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Ripple Effects, Women’s Rhetoric,

& Microfinance

A study on the impacts of women’s

participation in microfinance

3/10/2009

Rachel Horton & Phelix Logan

Case Study Project 2Women’s Rhetoric 4376Rachel Horton & Phelix Logan

In the grand scheme of things, women are often the first affected when their

community experiences economic difficulty. In poverty stricken neighborhoods, the

responsibility of finding food and clothing often falls to the women, in addition to the

duty of earning a little extra to aid in getting the family through the day. Typically, men

leave home in hopes of finding a better job elsewhere and often do not return, leaving the

woman with her heavy responsibilities and no dignified way out. Women around the

world have observed the need and answered the desperate call for help from women in

poverty through the practice of micro-finance. In this study, we will examine the

influence of women on behalf of women by discussing four issues. First, we feel it is

important to understand the unique scope and affects of poverty on women. Second, the

first responders to the casualties of poverty are most often women who seek not simply to

give a hand-out, but rather a hand-up that encourages empowerment and enables women

to conquer their circumstances. Third, it is vital to recognize that the practice of micro-

finance encompasses several key concepts which are principally found in women’s

rhetoric. Finally, we observed the impact that this cycle in particular has on the

community as a whole. Ripple effects are common in a world as increasingly connected

as ours. Yet the ripples created by women for women are almost too large to be ignored.

Through the tool of microfinance, women have managed to empower other women in

developing countries, giving them the means necessary to rise above the debilitating

circumstances society and poverty have conspired to place them in; instead, they emerge

as noble heiresses of independence, wisdom, and compassion.

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Around the world, poverty is not unusual – notably for women. To that point, the

United Nations Fourth World Conference on Women held in Beijing, China in 1995

estimated that there were more than 1 billion people in poverty, the great majority of who

were women. The conference’s studies point out that over the past decade or more the

number of women falling into poverty has increased disproportionately to the number of

men, particularly in the developing world. Poverty places additional handicaps on women

in developing countries. Not only are they responsible for the average household duties,

but have no hope of ever breaking an endless cycle of hand-to-mouth practices.

Education is a luxury item for many children and a rarity for young girls. Women are left

repeating the actions of their mothers as they attempt to stay afloat

in the devastating flood of impoverished surroundings. In its effort

to combat poverty the U.N. declared 2005 as the International Year

of Microcredit, and the microfinance pioneer Muhammad Yunus

won the Noble Peace Prize in 2006. In the developing world,

institutional and individual investments in microfinance more than

double between 2004 to 2006, to $4.4 billion, and the total volume of loans made has

risen to $25 billion, according to Deutsche Bank. Because these loans were very small,

generally about $200 to $500, a greater number of people, in most cases women, are

benefited.

Women are most keenly aware of the financial straits of other women in

developing countries. Microfinance allows an individual with a small

amount of capital to affect and drastically change the life of several

women in a developing country. For example, the Women’s Trust

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organization began because Dana Dakin felt the need to make a difference in the lives of

impoverished women in Ghana. Today, Women’s Trust is thriving in the village of

Pokuase, with “more than 400 women in the loan program” and “repayment rates

consistently above 90 percent” (Dakin, “Dana’s Story”). In addition, “funding is directed

toward such pressing needs as scholarships for girls, adult literacy and a pilot initiative to

shore up local healthcare” (Dakin, “Dana’s Story”). Other organizations such as

Women’s World Banking have noted the necessity of improving “the economic status of

poor families in developing countries by unleashing the power inherent in women”

(WWB, “Mission”). Women’s World Banking emerged in 1975 out of the first

International Women’s Year conference. From this gathering, a small visionary group

“realized that economic independence allows women to

choose and affect their own education, opportunity and

well being” (WWB, “Mission”). These women went on

to found Women’s World Banking “as an organization

that would truly be able to meet the challenge of the coming decades and influence the

economic and professional growth of women throughout the world” (WWB, “Mission”).

Of course, men have had their role in establishing the legitimacy of microfinance and in

using it as a tool in the war on poverty. After all, it was Muhammad Yunus’ influence

which granted microfinance an international spotlight. Because women have been on the

front lines of combat, however, women have uniquely influenced the course of this

eternal war and turning the tides of victory in favor of independence from the relentless

grip of poverty.

Rhetoric of Microfinance

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Most organizations utilize characteristics uniquely belonging to women’s rhetoric

such as collaboration and the establishment of personal connections. The use of these

characteristics makes it possible for big change to come in small packages. It is important

to note that the small size of these microloans makes them so successful for women in the

developing world. Fatima de los Angeles Polanco Lopez of Managua, Nicaragua is a

hard-working woman who sells used clothing her loan request is $400.00. Afiwo Sodofio

lives in Agoe, Togo she sells cloth, clothes, and shoes. Her request is for $500.00. Sheryl

Marianas lives in Balite Sagay Camiguin Province, Philippines her request is for $250.00.

