women and microfinance: projects, policies, and power · women and microfinance: projects,...

Summary Report Based on the Proceedings of a Workshop

WOMEN AND MICROFINANCE:

PROJECTS, POLICIES, AND POWER

Component Eight of "Evaluating the Impact and Efficacy of Credit and Savings Programmes for Women in Viet Nam"

Tran Bang Tam and Stefan Nachuk

for Oxfam UK/Ireland in Viet Nam

May 1997 Ho Tay Villas

Hanoi, Vietnam

CONTENTS

FOREWORD 1

1. INTRODUCTION 2

2. RESEARCH FINDINGS 3

OPENING PRESENTATION: SUMMARY OF FINDINGS AND ISSUES TO BE ADDRESSED

3

Situation analysis 4

Secondary Data Review 4

Impact Evaluation – Save the Children Fund Program in Cam Xuyen District, Ha Tinh Province

5

Impact and Management Evaluation – Oxfam UK/I Program in Ky Anh District, Ha Tinh Province

5

Other Research 5

3. SEMINAR ISSUES 6

PRESENTATION #1: MICROFINANCE AND WOMEN'S EMPOWERMENT – Do THEY ALWAYS GO TOGETHER?

6

Questions posed to Small Groups. 8

Findings from Small Group Discussions 8

PRESENTATION #2: FINANCIAL AND INSTITUTIONAL SUSTAINABILITY 10

of 15

FOREWORD

Oxfam UK&I would like to thank the Canadian Embassy in Hanoi for extending financial support for this seminar, which enabled a large group of development practitioners and supporters to share in the findings. Oxfam would also like to thank the Royal Netherlands Embassy for their very generous support of the entire series of activities undertaken during the past nine months, upon which this workshop was based. If not for the generous support of these two Embassies, the activities described in the following pages could not have happened.

Oxfam would also like to thank the many individuals who contributed to the workshop as facilitators of small-group sessions, including Ingrid Knutson, Andrea Esser, Mia Hyun, Le Kim Dung, Susannah Hopkins, and Orin Ginzburg.

1. INTRODUCTION

Oxfam UK & Ireland hosted a one-day seminar titled "Women and Microfinance: Projects, Policies, and Power" on May 19, 1997 in Hanoi. The seminar was the culmination of a series of research activities and evaluations titled Evaluating the Impact and Efficacy of Credit and Savings Programs for Women in Viet Nam that began in September 1996 and involved both Oxfam UK&I and Save the Children Fund/UK. The reports are:



PRESENTATION #3: PROGRAM DESIGN – MINIMALIST VS. "CREDIT PLUS" 12



PRESENTATION #4: OWNERSHIP OF MICROFINANCE PROGRAMS 13



4: CONCLUSIONS 15

ANNEX: LIST OF PARTICIPANTS 17

Title Author Date Content

Credit in Rural Vietnamese: Situation Analysis at a National land Local Level

Odile Ruijs October /November 1996

Macroeconomic context of rural financial services in Vietnam.

Secondary Data Review: Gender and Evaluation Aspects of Credit and Savings Programs

Odile Ruijs November 1996 Literature review and bibliography.

The Impact of Credit and Savings in Cam Xuyen District, Ha Tinh Province, Vietnam

Alana Albee December 1996 Evaluation of SCF/UK's Cam Xuyen program.

Qualitative Research on Poverty Alleviation Programs

Phan Thi Thien Huong et al

December 1996 Contrasts the preliminary impact of various government and NGO

of 15

The workshop served as a venue to facilitate dialogue between organizations involved in microfinance and also to expand upon the main findings of a Synthesis Report. Over 70 people from INGOs, bilateral donors, the Women's Union, and other Vietnamese organizations attended.

2. RESEARCH FINDINGS

Opening Presentation: Summary of Findings and Issue s to be addressed

(Summary of presentation made by Ms. Heather Grady, country representative of Oxfam UK/I)

What prompted Oxfam to begin this initiative? We found that there was an active, widespread discourse in development circles in Viet Nam on microfinance activities, focusing on various issues, including sustainability management, and impact. At the same time, there was also an active, widespread discourse on gender issues in Viet Nam, particularly on women's roles in the family and workplace, on changing sexual mores, and on women's participation in leadership.

