Contribution of microfinance in women empowerment. A case study of pro-femme/twese hamwe through Duterimbere microfinance institution

LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF COMMERCE

Report of Research on:

«CONTRIBUTION OF MICROFINANCE IN WOMEN EMPOWERMENT»

A Case Study: Pro-Femmes/ Twese Hamwe through DUTERIMBERE Micro-Finance Institution

Submitted to Lovely Professional University In partial fulfillment of the

Requirements for the award of Degree of

Master of Commerce in Finance Specialization Prepared by:

Adeline MUKAYIRANGA

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DECLARATION

I hereby declare that the study on «Contribution of microfinance in women empowerment» a case study of Pro-Femmes/ Twese Hamwe through Duterimbere Micro-Finances is my original work, that has not been to my best knowledge submitted and presented to any university of higher learning for a similar award, and that all sources I have used and quoted have been acknowledged by complete references.

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Signature

Date

Adeline Mukayiranga

I, Satendra Bhardwaj acknowledge that this research project entitled «Contribution of microfinance in women empowerment: A case study of Pro-Femmes/ Twese Hamwe through Duterimbere Micro-Finances» is an original work of Mrs Adeline Mukayiranga and has been done under my supervision.

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Supervisor:SatendraBhardwaj

Date..............................................

Signature:

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DEDICATION

I dedicate this work to the Almighty God who enables us for any commitment.

Special dedication to my parents, husband and children for their unprecedented support through my life, and to all friends for their devotion and courage that have led to the completion of my studies and this research.

ACKNOWLEDGEMENTS

The final product of this research project is not the result of the effort of one person but a combination of participation of different parsons.

First and foremost I thank the Almighty God who has been taking care of me and keeping me strong and done everything for my best.

My special thanks go to my husband, Kwizera Anicet and to my children: Kwizera Sangwa Aldo and Kwizera Rwema Alida for their moral and financial support along my education. Your love has made me what I am today.

My sincere gratitude goes to Mr Satendra Bhardwaj who kindly accepted to supervise me and for his enrichment advices despite his other duties.

I would like to thank so much Mr Manishaka Jean Bosco Aboubacar. I will eternally remember your encouraging guidance and intellectual capacity, which will surely always guide me in my further academic endeavors.

I also wish to express and record my sincere appreciation to the Lovely Professionally University (LPU) and Faculty of Management administration in general, and especially to the teaching staff in the department of Commerce, for the immense support accorded to me during my courses. This was evidenced through material and moral support granted to me.

I would like to thank all those who contributed in one or another way to the accomplishment of this study.

I'm highly indebted to the Pro-Femmes/ Twese Hamwe for contributing toward the successful completion of my research project. To the Executive Secretary of Pro-Femmes/ Twese Hamwe, and to Mrs Suzanne Ruboneka and to all staff of Pro-Femmes/ Twese Hamwe & Duterimbere MFI, I am tremendously appreciative of the support you gave me.

It is not possible to thank all of you in person, as this may not be sufficient or exhaustive in coverage, extent and depth.

However, special thanks go to my fellow friends who have been together with me during my studies, and who managed to provide any kind of support during this period.

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Adeline Mukayiranga

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TABLE OF CONTENTS

DECLARATION ii

DEDICATION iv

ACKNOWLEDGEMENTS v

LIST OF OBSERVATIONS xi

ABSTRACT xii

CHAPTER ONE: INTRODUCTION 1

1.1 Background of the study 1

1.2 Statement of the problem 2

1.3 OBJECTIVES OF STUDY 2

1.3.1 General objective 2

1.3.2 Specific objectives 2

1.4 HYPOTHESES OF THE STUDY 3

1.4.1 General hypothesis 3

1.4.2 Specific hypotheses 3

1.5 DEFINITION 3

1.6 ROLE OF MICROFINANCE IN WOMEN EMPOWERMENT 4

1.7 Microfinance & empowerment 5

1.8 Scope of study 6

1.9 INTRODUCTION TO THE ORGANIZATION (Pro-Femmes/ Twese Hamwe) 6

1.10 HISTORICAL BACKGROUND OF PRO- FEMMES /TWESE HAMWE 8

ORGANISATIONS UMBRELLA 8

1.11 PRO -FEMMES / TWESE HAMWE'S VISION 8

VII

1.12 PRO- FEMMES / TWESE HAMWE'S MISSION 9

1.13 PRO -FEMMES/TWESE HAMWE'S OBJECTIVES 9

1.14 CONCERN OF DUTERIMBERE MFI 10

1.14.1Duterimbere objectives 10

CHAPTER TWO: REVIEW OF LITERATURE 13

2.1. INTRODUCTION 13

2.2 DEFINITION OF MICROFINANCE CONCEPTS 15

2.3 MICROFINANCE INSTITUTION 21

2.4 CHALLENGES FACED BY MICRIFINANCE INSTITUTIONS 21

2.5 MICROFINANCE AND WOMEN'S EMPOWERMENT: QUESTIONNING 22

`VIRTUOUS SPIRALS' 22

2.6 Theoretical links between Microfinance and Poverty 27

2.6.1Reduction/Analytical Framework 27

2.6.2 Poverty Reduction and Microfinance 27

2.6.3 Analytical Framework 30

CHAPTER THREE: RESEARCH METHODOLOGY 33

3.1. RESEARCH METHODOLOGY 33

3.2 CASE STUDY 33

3.3. AREA OF THE STUDY 33

3.4. POPULATION OF THE STUDY 34

3.5. SAMPLE SIZE 34

3.6 SAMPLE TECHNIQUE 35

3.7 CLASSIFICATION AND SOURCES OF DATA 35

3.8 DATA COLLECTION TECHNIQUE 36

3.9 QUESTIONNAIRE FOR CLIENTS 36

3.10 INTERVIEWS FOR KEY STAFF 36

3.11 DATA PROCESSING, ANALYSIS, AND INTERPRETATION 37

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3.12 EDITING 37

3.13 TABULATION 37

3.14 LIMITATIONS OF THE STUDY 37

CHAPTER FOUR: PRESENTATION OF KEY FINDINGS AND DATA ANALYSIS 39

4.1. INTRODUCTION 39

4.2. IDENTIFICATION OF PARTICIPANTS 39

4.3. PRESENTATION OF RESULTS FROM QUESTIONNAIRES 42

4.4. DISCUSSION OF RESULTS 50

4.4.1. DISCUSSION OF RESULTS FROM QUESTIONNAIRES 50

4.4.2. DISCUSSION OF RESULTS FROM INTERVIEW 52

CHAPTER FIVE: CONCLUSION AND RECOMMANDATIONS 55

5.1. INTRODUCTION 55

5.2. CONCLUSION 55

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LIST OF TABLES

Table 1: Respondents numbers in the Districts

Table 2: Sample size in every district

Table3. Identification of respondents

Table 4: Women use savings and credit in economic activity for their empowerment

Table 5: Women who benefit credit from Duterimbere IMF are confined in range of

female low-income Activities

Table 6: Women economically-developed change gender role and status within household
and community

Table 7: Microcredit given by Duterimbere IMF is limited according to the beneficiary

Table 8: Microcredit provided by Duterimbere IMF is enough to women empowering

Table 9: Women appreciate the short-term loan from Duterimbere IMF for their
empowerment purpose

Table 10: Women may be economically self-sufficiency due to microcredit without the men
support

Table 11: Socio-demographics variables such as education level, age, marital and
professional status lead to success of microcredit in women empowerment

Table 12: Business held by women are competitive with others

Table 13: Microcredit offered to women improves the family standing

Table 14: Women empowerment involves the family and community development

Table 15: Family economy may be based on the women empowerment due to savings and

credit through microfinance

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LIST OF GRAPHICS

Graphic 1: Identification of respondents

Graphic 2: Women use savings and credit in economic activity for their empowerment

Graphic 3: Women who benefit credit from Duterimbere IMF are confined in range of

female low-income Activities

Graphic 4: Women economically-developed change gender role and status within
household and community

Graphic 5: Microcredit given by Duterimbere IMF is limited according to the beneficiary

Graphic 6: Microcredit provided by Duterimbere IMF is enough to women empowering

Graphic 7: Women appreciate the short-term loan from Duterimbere IMF for their
empowerment purpose

Graphic 8: Women may be economically self-sufficiency due to microcredit without the men support

Graphic 9: Socio-demographics variables such as education level, age, marital and
Professional status lead to success of microcredit in women empowerment Graphic 10: Business held by women are competitive with others

Graphic 11: Microcredit offered to women improves the family standing

Graphic12: Women empowerment involves the family and community development Graphic 13: Family economy may be based on the women empowerment due to savings and credit through microfinance

LIST OF FIGURES

Figure 1: Framework of women's empowerment through microfinance (Household
model)

Figure 2: Virtuous spirals

Figure 3: Linking Microfinance with Poverty Reduction

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LIST OF OBSERVATIONS

AKRSP: Agha Khan Rural Support Program

CEDAW: Convention on the Elimination of All Forms of Discrimination Against

KFW: KreditanstaltfürWiederaufbau

LPU: Lovely Professionally University

MFI: Microfinance Institution

MIGEPROF: Ministry of Gender and Women Promotion

NGO: Non government organization

OPP: Orangi Piolt Project

PTH: Pro-Femmes/ Twese Hamwe

RCA: Rwanda Cooperative Agency

RWAMREC: Rwanda Men's Resource Center

SBP: State Bank of Pakistan

UNFPA: United Nations Population Fund

UNIFEM: United Nations Development Fund for Women

UNSCR1325: UN Security Council Resolution on Women 1325

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ABSTRACT

In a male dominated society, women have always been underestimated and discriminated in all spheres of life be it their family and social life or their economic and political life. Moreover, the traditional duties of managing households create hindrances in their social and economic empowerment. Over the years various efforts have been made by many Government and Non Government organizations to promote women empowerment in general and especially in rural areas. One such effort is the microfinance intervention. Many leading public and private sector banks are offering schemes exclusively designed for women to set up their own ventures. Even the unorganized sector has been heading into microfinance movement. The present paper is an attempt to study the role of microfinance intervention in promoting women empowerment in Rwanda through Pro-Femmes/ Twese Hamwe and other institutions. The objective is to analyze the use of micro financial services by the women clients and access their level of satisfaction with regards to these services.

After conducting this research the following results were obtained:

Microfinance institutions have contributed to the improvement of the economic and social conditions of the population and women in particular by their policy of promotion of the saving and credit which helps this population to carry out income generating activities via the individual projects and groups of solidarity.

In general, this study found that microfinance institutions contribute to rapid socio-economic growth by leveraging neglected sectors of the economy through providing them financial assistance and helping them to finance their own projects and increase their income.

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CHAPTER ONE: INTRODUCTION

1.1 Background of the study

Rwanda is among the developing countries still characterized by the fact that there is over dependence on agricultural activities in rural areas, low savings, low income groups and the economy highly depending on agricultural activities.

Globally, women disproportionately represent 70% of the world's 1.3 billion population who live on less than one dollar per day.

In Rwanda, women comprise (54%) of 11 million of the entire population. However, most of these Rwandan women are illiterate and this limits their employment opportunities and financial ability to take care of their families of which 37% of Rwandan household are managed by women. Moreover, 70% of the Rwandans live below the poverty line yet a large proportion of these are women.

Women have been the most underprivileged and discriminated strata of the society not only in Rwanda but all over the world. Inspire of all Government and Non-Governments' efforts, they have been highly inactive clients of the financial sector. In the recent times, microfinance has been emerging as a powerful instrument for empowering women particularly; the women that have little financial ability. Apart from the informal sector of finance, the formal and semi formal sectors like commercial banks, NGOs etc. are taking much interest in providing microfinance services to women in order to promote them. Women are also participating in the microfinance movement by availing the microfinance services being provided by the various financial channels.

Women empowerment is one of the most important issues that have been in the focus of various policies and programs initiated by the Government and the non-government organizations. Microfinance is one such effort that has been emerging as a powerful tool of women empowerment. It has been observed through the available literature that most of the studies related to microfinance have been carried out in the all province regions of the country (Rwanda) particularly and worldwide in general. The present study aims to fill in the gap in the available literature. It is a modest attempt to analyze the role of microfinance in women empowerment and the satisfaction level of the women towards microfinance services.

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1.2 Statement of the problem

After the genocide of 1994, women in Rwanda took enormous responsibilities that made it difficult for women to be able to support themselves in absence of their spouses. This explain how women are vulnerable to poverty especially those women heading the family.

