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When we talk about micro credit, we're dealing with finance at a very small scale, and today's article is about dealing with women who own such small-scale businesses and need funds to run them, Women in rural areas of developing countries are often associated with extreme poverty, lack of education, poor access to health care, domestic violence, social seclusion, and the list goes on. As a result, the third Millennium Development Goal is to “promote gender equality and empower women”. Micro finance institutions are eager to serve women for this reason (among others), but working with women has its own pros and cons. This article covers the pros. According to a survey report by UNCDF, 'Practices and Innovations among Microfinance Institutions', there are several institutional benefits and social benefits of working with female clients. Women make responsible micro finance clients Women are good customers in the sense that their loan repayment patterns are “more reliable and timely” compared to repayment patterns of men. Plus, women tend to save more than men so banks can either offer them additional savings accounts or the entire family benefits from the bigger safety net. Women are loyal customers Compared to men, women are more loyal to their micro finance banks and credit institutions. This helps perpetuate a strong relationship between the credit firm and its clients, and can lead to better service delivery to those women. Women are more honest in their dealings One of the credit institutions surveyed noticed that women generally invest the loans as per program guidelines and not use it for purposes other than those stated on the loan contract. This effectively reduces the client's risk profile. Women offer less resistance when called upon to participate in social causes This benefit is harder to measure compared to other benefits listed in this article, yet the results were pronounced enough to be noticed. Some micro finance institutions included in the survey, reported that women are “more easily mobilized for social goals” that require behavioral changes for the better. Many lenders have a social agenda of improving the overall lives of their clients and that includes offering trainings related to money management, family planning and hygiene. In this scenario, female clients were more open to change than men. Women look after their family As per the survey, female borrowers tend to look after their family more than their male counterparts. This benefit is more social than institutional in nature, and results in a minor ripple effect of this financial service. Many credit institutions reported that female business owners were “more likely than men to spend their profits on household and family needs" (such as clothing, food, education, health care, etc.), which enhances the "multiplier effect” of such social businesses. Note: these findings should not be generalized because each society is different and each family is different.
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loans for women, small business women, credit and women,
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