Yet the nexus between gender issues and microfinance activities had not been thoroughly investigated. Only general references have been made to gender issues in the microfinance Work being done in Viet Nam. This is true despite the fact that tile Women's Union is one of the most important rural microfinance institutions in Vietnam. In fact, Oxfam felt that it was partly because of this that less attention had been given to the linkage between gender and microfinance. The Women's Union partnership with many microfinance programs has encouraged donors and others to feel that enough attention was being paid already to gender issues.

However, we know that providing funds will not, in itself, address issues of gender inequities, participation, access to and control of resources, and related issues. Moreover, good gender analysis requires looking at women in the context of their relationships with men, both within households and within the community as a whole.

When we began our studies in the fall of 1996, several questions informed our work. In the Vietnamese context, what is the appropriate structure for a microfinance program to bring the most benefits to women? One part of this issue lies in discussions in the last few years about replicating Grameen Bank's program and experience in Viet Nam and in other countries around tile World. A fundamental part of Grameen's work was bringing women together in group meetings that convened on a regular basis. This was seen as empowering female participants.

Yet this. grew out of the specific cultural context of Bangladesh where women are often in "seclusion'; in the household and had few opportunities to leave the home to ;In Viet Nam, this aspect may have no added benefit

programs in one district

Sustainability, Scale, and Linkages for the SCF/UK Credit and Savings Program

Beth Porter January 1997 Issues of financial sustainability, expansion and Potential linkages with the formal sector in Cam Xuyen program.

Evaluation of the Ky Anh Savings and Credit Program of Oxfam UK&I

Beth Porter March 1997 Impact and management evaluation of the Ky Anh program.

Evaluating die Impact and Efficacy of Credit and Savings Programs for Women in Vietnam: Learning from the field experiences of Oxfam UK/I and Save die Children/UK (A Synthesis Report)

Valerie Sapin

June 1997 A summary and analysis of the previous five reports. This report used to help plan the May 19 workshop in Hanoi.

of 15

to women who have the freedom but not the time to meet and who are already overburdened by their work outside the home. We are not suggesting that meetings are not beneficial. But we do believe that we should be analytical and examine tile relationships between our goals and our prescribed activities.

A second, important question was what benefits, in reality, come to women when they are the borrowers within households? A woman's name on a loan agreement implied, but did not automatically mean, improved access to and control over resources in the household. Similarly, holding a savings passbook implied but did not guarantee this for women depositors. Access to a loan may mean more financial obligations, a heavier workload, and more stress. Women did, on the average, have higher repayment rates than men, but we could not assume that this meant all was well when we lent to women instead of men. In the international discourse on microfinance, more attention is being paid to, the gender division of labor within households and to what happens with credit and savings resources within households. Little substantive analysis has been done on this in Viet Nam,

We have not answered these questions, but we hope that we have gone some way in addressing them. By disseminating our documents and organizing this seminar, we want to raise these and other issues in order to involve the broader development community in Viet Nam in this very important dialogue. Below is a summary of key issues raised by some of the reports which have been commissioned for this study.

Situation Analysis

� Significant fluctuations in inflation rates make microfinance program management more difficult than it would be in a more stable macro environment.

� Strict banking regulations (combined with an emphasis on achieving low inflation) make banks extremely risk-averse. Poor women will be affected by this, as they are the last to have access to formal financial sector services.

� Individuals within the banking sector recognize the advantages of lending to women, but women are not formally targeted, and banks do not keep gender- disaggregated statistics on their lending activities. In addition, Women's Union cadre who act as intermediaries provide a hidden subsidy to banks, as they are normally paid little or nothing for their work.

Secondary Data Review

� It is now widely accepted in Vietnam (and elsewhere) that microfinance programs should strive towards financial and institutional sustainability.

� There is little consensus regarding gender issues. While much has been written on lending to women, little attention has been paid on the effect that these loans have on women, and to whether this contributes to women's empowerment.

� Internationally, more attention is being paid to intrahousehold division of assets, and how microfinance programs affect this division.

� There is an active debate on what type of services to provide: minimal financial services, or more comprehensive social interventions – training, health, literacy, etc. This "minimalist vs. credit-plus" issue is closely related to empowerment. Some feel that "credit-plug" programs are better for traditionally disadvantaged groups, but that this increases costs and makes sustainability more difficult to achieve.