In general, Rwanda women make up the majority of the low income earners, unorganized informal sector of the economy and bigger number of them are windows left behind by the 1994 genocide tragedy, others are illiterate and have been marginalized by poverty and negative cultural practices.

Accessing loan is the major constraint on women's ability to earn income since most traditional financial systems require physical collateral worth more than the amount of loan requested. The poor women find it difficult to generate significant income from such loan because interest rates are high. In addition, due to high rate of illiteracy, women have always been facing unemployment problem compared to men. Providing the poor women with financial services boost their income and productivity, thereby reducing poverty.

The microfinance has been developed to fill these gaps, with increasing assistance from the various financial institutions and other donors, microfinance service is emerging as a powerful tool to reduce poverty and improve access to financial services for the poor women of Rwanda.

It is against this background that the researcher intends to carry out a study in order to analyze the outreach and impact of microfinance on the poor women of Rwanda. The findings will be drawn from an in-depth analysis of data obtained from microcredit issued to women beneficiaries.

1.3 OBJECTIVES OF STUDY

1.3.1 General objective

To determine the contribution of microfinance in women empowerment in Rwanda.

1.3.2 Specific objectives

? To identify various determinants of women empowerment.

? To find out the impact of microcredit in women development/promotion. ? To analyze the role of microfinance in family empowerment by women.

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1.4 HYPOTHESES OF THE STUDY

1.4.1 General hypothesis

The main hypothesis stipulates that the microfinance contributes in women empowerment.

1.4.2 Specific hypotheses

? Savings, credits and family self-sufficiency are among various determinants of

women empowerment.

? Microcredit impacts the women development/promotion.

? Women contribute in family empowerment through microfinance.

1.5 DEFINITION

1. WOMEN EMPOWERMENT

Empowerment of women means to let women survive and let them live a life with dignity, humanity, respect, self esteem and self reliance source. Different scholars have identified the indicators of women's empowerment, likewise, Schuler and Hashemi (1994) outlined six elements of women's empowerment in Bangladesh which includes a sense of self and vision of a future, mobility and visibility, economic security, status and decision making

power within the household, ability to interact effectively in the public sphere and participation in non-family groups. While on other hand, Friedman's (1992) analysis of women's empowerment identified different kinds of power: economic, social, political and psychological. Economic power means access to income, assets, food, markets and decision-making power in the economic activities. Social power means access to certain bases of individual production such as financial resources, information, knowledge, skills and participation in social organizations. Political power means the access of individual household members to the process by which decisions, particularly those that affect their own future, are made. Psychological power means the individual's sense of potency, which is demonstrated in self-confident behavior and self esteem. While on other hand Rowlands (1995) describe it as «a process whereby women become able to organize themselves to increase their own self-reliance, to assert their independent right to make choices and to control resources which will assist in challenging and eliminating their own subordination». Her emphasis that ability to exercise choice incorporates three interrelated dimensions: Resources, Agency and Achievements. According to UNIFEM, «to generate choices, gaining the ability and exercise bargaining power», «developing a sense of

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self worth, to secure desired changes, belief in one's ability and the right to control one's life» are important elements of women empowerment. Women will be empowered when they will have full control over their own life. For the analysis of the present research we will use both Schuler and Hashemi (1994) and Friedman's (1992) definitions of the term women empowerment

2. MICROFINANCE

Some see microfinance as a source of major social transformation; others see it as the seed of a revolution in banking access. Is true believers push for both? Microfinance is a type of banking service which provides access to financial and non financial services to low income or unemployed people.

According to Kreditanstalt fürWiederaufbau (KfW) microfinance is a significant instrument for poverty reduction. Whether it can also be seen as a tool for women's empowerment is of special interest to KfW.

The connection between microfinance and women's empowerment becomes obvious when one realizes that the vast majority of clients are women. Given the interconnectedness of the social, political and economic dimensions of empowerment, empowering changes in one dimension may trigger changes in other dimensions. Thus, the improvement of women's economic empowerment has the potential to lead to positive changes in social and political dimensions.

1.6 ROLE OF MICROFINANCE IN WOMEN EMPOWERMENT

Microfinance is a type of banking service which provides access to financial and non financial services to low income or unemployed people. Microfinance is a powerful tool to self empower the poor people especially women at world level and especially in developing countries. Microfinance activities can give them a means to climb out of poverty. From early 1970's women movement in number of countries has been increasing to alleviate poverty through microfinance programs. The problem less access to credit by women was given a particular concentration at First International Women Conference in Mexico in 1975.

The evolution of microfinance is from Bangladesh since late 1970s and a very successful project. But in Pakistan, the movement of microfinance sector started from Agha Khan Rural Support Program (AKRSP) and Orangi Piolt Project (OPP). With the passage of time microfinance becomes NGO activity and five microfinance banks have been started under State Bank of Pakistan (SBP) ordinance. Microfinance services lead to women empowerment by positively

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influencing women's decision making power at household level and their overall socioeconomic status. By the end of 2000, microfinance services had reached over 79318million of the poorest of the world (Women and Men). As such microfinance has the potential to make a significant contribution to gender equality and promote sustainable livelihood and better working condition for women. (ILO Geneva)

It has been well documented that an increase in women resources or better approach for credit facilities results in increased well being of the family especially children. (Maoux, 1997; Kabeer, 2001).

Basic infrastructure is insufficient in rural areas where 78% of female population resides. Nyabihu and Musanze are highly deprived districts in Northern Province poverty reduction strategy paper( government Statistics report, 2010). Women community in this region is also deprived. Microfinance plays a great role in the lives of millions of poor people particularly women. Most areas of city, where microfinance loan is disbursed, dearth of women decision making at domestic level exist in both rural and urban areas of city. Microfinance as a whole is a new concept in the Rwanda country for improvement of women empowerment.

1.7 Microfinance & empowerment

Regarding the contribution of microfinance to women's empowerment, most people listed the facilitation of economic and financial independency (41%) followed by the increase in child and family welfare (18%). (Cheston, Susy & Kuhn, Lisa, 2002)

All persons were ready to suggest how this influence could be expanded. Most mentioned financial-product innovation to fit women's specific needs (41%), followed by awareness-raising programs (19%). 48% of the interviewees suggested that training and capacity building (on financial, legal and gender issues, technical, entrepreneurship, personal development and health issues) are services that could increase this influence.

When asked what contributed to women's empowerment, all interviewees found equal rights and opportunities most important, followed by increased welfare. Financial independence, decision-making in the household and education were deemed more important by Pro-Femmes/ Twese Hamwe attribution and MFI partners than by the clients themselves. Expanded networks and elevated status as business women were neither perceived as neither most nor least important by all interviewees.

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1.8 Scope of study

The research adopted a case study approach mainly because of limited time and resource. There are many financial players in the economy trying to empower women through microloan support. Due to limited time and resource Pro-Femmes/ Twese Hamwe through Duterimbere FMI, was chosen to represent all players in the empowerment of women.

The researcher want to build on the growing body of research on the topic, combine academic theories, what is done in practice and field experiences, and encourage further exploration and dialogue on the subject. Throughout the paper, we provided references so that those interested in exploring specific aspects of empowerment can find more in-depth information. At the outset of my research, I wished to find out how microfinance empowers the women in general and particularly in Rwanda.

1.9 INTRODUCTION TO THE ORGANIZATION (Pro-Femmes/ Twese Hamwe) Pro-Femmes/ Twese Hamwe is an Umbrella Organization that promotes gender, peace and development. It was created on 18^th October 1992, by 13 Rwandan Women Associations. Today Pro-Femmes/ Twese Hamwe is composed of 58 member associations including Rwanda Men's Resource Center, a men's Organization. (Inside Pro-Femmes newsletter Issue no 1)

Those associations are follows:

1. AEC: Drivers' Wives Associations

2. AFCF: Households Heading Women Associations

3. AFEPROF: ASSOCIATION DES FEMMES POUR LE PROGRES FAMILIAL.

4. AFER: Association of Female Entrepreneurs in Rwanda

5. AGR: Association of Girl Scouts in Rwanda

6. AHUMWAGUTARI

7. AMALIZA

8. AMIZERO

9. ARBEF: Rwandan Organisation for Family Welfare

10. ARCT- RUHUKA: Rwandan Association of Trauma Counsellors

11. ARFEM: Rwandan Association of Media Women

12. ARTCF: Rwandan Association of Christian Female Workers

13. ASOFERWA: Rwandan Women Solidarity Association

14. ASSOCIATION MISERICORDE

15.

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ASSOCIATION NDABAGA

16. ASSOCIATION NZAMBAZAMARIYA Veneranda

17. AVEGA AGAHOZO: Genocide Widows' Association

18. BENIMPUHWE

19. BENISHYAKA

20. CARITAS UMUHOZA

21. CMS: Club Mamans Sportives

22. COCOF: Women Consultative Council

23. COR-UNUM

24. DUHOZANYE

25. DUKANGUKE

26. DUTERIMBERE

27. FAWE Rwanda : Forum for African Women Educationalists

28. FONDATION BARAKABAHO

29. FONDATION TUMURERE

30. FVA: Faith Victory Association

31. GIRANEZA

32. GIRIBAMBE

33. HAGURUKA

34. ICYUZUZO

35. JOC-F: Female Catholic Working Youth

36. LUMIERE DE LA VIE

37. MBWIRANDUMVA INITIATIVE

38. MISSION OF HOPE

39. MTCR : Mouvement des Travailleurs Chrétiens Rwanda

40. RESEAU DES FEMMES OEUVRANT POUR LE DEVELOPPEMENT RURAL

41. RWAMREC : Rwanda Men's Resource Centre

42. RWANDA WOMEN'S NETWORK

43. SERUKA

44. SEVOTA : Solidarité pour l'Epanouissement des Veuves et des Orphelins visant le Travail et l'Autopromotion

45. SOLIDAIRES BENURUGWIRO

46. SOS RAMIRA

47. SWAA RWANDA: Society for Women against AIDS in Africa

48. UCFR: Christian Union of Rwandan Women

49. UMUSEKE

50. UMUSHUMBA MWIZA

51. URUMULI RW'URUKUNDO

52. URUNANA DEVELOPMENT COMMUNICATION

53. WIF: WOMEN INVESTMENT FUND

54. WOMEN FOR WOMEN INTERNATIONAL

55. ATEDEC : Action Technique pour un Développement Communautaire

56. Association KANYARWANDA

57. RéseauCulturelSangwa

58. Association of Kigali Women in Sports

59. CCOAIB (Honorary member)

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1.10 HISTORICAL BACKGROUND OF PRO- FEMMES /TWESE HAMWE ORGANISATIONS UMBRELLA

In 1991, there were associations working for women promotion. They had been initiated for various specific reasons.

In 1992, 13 Rwandan Associations decided to combine their efforts and created the umbrella PRO-FEMMES/TWESE HAMWE. On 18^th October 1992 it was publicly started and obtained its legal status in 2002. (Inside Pro-Femmes newsletter Issue no 1)

1.11 PRO -FEMMES / TWESE HAMWE'S VISION

PRO-FEMMES/TWESE HAMWE is longing for a Rwandese society rid of all forms of gender related discrimination, and thus characterised by equality and equity between men and women in the development process and in a context of a stable and peaceful society.

It has made a recognizable impact at national, regional and international levels. Through cooperation, coordination and consultative meeting between member organizations, the government, parliament and international organization.

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Pro-Femmes/Twese Hamwe advocated and contributed towards revision of discriminatory laws and initiation of new ones in favour of women and children, ratification of different conventions on human and women rights like CEDAW, UNSCR1325, Beijing Platform for action, mobilization of women to participate in decision making decision positions by training women candidates through Women can do it program among others.

Pro-Femmes/ Twese Hamwe endeavours to promote gender equality through advocacy, economic empowerment, and equal participation of women and men in the development process and fight gender based violence for a better Rwandan society. (Pro-Femmes report 2011).

1.12 PRO- FEMMES / TWESE HAMWE'S MISSION Its mission is to contribute to:

> the eradication of all forms of discrimination towards women and promotion of their socioeconomic, political and legal status,

> the enhancement of the institutional capacity of the umbrella and member associations , and the promotion of:

· A sustainable human development based on gender and

· A culture of peace based on social justice, respect of human rights, tolerance and nonviolence.

