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grameen » Women's Courage

Posts Tagged ‘grameen’

The “Women-Only” Approach Versus the “Family Empowerment Approach”: Egypt as a Case-Study

March 7th, 2011

The access to basic financial services that Islamic Microfinance offers empowers Muslim women in giving them a new dimension in life and feeling of self-worth. However, while this ability of Microfinance to provide rural women with micro-loans in gender-segregated societies is laudable, working with Muslim women in particular raises the issue of interfering with social, cultural and religious codes. The Qur’an encourages men and women to play their respective roles in society, by ensuring the economic and social wellbeing of the family: “Men shall have a share of that which they have earned, and women a share of which they have earned” (Qur’an, VI, 32).

Hence, the “women-only” approach typical of conventional microfinance is not always followed by Islamic Microfinance Institutions (IMFIs) that try to adhere to Islamic principles and values while providing customers with loans. IMFIs overcome this problem by shifting their focus from “women empowerment” to “family empowerment”, which is also promoted by the Qur’an. While this kind of an approach might be met by criticism, it must be understood that it is a very culture-specific approach that mostly caters to male-dominated societies.

The “women-only” approach does weaken the institution of the family by sending both the male and the female out to work, giving them both the feeling of being the breadwinner for their family. But besides this, this approach is also prone to many risks posed by traditional male-dominated societies. In these societies, the funds provided to women for investment in their enterprises are often usurped by the male members of the family, while the women consequently end up carrying the burden of repayment and of their business independently.

In a Muslim country like Egypt, which was the first MENA country to sign the UN Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), Microfinance has had a great impact on women’s empowerment in the country. In 2008, a national survey carried out by Planet Finance (NGO) evaluated the impact of microcredit as well as the perception of this impact: “During the focus group discussions, women unanimously stated that the loan had had a positive effect in terms of their image in their communities; they are also more self-confident and their children appreciate what they do. Their projects have allowed them to have a better life in general (“National Impact Survey” 86)”. Despite being a male-dominated Muslim society, Islamic Microfinance accentuates women empowerment.

47 percent of Egypt’s microentrepreneurs are women; 88 percent of these women operate home-based businesses and only 28 percent operate non home-based businesses. Despite these circumstances wherein women are allowed to realize their entrepreneurial skills and abilities out of their home, 45 percent of women have noticed a positive change in their life, in terms of education and economic possibilities, whereas 86 percent of women have experienced a positive impact in terms of personal autonomy (V. COSTA – H. MAKHLOUF – P. MAZAUD).


Costa, Valentina. Makhlouf, Hala. Mazaud, Perrine. “Women’s Empowerment through Islamic Microfinance in Egypt”. MESCI 2009-2010.

What Does It Mean For Women To Be “Empowered” And Does Empowerment Compromise The Viability of Microfinance Institutions Worldwide?

March 3rd, 2011

Microfinance has had a positive impact on the status of women globally. What does it mean for women to be “empowered”?

According to the State of the Microcredit Summit Campaign 2001 Report, 14.2 million of the world’s poorest women how have access to financial services through bank, Microfinance Institutions (MFIs), NGOs, and other such institutions. These women belong to the 74 percent of the approximately 20 million of the world’s poorest people that are now being catered to by MFIs. This means that most of these women have access to the ‘loan’ they need to start or invest in their own enterprise; also, most of these women have great repayment records despite the financial problems they run into on a regular basis. So then, is it a good idea to lend money to the poor, and more specifically to poor women? What does this money do for them in terms of their ‘empowerment’?

The word empowerment is difficult to define precisely; yet, it is easy to pin-point an example of empowerment when we see one:

Snapshots of Empowerment:

  • Nury, an illiterate Trust Bank client at AGAPE in Colombia, formerly too shy to speak to strangers, became the treasurer for her Trust Bank.
  • A group of widows in Bali received loans from WKP to start simple projects raising pigs. Over time, they grew in confidence and solidarity and expanded to form a pig-feed cooperative that became the major supplier for their village.
  • Hanufa, a member of CODEC in Bangladesh, defends her rights against an illegal divorce but ultimately decides that she is better off on her own. “I can walk on my own shoes now.”