� Finally, group formation is a key issue. Should participants be forced to enter into groups? Should women of different socioeconomic strata be included in groups? What is the most appropriate group size?

Impact Evaluation – Save the Children Fund Program in Cam Xuyen District, Ha Tinh Province

Alana Albee's evaluation addresses the impact SCF/UK's credit and savings program in Cam Xuyen District has had on participants. The main findings from this report include:

� Participants significantly diversified income-generating activities and acquired new assets. � Decrease in the "hunger period" of participating households. � Households were able to save more, which is an important coping strategy during times of financial

shortages. � Women and children were working harder than before, but this was almost irrespective of whether they

obtained a loan from the program or not. � Some (but 'not much) "graduation" into the formal banking sector by participants. � Higher school enrollment rates for the children of borrowing households. � Requests for more child care or creche facilities arose during the evaluation. � These positive results depended in large part on providing long-term access to savings and credit

services – one loan was not enough to materially change a household's situation.

of 15

Impact and Management Evaluation – Oxfam UK/I Program in Ky Anh District, Ha Tinh Province

Beth Porter assesses the impact and management of an Oxfam credit and savings program in Ky Anh district. Findings include:

� Significant diversification of activities, which smoothed out labor requirements across the seasons, allowing women to engage in income-generating activities during times of reduced agricultural workload.

� Overall, women's workload increased slightly, but the nature of work was often easier and there was less need to do day laboring.

� Increases in income and assets. � The status of the District WU increased,

On the management side, it was found that:

� Borrowers were still not actively participating in management and decision-making within the program, mainly because borrower groups were administrative rather than "cohesive."

� Savings needed to be promoted more widely, and savings services improved. � The program needed significantly more technical assistance to be managed to ensure proper financial

management. � The program was moving toward financial sustainability, especially after the recent increase in the

interest rate to 2%.

Other Research

Oxfam also undertook qualitative research related to INGO and Government of Vietnam poverty alleviation programs. This research was carried out in very poor areas of Ha Tinh province. From this research, we found the following:

� Loan sizes of 150,000 VND to approximately 500,000 VND were appropriate. Larger loans given through a donor-aided program of 1.5 million VND had high default rates and were putting many people in severe debt rather than lifting them out of poverty. Some of this credit went toward animal husbandry activities (for which there was no technical assistance offered), and these activities and suffered very high failure rates.

� Many poor households were no t receiving credit because they did not have collateral, and yet these households were ostensibly the focus of formal poverty alleviation activities.

� Some poor households could not participate in WU credit schemes (which may be the only ones that truly target the poorest,) because they have not paid fees or participated in their activities.

� It was often difficult for divorced women to participate in credit programs. Those who moved their "civil status" to their husband's village and after divorce returned to their own village were not able to access credit programs until they regained their "civil status" in their birthplace. This can take years.

3. SEMINAR ISSUES

Four issues were addressed during the seminar:

1. Empowerment

2. Sustainability

3. Minimalist vs. "credit plus" programs

4. Ownership of programs

In practice, all four issues are intertwined in any microfinance program: if tile WU can successfully own and run a, savings and credit scheme, it can empower itself as well as empower the women it represents. Program design (minimalist vs. credit-plus) also has significant ramifications on sustainability, and on ultimate ownership of the program. Also, sustainability takes on increased importance as, according to Sapin, managing a self-sustaining, program fosters participants' empowerment.

Presentation #1: Microfinance and Women's Empowerme nt – Do They Always Go Together?

of 15

(Summary of issues presented by Ms. Tran Thi Huong, Program Officer of Save the Children Fund/UK)

Ms. Huong, who advises the Cam Xuyen District Women's Union on their savings and credit project, included in her presentation information from a workshop on women's empowerment and microfinance, in India (see details below) in which participants discussed definitions of empowerment. She defined it as a process of promoting democracy and freedom, in which women can participate actively in all aspects of life, including economic, social, political, and environmental aspects. Empowerment implies access to resources, services, and control over decision-making. These types of access can be improved by fostering knowledge, skills, attitudes, and economic power.