1.13 PRO -FEMMES/TWESE HAMWE'S OBJECTIVES

· To combine efforts, work for change so as to eradicate all forms of discrimination and violence towards women;

· To be a consultation and a reflection framework on success strategies on mission of member associations committed to the promotion of peace, women's social, economic, cultural and legal status;

· To facilitate exchanges between various member organisations and to promote partnership with organisations or institutions working for women promotion.

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1.14 CONCERN OF DUTERIMBERE MFI

The Duterimbere MFI is microfinance institution which receives the economies of usual customers served by the banking system and those who don't have sufficient guaranties to offer in order to ensure the refunding of the authorized credit. The activities of saving and credit for Duterimbere MFI were created on June 5^th, 1997.

Last year, Duterimbere made a net profit of Rwf116 million and is targeting a total of Rwf200 million as proceeds this year, which signals the recovery of MFIs after a period of poor business practices and now that institution have a total of 53,500 customers, the women have 70% of clients.

1.14.1Duterimbere objectives

? To aim at the improvement of economic and social conditions of its members, in particularly the women

? To provide the financial services (Saving and credit) to the population with low and to the women in particularly

? To help the women to carry out the income activities via individual projects and the groups of solidarity

? To promote the agriculture of saving and economic, social education and cooperatives of its members.

The customers situation of Duterimbere MFI period of 2009 to 2011 according of the different sites/branches

Sites	2009		2010			2011
	Male	Female	Male		Female	Male	Huye
982	327	2,454	818		2,643	880	Nyanza
374	124	438	146		1583	527	Ruhango
3,286	1,095	4,620	1,539		7,101	2,367	Muhanga
7,674	2,558	8,032	2,677		10,963	3,652	Musanze
2,679	893	3,399	1,133		4,010	1,336	Nyagatare
954	317	2316	771		2,859	952

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Mutimba	453	151	1,321	440	1,470		490	Rukomo
815	271	1,147	382	1,641	547		Gatsibo
630	209	1,312	437	1,541	513		Gahini
744	247	889	296	1089	363		Kayonza
662	220	891	296	1,268	422		Kigali
444	147	1389	462	2,288	762		Total
19,692	6,564	28,204	9,401	38,451	12,816

Source: Duterimbere MFI report

Situation of loans of Duterimbere MFI given its customers from 2009 to 2011

Sites	Total (Rwf million and billions)	2009 (credit in Rwf million and billions)		Total (Rwf million and billions)	2010 (credit in Rwf million and billions)		Total(Rw f million and billions)		2011(credit in Rwf million and billions)
	Female	Male		Female	Male		Female		Male	Huye
76,236	53,365	22,871,072	69,536	48,675	20,861	131,046	91,732		39,313	Nyanza
48,733	34,113	14,619,992	30,278	21,194	9,083	61,041	42,729		18,312	Ruhango
318,858	223,200	95,657,547	423,508	296,456	127,052	477,462	334,223		143,238	Muhanga
394,274	275,992	118,282,30 9	442,260	309,582	132,678	496,947	347,863		149,084	Musanze
150,193	105,135	45,057,947	244,041	170,828	73,212	383,066	268,146		114,919	Nyagatar e
108,984	76,289	32,695,420	192,481	134,737	57,744	277,966	194,576		83,390	Mutimba
75,063	52,544	22,519,049	124,192	86,934	37,257	149,036	104,325		44,710

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Rukomo

101,696	71,187	30,508,985	142,401	99,681	42,720	163,758	114,630	49,127	Gatsibo
	41,579	17,819,715	165,325				150,698	64,584
59,399				115,728	49,597	215,283			Gahini
	42,920	18,394,614	75,385				64,147	27,491
61,315				52,769	22,615	91,638			Kayonza
	20,096	8,612,619	65,181				84,775	36,332
28,708				45,626	19,554	121,108			Kigali
	44,594	19,111,899	140,174				157,900	67,671
63,706				98,121	42,052	225,571			Total
	1,041,01	446,151	2,114,76				1,955,74	838,178
	9		7	1,480,33	634,430	2,793,928	9
1,487,170				7

Source: Duterimbere MFI report

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CHAPTER TWO: REVIEW OF LITERATURE

2.1. INTRODUCTION

The literature review on how microcredit impact women empowerment will allow to assess and let women survive live a life with dignity, humanity, respect, self esteem and self reliance. The emphasis will assess the ability to exercise choice incorporates three interrelated dimensions and the women will be empowered when they will have full control over their own life.

According to KreditanstaltfürWiederaufbau (KfW) microfinance is a significant instrument for poverty reduction, whether it can also be seen as a tool for women's empowerment is of special interest to KfW.

In order to answer the question many studies (reports, journals, microfinance profile) have been carried out in developing countries and the majority of these studies have been carried on Rwandan women because this was the country where microfinance schemes first time started by women umbrella called Pro-Femmes/ Twese Hamwe through its member called Duterimbere microfinance institution since 1992.

The main objective of this initiative was to provide loans to poor people without collateral, alleviating poverty and unleashing human creativity and endeavor of the poor people.

Microfinance has proven its potential to generate results and in general, studies suggested the poorest seldom benefit from microfinance, while the middle and upper poor benefit the most. Women in particular face significant barriers to achieving sustained increases in income and improving their status, and require complementary support in other areas, such as training, marketing, literacy, social mobilization, and other financial services (e.g.,

Consumption loans, savings).

In fact, it is difficult to separate the impact of microfinance from that of other interventions (Maclsaac, 1997).Further Maclsaac (1997) said that «most women borrowers have only partial control over loans, or have relinquished all control to male members of the family. This has serious implications for the impact of gender equity. However, this is not to say benefits are non-

14

existent. As part of a broader effort to raise awareness and mobilize women, credit could play an important role as an «entry point» to strengthen women's networks and mobility, increase their knowledge and self-confidence, and increase their status in the family.»

In the context of Rwandan women and men discusses that «during the last two decades, micro-credit approach has been increasingly incorporated in the development discourse. Specially the loan is given to the women and the popular belief is that women are benefited and empowered and are being acknowledged for having a productive and active role and thus it is the gateway of gaining freedom for themselves.»

There are few studies in the context of Pakistan which discussed the relationship between microcredit and microfinance and women empowerment, one of them was a review based study done by Malik and Luqman (2005).

Thus I see a broadening of the concept of microfinance the current challenges is to find efficient and reliable ways of providing a richer menu of microfinance products.

Microfinance and other services for poor people are important instruments for poverty reduction and for entrepreneurship development especially for women according to a report prepared by the United Nations Secretary General Kofi Annan (Ref. world submit and social development and microfinance 6-12 March 1995 Copenhagen).

They assert that «from the previous research studies, it was concluded that micro finance or microcredit programs had the potential and powerful impact on women's empowerment. Although these were not always empowering all women, most women did experience some degree of empowerment because it was a complex process of change experienced by all individuals somewhat differently and varied from culture to culture.

Microfinance programs had both positive and negative impacts on women's empowerment and eradication of poverty throughout the world.» There are different perspectives on the issue of microfinance in connection with women empowerment. In few cases, women were unable to use the microcredit to empower themselves. In this regard, Goetz and Gupta (1996) said that «most programs could not ensure that women retained control over the money. The Women commonly hand over control of the loan or invest it in a family enterprise.

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2.2 DEFINITION OF MICROFINANCE CONCEPTS

It is necessary first to make explicit definitions and assumptions which much of this paper work is based. These points are based on mostly on field experience with microfinance program and in particular the work of MFIs in developing countries rather than in the middle income and industries countries.

1. What is microfinance?

The term refers to the provision of financial services to low-income clients; including the self-employed. Financial services generally include savings and credit. However, some microfinance organizations also provide insurance and payment services. (UNIFEM, 2001)

In addition to financial intermediation, many MFIs also provide social intermediation services such as group formation, development of self confidence, and training in financial literacy and management capabilities among members of a group. Thus the definition of microfinance often includes both financial intermediation and social intermediation. Microfinance is not simply banking, it is a development tool.

Microfinance activities usually involve:

+ Small loans, typically for working capital.

+ Informal appraisal of borrowers and investments.

+ Collateral substitutes, such as group guarantees or compulsory savings.

+ Access to repeat and larger loans, based on repayment performance.

+ Streamlined loan disbursement and monitoring.

+ Secure savings products.

MFIs can be nongovernmental organizations (NGOs), savings and loan cooperatives, credit unions, government banks, commercial banks, or nonbank financial institutions.

The people who require the micro finance are typically self-employed, low-income entrepreneurs in both urban and rural areas. Clients are often traders, street vendors, small farmers, service providers (hairdressers, rickshaw drivers), and artisans and small producers, such as blacksmiths and seamstresses. Usually their activities provide them stable source of income (often from more

16

than one activity). Although they are poor, they are generally not considered to be the "poorest of the poor."(Lidgerwood, 1999)

2. What is economic empowerment?

According to Cheston & Kuhn, (2002); «the economic empowerment is bringing people on the outside of a decision process into it» (Rowlands, 1997). It is the ability to obtain an income that enables participation in economic decision making. Individual become empowered when they obtain, the right to determine choices in life and to influence the direction of change, through the ability to gain control over material and non material resources (Rowlands, 1997).

Batliwala (1994) also sees economic empowerment as a process of challenging existing power relations and of gaining greater control over the sources of power or is social force meant to inspire the poor to challenge the status quo.

According the UNIFEM, economic empowerment is gaining the ability to generate choices and exercise bargaining power, developing a sense of self worth, a belief in one's ability to secure desired changes, and the right to control one's life. Empowerment is about change, choice, and power. It is a process of change by which individuals or groups with little or no power and ability to make choices that affect their lives.

Microfinance programs can have tremendous impact on the empowerment process if their products and services take these structures into account. In the order for women to be empowered, she needs access to the material, human, and social resources necessary to make strategic choices in her life. Not only have women been historically disadvantaged in access to material resources like credit, property, and money, but they have also been excluded from social resources like education or knowledge of some businesses.

Access to resources alone does not automatically translate into empowerment or equality; however, women must also have the ability to use the resources to meet their goals. In order for resources to empower women, they must be too able to use them for a purpose that they choose. Naila Kabeer uses the term agency to describe the processes of decision making, negotiation, and manipulation required for women to use resources effectively. Women who have been excluded from decision making for most of their lives often lack this since of agency that allows them to

define goals and act affectively to achieve them. Since women's economic empowerment is the key to socio economic development of the community, bringing women into the mainstream of national development has been a major concern of government of Rwanda.

Figure 1: Framework of women's empowerment through microfinance (Household model)

Women economic

Change in intra-household

Empowerment

increased status of

Bargaining and gender

relation women within household

Income under women's Control increases

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Women decision Increased independent increased household

Women's access to credit

About savings and income income

Credit use

Source: The role of microfinance in economic empowerment of women in Rwanda, 2009

It has been well documented that an increase in women's resources results in the well being of the family, especially children (Mayoux, 1997; Kabeer, 2001; Hulme and Mosley, 1997). A more feminist point of view stresses that an increased access to financial services represent an

18

opportunity for greater economic empowerment. Such as organizations explicitly perceive microfinance as a tool in the fight for the women's rights and independence. Finally, keeping to up with the objective of financial viability, an increasing number of microfinance institutions prefer women members as they believe that they are better and more reliable borrowers.

Hashemi et.al (1996), investigated whether women's access to credit has any impact on their lives, irrespective of who had the managerial control. Their results suggest that women's access to credit contributes significantly to magnitude of the economic contributions reported by women, to the likelihood of an increase in asset holdings in their own names, to an increase in their exercise of purchasing power, and in their political and legal awareness as well as in combined economic empowerment index. Also Kabeer (1999), stresses that women's economic empowerment is about the process by which those who have been denied the ability to make strategic life choices acquire such ability. According to her, it is important to understand economic empowerment as a process and not an instrumentalist for of advocacy.

3. Various Credit Lending Models

Microfinance institutions are one of the oldest financial institutions in the world, but like all the other institutions in the world, with time they have adapted various kinds of changes, and have started using various credit lending models. The Microfinance service/or community has divided itself into hierarchies. Some of the popular microfinance credit lending models adopted across the world are:

Associations: In this type of model, a target community forges together to form an association through which a variety of microfinance activities are carried out. The microfinance activities may also include savings. The associations may comprise of youth, women, or be formed around cultural, religious, or political issues.

In some of the countries a legal body can also form an association. These legal associations have certain advantages, like collection of insurance, fees, tax breaks, and provide other protective measures.

