Improving women’s financial capacity good for economic growth

Recently, at a one day workshop organized on gender and enterprise development at Hotel Novotel, the First Lady, Jeannette Kagame highlighted women’s economic potential in Rwanda, “women comprise the biggest work force and have the potential to do business. However they need to be educated as a way of doing their work better,” said the First Lady. She noted that increasing women’s ability to contribute to economic growth is critical, saying women were trusted members of society at paying back loans advanced to them. However, one of the salient observations in developing countries in the last decade has been that of a large percentage of women in the population and that they continue to become poorer. The phrase “feminization of poverty” has appeared in several publications, underlining the particular disadvantages, which confront women in less developed countries. Poor women in developing countries are involved in daily struggle for survival. They have to fulfil a variety of productive roles in agriculture, small businesses or in the service sector in order to contribute to the household budget. Moreover, they also have their reproductive role in the family, such as the upbringing of children, care for the sick and needy and preparation of food. All these responsibilities form a continuous demand on poor women’s labour, energy and time. These women have to devise strategies to guarantee a steady income for their families, while balancing their productive and reproductive duties. In most cases they opt for businesses which are accessible to them and which can be managed, in the sense that they can easily be combined with their household duties and allow for a regular minimum income. A common strategy among poor women found in many African countries, including Rwanda, is the formation of informal savings and credit groups. These groups can function as a source of capital for women who want to improve their businesses. They are managed by women themselves and are constantly adapted to suit their capacities and needs. Accessibility, manageability and controllability seem to be key criteria for poor women in the selection of their business strategies. Until recently, financial institutions and development banks did not recognize the importance of women’s productive activities in the national economy. Traditionally development banking for the rural population or for small scale entrepreneurs is typically and largely oriented towards men. Through bureaucratic procedures, security requirements and a gender bias on the part of the banking officers, women are often excluded from most of the services which financial institutions have to offer. It is becoming increasingly important for such programs to address poor women’s problems to uplift their welfare and that of their families. Rwanda’s women entrepreneurs can now access financial services through the International Finance Corporation (IFC), a private sector arm of the World Bank group and the largest multilateral financial provider for private enterprises in developing countries. In Rwanda, for example, a variety of financial service programmes for the poor, have special emphasis on women. Financial service programmes experience a multitude of problems in reaching poor women, while examples of successes have only recently become evident. International Finance Corporation (IFC), Centre for small and medium Enterprises in Rwanda (CAPMER) and Rwanda Private Sector Federation (PSF) have taken lead in the development of appropriate financial services for women. Key criteria for successful financial services for the poor women are accessibility and the need for such services to be managed and controlled by women themselves. Accessibility of services involves physical accessibility as well as taking into account gender imbalances and socio-cultural disadvantages in the programme design. Manageable and controllable services for women usually call for acceptance of small savings and loans and critically for low transaction cost. In essence, services should be based on the problems and needs, capacities and opportunities as perceived by women themselves. This calls for a participation approach by the financial service delivery systems. Analysis of strategies developed by women, discussion with poor women and co-operation with informal groups set up by these women can be instrumental. The financial service programs should furthermore aim at the empowerment of women by increasing their ability to access and control resources and put them to effective use . Often this will imply that the program has to encompass non-financial services such as business management and technical advise. Gender imbalances in the field of legislation, information and education also need to be addressed. ubernie@gmail.com