Summary of Workshop on Women's Empowerment and Microfinance (Bangalore, India)

1. The workshop o microfinance and women's empowerment, held in Bangalore, India from April 9 to 11, 1997, was an effort to create a regional strategy to promote women's empowerment and microfinance. There are three phases to this activity. Initially, research was done by British NGOs, such as Action Aid, Oxfam UM, and SCF/UK. The purpose is to create a strategy and guidelines for microfinance and women's empowerment; identify gender issues that need to be addressed; and propose strategies for promoting gender equity, The group discussed credit and savings models in Asia; and discussed and proposed a research program for 2nd and 3rd phases. There are three-phases, including regional seminars (until May 1997), Country case studies (18 months long), and larger-scale research (2-5 years).

� More than 35 participants came from India, Bangladesh, Vietnam, Pakistan and Afghanistan. More than 20 international and local NGOs and other donors attended, such as British ODA. Six participants attended from Vietnam, including staff from Action Aid, Oxfam, World Vision, and Save the Children/UK.

There are many positive impacts of microfinance found in Save the Children's programme in Viet Nam and elsewhere in the world.

Economic:

� Income increased – living conditions improved.

� Savings increased – economic security increased.

Skills:

� Improved knowledge and experience.

� Improved technical skill.

� More active and dynamic.

� Improved household management skills.

� Better savings habits.

Social Activities:

� Active participation in different union activities.

� Solidarity, helping each other.

� Knowledge of policies, laws.

� Understanding of other social activities.

Women's role in family and society,

� Enhanced economic control and decision making in family + participation in government offices at higher levels (People's Committee, People's Council) + reputation among local community and authorities.

of 15

Two main constraints or problems remain:

� Increased workload for women.

� Programs are not yet really sustainable.

Questions posed to small groups

1. Is empowerment relevant for poor women in Viet Nam?

2. If so, what are the most appropriate and useful indicators for empowerment for women participating in microfinance program in Viet Nam? In other words, if we are interested in providing more than material benefits to women through microfinance programs, what non-material benefits do we think they should gain?

3. What indicators will tell us they are achieving them? Please suggest a list of 4-8.

4. How might we measure these indicators? For example, who should measure them, how should they be measured, and how often?

Findings from Small Group Discussions

The groups maintained that empowerment is a relevant concept in Viet Nam but is difficult to define. According to one participant, the Vietnamese translation of empowerment, trao quyen, is not a perfect or even a literal translation of the English word empowerment. Other participants mentioned that words are 'coined' to reflect a concept that is shared by a group of people who need a new word to express what they mean. In this sense, trao quyen may be appropriate. The debate on this nomenclature continues.

Vietnamese law recognizes women but it is nonetheless important to distinguish women's rights "on paper" and in reality. It was agreed that empowerment includes relationships within and outside the family. There are still many traditional concepts of women and their role in society. One group stated that poor women do not often exercise the rights they have under the law. Another issue to consider regarding women's legal status is the diversity of the women's socio-economic status in Viet Nam (i.e. rural, urban, ethnic groups, etc.).

Workshop participants identified numerous nonmaterial benefits that they felt women could gain through participation in microfinance programs:

� Experience which can provide women with access to information and increased knowledge and awareness.

� Education and skills, including communication, management, and technical skills. � Increased status within the household and society, including decision-making power. � Increased control of family and community resources. � Greater self-confidence. � More theme for social activities.

Non-material benefits are difficult to measure. How can an INGO quantify increased respect from a husband for his wife because she has increased the family's income? According to Sapin's paper, empowerment is almost always the result when a woman brings more money into her household and subsequently improves tile welfare and living standards of her family. 1

Several ways of measuring these indicators were proposed. One can follow the process of attitudinal and behavioral change within the individual, family, and community by using the above indicators to measure different aspects of empowerment. Another group suggested examining a continuum of events that began with baseline data (where is the woman now?) and seeing how the objectives of empowerment are reached (where does she want to be?).

Specific qualitative indicators of increased empowerment include: respect from tile woman's husband, family, and community; changes in her responsibilities; application of her suggestions and ideas; her ability to mobilize resources; and so on.

of 15

Presentation #2: Financial and Institutional Sustai nability

(Summary of presentation by Ms. Nguyen Thi Ha, Program Officer of Oxfam UK/I)

Ms. Ha is the project advisor to the Ky Anh District Women's Union Savings and Credit Program in Ha Tinh Province.

