Gender and rural microfinance: Reaching and empowering ... - IFAD

identifying mutual learning possibilities,
collaborating organizations could apply for
donor funds to develop them. They could
then introduce service charges for their betteroff
members or nonmembers at a later date.
In other cases, although the microfinance
services or programmes themselves may be
financially sustainable, complementary
services may need to be treated as ongoing
commitments to be met through donor
funding – especially when services are seeking
to reach very poor women.
In many rural areas, particularly more
remote areas with inadequate infrastructure,
separating the delivery of financial services
from other types of complementary support
is not necessarily the most cost-efficient
strategy, because it entails parallel sets of staff,
high transport costs and duplication of other
costs. The desirability or undesirability of
separating functions needs to be judged on
the basis of the particular context, the level of
expertise required for the types of financial
and non-financial services needed, and the
capacity of particular organizations and staff.
It is also possible to separate the costs of
delivering different services without
separating their operational delivery.
In all the above, it is vital to stress that
gender equality of access and women’s
empowerment are not ‘complementary’ or
‘credit-plus’ as are literacy or business
training. They are cross-cutting strategies that
must be mainstreamed through the delivery
of financial services themselves and other
complementary interventions. At the same
time, gender mainstreaming measures must
complement rather than substitute for
gender-specific services, particularly women’s
rights training for women (and men), as well
as legal and other support for women with
very difficult household situations.
Participation and collective action
In microfinance programmes targeted at
reducing poverty, group-based savings and
credit have been seen as key innovations,
combining efficiency with empowerment
(Otero and Rhyne 1994). Many types of
group-based delivery have evolved, with
varying degrees of control and function. For
example, groups may be responsible for client
identification, savings collection and loan
disbursal, loan follow-up and repayment,
mutual guarantees for loans, product design,
more cost-effective service delivery, and
pressuring peers to establish and maintain
credit discipline. Most group-based
microfinance programmes focus on women –
or, conversely, most rural finance services
directed at women are group-based MFIs.
Rural cooperatives are an exception since
membership is based on the assumption that
households are headed by men. Rural
financial institutions targeting men are much
more likely to give loans to individuals,
because experience suggests that men are
generally less likely to favour group loans and
group activities in general.
Although MFIs clearly benefit from
providing savings-and-credit services to
women’s groups, the benefits for women are
not so obvious (box 12). Groups can be a
powerful force for change at the local level
and for lobbying and advocacy at the
national level, yet participation does not
necessarily guarantee empowerment. Many
rural finance programmes provide groupbased
services offering small loans, mostly to
women, concurrently with services offering
larger, individual loans, mostly to men. Men
have other options and may not be interested
in group-based finance (Cheston and Kuhn
2002). It is crucial to track gender differences
in applications and subsequent approval for
the whole range of financial services – and to
take appropriate steps to ensure equal access
for men and women if inequalities are found.
The benefits of economic collaboration
should not be assumed. Collaboration needs
to be based on a sound economic rationale,
supported by appropriate management and
technical training and assistance. Nor can it
be assumed that groups add to women’s
networks or increase their access to
information. For example, landless Arab
women, often very constrained in the types
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