These small requests seem insignificant. However, Fatima Afiwo, and Sheryl all have

face, a specific plan, and a story to share with the individual who decides to sponsor their

microloan requests. It is this personal touch which creates rapport with potential donors

and establishes a personal connection. In addition to this tactic, microfinance

organizations also employ group-lending models. First utilized by the Grameen Bank in

the 1980s, microfinance organizations have seen the benefits of giving the loan to a

collaborative group rather than just an individual. (Dakin, “WT Microlending”) Women’s

Trust, for example, accepts potential client groups of four or five women who go through

the initial screening process. The group is responsible for the total amount of money

received. If one woman does not repay her loan, the entire group becomes ineligible to

re-apply in the future. When approved, each woman receives her individual requested

amount, but remains accountable to the group as a whole. (Dakin, “WT Microlending”)

This mechanism also encourages collaboration among the women in the group who

confer with each other on good business practices and potential markets. Organizations

such as Women’s World Banking takes things a step further to provide workshops and

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leadership training conferences so that women have a better grasp on their resources and

potential expansion. (WWB, “Lateral Learning”) In short, the collaborative nature of the

loans not only ensure high rates of repayment, but empower women to use the resources

around them to build upon the foundation they have received.

Research shows that when a woman is given the tools to develop a small business,

build assets, and protect against catastrophic loss, she is empowered to change her life

and that of her family. The International Fund for Agricultural Development (IFAD), a

specialized agency of the United Nations, conducted a study on the impacts of the

practice of microfinance on women in poverty. Their conclusions appeared in a 2004

article in the Bangkok Post. Because of women’s involvement in microfinance, Roy notes

that “many women become leaders, instigating change in social practices and

relationships and mobilising social action” (Roy). The article concluded that when

women “generate and control their own income, women gain a level of power that means

they can make decisions independently and command more respect” (Roy). The

argument is almost too facile, yet profound in its simplicity. Because women and the

household are interdependent upon one another, the success of one translates into the

success of the other. A successful household influences the neighborhood around it and

eventually, spreads to community as a whole. Microfinance organizations such as

Women’s World Banking and Women’s Trust have recognized this truth, and most have

dedicated side resources to improving education, healthcare services, and expanding

opportunities for small business development.

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Being able to consciously realize that we have a problem is the beginning of the

solution. Some people do not recognize or understand that microloans targeted directly to

poor women around the world helps their entire community. James Surowiecki argues on

the financial page of The New Yorker in his article entitled What Microloans Miss that

these microloans do not make the countries richer. Contrary to his point, we don’t think a

trickle down approach works. One the government handling the funds may be corrupt.

Two the government handling the funds may have endless red tape. Three the

government handling the funds decides who gets the monies. Furthermore is this a

logical assertion? Isn’t this like saying let the poor women pull themselves up by their

own bootstraps when they have no boots? Isn’t this like saying let the poor women feed

themselves when they have no food? Isn’t this like saying let the poor women cloth

themselves when they have no clothes? We reject the notion that government can best

handle these types of direct investments.

Now that we have created a global economy, we cannot just sit back and say that

someone else will handle the problem of women in poverty around the world. Because

what affects the poor women in Latin America, the Middle East, Africa, India, Asia and

the Pacific Rim affects everyone. As we have cited in our paper women are the most

affected by poverty. These “developing” or “transitional” countries inside of these

underdeveloped continents need our help. Are we as the most powerful Nation in the

world comfortable seeing how poverty devastates women and children? We would hope

not! We would much rather look to the example of the philanthropy in Latin America

where millions of dollars are sent home to Mexico, Argentina, Brazil, Ecuador,

Guatemala, and Jamaica every year and the many women’s organizations that are starting

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to fund these loans as viable models. We would rather view microloans as a more

personal endeavor rather than a corporate or governmental bureaucracy. The importance

of women’s rhetoric in the practice of microfinance is evident and the success stories are

overwhelming. Poverty in developing countries will continue to be a source of constant

struggle, but as long as women are enabled and given the power to make a difference in

their community, poverty can be beaten.

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Works Cited

Dakin, Dana. "Dana’s Story - The Founding of Women's Trust, Inc.". Women's Trust. March 11, 2009 <http://www.womenstrust.org/content/dana%E2%80%99s-story-founding-womens-trust-inc>.

Dakin, Dana. "OTHER WT PROGRAMS". Women's Trust. March 11, 2009 <http://www.womenstrust.org/?q=content/other-wt-programs>.

Dakin, Dana. "WT MICROLENDING". Women's Trust. March 11, 2009 <http://www.womenstrust.org/?q=content/wt-microlending>.

Roy, Phrang. "Poverty Reduction: A little credit goes a long way ". International Fund for Agricultural Development. March 11, 2009 <http://www.ifad.org/media/news/2004/150204.htm>.

Surowiecki, James. "What Microloans Miss". The New Yorker. March 10, 2009 <http://www.newyorker.com/talk/financial/2008/03/17/080317ta_talk_surowiecki>.

Women's World Banking Inc., "Lateral Learning". Women's World Banking. March 11, 2009 <http://www.swwb.org/lateral-learning>.

Women's World Banking Inc., "Mission and Vision". Women's World Banking. March 11, 2009 <http://www.swwb.org/mission-vision>.

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