Undercurrent-Issue-Fall-Winter-2014-3

of the system, it is difficult to ascertain how widespread this type of corruption is. Different microfinancesystems, particularly those which help women more equitably access workshops on literacy, numeracyand other skills, may not encounter such abuses of power. Regardless, however, Wright’s study makesclear how important the social dynamic within a community is to the success of a group-lendingscheme, particularly for women for whom these societal ties are so vital (2006).The Prospects and Problems with Empowering Women in a Machismo SocietyWhile there have been problems within the group lending systems used by microfinance, theempowerment of women, purported as a benefit of microfinancing, has also caused problems withinhouseholds. MFIs claim to specifically target women in poverty and empower them through increasedindependence and confidence. However, in doing so they can create difficult social dynamics thatchallenge societal norms.Women have been involved in MFIs for decades. From 1985 to 1995, violence in Peru wasresponsible for displacing many people, resulting in an economic crisis. Women began seekingsupplementary income, and NGOs began forming clubes de madres in order to alleviate financial stress.While women may have been the original target group, various factors have led to a decreasingemphasis on both women and the extreme poor in recent years.Microfinancing was not initially meant to empower women, which is now promoted as a majorbenefit of the system (Pait, 2009). Non-government organizations target women because they believedthem to be more trustworthy. Furthermore, women may be intimidated by male organization workers andtherefore more compliant with the organization (Hossain, 2002). Men are less likely to be intimidated inthe same fashion. Men, particularly in a machismo society, are more likely to challenge the organizationand are thus more difficult clients to manage.Although in many cases women are empowered and gain confidence through their microloans,research has investigated whether domestic violence has increased as a result of microfinancing. Someresearchers have found higher rates of domestic violence amongst those involved in microfinance, and itis possible that consequences of microfinancing may lead to increased domestic violence, especially inPeruvian society where it is already a major problem (Hossain, 2002; Schuler, 1998). In 2006, 69 percentof Peruvian women reported having been a victim of abuse at some point in their lives (U.S. Departmentof State, 2007). It is possible to illustrate some of the possible ties between microfinance and increaseddomestic violence. For instance, women may be reprimanded for being distracted from householdactivities (Hossain, 2002). Giving women empowerment and independence may lead to more householdconflicts, especially as men in a machismo society adjust to more independent and vocal wives. Ifmicrofinance is instigating problems, then its practices may need to be revised.It should be noted that there are conflicting sources as to whether microfinance truly influencesincreased rates of domestic violence. It is important to note that many women claim that microcredit hasprevented a certain amount of violence. It has increased their general protection through group solidarityand by making the issues visible (Schuler, 1998). While this may be a trend as women are involved inmicrofinance organizations for long periods of time, it is possible that domestic violence may temporarilyincrease as women begin to assert themselves at home. It takes time for other men in the household,such as husbands and sons, to adjust.Although microfinance traditionally targets women as their clientele, they are increasingly movingaway from this goal. Since women overwhelmingly comprise of the poorest of the poor, microfinanceorganizations seem to be targeting the less-severely impoverished. While some organizations likeConsortium of Private Organizations to Promote the Development of Small and Micro Enterprises haveon average 78.8 percent of clientele as women, the percentage of female clientele has been declining.Many organizations now lend equally to both genders. The organization Confianza, for instance, issuesapproximately 46 percent of its loans to women (León, 2008). Since women tend to live in greater49