contribution of microfinance and women empowerment
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CONTRIBUTION OF MICROFINANCE IN WOMEN
EMPOWERMENT
A Case Study: Profemmes Twese hamwe through
DUTERIMBERE Institution Micro- Finance
BY Adeline
INTRODUCTION Globally, women disproportionately represent 70% of the world and 1.3
billion population who live on less than one dollar per day.
In Rwanda, women constituting 54% of the 11,3 million of entire population
However, most of these Rwandan women are illiterate and 70% of Rwandan
live below the poverty line yet a large proportion of these are women
The Rwandan women make up the majority of the lowery paid workforce
especially in unorganized informal sector of the country’s economic
The poor find it difficult to generate significant income from such loan
because interest rates are high
Rwandan women have always been facing unemployment problem compared
to men
Cont’s Normally, providing the poor women financial services increases their
income and productivity and reducing poverty
That is why microfinance services have been developed to fill these gaps,
with increasing assistance from the various financial institutions and other
donors.
Microfinance services is emerging as a powerful tool to reduce poverty
and improve access to financial services for the poor women in world wide
in general and in Rwanda especially
Economic power means access to income, assets, food, markets and
decision-making power in the economic activities.
Cont’s Social power means access to certain bases of individual production such
as financial resources, information, knowledge, skills and participation in
social organizations.
Psychological power means the individual's sense of potency, which is
demonstrated in self-confident behavior and self esteem.
According of the Lowlands (1995) describe it as “a process whereby
women become able to organize themselves to increase their own self-
reliance, to assert their independent right to make choices and to control
resources which will assist in challenging and eliminating their own
subordination
Concern of PTH Organization Pro-Femmes Twese Hamwe is an Umbrella Organization that promotes
gender, peace and development through advocacy, economic
empowerment, and equal participation of women and men in the
development process and fight gender based violence for a better
Rwandan society.
It formed on 18th October 1992, by 13 Rwandan Women Associations,
today Profemmes Twese Hamwe is composed of 58 member associations
including Rwanda Men’s Resource Center, a men’s Organization
(RWAMREC) .
PTH Objectives To combine efforts, work for change so as to eradicate all forms of
discrimination and violence towards women;
To be a consultation and a reflection framework on success strategies
on mission of member associations committed to the promotion of
peace, women’s social, economic, cultural and legal status;
To facilitate exchanges between various member organisations and to
promote partnership with organisations or institutions working for
women promotion.
Concern of Duterimbere MFI It is microfinance institution which receives the economies of usual customers
served by banking system and those who don’t have sufficient guaranties to offer
in order to ensure the refunding of the authorized credit.
It was created on June 15th 1997, the idea of creation of this institution come
from the non-profit making which in the achievement of its mission of promotion
of the female entrepreneurial in Rwanda
Another , Duterimbere MFI had initiated a program of saving and credit in
Rwanda.
The Managing Director of Duterimbere, Delphin Ngamije, said his institution will
provide credit worth Rwf4 billion by the end of this year, up from Rwf2.5 billion
last year that was loaned to a total of 53,500 customers, the women have 70% of
clients
Last year, Duterimbere made a net profit of Rwf116 million and is targeting a
total of Rwf200 million as proceeds this year, which signals the recovery of MFIs
after a period of poor business practices.
Duterimbere objectives To aim at the improvement of economic and social conditions of its
members, in particularly the women
To provide the financial services (Saving and credit) to the population with
low and to the women in particularly
To help the women to carry out the income activities via individual
projects and the groups of solidarity
To promote the agriculture of saving and economic, social education and
cooperatives of its members.
OBJECTIVES OF STUDYOBJECTIVES OF STUDY General objectives
To determine the contribution of microfinance in women empowerment in
Rwanda.
Specific objectives
To identify various determinants of women empowerment.
To find out the impact of microcredit in women development/promotion.
To analyze the role of microfinance in family empowerment by women.
HYPOTHESES OF THE STUDY
General hypothesis
The main hypothesis stipulates that the microfinance contributes in women
empowerment.
Specific hypotheses
Savings, credits and family self-sufficiency are among various
determinants of women empowerment.
Microcredit impacts the women development/promotion.
Women contribute in family empowerment through microfinance.
Cont’s Some see microfinance as a source of major social transformation; others see it
as the seed of a revolution in banking access. Is true believers push for both.
Microfinance is a type of banking service which provides access to financial and
non financial services to low income or unemployed people.
According to Kreditanstalt für Wiederaufbau (KfW) said “microfinance is a
significant instrument for poverty reduction and tool for women’s
empowerment”
Thus, the improvement of women’s empowerment has the potential to lead to
positive changes in social and political dimensions.
It has been well documented that an increase in women resources or better
approach for credit facilities results in increased well being of the family
especially children
REVIEW OF LITERATURE
The literature review on how microcredit impact women
empowerment will allow to assess and let women survive live a life
with dignity, humanity, respect, self esteem and self reliance.
