Microcredit
makes women poor
By
L. Muthoni Wanyeki
(The EastAfrican)
The
latest manifestation of the ability
of our bosses, sorry development
partners to absorb and seemingly
respond to criticism in ways that
renders it meaningless, is the
rehabilitation of microcredit
as a strategy to address women's
absolute and relative poverty.
At
the global level, Mohammed Yunus
of Bangladesh wins a Nobel Prize.
And everyone bends over backwards
to accommodate the Grameen Bank
model-providing small loans to
women for entrepreneurial activities
at the basic level.
The
Grameen Bank experience clearly
showed that women tend to have
higher repayment (and entrepreneurial
success) rates than men. And because
of the difficulties of accessing
credit otherwise, women are also
more prone to accept the higher
interest and transaction costs
generally associated with microcredit.
Meaning that the Grameen model
can be adapted to make money off
women.
Here
in Kenya, the retreat of the multilateral
banks from much of the country
during the 1990s together with
the collapse of many local banks
meant that a void was clearly
there to be filled. In stepped
new entrants like Equity Bank
- who have, in fact, offered clearly
necessary and valuable services
to Kenyans left out of the credit
sphere. I am not oblivious to
that fact and I think that examples
like that provided by Equity Bank
deserve recognition and support
- as well as analysis of their
impact on the lives of such Kenyans.
What
I am objecting to, however, is
the dishing out of easy answers
to complex questions. The government
of Kenya's new women's fund for
instance. The new injection of
funds by the international financial
institutions into Equity Bank
to enable the roll-out of microcredit
to women. The assumption that
efforts like these are sufficient
to move women out of poverty.
RETURNING
TO THE GRAMEEN Bank example, it
is obvious that the provision
of microcredit to women can enable
individual women to improve their
livelihoods -but only when also
provided not just with small loans
but also a host of related support.
It is equally obvious, however,
that microcredit alone is insufficient
to change the livelihood possibilities
of women collectively.
Because
microcredit is essentially used
for small entrepreneurial activities
within the context that its women
beneficiaries live in, it essentially
enables a redistribution of sorts
among the poor, rather than redistribution
in a broader sense. In fact, when
not clearly based on principles
like the Grameen Bank's, it can
contribute (because of the higher
interest and transaction rates
associated with commercial microcredit
schemes) to further impoverishment
of the poor - and more distribution
from the poor to the rich.
So
far, however, all we've seen in
terms of responses to the new
women's fund are generally congratulatory
messages. With some rumblings
of discontent about how it will
be disbursed-in consultation with
which women's networks and through
what modalities. And some more
rumblings of discontent about
the amounts proposed for the fund
overall.
What
we haven't seen is a concerted
effort to ensure that it truly
will work for at least the individual
women it will serve - which needs
to be done with the Kenyan financial
institutions with a long history
in reaching individual women this
way, like the Kenyan Women's Finance
Trust. Neither have we seen a
concerted effort to seize the
moment to pose more fundamental
questions and propose more fundamental
strategies about how to address
women's collective impoverishment.
Where are our feminist (not just female) economists and activists in this field? It's time to stand up to be heard.
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