Fundamental Questions About Sustainability:

1. What is it?

� It encompasses both financial and institutional issues.

2. Summary of findings from workshop in Bangalore, India.

� Research findings summarised below.

3. Relevance to Vietnamese women.

� Discussed during small-group sessions.

Institutional Sustainability (Part 1)

� A Stage Where People, Groups and Organisations Can Meet Their Growing Needs with Their Own Resources, And Without External Support.

� Managers Own Program.

� Program is Legal.

� Program Has Coherent Objectives And Strategy,

� Managers Link With Other Programs.

� Managers Have Appropriate Skills.

Different Levels Of Financial Sustainability

Level 0: Interest Earnings Pay For Cost Of Basic Management + B) Lost Loans.

Level 1: Interest Earnings Cover Costs Of Inflation, B) Lost Loans, And C) Basic Management.

Level 2: Same As Level 1, But Also Covers Costs Of Training And Monitoring

Level 3: Interest Earnings Pay For: A) Cost Of Funds (Donor Funds + Savings + Commercial Loans), B) Lost Loans, And C) All Management And Training Costs.

Institutional Sustainability (Part 2)

Managers Own the Program

� WU Managers Feel Confident And Independent. They Do Not Defer To Outsiders (i.e. Donors Or Local Authorities)

Program is Legal

� Law recognises the WU as the legal owner of funds, and as a recognised financial intermediary. � Program funds cannot be seized by local authorities or other outside agencies.

of 15

Program Has Coherent Objectives And Strategy

� WU Managers Have Clear Objectives (Poverty Reduction, Financial Sustainability, Etc.) � WU Managers Have A Clear Strategy to Achieve Those Objectives (Capacity Building, Appropriate

Financial Instruments, Etc.)

Program Links with Other Programs/Institutions

� Program Links With The VBA (Borrows Money, Learns Skills, Etc.), Other Donor Agencies, or Other Counterparts.

Managers Have Appropriate Skills

� Managers Can Train Other Members, Can Calculate Appropriate Interest Rates, Can Maintain Clear Records, And Can Create Appropriate Strategies.


1. Identify 2-4 key constraints to microfinance programs in Viet Nam achieving Sustainability.

2. What would you recommend to overcome these constraints? Please give details if possible.


It is now widely accepted within Viet Nam as elsewhere that microfinance programs should strive toward sustainability – both financial and institutional. But the legal status for such programs is not clear. Furthermore, there is no legal framework to support different banking models (e.g. private, cooperative, etc.), and this diversity of models is important for women's access to credit.

Another constraint lies in the management of some programs, Some still promote subsidized credit and enforce this by putting a ceiling on interest rates. One group from the workshop felt that this was wrong, as market rates sometimes help the poor by ensuring that they are not "crowded out" by wealthier borrowers.

Other constraints noted included: 1) lack of coordination between microfinance implementors and local officials, 2) low levels of capacity in management, and 3) low mobilization of savings among participants.

Several action steps were identified to overcome these constraints:

1. Promoting a legal framework that includes and protects microfinance programs.

2. Designing schemes more thoroughly, with clear objectives, high transparency, better incentives, and more training for both managers and borrowers.

3. Greater understanding and closer cooperation between program implementors and local authorities.

4. Measuring the real costs of program subsidies to raise awareness of the importance of savings mobilization and financial sustainability.

Sapin emphasizes (in her report) the importance of examining financial procedures and not just results: having solid financial practices and keeping accurate data are essential for a program's financial sustainability. This is even more critical if and when a program decides to seek funding from a donor or financial institution.

Presentation #3: Program Design – Minimalist Vs. "C redit Plus"

(Summary of presentation by Mr. Stefan Nachuk, Program Coordinator of Oxfam UK/I)

There is an active debate on the Minimalist vs. Credit Plus issue: should a microfinance program concentrate narrowly on providing lending and savings services, or should it include social components (health, literacy,

of 15

training, technical assistance, etc.) as well? This debate stems from differences in assumptions that implementors work with as well as differences in program objectives. Some feel that Credit Plus programs are better for traditionally disadvantaged groups, including women. But providing additional services increases costs and therefore makes financial sustainability more difficult to reach.