Community banking: This financing model considers the whole community as one unit and facilitates the establishment of semi-formal and formal institutes through which microfinance are administered. Usually NGOs and other similar organizations take it upon themselves to form such institutions, and also educate the community members in diverse financial activities.

Co-operatives: A co-operative is an independent association of people who come together voluntarily to meet their mutual economic, social and cultural aspirations and needs through a

19

egalitarian controlled enterprise. Sometimes the cooperatives also include savings activities and member financing as well.

Credit Unions: A credit union is a member-driven unique self-help financial institute comprising of members of a specific group like labor unions or a social fraternity who assent to save money and make loans to each other out of that fund at reasonable interest rates. A credit union membership is free to all, and it follows a democratic approach in electing the director as well as the committee representatives.

Grameen model or JLG model: The Grameen model is the most popular model which is practiced by so many MFIs all around the world. The grameen model entails that a bank unit be composed with a field manager and a set of bank staff covering a specified area, like 15 to 20 villages. The banking service starts when the manager and the staff familiarize themselves with the native people and explain to them the intent, functions motives, and mode of operation. Finally, groups comprising of five future borrowers are formed, out of which only two people get the loan initially, and if within fifty weeks they return the principal amount along with interest, as per the banking rules, the othermembers become eligible as well for taking loans. This is done, so that there is a collective liability on the group, which serves as guarantee against the loan as risk factor is so high.

Group: This model is based on overcoming individual shortcomings by the aggregated accountability and security engendered by the formation of a group of these individuals. This collective approach also helps in educating and building awareness, collective negotiation powers, peer pressure etc.

Individual: This is the simplest and the oldest credit lending model where small loans are given straight to the borrower. In most cases such loans are accompanied by socio-economic services like education and skill development.

Intermediaries: As the name suggests this model is a `go-between' organization operating between the lender and borrower. They play a critical role of creating credit cognizance like starting savings programs and thus raising the credibility of the borrowers to a sufficient level. These intermediaries can be NGOs, individuals, commercial banks etc.

Non-Governmental Organizations: NGOs are very active in the field of micro-credit, be it creating consciousness of the importance of micro-credit, or developing tools and resources to monitor and identify righteous practices. The NGOs have also created many opportunities to help people learn all about micro-credit practices and principles through organizing workshops, seminars, training programs etc..

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Rotating Savings and Credit Associations: A group of people join together and make periodic cyclical contributions to a common fund that is given to a member in a lump sum. After receiving the amount the member starts paying back by making regular contributions.

Small Business Enterprises (SME): They get loans from micro-credit programs for creating employment, increasing income etc. The micro credit is either provided directly to the SME or as a part of a bigger SME development program.

Village Banking: This is a community based banking. In this 15-50 low income individuals who seek self-employment come together to collect funds and give loans. The initial capital is generally arrived from outside, but the members follow a democratic approach in operation and moral collateral for repayment. ( http://www.gdrc.org)

Literature prepared for the Microfinance Summit in Washington in February 1997, many donor statements on credit and NGO funding proposals presented an extremely attractive vision of increasing numbers of expanding, financially self-sustainable micro-finance programs reaching large numbers of women borrowers. Through their contribution to women's ability to earn an income these programs are assumed to initiate a series of `virtuous spirals' of economic empowerment, increased well-being for women and their families and wider social and political empowerment. Female-targeted programs have supplanted support for many other gender strategies in many donor agencies.

However parallel to, but to a large extent marginalized by, the enthusiasm of donors and many MFIs and NGOs some researchers have questioned the degree to which micro-finance services in themselves benefit women. Some argue strongly that current models of microfinance where the overriding concern is financial sustainability divert resources from other more effective strategies for empowerment and/or poverty alleviation. There are now beginning signs of a change in thinking. On the one hand donors are beginning to be more skeptical of the achievements and potential of microfinance on its own and also more interested in self-managed programs. On the other hand there is rapid innovation at program level and an increasing focus on participation. These trends are combined with a growing recognition of the need to address macro-level constraints. The solutions proposed have been varied and are far from presenting a coherent strategy for poverty elimination and empowerment. Nevertheless there are now spaces for introducing policy changes which may increase the contribution of microfinance to both these development aims.

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2.3 MICROFINANCE INSTITUTION

A micro finance institution is an organization that offers financial services to the poor. Most MFIs are non-governmental organizations committed to assisting some sector of low income earning population. Almost all of these MFIs offer micro credit and only take back small amounts of savings from their borrowers, not from the general public.

Within the microfinance industry the term microfinance institution has come to refer to a wide range of organizations dedicated to providing these services NGOs, Credit Unions, Cooperatives, Private commercial banks and non bank financial institutions some that have transformed from NGOs into regulated institutions and parts of state owned banks. (Rwanda microfinance forum report, 2000)

2.4 CHALLENGES FACED BY MICRIFINANCE INSTITUTIONS

Among challenges facing microfinance industry in developing nations are:

? High cost of service delivery with poor infrastructure, regulatory policy issues and the need to develop institutional leadership. Because infrastructure and communication technology remain largely underdeveloped in most developing nations, it is significantly more expensive for microfinance institutions in these nations to operate compared to their peers in developed countries.

? Another challenge is policy making and government regulations, which vary by country. I many countries, the supervisory capacity of central banks, which holds the ultimate responsibility of financial sector needs an adjustment. The countries which are able to close the microfinance demand gap most successfully will be those that improve their policy frameworks and adapt their legal and regulatory systems in line with rapidly changing environment.

? A low population density area where the number of women to form a variable group is inadequate also poses as challenges. The situation is worsened by the unequal distribution of the family resources, which makes it difficult for women to raise the necessary savings and participate in a group.

? Some women access credit, but only to pass it into others who are not directly accountable, leaving them with the loan repayment burden. The one year repayment period is one of the reasons for default in repayments. Examples of such failure make other women reluctant to borrow. Another one is because of the society's perception of a

22

women's place in the home, some women are reluctantly not informed of the existence of sources of finance.

2.5 MICROFINANCE AND WOMEN'S EMPOWERMENT: QUESTIONNING `VIRTUOUS SPIRALS'

Micro-finance programs have a significant potential contribution to women's economic, social and political empowerment. Access to savings and credit can initiate or strengthen a series of interlinked and mutually reinforcing ' virtuous spirals ' of empowerment (See Figure 2).

· Women can use savings and credit for economic activity, thus increasing incomes and assets and control over these incomes and assets.

· This economic contribution may increase their role in economic decision-making in the household leading to greater well-being for women, children as well as men.

· Their increased economic role may lead to change in gender roles and increased status within households and communities.

The women in agriculture sector

These virtuous spirals are potentially mutually reinforcing in that both improved well-being and change in women's position may further increase their ability to increase incomes and so on.

This process of empowerment may be further reinforced by group formation focusing on savings and credit delivery:

· Women can access wider information and support networks for economic activity.

· Groups can support women in disputes within the household and community

· Groups can link to wider movements for change in women's position.

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Particularly in Rwanda microfinance programs like those of PTH through of Duterimbere, Inkingi, Agaseke, Goshen, etc have been pioneers of an empowerment approach to development for women in the informal sector and rural areas.

However although it is clear that microfinance programs have led to such changes for some women in microfinance programs, these changes are not an automatic consequence of savings and credit alone or of group formation. Evidence suggests that even in financially successful micro finance programs:

· Most women remain confined to a narrow range of ' female ' low-income activities

· Many women have limited control over income and/or what little income they earn may substitute for former male household contributions as men retain more of their earnings for their own use

· Women often have greater workloads combining both production and reproductive tasks

· Women's expenditure decisions may continue to prioritize men and male children while daughters or daughters in law bear the brunt of unpaid domestic work

· Where women actively press for change this may increase tensions in the household and domestic violence

· Women remain marginalized in local and national level political processes

Together association of women supported by Dutermbere Microfinance through microcredit.

24

This is not just a question of lack of impact, but may also be a process of disempowerment:

? Credit is also debt. Savings and loan interest or insurance payments divert resources which might otherwise go for necessary consumption or investment.

? Putting the responsibility for savings and credit on women may absolve men of responsibility for the household.

? Where group meetings focus only on savings and credit this uses up women's precious

work and leisure time, cutting program costs but not necessarily benefiting women.

Impacts are therefore very complex. There may be trade-offs for individual women which they negotiate to the best of their ability. There may be both reinforcing and conflicting changes at household level. Impacts on gender inequalities at the community level may also combine elements of empowerment and disempowerment and affect different women in different ways.

Handcraft trading for AGASEKE Association, there are used the loans microfinance in their activities.

Importantly women themselves are not passive victims, but active participants using opportunities as best they can in the context of the many constraints of gender inequality and poverty. Many apparent positive impacts may be more due to the determination and ingenuity of women than to program policy. Many negative impacts may be unavoidable because of the magnitude of constraints.

25

26

^{Fig.1 VIRTUOUS SPIRALS} : ^{QUESTIONING ASSUMPTIONS}

^SAVINGS

^AND

^CREDIT

^{?MEN MAY TAKE LOAN}

^WOMEN'S

^{DECISION ABOUT}

^{SAVINGS AND}

^{CREDIT USE}

^REPAYMENT

^{INCREASED WELLBEING}

^{?DIVERSION OF LOAN}

^{?WOMEN MAY GIVE TO MEN}

^{?MEN MAY WITHDRAW THEIR}

^{INCOME CONTRIBUTION}

^WOMEN'S

^{DECISIONS ABOUT}

^CONSUMPTION

^{?WOMEN'S DECISIONS MAY REPLICATE}

^{GENDER INEQUALITY}

^WOMEN'S

^MICRO-

^ENTERPRISE

^{?INCOMES MAY BE LOW}

^INCREASED

^INCOME

^{SOCIAL AND POLITICAL}

^EMPOWERMENT

^{ABILITY TO}

^{NEGOTIATE CHANGE}

^{IN GENDER}

^RELATIONS

^{?MAY REINFORCE}

^{EXISTING ROLES}

^{?MAY HAVE}

^LITTLE

^IMPACT

^{?MEN MAY CONTROL INCOME}

^{INCOME UNDER}

^WOMEN'S

^CONTROL

^{?WOMEN MAY USE}

^{UNPAID FAMILY}

^LABOUR

^IMPROVED

^{WELLBEING OF}

^WOMEN

^INCREASED

^{STATUS AND}

^{CHANGING ROLES}

^IMPROVED

^{WELLBEING OF}

^CHILDREN

			^WOMEN'S ^NETWORKS AND ^MOBILITY
^?WOMEN MAY ^NOT WORK FOR ^WIDER CHANGE

^{ECONOMIC EMPOWERMENT}

^IMPROVED ^WELLBEING OF ^MEN	^INCREASED ^WAGE ^EMPLOYMENT ^FOR WOMEN	^WIDER MOVEMENTS ^FOR SOCIAL ^AND POLITICAL CHANGE	Source: UNFEM PAPER, 1995

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2.6 Theoretical links between Microfinance and Poverty

2.6.1Reduction/Analytical Framework

This section is a presentation of theoretical debates about microfinance and poverty reduction and an illustrative analytical framework that is relevant for understanding this study.

2.6.2 Poverty Reduction and Microfinance

The poor and poverty reduction has become the object of unparalleled concentration now days both at national and international levels ( www.countercurrents.org). As one of the MDGs, elimination of poverty has become a key issue for all those interested in development of the developing countries (Nalunkuuma, 2006), with microfinance as one of the predominant methodologies for making finance accessible to the poor especially among the donor community. Many donor agencies and governments in developingcountries are now funding a growing number of microfinance organizations (Lont and Hospes 2004).

Microfinance is considered to be a solution for overcoming poverty. Lack of savings and capital make it difficult for many poor people who want jobs in the farm and non-farm sectors to become self employed and to undertake productive employment-generating activities. Providing credit seems to be away to generate self employment opportunities for the poor. But because the poor lack physical collateral, they have almost no access to institutional credit.

At the same time, informal lenders in many developing countries often charge high interest rates, inhibiting poor households from investing in productive income-increasing activities (Khandker, 1998).

