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Should microfinance be gender specific?
February 2008
"We need micro finance for all, but it may also require special techniques to
reach key groups such as women". So Maria Nowak concluded her statement in the
presidential style debate titled 'one size fits all' held at the end of the two
days "Gender Equality in micro entrepreneurship and microfinance in Europe[1]"
in Madrid on 13th and 14th December.
An age old question
This resolution to the age old question of whether women need specialist
services or specialist funds was accepted by nearly all delegates at the
conference The vote taken at the start had shown almost unanimous support for
the position of Foria Chereches of Integra in Romania who went on to argue that
the position of women was different because of their role in the family. "Language is not called
'mother tongue' for nothing" she added. The two
protagonists had ended the debate by reaching a common position – perhaps an
impossibility in a debate between two men!
This issue of
specialist versus generalist support for women was a dominant theme running
through the conference. The fact that the co-host was Womens World Banking (WWB)
sharpened debate. WWB Spain
has a long history of providing individualised assistance to women entrepreneurs
Micro finance offers small loans (typically under €10,000 and defined in Europe
as under €25,000) to people that have difficulty obtaining credit through the
banking system whether men or women.
Inger Berggren President of WWB Spain, presented the study on
the Social Impact of Microcredits that has been carried out by the organisation.
Two hundred female entrepreneurs who were borrowers fro WWB in Spain
participated in this study.
Having noticed
the small impact of microcredit in rural areas, the study on the
Social Impact of Microcredit included a chapter specifically
focused on the problems encountered by women entrepreneurs in rural areas.
In Europe however, there are
marked gender differences in the propensity to set up and run a business between
men and women. On average, men are twice as likely to be entrepreneurs.
Microfinance is a proven
technique for raising household livelihoods in many developing countries where
it has been particularly successful with lending to women, including those such
as Bangladesh where Islam is the main religion. Nobel Peace prize winner
Muhammad Yunus argues that lending to women can be more effective at raising
household income because the money is used for the benefit of the family rather
than being dissipated.
Women speak out
The particular experiences
of women entrepreneurs were highlighted by a moderated discussion with three
women entrepreneurs: Beatriz Ruiz Alvarez from Spain, Gabriela Rvicka from
Slovakia and Julie Bishop from the UK. They spoke movingly of the challenges
they had faced in starting a business and the struggle to balance home and work
commitments. Surprisingly, Julie Bishop said that she did not feel
discriminated against as an entrepreneur. Beatriz pointed out that it was
impossible to imagine a seminar where a man would be asked what it felt like to
be a male entrepreneur.
This conference was also the
culmination of a 15
month EU funded project supported by the DG Employment and Social Affairs.
EMN
coordinated the project and involved 7 partners. EMN is the leading microfinance network in Europe with 53 members
from 21 countries. A highlight of the meeting was the presentation by
Stefanie Lahn, Evers & Jung, Germany which were then debated in a
panel discussion. The project used an adapted scorecard approach that built on
the EScorecard developed for DG
Employment to compare micro finance environments in eight countries [2].
The gender scorecard approach analyses specific aspects of policy and enterprise
environments by gender. What it reveals is that no Member State has cracked the
gender code. Some are much more advanced than others and in particular there
are now key elements to a successful approach that are understood and can be
adopted elsewhere. The report raises questions for countries like France which
has adopted a neutral gender approach. Countries like the UK have developed
specific approaches with some success and now have a task force on women
entrepreneurship.
USA leading Europe on female entrepreneurship
The situation in Europe, as
identified by the scorecard, contrasts with the situation in the United States
where women have achieved parity in start-up rates, although they still tend to
have smaller businesses, fewer businesses with employees and smaller capital
requirements. Some of Europe's most excluded groups are women, including many
women bringing up children alone, and women from certain minority ethnic
communities. Women cite access to finance as a major barrier to starting their
own businesses. Micro finance offers the potential to assist women to set up
in business and may be particularly appropriate because of the lack of
requirement for collateral guarantees.
Tamara Underwood, from Community Capital Resources,
highlighted the USA experience where there has been a considerable growth in the
number of women startups. The number grew by 14% from 1997 -2002. This has
been accompanied by dramatic increase in commercial credit, better banking
relationships and growth in SBA loans by 4 times from 1990 to 2000. More than
half of microloan programme borrowers are women.
A range of factors has supported this transformation. Growing education, more
women working, equal rights legislation, women's enterprise lobby followed up by
government research and policy action. Perhaps the most critical piece of
legislation was the Women's Business Act of 1988 which :
- Amended Equal Credit Opportunity
Act to include business loans;
- Set up Women's Business Center "demonstration sites",
providing training and access to capital exclusively for women. Today 100 such
centers exist across the US;
- Established a National Women's Business
Council.
The other feature of the scene in the States is the proactive campaigns by
women's business activists and entrepreneurs.
The first census of women's enterprises and Women's Business Act are in part the
result of lobbying by women business owners. There are business associations
and networks of women's business associations that support their members and
advocate for women's enterprise with government, policy makers and the private
sector. It improved data collection and research through US Census Bureau,
National Women's Business Council and Centre for Women's Business Research.
A key difference in the US is the involvement of the big banks. Wells Fargo
leads the way with a range of measures focusing on women. It began its first
Women's Loan Programme in 1995. Key features include:
- To date $25 billion lent to
700,000 women owned small businesses;
- Women's Business Services programme involves outreach and
education;
- Wells Fargo has a national alliance with the main women's
business network, National Association of Women Business Owners (NAWBO) with
which it undertakes outreach in 23 states;
- Bank encourages staff in local offices to participate in
community events, be speakers, provide materials and reach
out to women's enterprise community.
What do specialist approaches entail?
One key finding of the
European study is that women and men have different approaches to enterprise and
different needs. This was underscored by
Sarah McPherson of Prowess – the women's enterprise
organisation from the UK in a workshop that focused on communicating and
marketing to women. Prowess had found that
women need support programmes that they can fit in around family life, that are
convenient for them, that are personal to them and they want to be able to enjoy
the course. They are less attracted by "being entrepreneurial, making money or being big and different". By contrast men are interested in working for themselves, running
their own business and being their own boss. They are less attracted than women
by working freelance, having a business based at home and running a business
with social aims. Because of the way women network, the research also found
that the best way to reach women was through word of mouth. If they like a
product or service, they will recommend it 17 times compared to an average of 3
times by men. The presentation by
Sarah van Cauwenbergh explained how the "Fonds de Participation" in
Belgium had targeted women in a promotional campaign. Nicola
Schuldt-Baumgart explained how the German magazine "Die Existenzielle" targets
female entrepreneurs and self-employed women.
Outreach is the other area that is critical if women are to be engaged and
supported by micro finance institutions. The workshop on outreach looked at
lessons learnt from two pilot projects: 'market access' in Slovakia presented by
Milena Uhlikova, from
Integra, and the
'female microloan scheme' in Hungary presented by Istvan Kovacs, of the
Hungarian Microfinance Network.
Key findings were that specific approaches were needed to raise the proportion
of women entrepreneurs and evaluation found that these approaches were
potentially transferable.
[1]
Conference website:
www.european-microfinance.org/conference_madrid_en.php
[2]
Facet, Evers and Jung and NEF
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