The emphasis will assess the ability to exercise choice incorporates
three interrelated dimensions and the women will be empowered
when they will have full control over their own life.
The main objective of this initiative was to provide loans to poor
people without collateral, alleviating poverty and unleashing human
creativity and endeavor of the poor people especially women.
Cont’s Microfinance has proven its potential to generate results and in general,
studies suggested the poorest seldom benefit from microfinance, while the
middle and upper poor benefit the most
Women in particular face significant barriers to achieving sustained
increases in income and improving their status, and require
complementary support in other areas, such as training, marketing,
literacy, social mobilization, and other financial services
(e.g., Consumption loans, savings).
Various Credit Lending Models Associations: a target community forges together to form an association
through which a variety of microfinance activities are carried out
Community banking: This financing model considers the whole
community as one unit and facilitates the establishment of semi-formal and
formal institutes through which microfinance are administered
Co-operatives: A co-operative is an independent association of people
who come together voluntarily to meet their mutual economic, social and
cultural aspirations and needs through an egalitarian controlled enterprise
Credit Unions: A credit union is a member-driven unique self-help
financial institute comprising of members of a specific group like labor
unions or a social fraternity who assent to save money and make loans to
each other out of that fund at reasonable interest rates
Cont’s Group: This model is based on overcoming individual shortcomings by the
aggregated accountability and security engendered by the formation of a
group of these individuals.
Individual: This is the simplest and the oldest credit lending model where
small loans are given straight to the borrower
Intermediaries: As the name suggests this model is a ‘go-between’
organization operating between the lender and borrower
Non-Governmental Organizations: are very active in the field of micro-
credit, be it creating consciousness of the importance of micro-credit, or
developing tools and resources to monitor and identify righteous practices
Rotating Savings and Credit Associations: A group of people join together
and make periodic cyclical contributions to a common fund that is given to a
member in a lump sum
Cont’s
Village Banking: This is a 15-50 low income individuals who seek self-
employment come together to collect funds and give loans
Small Business Enterprises (SME): persons get loans from micro-credit
programs for creating employment, increasing income
CASE STUDYCASE STUDY
Profemmes Twese Hamwe through Duterimbere MFI Institution is the
oldest and one of the renowned Microfinance institution in Rwanda.
The research chose this organization because of its outstanding
performance in promoting of women economic development of poor in
Rwanda especially the marginalized women.
To this point it serves as an important source of content for the researcher
to achieve the objective of her research topic.
The bank helps the unemployed women to get microcredit loans to invest
in small income generating activities to ensure them with income self
sustenance result into economic empowerment of Rwanda women.
POPULATION AND SAMPLE SIZE OF THE STUDY
The target populations were all beneficiaries of PTH through Duterimbere
MEI in Kigali city specifically in Nyarugenge, Kicukiro and Gasabo District
The study of whole population was not possible due to limited time and as
result study used 200 clients as sample to represent the whole clients
population
Data collection methods: direct interview, telephone, and field visited
DATA ANALYSIS, PRESENTATION OF KEY FINDINGS AND
INTERPRETATION
Previously, the research mainly hypothesized that the microfinance
contributes in women empowerment, and specifics hypotheses were:
1) Savings, credits and family self-sufficiency are among various
determinants of women empowerment,
2) The microcredit impacts the women development/promotion,
3) Women contribute in family empowerment through microfinance.
IDENTIFICATION OF PARTICIPANTS
Participants to our research were identified according to some socio-
demographics variables.
These are the age, marital status, education level, and employment status,
which are synthesized in the one table .
These variables affect the use of savings and credit operations.
PRESENTATION OF RESULTS FROM QUESTIONNAIRES
Results from questionnaires are presented in different tables.
The questions have been formulated regarding the objectives and
hypotheses of the research.
For each question, respondents had to choose their position regarding
the statement, and depending on the following elements: strongly
agree, agree, neutral, disagree and strongly disagree.
According to the variable age, most of respondents are ranged between
18-25 years, representing 37, 5%. This meets the fact that the above
category represents the active population in general; while below 18 years
of respondents have 11%, which means that this group have not yet begin
the income generating activities.
Cont’s
regarding to the marital status, the married group showed 68%, and became
higher involved in savings and credit operations rather than the single groups of
the 32%
The results show that people with primary level constitutes 56% of the
respondents. Thus, 2.5% of respondents represents category of others. The others
group includes those who didn’t finish their primary school or never attended, we
explain these findings as a result of the microfinance’s institutions deal with low
income projects.
