Using Microcredit to Advance Women
Traditional financial institutions in many countries, have often failed to provide the needy with financial services to increase their income and reduce poverty. Hence, microcredit programs have been developed to fill in this gap. This note analyze...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1998/11/438761/using-microcredit-advance-women http://hdl.handle.net/10986/11523 |
| Summary: | Traditional financial institutions in
many countries, have often failed to provide the needy with
financial services to increase their income and reduce
poverty. Hence, microcredit programs have been developed to
fill in this gap. This note analyzes the outreach on the
poor, with particular attention on women. Specifically, it
examines three microcredit programs in Bangladesh, where
women participation is significant. Interestingly, these
microcredit programs mobilize the needy into groups,
provides training, and uses a group based lending approach,
with the following attractive incentives: 1) easier credit
accessibility due to personal selection of group; 2) lower
loan defaults due to group pressure and monitoring upon loan
enforcement; 3) availability of resources and risk
diversification because of close ties across groups and
communities; and, 4) savings mobilization, as an integral
part of group-based lending. The note finally suggests, that
even though an increase in assets may empower the needy and
women, to higher consumption, thus contributing to welfare,
only those with entrepreneurial ability have access to
borrowing, unevenly apportioned among women and poor people,
as seen in any other population group. The sustainability of
these programs remains to be seen. |
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