Gender Inequality : Microfinance, An Empowering Practice?

In both developing and emerging economies, microfinance has vastly and increasingly been seen as one of the most important means for enhancing the lives of the poor and therefore a major tool for economic and social development mostly in rural areas. Lately, contrary to this widespread belief, critics have raised eyebrows against this growing popularity of microfinance as a major tool for enhancing economic development. Contrary to belief, they are of the opinion that microfinance is a ‘make-belief’ that is hindering economic and social development rather than enhancing it.

Women in developing countries gain more acknowledgement in their cultures because of micro-loans. Microfinance: empowering female entrepreneurs claims that “women’s entrepreneurship has become the prefered method for economic development.” It's fantastic that women are prefered because before women had little to no responsibility outside of the home. Females in most developing countries were treated like they weren't human. They were only expected to make food and feed the children. They would have to beg their husbands for money. The tables have turned and now women are the breadwinners in the family. Women now rely less on their husbands and they are not controlled by them anymore. According to, Geography Alive, in Mali some

The proposed research has intent to develop new research model for behavioral finance through ethnography by considering social relationships as an economic resource for the financial participants in microfinance. The proposed research envisage with psychological and sociological variables of microfinance beneficiaries.

Studies of the impact of microfinance in more than 24 countries have found high improvements in household income levels (Carr, 2002). Access to microfinance allows the borrower to reduce costs with lower interest rates and purchasing of raw materials. Income increases as the number of goods or services offered grows and product costs are reduced. Microcredit was initially created in developing countries where extreme poverty percentages are higher, but it also helps developed countries in a significant way. Even though the United States is one of the world’s greatest economies, microcredit helps micro businesses to develop effective financial plans and have an individual as well as collective growth.

Women are integral part of every economy. All round development and harmonious growth of a nation would be possible only when women are considered as equal partners in progress with men. However, in most developing countries, women have a low social and economic status. In such effective empowerment of women is essential to harness the women labour in main stream of economic development of all the facets of women’s development, economic empowerment is of utmost significance in order to achieve a lasting and sustainable

What is microlending? In simplest terms microlending is the lending of very small amounts of money at low interest, to low income people in urban and rural areas. It started forty years ago, when a person named Muhammad Yunus was visiting his family and his country Bangladesh which had recently become an independent country. Muhammad Yunus had left his home country then –East Bengal- when he was a child with his parents in search of a better future. He graduated from Vanderbilt University in Nashville, Tennessee, with a PhD in economics. Muhammad Yunus is the founder of Grameen Bank, the first non-profit organization to offer microfinance services in Bangladesh and in the world (New York Times). This bank showed the world on how little

Once the Era of apartheid had come to an end in 1994 the internationally development community entered South Africa promoting the microcredit model with high hopes to empower the poorest black communities to break loose from the poverty spiral, however the Microcredit model was seen to be having the complete opposite effect, ultimately causing incredible damage to the area. The microcredit model was supposed to be the means of bringing sustainable development to the extreme poor areas. The model has been named the “anti-development” intervention (1), because in practice it has only shown that it supports consumption spending. The poor are worse off than ever before; to keep up with the obligations of repaying their microloans, they are forced to sell the few assets they own or borrow money from friends or relatives or even worse take up new microloans in order to pay for the old ones. This is not the only downfall of this type of so called sustainable development; another problem that emerges from this is that the actual businesses emerging form microloans are anything but businesses elevating poverty. The type of business that has been arising from the microloans have only created hyper-competition amongst all the new businesses as well as the old ones, leaving about 40% of the South African population repaying debt. The poorest and most vulnerable are left behind to take care of themselves drowning in debt, while the private banks

“Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services.”