A lot of different terms have been associated with empowerment: self-reliance, self-respect, self-enabling to reach potential, development of self-worth, and so forth. Empowerment is definitely the goal of many MFIs worldwide; these institutions help women that have previously experienced little or no power, make choices that impact their lives forever. By providing these women with basic financial services, and a loan to become an entrepreneur, they have a tremendous impact on this empowerment process.

Even though MFIs with a strong focus on empowerment have been criticized to have lose their operational viability and sustainability in the process, this has been proved wrong by many MFIs with the same women-empowerment focus. Working Women’s Forum (WWF) in India, for example, is fully financially sustainable and offers a range of nonfinancial services, including organizing women in the informal sector to achieve better wages and working conditions. WWF also empowers poor women through its institutional structure by training them to act as health promoters and credit officers in their neighborhoods. Therefore, MFIs with a strong focus on empowerment maintain very high levels of operational and financial sustainability, suggesting that a great deal can be done to enhance women’s empowerment even within the constraints of financial sustainability.

Microfinance at an Inflection Point

January 26th, 2011

First, some updates: last week I said I would discuss the Omidyar Network, which is working to provide loans for larger-scale operations in third-world countries, but I’ve secured an interview with a managing partner there, and so I will hold off on that discussion until I can hold and then post the conversation.

In the meantime, the past week has brought a few new interesting twists to the arena of microfinance, particularly regarding the Grameen Bank. Currently, founder Muhammad Yunus is charged with defamation for a remark made in 2007, a charge that could result in up to two years in prison—a lowly outcome for a Nobel laureate. It appears as though Yunus has become a public face for the concept of microfinance, and appropriately or not, he is receiving much of the flack for its shortcomings (http://www.guardian.co.uk/social-enterprise-network/2011/jan/26/microfinance-and-the-muhammad-yunus-case).

In a BBC article published on the 24th, author Madeleine Morris mentions many of the mounting criticisms of the expanding business practice. Specifically, an MIT report conducted between 7000 households in India “found access to microcredit had no impact on three poverty indicators – women’s empowerment and expenditure on child’s health and education – over the 18 month period it tested.” Although 18 months is a short timespan, it likely reflects the fact that microloans are generally used to help smooth over rough financial patches, rather than to expand into new ventures. (http://news.bbc.co.uk/2/hi/programmes/newsnight/9369880.stm).

Compounding the issue is that because some for-profit organizations have used international goodwill toward microfinance to create what are effectively loan-shark organizations taking advantage of the poor, demanding exorbitant interest rates for unpaid debts. This has in turn led politicians in places like India to discourage repayment, which is why currently the return on investment in the country has plummeted to only 20%. As microfinance’s model, both for-profit and non-profit, depends on being self-sufficient, such massive rates of default could spell an end for some organizations.

This is why Grameen’s announcement this week is so interesting—as of the 21st, the bank has opened up a branch in our own San Francisco Bay Area, where they hope to provide small loans to some of our most impoverished citizenry, particularly women, who would normally be denied more traditional loans. Although Grameen has been in the country since 2008, I suspect that a part of the motivation for the expansion may be due to the anti-microfinance political climate abroad (http://www.chevron.com/chevron/pressreleases/article/01212011_chevrontoprovide1milliontohelpbringgrameenamericatobayarea.news).

In any case, it’s clear microfinance is at the crossroads of change. More money continues to pour in at record levels (largely from philanthropists), its impact is increasingly unclear, and the likelihood of repayment seems to be decreasing. The model is expanding into newer, wealthier areas, and even though microfinance may be doing more good than harm, its impact is limited simply by its targeting of very small operations.

Microloans: Promise and Peril

January 13th, 2011


“Can I borrow a feeling? Could you send me a jar of love? Hurtin’ hearts need some healin’. Take my hand with your glove of love.”–Kirk Van Houten

As with many authors before me have done with subject-driven blogs, I decided to start mine off with an italicized quote.  Over the course of the next two months, I will be exploring a subject much more substantial than this quote by Mr. Van Houten might portend, that of women, microloans, and the cultures they work within.

