NFS Series: Women's Empowerment Part 2: Women's Empowerment and Microfinance

Part 2 of Women's Empowerment is written by Mary Ellen Iskenderian from Women’s World Banking (WWB). She will be discussing WWB's role in women's empowerment and how WWB relates to microfinance and our borrowers. For more on Ms. Iskenderian and Women's World Banking click on Part 1 of our series: Economic Empowerment.

Here's part 2 of our guest blog post by Mary Ellen Iskenderian:

WWB’s role in supporting women’s empowerment around the world:

Can you imagine if the only product that your bank offered you was a loan? Or trying to live without a bank account and having to conduct every payment with cash? Or seeing your entire business and all the assets you had painstakingly accumulated jeopardized by the costs of caring for a sick child? Around the world, the poor need access to the same array of financial services to manage these risks and opportunities that are afforded to everyone else. Microfinance institutions (MFIs) have the capacity to provide these services to poor and low-income women in a convenient and affordable way and open a new world of possibilities for low-income women and their families.

Jeruk Manis 2 is a borrowing group from Indonesia on Kiva right now!

Women’s World Banking has been empowering women around the world for more than 30 years by giving them access to fundamental financial products that allow them to build a secure financial future for themselves and their households. Today, as the industry becomes more advanced and sophisticated, WWB is committed to reaching those unbanked poor women who still need access to basic financial services, and to making sure that clients are getting the broadest range of affordable services possible.

Innovation in Product Design: Savings and Insurance

One of the most important products we can offer women is access to a safe place to save. WWB knows from its research that poor women, those living on less than US$2 a day, are inherent savers but are forced to save informally in unreliable ways: under a mattress, or through buying livestock because they don’t have access to savings accounts. While their financial lives are complicated; juggling subsistence needs, emergency expenses, and school fees, with an unpredictable income, they still manage to save on average 10 to 15 percent of their income.

Beyond meeting the basic financial needs of the poor, several studies have shown that access to formal savings accounts can lead to female empowerment, and changes in behavior that affect health and nutrition. A study in the Philippines showed that access to certain savings products increased women’s economic empowerment, including decision making power over purchases, family planning, and children’s education.

Any product we develop has to work for women – it has to be confidential, and convenient. WWB client research confirmed that low-income women are interested in a better alternative: a savings program that is secure, convenient, has low-fees and is confidential. For example, women need a way to make small, frequent deposits without taking time away from their child care duties or from running their businesses.

WWB is testing ways to use local merchants to accept deposits through point-of- sale terminals. We are also building on mobile phone banking with products that resonate with women so this technological innovation becomes a real tool for savings. We know that for poor families, money that is in the house gets spent on immediate needs, so allowing women to deposit regularly, including weekly, can really help them save.

Microinsurance has been another major initiative of WWB, as it has become widely accepted that specialized insurance products for women are absolutely vital to protect a woman against business losses due to health emergencies. As of 2010, WWB has worked with Microfund for Women in Jordan to provide insurance to 11,000 client policies on which 270 claims have been made, 40 percent of them related to maternal health issues.

Microinsurance Program in Jordan

WWB knows that women need products that help them build a secure financial future. When women use the services of Women’s World Banking network member MFIs to take advantage of financial products, they witness powerful results.

In part 3 of Women's Empowerment we'll discuss how Kiva Field Partners can help by targeting women clients and designing products specifically to meet women's needs.