Microfinance also known as microcredit is the provision of financial services to small businesses or groups of entrepreneurs in an effort to eradicate poverty. This is most common to developing or third world countries and is provided to people who don’t qualify for the formal banking system, in other words people without

One of the biggest examples of success of microfinance is Bangladesh. However talking about the Indian context of Micro-finance, as a concept it has made its presence felt in India through several prominent MFIs and NGOs and now Banks are also stepping forward. Microfinance has a great scope in creating sustainable economic development in the economically backward areas of India. Work has already been started in promoting micro-finance and making it a provider of credit and banking facilities for those not covered under the purview of the Indian banking system and the associated benefits. However, apart from its primary function of extending the benefit of credit facility to the rural community and economically backward classes, microfinance also has a huge potential in creating community based entrepreneurship with the ability to create significant employment in the communities.

One of the biggest examples of success of microfinance is Bangladesh. However talking about the Indian context of Micro-finance, as a concept it has made its presence felt in India through several prominent MFIs and NGOs and now Banks are also stepping forward. Microfinance has a great scope in creating sustainable economic development in the economically backward areas of India. Work has already been started in promoting micro-finance and making it a provider of credit and banking facilities for those not covered under the purview of the Indian banking system and the associated benefits. However, apart from its primary function of extending the benefit of credit facility to the rural community and economically backward classes, microfinance also has a huge potential in creating community based entrepreneurship with the ability to create significant employment in the communities.

Microfinance are the financial institutions who provide loans or funds to individuals who do not possess the actual documents which can be submitted to banks to seek/borrow loans. These individuals can be entrepreneurs and small scale business owners. Microfinance institutions mostly function in developing countries when compared to developed countries. They are almost similar to banks with regards to the nature of functioning, for instance, they fund people who would like to start a poultry business (farmers), transportation and restaurants.

Microfinance programmes are intended to reach poor segments of society as they lack access to formal financial services. It, therefore, holds greater promise to further the agenda of FI as it seeks to reach out to this excluded category of population. India has adopted the Bangladesh’s model in a modified form. The Apex-Bank NABARD started ‘SHG bank linkage programme’ during the last decade of by-gone century, is by far the major programme initiative without parallel in any parts of the world for achieving the FI. The programme has demonstrated across the country its effectiveness in linking banks with excluded category of poor segments of population. In this process role of NGOs in development is quite pronounced in providing the last mile connectivity as enablers and catalyst between the SHGs and Village level co-operatives/banks. This is also supplemented by the MFIs delivering credit. To alleviate poverty and to empower particularly women, the micro-finance has emerged as a powerful instrument to serve the objective of FI in India. With availability of micro-finance, self-help groups and credit management groups have also started in India. More importance is being given to SHGs, since the micro lending to the group rather than individual borrowers is more successful and in the process also making it to reach the goal of FI. All the members of the group are equally benefitted and also the repayment by each member is guaranteed by

Microfinance is the provision of small scale financial services to low income or unbanked people. It is about provision of “a broad range of financial services such as deposits, loans, payments services, money transfers and insurance, to the poor and low-income households and their farm or non-farm micro-enterprises” (Mwenda and Muuka, 2004:145) . This agrees with the Asian Development Bank (ADB) which defines microfinance as the provision of a broad range of financial services such as deposits, loans, payment services, money transfers, and insurance to poor and low-income households and their micro-enterprises . From the above definitions, microfinance is more than just provision of small loans also known as microcredit. It is about provision of various small scale financial services. Thus for this study, consistent with the above definitions, we use the term microfinance to mean the provision of small scale loans, savings, deposits, and other financial services to the poor. Institutions that provide these small (micro)

Half of the world’s population is living below or near poverty line, which is 2 or less then two US dollars. To encourage the development and eliminated poverty UN have announced their goal of millennium to eradicate poverty till 2015. Pakistan is 87th poorest country of the world and 23% of its population is living under poverty line, which is US$ 1 per day. Micro finance is a method to alleviate poverty and empower, and raise the living standard of poor people. Micro finances are provided by the MFIs, who address the financial needs of poor people, neglected by the conventional financial institutions. Micro financial activities are as old as 200 B.C, which were started in India in shape of moneylenders, chit funds and merchant banks.