
confidence. This might be due to the increased level of acceptance and appreciation both at
household and community level.
The empowerment level of women
clients of rural and pre-urban seems similar and there is no statistical
difference between the two groups in all parameters.
However, full women empowerment stage can not be achieved by microfinance services alone. Other government policies and strategies could also influence the level of women empowerment. Women empowerment could also influenced by factors such as literacy rates, life expectancy at birth, sexual and physical abuse against women, etc. Future researches need to include such important indicators in conducting similar studies.
Finally, the paper presents key recommendations on group formation, deepening the outreaches, business plan development, capacity building, and experience sharing among women.
CARE defines an ‘empowered woman’ as
women who enjoy bodily integrity (is free from coercion over her physical
being), has positive images of her own worth and dignity, has equitable control
and influence over strategic household and public resources, and lives in an
enabling environment in which women can and do engage in collective effort.
Another definition of empowerment is
given by Alsop, R. and Heinsohn, N. (2005). They defined empowerment as a
person’s capacity to make effective choices and to transform choices into
desired actions and outcomes. The extent to which a person is empowered is
influenced by personal agency (the capacity to make a purposive choice) and
opportunity structure (the institutional context in which choice is made). To determine degrees of empowerment various
indicators are suggested: for agency, asset endowments - psychological,
informational, organizational, material, social, financial or human; for
opportunity structure, the presence and operation of formal and informal
institutions, including the laws, regulatory frameworks, and norms governing
behavior.
Malhotra, Anju, et al. (2002) defined
empowerment as the ability of people to make strategic choices in areas that
affect their lives. Two key factors in the process of empowerment are
identified: control over resources (the conditions for empowerment) and agency
(the ability to formulate choices).
Moghadam, V.M. and Senftova, L. (2005) also
argue that empowerment is defined as a multi-dimensional process of civil,
political, social, economic, and cultural participation and rights. They
presented six domains, namely; socio-demographic indicators, bodily integrity
and health, literacy and educational attainment, economic participation and
rights, political participation and rights, and cultural participation and
rights. Indicators include: life expectancy at birth, sexual and physical abuse
against women, literacy rates, amount of maternity leave, and the number of
feminist resources in the print and electronic media.
Kabeer, N. (2005) presented empirical
evidence on the impact of microfinance with respect to poverty reduction and
the empowerment of poor women in
Mayoux, L. (2006) argued that women's
access to microfinance services has significantly increased over the past two
decades. By enhancing women's ability to earn an income, these programmes have
the potential to initiate a series of ‘virtuous spirals’ of economic
empowerment and increased well-being for women and their families. However,
this paper challenges assumptions about the automatic benefits of micro-finance
for women. For example, high repayment levels by women do not necessarily
indicate that they have used the loans themselves. Men may take the loans from
women, or women may choose to invest loans according to men's priorities.
Likewise, high demand for loans by women may be a sign of social pressure to
access resources for in-laws or husbands rather than an indicator of
empowerment. Where women are unable to negotiate changes in intra-household and
community gender inequalities, they may become dependent on loans to continue
in low-paid occupations with heavier workloads. However, these shortcomings
should not discourage microfinance programmes being undertaken. The experience
of current innovations in many programmes indicates a range of ways in which
contribution to women's empowerment can be increased. Suggestions include the
need to provide services to reduce the burden of unpaid domestic work on women,
including childcare, and to ensure that repayment schedules and interest rates
reflect the reality of women's economic activities and life cycles.
Generally, the empowerment of women
refers to access to economic resources, participation of women in political and
social affairs and making decision at the household and community level, end
violence against them, and a change in the image and status of women in the
society. The achievement of all these is a matter of human rights and a
condition for social justices. Lack of access to resources and development of
human capital limits empowerment of women regarding aspects discussed above.
The
main objective of the study was to assess the performance of microfinance
institutions in empowering women in rural and urban areas. In relation to this
major objective, the specific objectives outlined were identifying and
reviewing the role of women in economic and social development in
Ethiopia; assessing the overall
performance of microfinance institutions in empowering women clients; reviewing best practices that can make a
positive contribution to women’s empowerment through the delivery of
microfinance services; assessing the challenges of women clients in the
microfinance industry; recommending the
way forward to improve the delivery of financial service to women clients; and developing an action plan to implement
the recommendations of the study.
