Women in rural areas of developing countries are often associated with extreme poverty, lack of education, poor access to health care, domestic violence, social seclusion, and the list goes on. As a result, the third Millennium Development Goal is to “promote gender equality and empower women”.
Naturally, microfinance institutions are eager to serve women for this reason (among others), but working with women has its own pros and cons. This article mentions some advantages of involving women as clients in microfinance.
According to a survey report by UNCDF, there are several benefits of working with women clients. Some are institutional benefits, where as others are social benefits.
Women make responsible microfinance clients
According to the survey, women are good customers in that their repayment patters are “more reliable and timely” compared to repayment patters of men. Additionally, women tend to save more than men.
Women are loyal customers
Another benefit to institutions is that women are more loyal to their microfinance institutions (MFI) compared to men. This helps perpetuate a strong relationship between the MFI and its clients, and also motivates loan officers to be more efficient in their service delivery to these women.
Women are more honest in their dealings
Compared to men, one microfinance institution found, women generally invest the loan as per program guidelines. In other words, if loans were advanced for the purpose of home improvement, men are more likely to use the loan elsewhere.
Women offer less resistance when called upon to participate in social causes
Some microfinance institutions reported that women are “more easily mobilized for social goals”. When social causes were promoted, women seemed more receptive to these ideas and social change, compared to men.
Women look after their family
This benefit is more social than institutional in nature. Many microfinance institutions reported that female clients were “more likely to than men to spend their profits on household and family needs’ (such as clothing, food, education, health care, etc.). The “multiplier effect” enhances the social impact of microfinance instructions.
Note: these findings should not be generalized.
Tomorrow’s post will be about the disadvantages of working with women clients in microfinance.