According to Guerin and Palier (2005), the primary objective of microfinance is the provision of financial aid on a small scale to those who are on the fringes of society, too overwhelmed by the formal restrictions and procedures of the organized sector, too vulnerable to help them and left out of the mainstream. Microfinance provided to the vulnerable has to be synonymous with empowerment of the beneficiary groups in order to sustain their income flow and make them economically independent (ibid)

Microfinance institutions are therefore intended to provide reliable and affordable financial services to the poor by providing cheap credit with minimum requirements for example they demand for securities which are affordable by the poor clients. These schemes also cut on the

28

bureaucratic tendencies which make it easier for the poor people to access micro credit. It is argued these microfinance institutions (MFIs) are in position to enhance the ability of the poor to move out of poverty as well as to prevent those above the poverty line from sliding into poverty (Qorini Iwan, 2005).

Montgomery and Weiss point out that the case for microfinance as a mechanism for poverty reduction is simple. If access to credit is improved, it is argued, the poor can finance productive activities that will allow income growth, provided there are no other binding constraints (Montgomery and Weiss, 2005).This is a route out of poverty for the non-destitute chronic poor. For the transitory poor who are vulnerable to fluctuations in income that bring them close to or below the poverty line, microfinance provides the possibility of credit at times of need and in some schemes the opportunity of regular savings by a household itself that can be drawn on. The avoidance of sharp declines in family expenditures by drawing on such credit or savings allows `consumption smoothing' (ibid).

However, there are inconclusive arguments on the impact and the role of microfinance and micro credit programs in poverty reduction. Proponents of microfinance consider that poor's access to credit boosts income levels, increases employment at the household level and thereby alleviates poverty.

Also that, credit enables poor people to overcome their liquidity constraints and undertake some investments. Furthermore that credit helps poor people to smooth out their consumption patterns during the lean periods of the year(Okurut et al 2004).By so doing, credit maintains the productive capacity of the poor households (ibid).

Zeller and Sharma (1998) cited by Okurut et al (2004) argued that microfinance can help to establish or expand family enterprises, potentially making the difference between grinding poverty and economically secure life.

But Burger (1989) observed that microfinance tends to stabilize rather than increase income, and tends to preserve rather than create jobs. In the same view, Arbuckle et al (2001) cited by Nalunkuuma (2006) indicates that studies carried found little to recommend that micro credit has any significant impact on enterprise incomes. Evidence by Coleman (1999) suggested that the village bank credit did not have any significant impact on physical asset accumulation; production and expenditure on education. The women ended up in a vicious cycle of debt as they used the money from the village bank for consumption and were forced to borrow from money

29

lenders at high interest rates to repay the village bank loans so as to qualify for more loans. However, impact for women who had access to bigger cheaper loans from the village bank was significant. The main conclusion of the study was that credit is not an effective tool for helping the poor to enhance their economic condition and that the poor are poor because of other factors (like lack of access to markets, price shocks, un equitable land distribution) but not lack of credit. A study of 13 MFIs in seven developing countries concluded that households' income tended to increase at a decreasing rate, as the debtors income and asset position improved (Mosley and Hulme 1998) cited by Okurutet al (2004).Similarly, Hulme and Mosley (1996) cited by Lont and Hospes(2004) in a study made on Twelve lending institutions providing micro-lending services in seven countries found that the impacts of microcredit on the poor were on average small or negative relative to the control group. Results by Diane and Zeller (2001) in the study done in Malawi also suggested that microfinance did not have significant effect on household income. Fisher and Sriram (2002) stress that access to microfinance services protects the poor against the often severe consequences of fluctuating incomes, ill health, death and other emergency expenditures. Despite the overwhelming claims that microfinance credit works best for the poor people, Johnson and Rogaly (1997) argue that poorest borrowers become worse off as a result of credit and that it makes them vulnerable and expose them to high risks.

Using gender empowerment as an impact indicator, some studies argue that microcredit has a negative impact on women empowerment (Goetz and Gupta, 1994). Goetz and Gupta (1994) as cited by Kabeer (2000) using a five point index of `managerial control» over loans as their indicator of empowerment. At one end of their index are women who are described as having `no control' over their loans: these are women who either had no knowledge of how their loans were used or else had not provided any labor into the activities funded by the loan. At the other end are those who were considered to have exercised `full' control, having participated in all stages of the activity funded by the loan including the marketing of the produce. The study found that the majority of women, particularly married women exercised little or no control over their loans by this criterion. Sebstad and Chen (1996) as cited by Lont and Hospes (2004) in their summaries of the thirty-two research and evaluation reports found that micro lending to women had positive impacts on their empowerment in Asian countries. However, reports from African programs found very little or no impacts of microcredit on the empowerment of women. In the same studies, credit had a positive impact on households' income, but the impacts on health, on

30

the nutrition level of family members, and on children's attendance at schools were not conclusive.

Also the view that it is the less badly-off poor who benefit principally from microfinance has become highly influential and for example was repeated in the World Development Report on poverty (World Bank, 2000) cited by Montgomery and Weiss ( 2005). Simanowitz and Alice (2002) put it clearly that, the microfinance industry has concentrated not on reaching the poor but rather on financial and situational performance. Meanwhile Mayoux (2001) argues that microfinance institutions are undergoing a period of rapid innovations. They are coming up with products and new methodologies for reaching the broader category of poor people including the poorest of the poor. This will enable microfinance to have a significant impact in achieving poverty reduction.

Also where group lending is used, the very poor are said to be excluded by other members of the group, because they are seen as bad credit risk, jeopardizing the position of the group as a whole. Similarly, it's argued that when professional staff operates as loan officers, they may exclude the very poor from borrowing, again on the grounds of the repayment risk (Montgomery and Weiss, 2005). Simanowitz in regard to groups points out that while the use of the groups has the potential to build social capital, develop skills; the way they are used varies considerably between MFIs. Some use them solely as means for creating peer group pressure while others use them more deliberately as vehicles of the empowerment (Simanowitz, 2003). From the above discussions, we realize that core issues remain how to make microfinance accessible to the poor and ensure that the benefits are positive. For the purpose of this study, the above theoretical debates form the bedrock to explore into the role of microfinance in poverty reduction in Rwanda.

2.6.3 Analytical Framework

There are various factors and constraints which may explain why people are poor: inadequate amount and/ or quality of assets; constrained opportunities for welfare generation from assets; and qualitative factors such as vulnerability, powerlessness and social exclusion (Gulli and Berger 1999). The main contribution of financial services savings, credit and insurance is to address their financial constraints and to facilitate management of money (ibid)

FIGURE 3: LINKING MICROFINANCE WITH POVERTY REDUCTION

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MFI OUTREACH IMPACT DOMAINS POVERTY REDUCTION

? MFI

· Mission and objectives

· Methodology, terms and conditions ? OUTREACH

· Scale

· Depth

· Breadth

· Geographical

· Quality

? IMPACT DOMAINS

· Income increases

· Protection against income shocks + reduced vulnerabilities +diversified IGAs

· Health and nutrition improvement

· Children Education

· Empowerment and building social capital

? Poverty Reduction

Source: Adapted from Gulli and Berger (1999)

This analytical framework is build on the ground that if the MFI mission and objectives are geared towards poverty reduction, then the terms, conditions and methodology and product design have to be favorable for the poor to access the microfinance products and services which will be reflected in the outreach; how many poor people are reached (scale of outreach), how poor are the clients (depth of outreach), in which economic sectors are they engaged (breadth of outreach), where do they live (geographical outreach) and the quality which is how the services fit the needs of potential clients. Depending on whether the poor have been reached with

32

microfinance, then impact may be expected in terms of (i) income generation, (ii) asset building and reduced vulnerabilities defined as increases in ownership of household's physical assets and reduced vulnerabilities as the poor are encouraged to save and diversify their livelihood activities, (iii) empowerment which means enabling the poor to have greater control over the resources and their lives and taking part in family and community decisions,(iv) building social capital implying reduced isolation, opportunity to share information and building the bond that was not previously there. (V) Good health in terms of improvement in nutrition and afford medical care, and (VI) education of clients' children which is investing in children's education as a result of new income from micro-enterprise. This will in turn lead to poverty reduction on women and all family members.

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CHAPTER THREE: RESEARCH METHODOLOGY

3.1. RESEARCH METHODOLOGY

This research methodology was designed in a simple way and conducted using a detailed questionnaire and structured interviewed to gather and systematically track the client's responses on the impact of microfinance towards their economic empowerment.

Research methodology can be described as a course of action which describes the tools that are used when conducting a research study. This chapter involves various methods, techniques and procedures of the data collection, processing as well as data analysis that were used to collect, analyze, and interpret data which gives an overview of how the entire study was conducted to reach a final conclusion on how microfinance leads to women's economic empowerment. I t also discusses the case study, the population, sample size, and sampling the techniques used during research study such as, documentations, questionnaires and interviews. The chapter cannot conclude without taking about various procedures for data processing and analysis. These procedures include percentages, editing, coding, and tabulation.

3.2 CASE STUDY

Pro-Femmes/ Twese Hamwe through Duterimbere Microfinance Institution is the oldest and one of the renowned Microfinance institutions in Rwanda. The research chose this organization because of its outstanding performance in promoting economic development of poor in Rwanda especially the marginalized women. To this point it serves as an important source of content for the researcher to achieve the objective of her research topic. The bank helps the unemployed women to get microcredit loans to invest in small income generating activities to ensure them with income self sustenance result into economic empowerment of Rwanda women.

3.3. AREA OF THE STUDY

An area of the study refers to the area in which the research was conducted. The research was carried out the PTH through Duterimbere Microfinance Institution in Kigali city. The reason for choosing to study the clients of PTH through Duterimbere Microfinance Institution is because the majorities are women who are most vulnerable and marginalized in Rwandan society. Secondly Pro-Femmes/ Twese Hamwe through Duterimbere Microfinance Institution is one of pioneers' of women microfinance in Rwanda. According to Pro-Femmes/ Twese Hamwe

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through Duterimbere Microfinance Institution, its mission is to provide unique financial services to low income groups in Rwanda and these are mainly women.

Both employees and clients of Duterimbere microfinance institution were considered. The Duterimbere microfinance institution has many clients located in almost all districts of Rwanda, but due to limited time the researcher targeted clients in both Nyarugenge, Kicukiro and Gasabo districts of the Kigali City in mid of May 2012. In addition these districts were selected purposely because of the density of the credit beneficiaries in the area. There are many microfinance institutions that provide similar microfinance services, their coverage in this research would therefore require enough time and fund to meet necessary requirement.

3.4. POPULATION OF THE STUDY

The target populations were all beneficiaries of Pro-Femmes/ Twese Hamwe through Duterimbere Microfinance Institution in Kigali city specifically in Nyarugenge, Kicukiro and Gasabo Districts. The clients from these three districts were chosen to represent other groups due to the limited time and the fact that Pro-Femmes/ Twese Hamwe through Duterimbere Microfinance Institution had within that period planned a meeting with these three groups helped the researcher to meet each group of respondents at a time and within short period.

3.5. SAMPLE SIZE

The sample size was drawn from both the staff and clients of Pro-Femmes/ Twese Hamwe through Duterimbere Microfinance Institution. However, the study of whole population was not possible due to limited time and resources. The researcher As used 200 clients as a sample to represent the whole population, however the researcher interviewed key members of Profemmes Twese Hamwe Through Duterimbere Microfinance Institution for their view. The purpose was to limit the sample size to 200 persons.

Table 1: Respondents numbers in the Districts

Districts	Total number of clients	Sample
Nyarugenge	350	70
Kicukiro	280	60
Gasabo	210	70
Total	840	200

Source: obtained from primary d

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Table 2: Sample size in every district

Districts	Sample
Nyarugenge	70
Kicukiro	60
Gasabo	70
Total	200

3.6 SAMPLE TECHNIQUE

A purposeful sampling method was applied by choosing predefined groups of clients. The researcher conducted study with purpose in mind and targeted specific predetermined groups of women clients in Pro-Femmes/ Twese Hamwe through Duterimbere IMF. Three women groups were selected and from them 70 are from Nyarugenge, 70 clients from Gasabo and 60 clients from Kicukiro. Those clients were selected to fill the questionnaires. This method was useful to the researcher in way that it enabled her to target specific group which has basic information that she believed to be critical for the research.

3.7 CLASSIFICATION AND SOURCES OF DATA

The tradition classification of data for an empirical study like this was employed. Both primary and secondary data sources were used for data collection.