This
study has mainly aimed at assessing the extent to which microfinance
contributed to women empowerment in economic, social, political, and knowledge
and self confidence. The study is designed in such a way that comparisons on
women empowerment could be drawn among women clients and non-clients on one
hand and women clients before and after the microfinance interventions on the
other. The variables under investigations were based on conceptual frameworks
of previous studies.
Previous
studies discussed under section 3 indicate that microfinance plays great roles
in women empowerment.
The major indicators for women empowerment can be categorized broadly
into economic empowerment, political empowerment, and social –cultural
empowerment. Based on the conceptual framework, the consultants framed the
hypotheses illustrated below.
(i)
Economic Empowerment
(ii)
Socio-cultural
Empowerment
(iii)
Political Empowerment
(iv)
Knowledge Development
Multi-stage sampling methods were used
for the study. The first stage was the selection of sample MFIs. Four MFIs namely; ACSI, OCSSCO, Wasasa, and
SFPI were selected for the study. Secondly, six sample Woredas, where the
sample MFIs operate, were selected purposively. These were Guto Wayu, Sibu
Sire, Akaki, Sendafa, Holeta, and Dawa Chafa Woredas. The third stage was the selection of sample Kebeles
where the sample MFIs operate from the selected Woredas. Rural and urban
kebeles were selected based on purposive sampling from the sample Woredas.
Finally, selection of sample cases
(respondents) was conducted. There were
two categories of respondents, namely; women clients and women non-clients.
Women clients are those who have been clients of the sample MFI for two or more
years while the non-clients are those who have never got access to microfinance
services. The women non-clients were used as a control group.
Based on AEMFI’s recommendation, a sample size totalling 500 was planned for the study. However, 484 women clients (97 percent) were interviewed. The total sample size of the women clients was proportionately distributed over the sample MFIs. Besides, the 121 women non-clients were selected and interviewed. A total of 605 samples were obtained for the study.
The selection procedure of the clients considered the following important points:
· All the respondents (samples) should be women, and
· All the samples should be married.
Similarly, the procedures for selection of the non-clients were:
· All samples should be women;
· All samples should be married women;
· All women should be those who have never got the access to microfinance services;
Moreover, the consultants thoroughly reviewed previous research reports and publications on women and microfinance worldwide by browsing websites and reviewing hard copies of the publications. Secondary data on financial service deliveries were also collected from microfinance institutions and other pertinent bodies.
As a complementary tool to the rest of the study methodologies, the consultant conducted participatory assessment methods such as Focus Group Discussions, Case Studies, Key Informants Interviews, Proportionate pilling, ranking and scoring, etc. The consultant conducted focus group discussions with key informants/beneficiaries of microfinance institutions, and other pertinent persons/bodies.
In order
to capture and document quantitative and qualitative aspects of the study, a
clients and non-clients survey method was mainly used for this assessment. In
line with this, the consultant prepared survey instruments/questionnaires
framed in consistency with the objectives of the study. Prior to the
formulation of the survey instruments for this particular undertaking, the
consultant reviewed various relevant literatures. Hypothesises were also
developed prior to the formulation of survey instruments. Two types of questionnaires were prepared in
English and later translated into Afan Oromo and Amharic. Experienced enumerators were recruited and trained.
The enumerators and supervisors conducted the survey in all the study
areas. Two supervisors were also
recruited to monitor data quality. The
supervisors checked the questionnaires on the spot.
Finally, the survey data collected from each respondent were entered into a computer using SPSS software. The consultant analyzed and interpreted the results obtained from the study. The findings of the study were tabulated and interpreted. Comparisons were drawn between women clients “Before” and “After” MFI intervention on one hand and Non-Clients on the other. The significance tests were made where ever appropriate.
The survey
sample covered 484 women clients and 121 women non-clients. The study was
conducted in OCSSCO, WASASA, SFPI, and ACSI operation areas. The number of women clients interviewed was
proportionately distributed over the four sample MFIs as shown on Table 4.1.
The number of women clients interviewed at SFPI was less than the expected
number, although efforts were made to interview a greater number of women in two Woredas. The study was conducted in six Woredas in two
regions, namely; Oromiya and Amhara. Table 4.1 shows the distribution of the
samples by Woredas.