Reference made to employment status, the high number of respondents (45.5%)
is self-employed, whereas the students represent the small group with 7,5%,
these results match with the Rwandan government initiatives which encourage
people not to look at States employment, but to set up their own business
(entrepreneurship)
Cont’s
About the women use savings and credit in economic activity for their empowerment
issue, the most of respondents (49%) agreed with the statement that women use saving
and credit for economic activity, while a small group of them (5%) were disagreed
According to the economic contribution may increase women role in economic decision-
making in the household and leading to greater well-being for women children as well
as men, the number of 14.5% of respondents are strongly agree while the greater
respondents of 85.8% are agreed that area , none of the respondents disagree with the
statement
A big number of respondents 57% confirms that the women economically-developed
change gender role and status within household and community
41% of respondents agree that: Microcredit provided by Duterimbere MFI is enough to
women empowering while 59% of respondents strongly disagree with the statement,
it’s means that the majority confirmed microcredit provided by Duterimbere is not
enough in case of the women empowerment.
Cont’s
63.5% of respondents confirmed that Business held by women is competitive with
others and reproductive tasks, 44% disagreed with the statement while 14.5% of
respondents did not comment about the subject
18% 0f the women interviewed strongly agreed to Women empowerment involves the
family and community development have highest the important in the family
promotion and the number of the 82% of respondents agreed with the statement
The number of 80.5% of the women respondents were particularly proud of the
financial contribution of the loan received to their empowerment especially in their
family.
The results from our research have confirmed the contribution of microfinance in
women empowerment in Rwanda.
Different questionnaires answered by respondents have underlain the above
assumption.
Some of these questions have evaluated the use of savings and credits in economical
activity for women empowerment, and this met the agreement of most of respondents
Cont’s
regarding to the socio-demographic variables, the majority of respondents are
married, self-employed, achieved only the primary level, and are aged between 18-
25 years
On the other hand, the women appreciation towards the microcredit provided by
Duterimbere IMF in their empowerment has been analyzed, and most of respondent
have expressed their wish to increase the amount of credit offered by Duterimbere
Based on the results of the present research, we intend to emphasize on the
strengthening of women empowerment through microfinance for the following
major achievements: firstly, as women constitute the high rations among all
Rwandan, they empowerment will become a key point in sustainable development of
the country. Secondly, the promotion of women through microfinance enhances
them to become more self-employed, and encourage gender promotion which leads
them to competitiveness with men
Challenges
Women have limited knowledge for business transaction and general
business knowledge; this affects clients’ business performance in term of
price negotiations and dealing with customers Few women clients still lack self confidence to try other business
opportunities; Limited educational background as it is big problem in the improvement
for women’s business; Excess household responsibilities that inhibit their business concentration The loan they receive is not enough to satisfy their business needs; Lack of tangible assets or properties to be used for larger loan guarantee
or caution in the case an individual women encounters loan repayment problem has been one of the challenges
Recommendations/Suggestions
From the study, the following suggestions are devised to make microfinance
more effective as a tool for poverty reduction.
MFIs should have broader target group including the ones in the extreme
poverty.
Moreover, according to Rwanda Microfinance Policy, microfinance services
should be available to all sections of the community, particularly to the
poorest and most vulnerable members of society.
The design of products and services should also be made flexible to reflect
the needs of the poor.
It’s thus important to mention that there is need to improve the design and
outreach and to see MFI as part of the package for targeting the poor.
Cont’s To sum it up, microfinance is not a ‘magic’’ bullet for poverty
reduction and the increasing government’s and aid agencies’
emphasis on microfinance as a panacea to poverty
This excludes a large majority of the poor people who would need the
products and services and cannot afford this collateral. It’s thus
important to mention that there is need to improve the design and
outreach and to see MFI as part of the package for targeting the poor.
MFIs should adapt existing training programs and set up new ones in
response to clients’ needs. With respect to introductory training, as
previously mentioned, transparency and full understanding of loan
modalities must be ensured.
Cont’s
The study findings indicate that MFI alone cannot meet the needs and resolve a
wide range of difficulties of the all poor women. There is need for infrastructure
developments for remote areas and need to improve market potentials.
We recommend pursuing a double bottom-line strategy using a socially oriented
approach to foster empowerment, while at the same time stimulating financial
sustainability and additionally, provisions for monitoring must be made and
MFIs should be involved and eventually assisted in developing empowerment
indicators.
Incentive systems should be set up on all levels to encourage MFIs and
Profemmes Twese Hamwe to incorporate strategies and activities supporting
women’s empowerment into their work. The key here is not to provide more
funds in general, but rather to specifically reward promising and/or effective
approaches.
Cont’s Profemmes Twese Hamwe needs to assist MFIs in adapting their financial
products and loan modalities to clients’ needs. This process includes obtaining
information on which needs different client groups have either through research
or feedback from loan officers and clients themselves and subsequently adapting
the loan modalities. This can be done with the participation of clients.
An internal communication and decision-making structure between Profemmes
Twese Hamwe actors at all levels should be put in place. These structures
should be participatory and provide ample space for all actors, especially the
MFIs and the Technical service Provider, to include their ideas and practical
experiences and discuss what assistance they need to successfully support
women’s empowerment.
Despite increasing competition between MFIs to disburse loans, both
Profemmes Twese Hamwe and its member MFIs must ensure that loans are
given responsibly to clients who can afford them
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