Empowering women through finance

"Human rights are women's rights and women's rights are human rights, once and for all." – Hillary Clinton.

BACKGROUND

When I was pursuing my master’s degree, one of the key course requirements was preparing a research study project book (which passes the much dreaded plagiarism test and your principal guide's approval) on a topic that relates to the course.

So after a lot of thinking, I finally managed to merge my interest of studying entrepreneurship with my knowledge of finance and zeroed down on the topic of "Microfinance for women entrepreneurs".

The decision to undertake research in this domain gave me the opportunity to closely work with several women led entrepreneurial ventures in the rural areas which helped me realize the pivotal role women played in lifting up economies.

OVERVIEW

All over the world, the significance of women entering into the workforce over the past three decades has produced profound transformation in the organization of families, society, economy and overall urban life.

Women participation in the economic activities has been gradually increasing post the 1950’s. Women have always actively participated in their local economies. Across a wide geographical domain, in Africa women produce 80 percent of the food and in Asia 60 percent and in Latin America 40 percent. In many cases, women not only produce the food but market it as well, which gives them a well-developed knowledge of not only the local markets and but also the customers.

This is a small example of the importance of women's work in the society. It illustrates the real extent of women's contribution, especially in developing countries, as a part of the labour force and also as a significant income-source for the family.

In order to be empowered economically women need to be ensured gender parity, insurance, education, healthcare and housing in addition to finance which will help them spiral upwards.

ISSUES

In developing countries like India the high illiteracy rate among women and the prevalence of several existing social evils is a major obstacle in the roadmap towards achieving women empowerment.
The government should be proactive in taking additional measures for educating women about their rights.

Policy makers and government should also ensure that: -

1. Legislation provides equal opportunity for women and men and non-discrimination is actually practised.

2. Women are the major beneficiaries of schemes under the financial inclusion agenda.

3. Women are aware of the schemes and programs through financial literacy campaigns.

4. Grassroot monitoring to ensure the effective implementation of the policies. Approaches to supporting women's productive activities have evolved over several decades. In some cases women were able to gain a better understanding of the political and power structures. However, the awareness of gender issues as a whole was frequently missing.

MICROFINANCE FOR WOMEN

The problems faced by the women entrepreneurs can be resolved through microfinance. Women entrepreneurs in rural areas who have fewer economic opportunities have attracted special interest from microfinance institutions.

Successful women organizations working for the overall upliftment of the rural women like the Shri Mahila Griha Udyog lijjat Papad (1959) and the SEWA established in 1972, have various credit programmes for women who earn a living through their own small businesses.

Establishing a network of S.H.G (self-help groups) to serve as a “self-help community” for microenterprise development activities has positively contributed towards promoting social recognition of women leading an enterprise and helped develop female mentors, trainers and advisors.

Putting women’s leadership to the forefront is important to deliver the promise of microfinance in alleviating poverty and uplifting the economy.

Increasing women representation in workforce, helping them develop leadership skills and giving them access to the available finance schemes is the key to exploiting the benefits of microfinance.

BRIDGING THE GAP

Lending to women-owned micro, small, and medium enterprises (MSMEs) as a segment is still unexplored. Due to the higher perception of risk, formal financial institutions have made little effort to venture into this segment.

There is a lack of awareness among the bankers of the potential opportunities that would motivate them to target this emerging sector. In cases where formal institutions have created MSME credit schemes targeted towards women, lack of awareness and outreach has resulted in a limited impact.

Microfinance continues to be one of the strongest weapons in supporting women led entrepreneurial ventures. Women constitute roughly half of the population and if given the right opportunities, can work as a significant catalyst in India’s economic development.

“For women, financial independence is a matter of necessity.” – Carrie Schwab-Pomerantz.
True economic empowerment is to ensure every individual the ability and equal opportunity to earn money and use it in a productive manner. Translated into practical terms, these plans fructify only when women receive the rightful economic power in their hands.