Table 4.1 Percent of Women
Clients and Non- Clients by Sample Woredas
|
Woreda |
MFI |
Clients |
Non-Clients |
|
Guto Wayu |
OCSSCO |
11.2 |
24.8 |
|
Sibu Sire |
OCSSCO |
15.5 |
0 |
|
Akaki/Dukam |
WASASA |
25.8 |
24.8 |
|
Sandafa |
SFPI |
10.3 |
24.8 |
|
Ejere (Holata) |
SFPI |
11.4 |
0.8 |
|
Dawachafa (Amhara
Region) |
ACSI |
25.8 |
24.8 |
|
Total |
|
100 |
100 |
|
Number |
|
484 |
121 |
One of the
purposes of delivering microfinance services to the poor is creating access to
credit services to the poor. The
microfinance institutions in
The findings of the assessment show that 96 percent of the women clients always have access to credit service after the MFIs intervention. On the other hand, only about 3 percent of the women clients reported that they always had access to credit before the MFIs intervention. Similarly, only about 2 percent of the women non-clients reported that they have always access to credit (Table 5.1). The level of women always getting access to credit has improved from 3 percent before the MFIs intervention to 96 percent after the MFIs intervention.
Table 5.1
Percent of Women Clients and Non-Clients Having Access to Credit
|
Access to Credit |
Women Clients |
Women Non-Clients |
|
|
Before MFIs
Interventions |
After MFIs Intervention
|
||
|
Always |
2.9 |
96.1 |
1.7 |
|
Sometimes |
11.4 |
3.1 |
2.5 |
|
Rarely |
2.9 |
0.8 |
4.1 |
|
Never/no access |
82.8 |
0.0 |
91.8 |
|
Total |
100 |
100.0 |
100.0 |
|
N |
484 |
484 |
121 |
As can be noted from Table 5.1, the women clients got better access to credit services after the MFIs intervention compared to both before MFIs intervention and non-client cases. This proved that microfinance institutions perform to their expectation in delivering credit service to women who had no access to such service. Having access to credit service by poor women could be a take-off stage for development and empowerment which could be analyzed in the subsequent sections.
Another important element in credit service delivery is sustainability of the service. This means that one-time credit may not elevate a poor from poverty unless the credit is accessible in a continuous way.
Repeated and continuous credit service delivery to MFI clients is one of the most important strategies that the four assessed MFIs are using. All the four MFIs focus on retaining their clients besides their objective of reaching new clients.
As shown on Table 5.2, some MFIs such as Wasasa and ACSI have already passed the 8th round credit delivery to their clients in certain areas. OCSSCO and SFPI reached 4th round in delivering the credit service to the women clients.
Table 5.2 Frequency of Credit Received by Women Clients
|
|
MFI |
Total |
||||
|
Number
of Credit service Delivered |
OCSSCO |
WASASA MFI |
SFPI |
ACSI |
Frequency |
Percent |
|
Two
Times |
61 |
14 |
51 |
34 |
160 |
33.7 |
|
Three
Times |
51 |
21 |
48 |
19 |
139 |
29.2 |
|
Four
Times |
15 |
19 |
7 |
26 |
67 |
14.1 |
|
Five
Times |
0 |
20 |
0 |
10 |
30 |
6.3 |
|
Six
Times |
0 |
21 |
0 |
11 |
32 |
6.7 |
|
Seven
Times |
0 |
6 |
0 |
16 |
22 |
4.6 |
|
Eight
Times |
0 |
16 |
0 |
2 |
18 |
3.8 |
|
More
than Eight Times |
0 |
8 |
0 |
0 |
8 |
1.6 |
|
Total
|
127 |
124 |
106 |
119 |
476 |
100 |
Over
one-third of the sample women clients received credit two times. Similarly, 29
percent of the sample women clients received the credit three times from the
MFIs. About one-third of the sample women clients reported that they received
credit four or more times from the MFIs. This also proved that MFIs created
sustainable credit access for the women clients. In line with this, one could also be
interested to know the amount of credit delivered to women clients.
Table 5.3
shows the volume of credit delivered to women clients of their recent loan.
Over one-third of the sample women clients reported that they received Birr
500-1000 in their recent loan. Similarly, 30 percent of the sample women
clients received credit of Birr 1001-1500 recently. Only about three percent of the sample women
clients reached credit size of more than Birr 3,000.
Table 5.3 Amount of the
Recent Loan Received by Women Clients
|
Credit Size |
Percent |
|
Less than Birr 500 |
2.1 |
|
Birr 500-1000 |
34.3 |
|
Birr 1001-1500 |
30.3 |
|
Birr 1501-2000 |
22.1 |
|
Birr 2001-2500 |