Secondary Data Sources

Secondary data sources are the foundation for which the theoretical and conceptual framework of the research is built. Relevant literature from existing empirical studies and reports from the institutions, library, websites, Government of Rwanda (relevant ministries) were contacted for reports, papers on contribution of microfinance in women empowerment, strategies in Rwanda, and Pro-Femmes/ Twese Hamwe through Duterimbere IMF was visited for reports on microfinance products, services and provision.

Primary data sources

Primary data refers to the original data compiled and studies for specific purpose. The data was collected from the field by issuing questionnaire and requesting the respondents to fill them. This involves focusing on group sessions and primary document analysis and is used to clarify, confirm or explain the results revealed by the secondary data or sources and any other relevant information that could not be disclosed by the existing records.

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Questionnaires and interviews during the research process were essential in the highlighting the contribution of microfinance in women empowerment in Rwanda.

3.8 DATA COLLECTION TECHNIQUE

This involves two types of data collection technique notably questionnaire and interviews, with the help of Pro-Femmes/Twese Hamwe Trough Duterimbere IMF in charge of marketing. Clients above were invited for training and this gave the researcher an opportunity to distribute questionnaires. Since clients were in groups, it was easier to fill questionnaires and return them within short time. As result, the researcher managed to meet the three groups in 3 days. One on Monday, the second on Wednesday, the last on Friday. This Implies that data collection involving interviews and questionnaires look only four days but the whole process including organizing and planning covered four weeks.

3.9 QUESTIONNAIRE FOR CLIENTS

A questionnaire refers to the form containing a set of questions especially the one addressed to statistically significant numbers of subject as a way of gathering information for a study. It is an instrument designed to collect data from respondents in the absence of the researcher this method is used because it allows respondents to give responses to the questions freely at their own time without researcher's influence.

The questionnaire used in data collection was designed in English language and later translated to Kinyarwanda language to ease communication and for those respondents who could be not able to read and write, interpreters were provided. The questionnaire was composed of both structured and unstructured questions, where by structured questions are useful to obtain detailed information where as unstructured questions were designed to extract short and precise responses from the respondents on the same issue.

The fact that all the interviewees were organized in the groups, both distributing and collecting questionnaires were done easily. The researcher issued 200 questionnaires to be filled and all of them were answered successfully, this implies that 100% of the questionnaires sent for data collection were received back.

3.10 INTERVIEWS FOR KEY STAFF

With help of interviews, the researcher conducted face to face interviews with respondents. It should be mentioned that the interviewer directed each question to the interviewee at a time

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while recording the information on a prepared paper for each question asked. The interview was chosen as one of the best instrument of research due to its flexibility and the way of getting responses quickly as an advantageous way to the researcher in terms of receiving information.

3.11 DATA PROCESSING, ANALYSIS, AND INTERPRETATION

Data processing is connection between data collected and data analysis. It involves transformation of observation from the fields into the system of categories and transformation into meaningful information for easily interpretation and understanding. Data processing involves editing, coding, tabulation and finally data analysis.

3.12 EDITING

This involves checking all questions in order to discover errors and remove unnecessary information. Here effort were made by the researcher to reduce errors that could come out during the course of research process, hence creates better ground for coding and tabulation.

3.13 TABULATION

After the process of coding, all information was put into statistical tables showing the number of occurrences of respondents in particular question. The research presented in calculated percentages, after tabulation data were analyzed and summarized in accordance with the objective of study.

3.14 LIMITATIONS OF THE STUDY

During this research, some contains were encountered and these include the following:

? Lack of enough financial resources for carrying out the research work, which did not

allow the researcher to collect enough information.

? Luck of enough documentation

? Lack full access on internet

? Lack of enough time employees were busy with day to day activities and had no time to

help the researcher

? Subjectivity of some respondents was another problem encountered during the study; this

is where some respondents answered the questions without taking into consideration their

real situation.

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? Illiteracy given that the study was conducted in microfinance having clients that are especially low income earner and with low level of education. Some clients failed to express themselves for some of the study attributes as required.

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CHAPTER FOUR: PRESENTATION OF KEY FINDINGS AND DATA ANALYSIS

4.1. INTRODUCTION

This chapter concerns the presentation of findings from the research project. Previously, the research mainly hypothesized that the microfinance contributes in women empowerment, and specifics hypotheses were: 1) Savings, credits and family self-sufficiency are among various determinants of women empowerment, 2) the microcredit impacts the women development/promotion, and 3) women contribute in family empowerment through microfinance.

The data have been collected from self-administered questionnaires and observation on the field to explore the women projects. The data collected have been tabulated and analyzed by descriptive statistics.

4.2. IDENTIFICATION OF PARTICIPANTS

Participants to our research were identified according to some socio-demographics variables. These are the age, marital status, education level, and employment status, which are synthesized in the below table. These variables affect the use of savings and credit operations.

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Table3. Identification of respondents

	Category	Number of respondents	Percentage
Age	Below 18 yrs	22	11%
	18-25yrs	75	37, 5%
	25-45yrs	59	29, 5%
	>45yrs	44	22%
	TOTAL	200	100%
Marital status	Single	64	32%
	Married	136	68%
	TOTAL	200	100%
Education	Primary	112	56%
	Secondary	69	34,5%
	High education	14	7%
	Others	5	2,5%
	TOTAL	200	100%
Employment	Self-employed	91	45,5%
	Employed	58	29%
	Unemployed	36	18%
	Students	15	7,5%
	TOTAL	200	100%

Source: Primary data.

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According to the variable age, most of respondents are ranged between 18-25 years, representing 37, 5%. This meets the fact that the above category represents the active population in general; while below 18 years of respondents have 11%, which means that this group have not yet begin the income generating activities.

With regard to the marital status, the married group showed 68%, and became higher involved in savings and credit operations rather than the single one. The explanation behind is that the single population is less charged than the married group, in terms of people who are/are not dependents on them. The person who has to satisfy the needs of many people has to increase his incomes.

From the above table, results show that people with primary level constitutes 56% of the respondents. Thus, 2.5% of respondents represents category of others. The others group includes those who didn't finish their primary school or never attended. We explain these findings as a result of the microfinance's institutions deal with low income projects.

Reference made to employment status, the high number of respondents (45.5%) is self-employed, whereas the students represent the small group with 7,5%. These results match with the Rwandan government initiatives which encourage people not to look at States employment, but to set up their own business (entrepreneurship). In addition, students are few beneficiaries because they launch their business simultaneously with their studies.

4.3. PRESENTATION OF RESULTS FROM QUESTIONNAIRES

Results from questionnaires are presented in different tables. The questions have been formulated regarding the objectives and hypotheses of the research. For each question, respondents had to choose their position regarding the statement, and depending on the following

elements: strongly agree, agree, neutral, disagree and strongly disagree.

Table 4: Women use savings and credit in economic activity for their empowerment

STATEMEN T	NUMBER OF RESPONDENT S	%
Strongly	41	20.50
agree		%
Agree	98	49%
Neutral	34	17%
Disagree	10	5%
Strongly disagree	17	8.50%
Total	200	100%

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Source: Primary data

From the tables above, most of respondents (49%) agreed with the statement that women use saving and credit for economic activity, while a small group of them (5%) were disagreed. It should also be noted that 20.5% strongly agree with the statement. This means that 69.5% agree with the statement at certain level. The neutral receives 17% of respondents. This may result from low knowledge or lack of information on existence of schemes that help women in promoting their economic activities.

Again 13.5% of the respondents do not agree with the statement

Table 5: Women who benefit credit from Duterimbere IMF are confined in range of female low-income activities

STATEMEN T	NUMBER OF RESPONDENT S	%
Strongly	29	14.50
agree		%
Agree	171	85.5
Neutral	0	0%
Disagree	0	0%
Strongly disagree	0	0%
Total	200	100%

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Source: Primary data

According to the table above, 14.5% of respondents strongly agree while 85.8% only agreed that economic contribution may increase women role in economic decision-making in the household and leading to greater well-being for women, children as well as men. Again none of the respondents disagree with the statement. This shows the high level of knowledge by the respondents on the criteria as of benefiting credits.

Table 6: Women economically-developed change gender role and status within household and community

STATEMENT	NUMBER OF RESPONDENTS	%
Strongly	45	22.5
agree		%
Agree	114	57%
Neutral	19	9.5%
Disagree	22	11%
Strongly disagree	0	0%
Total	200	100%

Source: Primary data A big number of respondents 57% confirms that the women economically-developed change gender role and status within household and community, 22.5%, 9.5% ,11% and 9.5% strongly agree, are neutral and disagree respectively with the role of economic of women in household and the communities while 0% of respondent strongly disagree with the statement.

Table 7: Microcredit given by Duterimbere IMF is limited according to the beneficiary

STATEMEN T	NUMBER OF RESPONDENT S	%
Strongly	77	38.50
agree		%
Agree	123	61.50
		%
Neutral	0	0%
Disagree	0	0%
Strongly disagree	0	1.50%
Total	200	100%

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Source: Primary data From the table above, 61.5% of respondents agree that the microcredit given by Duterimbere IMF is limited according to the beneficiary and 77 persons (38.5%) strongly agree with the same statement.

Table 8: Microcredit provided by Duterimbere IMF is enough to women empowerin

STATEMENT

	NUMBER OF RESPONDENTS	%
Strongly agree	0	0%
Agree	82	41%
Neutral	0	0%
Disagree	0	0%
Strongly disagree	118	59%
Total	200	100%

Source: Primary data

According to the table above, 41% of respondents agree that: Microcredit provided by Duterimbere MFI is enough to women empowering while 59% of respondents strongly disagree with the statement. This means that the majority confirmed microcredit provided by Duterimbere is not enough in case of the women empowerment.

Table 9: Women appreciate the short-term loan from Duterimbere MFI for their
empowerment purpose

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STATEMENT	NUMBER OF RESPONDENTS	%
Strongly agree	0	0%
Agree	0	0%
Neutral	0	0%
Disagree	200	100%
Strongly disagree	0	0%
Total	200	100%

Source: Primary data

According to the above table, all respondents (100%) have been disagreed the short-term loan from Duterimbere IMF for their empowerment. It means that time allocated to the repayment of credit is not enough according to the capacity of the initiated business.

Table 10: Women may be economically self-sufficiency due to microcredit without the men support

STATEMENT	NUMBER OF RESPONDENTS	%
Strongly agree	0	0%
Agree	112	560%
Neutral	0	0%
Disagree	55	27.50%
Strongly disagree	33	16.50%
Total	200	100%

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Source: Primary data

The above table shows that 112 respondents (56%) agreed that most women may be economically self-sufficiency due to microcredit without the men compared to 33 respondents (16.5%) who did not strongly agree with the statement.

Table 11: Socio-demographics variables such as education level, age, marital and professional status lead to success of microcredit in women empowerment

STATEMEN T	NUMBER OF RESPONDEN TS	%
Strongly agree	13	6.50%
Agree	61	30.50
		%
Neutral	27	13.50
		%
Disagree	39	19.50
		%
Strongly disagree	60	30%
Total	200	100%

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Source: Primary Data From the above data, 6.5% strongly agree and 30.5% agree that Socio-demographics variables such as education level, age, marital and professional status lead to success of microcredit in women empowerment and/or what little income they earn may substitute for former male household contributions as men retain more of their earnings for their own use. 13.5% of respondents are neutral while 19.5% and 30% strongly disagree and disagree with the statement respectively

Table 12: Business held by women is competitive with others

STATEMENT	NUMBER OF RESPONDENTS	%
Strongly agree	0	0%
Agree	127	63.50%
Neutral	29	14.50%
Disagree	44	22%
Strongly disagree	0	0%
Total	200	100%

Source: Primary data

The table shows that 63.5% of respondents confirmed that Business held by women is competitive with others and reproductive tasks, 44% disagreed with the statement while 14.5% of respondents did not comment about the subject.

Table 13: Microcredit offered to women improves the family standing

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STATEMENT	NUMBER OF RESPONDENTS	%
Strongly agree	100	50%
Agree	62	31%
Neutral	0	%
Disagree	38	19%
Strongly disagree	0	0%
Total	200	100%

Source: Primary data

From the above table, most of respondents (50%) were strongly agreed, and 31% agreed that the microcredit offered to women improves the family standing, whereas 38% of them disagreed with the statement.

Table 14: Women empowerment involves the family and community development

STATEMENT	NUMBER OF RESPONDENTS	%
Strongly agree	36	18%
Agree	164	82%
Neutral	0	0%
Disagree	0	0%
Strongly disagree	0	0%
Total	200	100%

Source: Primary data 18% 0f the women interviewed strongly agreed to Women empowerment involves the family and community development have highest the important in the family promotion and the number of the 82% of respondents agreed with the statement.

