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
60
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
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Internet Sources
1. Deshmukh- Ranadive,J. 2008, Can microfinance empower women?
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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
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http://www.betterworld.net/quotes/microcredit-quotes
accessed on 08th Nov.2008
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2008
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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
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