SPECIAL REPORT: Women Microfinance Clients Often Save More, Are More Loyal to Lenders

At today’s session on gender at European Microfinance Week in Luxembourg, panelists eschewed the idea that lenders have a moral obligation to serve a greater proportion of women. Instead, Anne-Marie Chidzero of South Africa and Anna Gincherman of the US-based Women’s World Banking (WWB) network both argued strenuously that lenders are leaving money on the table by failing to reach out to women. Ms Chidzero is both the chairperson of African women’s network New Faces New Voices and the CEO of Johannesburg-managed AfriCap Microfinance Investment Company.

Ms Gincherman cited data from WWB, which has partner microfinance institutions (MFIs) in 18 countries, indicating that MFIs with at least 60 percent female clients perform better on a range of financial indicators, including earning 53 percent higher return on investment.

The panelists cited well-known barriers to women’s usage of financial services, such as collateral being in the name of a male relative, low financial literacy, poor self-confidence and pressure from husbands. Ms Gincherman and Lisa Peterlechner of German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit, both reported success with radio campaigns to help men get more comfortable with the idea of women using financial services.

Regarding how to show that serving women is not a threat to men, Ms Chidzero argued “This is building our economies. The contribution of women to gross domestic product is highly underestimated and under-documented. It is important for policymakers to understand that so they can overcome this view that women are supposed to be at home.”

The panelists agreed that men often focus on longer-term projects such as cash crops, whereas women often need smaller, shorter-term loans to manage household cash flow. Ms Gincherman cited the example of Interfisa Financiera, an MFI in Paraguay, that had a policy of allowing one loan per household. Commonly the male head of household had an agricultural loan, thus precluding the woman of the family from borrowing for her enterprises – perhaps a small store or the raising of animals. When Interfisa Financiera adjusted its policy to allow two loans per household, it was able to serve many more women.

Ms Gincherman also cited the rollout of a mobile banking product by Nigeria’s Diamond Bank. At first, the product attracted mostly men – about 40 percent women. However, over time, the women used the product more and their total level of savings surpassed that of men. She added that men were less likely than women to stay with the same bank over time.

To scale up services to reach more women, the panelists cited the need for more mobile services; data collection; products tailored to women’s needs; financial education to stimulate demand; and leadership from central banks such as by establishing targets for percentages of women clients, managers and board members.

This content is sponsored by e-MFP, the organizers of European Microfinance Week. It is one in a series of articles covering the proceedings of the event, which is taking place in Luxembourg from November 12 to November 14. MicroCapital is reporting on the sessions onsite throughout this time.

Additional Sources and Resources:

MicroCapital Special Report; November 13, 2013; Michael Chu: “Disrupt this Old Model to Unlock the Potential of Microfinance”

MicroCapital Special Report; November 12, 2013; “Making Microfinance Investment Responsible” Group Wrestles with Inconsistent Data Reporting at European Microfinance Week

MicroCapital Special Report; November 12, 2013; Youth Financial Inclusion Group Tackles Business Training, Scaling-up, Dormant Accounts, Program Indicators, Self-sufficiency at European Microfinance Week

Microfinance Event; September 24, 2013; European Microfinance Platform (e-MFP) to Host European Microfinance Week 2013, Luxembourg, November 12-14, 2013, With On-site Coverage Provided by MicroCapital

MicroCapital Special Report; November 15, 2012; Sanjay Sinha of M-CRIL Calls Overexuberant Growth “Recipe for Disaster” at European Microfinance Week Opening

MicroCapital Universe Profile: AfriCap Microfinance Investment Company

MicroCapital Universe Profile: European Microfinance Platform (e-MFP)

MicroCapital Universe Profile: Women’s World Banking

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