Table 15: Family economy may be based on the women empowerment due to Savings and credit through microfinance

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STATEMENT	NUMBER OF RESPONDENTS	%
Strongly agree	161	80.50%
Agree	23	11.50%
Neutral	0	0%
Disagree	7	3.50%
Strongly disagree	9	4.50%
Total	200	100%

Source: Primary data

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The study shows that 80.5% of the women respondents were particularly proud of the financial contribution of the loan received to their empowerment especially in their family and 11.5% of respondents agreed with the same. However, 4.5% and 3.5% disagreed and strongly disagreed with the statement respectively.

4.4. DISCUSSION OF RESULTS

The researcher expressed her interest to conduct microfinance impact assessment among PTH through Duterimbere MFI women clients and their path to economic development. It has been recognized that PTH through Duterimbere MFI is doing an outstanding work to ensure transformation of lives of Rwandan poor women who have been lagging behind economically due to political, social and cultural barriers.

However, Rwandan academicians and the public alike do have limited knowledge about intervention that PTH through Duterimbere MFI has been providing to bring economic independent, pride, and confidence and build power in decision making to the women clients.

4.4.1. DISCUSSION OF RESULTS FROM QUESTIONNAIRES

The results from our research have confirmed the contribution of microfinance in women empowerment in Rwanda. Different questionnaires answered by respondents have underlain the above assumption. Some of these questions have evaluated the use of savings and credits in economical activity for women empowerment, and this met the agreement of most of respondents. Indeed, when the people resources are limited or no existent, they have to look on low-income generating activities in order to gain money. In regards to the socio-demographic variables, the majority of respondents are married, self-employed, achieved only the primary level, and are aged between 18-25 years. This justifies the fact that respondents in the mentioned categories deal with microfinance in terms of saving & credits for their survival. The requirements to beneficiate the credit from the microfinance are flexible rather than in other Banks. Currently in Rwanda, it has been evidenced that none can get better economically without the credits and savings operations.

Further, another item has questioned about the change of gender role and status within household & community by economically developed-women. In the past, women in Rwanda were not considered with appropriate dignity. Since they have been involved in business and other responsibility, they have changed that mentality. From our research, most of respondents have

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agreed with the statement. Effectively, women empowerment affects their status not only in their place of residence but also within the community, and this constitutes the sum or the result of their status change. The women economically-developed need their involvement in income generating business, which imply the use of saving and credit operations.

On the other hand, the women appreciation towards the microcredit provided by Duterimbere IMF in their empowerment has been analyzed, and most of respondent have expressed their wish to increase the amount of credit offered by Duterimbere. All the same, the research has evidenced that most of clients who benefit from Duterimbere's microcredit have agreed to be in female low-income activities. This means that women who deal with Duterimbere IMF would like to have more amount of credit for high income generating activities. Obviously, it emphasizes that a low income generating activity becomes later a high income generating activity, and justifies the contribution of microfinance in women empowerment.

Thus, respondents have agreed that through the microcredit, women may become economically self-sufficiency even with the absence of men support. This confirms the part of microfinance in women empowerment because in former times, the woman has been for a long time financially dependent on man. Currently, as long as Rwanda still obsessed by the women promotion in various domains, their financial self-sufficiency will strengthen and make easy the process. Besides, the Rwanda cabinet meeting held on 27^th June, 2012, approved the strategies which intend to facilitate women and young people to accede to credit within financial institutions for their economical development.

Moreover, the research has interestingly enough evidenced that most of participants were strongly agreed not only that the microcredit offered to women in context of family impacts positively its standing improvement, but also that the family economy may be based on the women empowerment due to savings and credit through microfinance. One thing is for sure, woman has always been the pillar of the family economical development. Furthermore, it is known that the family development goes hand in hand with the community development. Then, the women involvement in savings and credit process towards microfinance leads up to the community promotion through the family one.

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Based on the results of the present research, we intend to emphasize on the strengthening of women empowerment through microfinance for the following major achievements: firstly, as women constitute the high rations among all Rwandan, they empowerment will become a key point in sustainable development of the country. Secondly, the promotion of women through microfinance enhances them to become more self-employed, and encourage gender promotion which leads them to competitiveness with men. Thirdly, the reinforcement of microfinance and the encouragement of people, women especially, to deal with them contributes in poverty alleviation through redaction of the rise in unemployment because people become job creator not job seeker.

It is important to note that these results concern only PTH through Duterimbere IMF and participants to the research. They can be generalized neither to all microfinance institutions nor to all women who deal with microfinance. Another limitation related to this research is linked to the inaccessibility to all respondents for interview and observation of all their projects. Thus, it has been difficult for us to evaluate with precision the progression made by our respondents since it wasn't easy to eliminate all factors which may have intervene in their economical development.

4.4.2. DISCUSSION OF RESULTS FROM INTERVIEW

We remind that some information have been obtained through interview with a small group among Duterimbere IMF staff and its beneficiaries. We mention that all information have been completed by observation on field for some projects and consulting some Duterimbere IMF documents. The results from interview have allowed us to draft the contribution or impact of Microfinance in women empowerment, and the challenges experienced by both sides: institution and beneficiaries (Women).

4.4.2.1. IMPACT OF MICROFINANCE IN WOMEN EMPOWERMENT

Since the most direct anticipated benefits of microfinance concern are women clients' business, I shall begin with a discussion of the effects of Microfinance program in that area. Running a successful business not only contributes to women's improved welfare; it also contributes both directly and indirectly to their economic empowerment. The interview held with the PFT and Duterimbere IMF managing director showed that through microfinance services, women's business become more successful in the following ways:

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These services enable an increase in operating income that affords women basic necessities, saving, self esteem, and self respect which have improved relationships with families and communities, more strategic planning and pricing, and diversification and expansion into more profitable product lines.

Microfinance services ensure an increase in operating income which is particularly important for women's economic empowerment through generating their own capital or have access to cash credit and provides women with considerable more power and prestige in the marketplace.

4.4.2.2. CHALLENGES EXPERIENCED BY DUTERIMBERE IMF IN OFFERING

CREDIT

Women have limited knowledge for business transaction and general business knowledge; this affects clients' business performance in term of price negotiations and dealing with customers. Thus in turn affects income returns which results into difficulties in their loan repayment. Product diversification has been also a burden to Duterimbere IMF bank clients; where by majority of the borrowers have diversified their loan into other activities leading to loan repayment failure.

4.4.2.3. CHALLENGES EXPERIENCED BY BENEFICIARIES (Women)

During the interview done with some women who have already benefited microcredit from Duterimbere IMF, we have noted certain challenges. The main challenges may be related to the educational background, where beneficiaries who have completed only primary level are more than other respondents (56%). This may easily arouse some doubt about the success of their business. But, according to the talk of Mrs Chantal Mukarugomwa , we realized that they struggle through somehow:» It was very difficult on the started my business cause my little skills and also business experience, I have not confident myself really I was lack the happiness and responsibility to take some loan cause of the lack of capacity knowledge in the using of bank loan. But according of the PTH through Duterimbere IMF advise I'm successful in income generating business and I have high knowledge in using loan after the different training given by PTH, RCA, MIGEPROF, Duterimbere IMF»; Chantal said.

Another woman (Kampire Alice) respondent from Muhima Sector said «my husband used to get angry whenever I would kneel before him (kneeling is a sign of respect that women pay to their husbands) to ask for money to buy clothes or any other domestic item but now I no longer kneel

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before him to ask money frequently. Similarly, I used to disturb neighbors and relatives asking for various things including clothes, salt, soap but now I buy them on my own and we are now happy with my husband in the house»

Also a woman (Uwibambe Angelique) respondent from Gikondo sector said «I can now take out my husband for a drink and can buy meat that he would find ready on table than before when he could eat meat and drink outside in the bar alone and bought beans for the house»

The above stories suggest that through microfinance provided by Duterimbere MFI, clients especially women have been empowered economically and this has impacted positively on their household relations with the husbands. However, when we probed to whether these women had full autonomy over their monies, most reported to have joint bank accounts with their husbands which raises questions to whether women really have `full' control over the loans and profits that accrue thereof.

In general, the challenges by women faced in microfinance services and in their business those are:

? Few women clients still lack self confidence to try other business opportunities;

? Limite educational background as it is big problem in the improvement for women's business;

? Excess household responsibilities that inhibit their business concentration

? The loan they receive is not enough to satisfy their business needs;

? Lack of tangible assets or properties to be used for larger loan guarantee or caution in the case an individual women encounters loan repayment problem has been one of the challenges

Few of the interviewee, pointed out that family responsibilities take a lot of of women's time that could be applied for improving their income generating efforts. Their responsibilty for children care limits their mobility and obliges them to generate income in less conducive environment for business.

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CHAPTER FIVE: CONCLUSION AND RECOMMANDATIONS

5.1. INTRODUCTION

This chapter represents a brief summary of findings of the study by expressing the general view of what the researcher discovered during the research. It is also in this chapter that the researcher's recommendations, suggestions and conclusion are mentioned.

5.2. CONCLUSION

The aim of this research is to explore the impact to microfinance intervention on women economic empowerment and the circumstances under which microfinance can help the poor women out of their poverty situation. Microfinance provides employment to the poor women who have no other means of income. Women are highly represented in self-employment and operating small income generating activities. Therefore, microfinance has the potential to have a powerful impact on women's economic empowerment.

Women need, want, and profit from credit and other financial services. Strengthening women's financial base and economic contribution to their families and communities plays a role in empowering them. To a large extent, access to capital or credit may be the only input needed to start women on the road to economic empowerment.

However, women have indicated that often they also value the non economic benefits of microfinance services. Some of the most valued benefits include expanded business and social networks, improved self esteem, increased household decision making power, and increased respect and prestige from both male and female relatives and community members.

Pro-Femmes/ Twese Hamwe through Duterimbere MFI has proved to be a powerful instrument toward women empowerment, enabling them to build assets, increase incomes, and reduce the vulnerability to economic stress. All women who receive a loan, gain access to additional resources and have succeeded in controlling their loans and using them to generate independent incomes.

Targeting women continues to be important for Pro-Femmes/ Twese Hamwe through Duterimbere in design of its products and services, mainly because women by default have less access to credit and because they face constraints unique to their gender. Product design and program planning should take women's needs and assets into account.

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By building an awareness of the potential impacts of their programs, PTH through Duterimbere can design product, services, and service delivery mechanisms that can break women economic dependence and enhance their economic empowerment.

Even when products and services target primarily women, some women still face considerable challenges relative to men because of more limited resources (land, houses) greater domestic burden, weaker self confidence and less education.

Some do target the most vulnerable, while others target the entrepreneurial poor and the not-so-poor. Furthermore, the clients interviewed may have started off very poor and improved their livelihood through the microfinance, made available by Profemmes Twese Hamwe partners. Obviously, even if a client is not «ultra-poor», she may have a long way to go before attaining a sustainable livelihood. Microfinance makes a valuable contribution to reaching that goal.

In just a few years period Mukamisha Leoncie has gone from dependence on food aid to producing and distributing food products and employing members of the community thanks to loans of Duterimbere Microfinance as well as the widow women association.

Awareness Based on the reasons given by PTH offices and MFI partners for the cause of women not being able to enter into certain businesses, there is ample scope for gender-related awareness rising. Time required for caring tasks, lack of education and training, and inadequate skills are

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mentioned as reasons women cannot perform certain work. Land ownership and sole capital ownership by men are apparently also still widely available and acceptable reasons for withholding opportunities from women.

All in all, most interviewees seem satisfied with the microfinance services as offered.

Most clients, in general, have a better life than before. By implementing a limited number of changes to the microcredit programs of MFI partner more direct involvement of PTH offices in gender related issues and gender training at various levels optimal use can be made of knowledge already available and enthusiasm at all levels. As Pro-Femmes/ Twese Hamwe is working on a country wide scale, an extra increase in women's empowerment could benefit women in many different countries.

In the Pro-Femmes/ Twese Hamwe offices that completed the questionnaire, 54% of staff is female. The number of women staff is just one of many criteria in a gender audit, but this is a positive result. There is a relation between the number of women on staff and gender mainstreaming in general. It is mainly through female staff that gender issues are really mainstreamed, notwithstanding the fact that men have a positive view and input. With regard to the expansion of gender and empowerment-related programming in future, this is very promising.