Microloans: a Primer

Much like their macroloan counterparts (generally just called “loans”), microloans are small sums of money banks or dedicated financial institutions make available to people, generally women, in impoverished nations.  With these loans, they theoretically can invest in themselves through learning a trade, developing a business, or improving one they already have.  Eventually, this grants them a degree of success that will allow them to repay their debts.

While microloans are anchored in philanthropic considerations, they are not intended as philanthropy.  Instead, loans given are expected to be repaid, with the central idea being that doing so fosters in entrepreneurs a sense that they are believed in and entrusted.  As stated on the Kiva.org website, they use microloans rather than donations because it imbues loan recipients with senses of:

  • Dignity: Kiva encourages partnership relationships as opposed to benefactor relationships. Partnership relationships are characterized by mutual dignity and respect.
  • Accountability: Loans encourage more accountability than donations where repayment is not expected.
  • Transparency: The Kiva website is an open platform where communication can flow freely around the world.



Although microloans have been used as far back as the 1700s and likely have parallels still earlier than that (see for a well-written discussion of the impact of micro-loans in helping the poor in Ireland, and how the semi-philanthropic efforts became less helpful with time), microloans as we understand them today emerged in the 70’s through economist Muhammed Yunus.  With his Grameen (Bangla for “rural”) Bank, he began loaning small amounts to impoverished women and men in a local village called Jobra.  Through its success and the eventual success of neighboring communities, the program expanded to encompass all of Bangladesh and, eventually, the poor nations worldwide.  Grameen Bank is currently 90% owned by the rural people that Grameen has helped, while the other 10 % remains in the hands of government.  (http://www.grameen-info.org/index.php?option=com_content&task=view&id=19&Itemid=114)

Other organizations have since followed in Grameen Bank’s footsteps, such as the aforementioned Kiva.org, the for-profit variant Microplace, and, more locally, the Valley Economic Development Center in the LA area.

Conflict and Controversy

Microloans are not without their dissidents.  The number of microloans issued per year appears to be growing at what some naysayers say is an unsustainable rate.  There’s an increasing rate of default, and some critics have alleged that microloan advocates have pressured rural workers into taking loans, only to harass them when they are unable to repay their mounting debt.  Additionally, it remains to be seen how open most societies are to the financial independence such grants give to women.  I hope to explore some of these darker sides to microloans through the course of this quarter.  (Check out http://www.nytimes.com/2011/01/06/business/global/06micro.html?_r=1&ref=vikasbajaj for a more in-depth look at some of the downsides of microloans.)

Firsthand Experience

As I wrap up this first post, I wanted to note that in order to better immerse myself in this subject, I signed up for Kiva and donated the last $25 needed for a woman named Ramatu Kamara in Sierra Leone to expand her baking business.  The time for repayment is anticipated to be ten months, and the organization has a relatively high delinquency rate (3.10%), so I am unlikely to see any meaningful contact or return this quarter, if at all.  That said, with any return on the money I will be able to re-invest in other entrepreneurs, or I can donate it all to Kiva.  (With Kiva, I can’t profit off of my loans).  That said, should any updates come in, I will be sure to share them.  By the same token, I will reach out to some of the other donors in the same project in order to get their impressions of the program. (Learn more about the recipient here: http://www.kiva.org/lend/264387#lenders_to_group).

For balance, I have also invested $25 through the for-profit MicroPlace, which I already feel a little bit uneasy about.  The money will be loaned to a South African organization named Kuyasa, which supports far more women entrepreneurs as they continue to recover from the impact of Apartheid.  The interest rate is low (1%), and I have justified my activity in the program to myself by promising to re-invest any proceeds I make in women.  I will be interested in seeing how my involvement here contrasts with what happens with Kiva, and I just hope that both actions result in far more good than harm.

Entrepreneurs Ramatu Kamara , Janet Kamara, Kadiatu Kamara, Liama Turay, and Marie Kamara.