Microfinance, one of Duterimbere in partnership with Pro-Femmes/ Twese Hamwe main activities, can be a very useful instrument in contributing to women's empowerment, and offers women a free choice with regard to the way they want to use their talents. If some extra efforts are made, the contribution could be even larger.

Microfinance has not been able to reach the poorest at the bottom of the poverty line and therefore the claims that it will reduce poverty for the majority poor remains a mere myth.

However, it's worth noting that, Pro-Femmes/ Twese Hamwe through Duterimbere MFI has reached a number of poor people who previously had been excluded from the formal banks. The program has been successful in reaching the poor especially women who have not been served by the traditional financial institutions and findings indicate that it has reduced poverty among the borrowers.

The MFI also besides group-based lending program has recently introduced individual lending for long term borrowers with excellent repayment records. This will enable microfinance borrowers to easily graduate to formal banking system in future. However, the study findings

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indicate that microfinance was likely to have greater positive impacts in urban than in the rural and this suggests differences in opportunities, women poverty levels and microfinance products appropriateness.

5.2. Recommendations/Suggestions

From the study, the following suggestions are devised to make microfinance more effective as a tool for poverty reduction.

1. MFIs should have broader target group including the ones in the extreme poverty. Moreover, according to Rwanda Microfinance Policy, microfinance services should be available to all sections of the community, particularly to the poorest and most vulnerable members of society. (Rep. of Rwanda 2006);

2. The design of products and services should also be made flexible to reflect the needs of the poor. As was found out by this study, microfinance is most directed to income generating activities, or delivered to those who have existing businesses, street trade or physical collateral.

3. This excludes a large majority of the poor people who would need the products and services and cannot afford this collateral. It's thus important to mention that there is need to improve the design and outreach and to see MFI as part of the package for targeting the poor.

4. The credit delivery mechanism (group lending with a weekly repayment schedule) can be effective in reaching a large number of small producers but cannot reduce poverty on large scale. The poor engaged in agriculture for instance would need a loan that would be paid when their harvests are ready. This suggests that microfinance products and services should be best tailored to the diverse needs of the poor people and the poor should not be looked at as a homogeneous group of people. Products should as well be contextualized taking into account rural-urban differences

5. To sum it up, microfinance is not a `magic» bullet for poverty reduction and the increasing government's and aid agencies' emphasis on microfinance as a panacea to poverty may be an over simplification of the matter.

6.

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The study findings indicate that MFI alone cannot meet the needs and resolve a wide range of difficulties of the all poor women. There is need for infrastructure developments for remote areas and need to improve market potentials.

7. We suggest of starting with the development of a strategy for encouraging women's empowerment. This should take place in conjunction with all microfinance's actors to discuss how to support empowerment and how to implement the strategic plan. I recommend pursuing a double bottom-line strategy using a socially oriented approach to foster empowerment, while at the same time stimulating financial sustainability and additionally, provisions for monitoring must be made and MFIs should be involved and eventually assisted in developing empowerment indicators.

8. Incentive systems should be set up on all levels to encourage MFIs and Pro-Femmes/ Twese Hamwe to incorporate strategies and activities supporting women's empowerment into their work. The key here is not to provide more funds in general, but rather to specifically reward promising and/or effective approaches.

9. Pro-Femmes/ Twese Hamwe needs to assist MFIs in adapting their financial products and loan modalities to clients' needs. This process includes obtaining information on which needs different client groups have either through research or feedback from loan officers and clients themselves and subsequently adapting the loan modalities. This can be done with the participation of clients.

10. MFIs should adapt existing training programs and set up new ones in response to clients' needs. With respect to introductory training, as previously mentioned, transparency and full understanding of loan modalities must be ensured. The current practice of one-day workshops will not be enough. I also encourage provision of financial literacy training and strategic transformative training, where women are not only confronted with calculation and business skills, but also reflect on their current situation.

11. An internal communication and decision-making structure between Pro-Femmes/ Twese Hamwe actors at all levels should be put in place. These structures should be participatory and provide ample space for all actors, especially the MFIs and the Technical service Provider, to include their ideas and practical experiences and discuss what assistance they need to successfully support women's empowerment. In additionally, information sharing and knowledge management with and between MFIs

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should be institutionalized. This is especially important at the beginning of the new program phase where new priorities are set.

12. Despite increasing competition between MFIs to disburse loans, both Pro-Femmes/ Twese Hamwe and its member MFIs must ensure that loans are given responsibly to clients who can afford them. Pro-Femmes/ Twese Hamwe should also encourage MFIs to re-evaluate their effective interest rates, requests for collateral and policies on group guarantees as well as punitive and legal measures in case of non-payment (e.g., criminalization of clients). Such measures will guarantee responsible finance and ensure that the current largely negative image of microcredit is counter balanced.

REFERENCES

1. Cheston, susy Kuhn, Lisa (2002). Empowering women through microfinance; in Daley-Harris, Sam (ed) «Pathways out of provety: Innovation in microfinance for the poorest families», Jumarian Press, Bloomfiled Connecticut

2. Batliwala, Srilatha (1994). The meaning of women's empowerment: new concepts from action, In G. Sen, A. Germain, and L.C. Chen, (ed).Population politics reconsidered: Health, Empowerment and Rights. Boston: Harvard University press.

3. Majanja (2002). Women enterprise development: (gains and challenges) paper presented at women international conference, Kampala Uganda 2002

4. Mayoux, Linda (2001). Tackling the Down Side: Social Capital, Women's Empowerment and Micro-Finance in Cameroon, Development and Change, Vol. 32, 2001 (1), 421-450.

5. Gulli, H. and M, Berger (1999). Microfinance and Poverty Reduction-Evidence from Latin America, Small Enterprise Development Vol. 10 No 3, Inter-American Development Bank

6. Ministry of Gender and Family Promotion, (2010). National Gender Policy

7. HelgeRoxi, Heidi Berkmüller, Phillip John Koller, Jennifer Lawonn, Nahide Pooya, Julia Schappert (2010). Economic Empowerment of Women through Microcredit in Sierra Leone. Berlin 2010

8. Bigsten, A. and A, Isaksson (2008). Country Economic Report; Growth and Poverty in Rwanda: Evaluating the EDPRS 2008-2012, Sida, Department for Policy and Methodology

9.

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Enterprising Solutions Global Consulting, LLC (2005). Rwanda Micro Finance Assessment, Kigali

10. Fisher, T. and M.S.Sriram (2002). Beyond Micro-credit: Putting development back into microfinance, Vistaar Publications, New Delhi

11. Guerin, I & J, Palier (2005). Micro-Finance Challenges: Empowerment or Disempowerment of the poor? French Institute of Pondicherry, India

12. Iribagiza, D (2007). A report on Industrial Training carried out in Urwego Opportunity microfinance Banking S.A, School of Finance and Banking, Kigali Rwanda

13. Kabeer, N. (2000). Conflicts over credit: Re-Evaluating the Empowerment Potential of Loans to Women in Rural Bangladesh, World Development Vol.29, No.1, pp 63-84, 2001, GreatBritain

14. Kereta, Befekadu, B. (2007). Outreach and financial Performance: Analysis of Microfinance Institutions in Ethiopia, African Economic Conference Centre (UNCC), AddisAbaba, Ethiopia

15. Khandker, Shahindu, R. (1998). Fighting Poverty with Microcredit: Experience in Bangladesh,Oxford University Press, New York

16. Mayoux, L. (2001). Tackling the Downside: Social Capital, Women's Empowerment and Microfinance in Cameroon, Development and Change, Vol.32, No.3 pp.435-464

17. Momoh, J. (2005). The Role of Micro-financing in Rural Poverty Reduction in Developing Countries, Wismar Discussion Papers, University of Technology, Business and Design, Wismar, Germany

18. Ahmed Obaid, Thoraya,( 2002). Empowering women through microcredit: progress and possibilities. Statement by the executive director, UNFPA. United Nations Headquarters, New York.

Internet Sources

1. Deshmukh- Ranadive,J. 2008, Can microfinance empower women? Indian school of microfinance for women. At URL: http://www.ismw.org.in/highlights1.asp (viewed 25/08/2009)

2. Development projects to promote economic empowerment of women: www.munfw.org/archive/50th/undp1.htm (viewed 30/08/2009)

3.

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Role of microfinance in empowering women in Africa. At URL: http://www.africanexecutive.com/modules/magazine/articles.php/article

4. http://www.betterworld.net/quotes/microcredit-quotes accessed on 08th Nov.2008

5. http://www.bnr.rw accessed on 04 June 2008

6. http://www.countercurrents.org accessed on 22nd Oct 2008

7. http://www. Mixmarket.org accessed on 30th Oct 2008

8. http://www.opportunity.org accessed on 4th Sept 2008

APPENDICES

1. Questionnaire

2. Interview guide

RESEARCH QUESTIONNAIRE Dear Respondent,

I'm pursuing the program of Master of Commerce at Lovely Professional University (LPU). And I'm doing a survey on the CONTRIBUTION OF MICRO-FINANCE IN WOMEN EMPOWERMENT. That is why I inviting all of you to take part in this survey, please answer the following questions as much as you can.

Thank you for your support.

Procedure of Survey: This questionnaire contains 12 questions at which every participant must answer each and every question.

Quote of Survey:

1. The quoted in this survey are both sex, male and female of age between 18 to above 45 years.

2. Marital status: (1) Single (2) Married, (3) Widow

3. Level of education from Senior School (Secondary School) up to the above Post graduate level.

4. The employment status

I. Regarding Survey

1. Full Name of respondent:

2. Gender : ( Tick the appropriate)

(1) Male

(2) Female

1. Full Name of respondent

2. Gender : ( Tick the appropriate)

(1) Male (2) Female

3. Which of the following ranges includes your ages? ( Tick the appropriate)

(1) Below 18 (2) 18 to 25 (3) 25to 45 (4) Above 45

4. II

Highest level of education you have completed ( Tick the appropriate)

(1) Primary school (2) Secondary (3) High education (4) Others

5. Marital status ( Tick the appropriate)

(1)Single (2) Married, (3) Widow

6. What is your employment status? ( Tick the appropriate)

(1)Self-employed (2) Employed (3) Unemployed (4) Student (5) Others II. Questions (Tick the appropriate quadrant)

No	Statements	Strongly disagree	Disagree	Neutral	Agree	Strongly agree
1	Women use savings and credit in economic activity for their empowerment	1	2	3	4	5
2	Women who benefit credit from Duterimbere IMF are confined in range of female low-income activities	1	2	3	4	5
3	Women economically-developed change gender role and status within household and community	1	2	3	4	5
4	Microcredit given by Duterimbere IMF is limited according to the beneficiary	1	2	3	4	5
5	Microcredit provided by Duterimbere IMF is enough to women empowering	1	2	3	4	5

III

6	Women appreciate the short-term loan from Duterimbere IMF for their empowerment purpose	1	2	3	4	5
7	Women may be economically self- sufficiency due to microcredit without the men support	1	2	3	4	5
8	Socio-demographics variables such as education level, age, marital and professional status lead to success of microcredit in women empowerment	1	2	3	4	5
9	Business held by women are competitive with others	1	2	3	4	5
10	Microcredit offered to women improves the family standing	1	2	3	4	5
11	Women empowerment involves the family and community development	1	2	3	4	5
12	Family economy may be based on the women empowerment due to savings and credit through microfinance	1	2	3	4	5

Adeline Mukayiranga

LPU/Faculty of Economics and Commerce /Department of Finance (Punjab- India) Cell phone: [phone]/ Email: [e-mail]

INTERVIEW QUESTIONS

1. Briefly describe your services

2. Who are your customers? Among them, many of those are women?

3. In percentage wise, how many women applied for microcredit loans in the year2011?

4. What would you think are the challenges facing microfinance in dealing with women Clients?

5. How does the participation of women in microfinance helps to improve their quality of life?

6. What are the criteria used to enable women qualified for microfinance loans?

7. Does participation of women in microfinance reduce their economic vulnerability? If yes how?

8. In which way has microfinance led to economic empowerment of women?

9. After using the loan acquired from Duterimbere MFI, have you income increased?

10. After acquiring the loan from Duterimbere MFI and carrying out your personal activities, have your management skills increased?

11. What are the problems in improvement for women empowerment in Rwanda? Thank you so much for your participation

iv

Adeline Mukayiranga