Minimalists tend to place more emphasis on healthy financial indicators. Their programs allow participants to make all decisions regarding the use of loans but provide no additional training. For these microbankers, the most important issue is that women have long-term access to financial services. As financial sustainability is difficult to achieve, program managers must focus only on providing financial services. Minimalist programs do not see offering additional training or services as germane to improving outcomes or achieving program objectives. Furthermore, minimalists argue that program managers cannot generate income from these "extra services" and thus these services add to costs but do not increase revenues.

Credit Plus advocates see microfinance as a tool to empower women. They favor programs that include non-credit components. As members have full control over decisions and program assets, grassroots participation is the key to a Credit Plus program's success. These "empowermentalists" regard focusing too much on short-term cost efficiency as jeopardizing long-term client and organizational sustainability. In addition, Credit Plus advocates argue that providing financial services without assisting clients to improve their skills is self-defeating – poor people do not lack only financial services, they also do not have the knowledge to make the best use of these services.

In this debate over Minimalist vs. Credit Plus programs, a systematic, cross-cultural study has not yet been undertaken (in Vietnam) as to how microfinance programs contribute to women's empowerment. A problem that would arise in such a study is deciding upon which indicators to use: those closely related to empowerment or those related to financial sustainability. It cannot be assumed that microfinance has a positive impact on women or that high repayment rates alone indicate Unproved outcomes on borrowers' lives. On the other hand, it cannot be assumed that offering additional training/technical services to clients measurably improves their welfare.


1. If we want to provide both tangible (financial) and non-tangible benefits to women in Viet Nam through microfinance programs, are they served well enough through minimalist programs?

2. In your view, are there:

� Essential additional activities? What are they? From what source should they be funded?

� Optional activities that would be beneficial if they can be covered from interest revenue or other sources? What are they?


Both tangible and intangible benefits are needed in microfinance programs but beneficiaries tend to think of economic benefits first. In general, workshop participants felt that Credit Plus programs are more useful, especially for women, as long as they were based on the needs and demands of the locality.

Intangible benefits were seen as vital for a woman and her family. For example, a woman cannot tend to her pig-raising business if she was too ill or needed to see to her sick children. Thus, a microfinance program should consider additional activities to promote intangible benefits, including skills and technical training, increasing access to education, health inputs, and awareness-raising for both men and women.

Regarding paying for Credit Plus services, groups did not have any concrete, sustainable suggestions. Some group members suggested seeking assistance from donors or the government, though this is probably not sustainable. This approach may retard empowerment, as program clients would get used to "receiving charity" ill tile form of subsidized credit + related services. Few group members were enthusiastic about raising interest rates to pay for increased services in savings and credit programs, though this is perhaps the most sustainable method of providing long-term, reliable services to program clients.

Finally, group member s did not seem enthusiastic about the idea of separating "financial" and "non-financial" services – providing savings and credit services only, but lobbying for improved government services as well. It is likely that they did not favor this option because it is viewed as being unrealistic – it will take many years before the average farmer sees a marked improvement in government social services.

of 15

Presentation #4: Ownership of Microfinance Programs

(Summary of presentation by. Ms. Than Thi Chung, Deputy Representative of CIDSE)

The transfer of ownership to local partners is 'a stated goal of many INGOs with savings and credit programs. As microfinance is a relatively new activity in Viet Nam, there have been very few instances of complete transfer of programs to local partners.

Ownership is not clear between INGOs & local partners. In the first place, there are several types of ownership: legal ownership, capital ownership; skills ownership; and owning the set of knowledge and attitudes needed to manage the program. Sapin writes that clear ownership objectives are integral for a microfinance program's managerial and financial strategy and that it may even help facilitate a program's smooth operation.

Building a viable program is also important to improve the formal financial sector's perceptions of microfinance programs and the WU as more professional financial institutions. The WU is given, by default, the task of providing small loans to rural women. This is because financial institutions view these transactions as commercially unprofitable. Sapin writes that the WU's involvement in microfinance programs is seen as the "least lucrative and most time-consuming segment of the formal banking market in Viet Nam." On the other hand, if women could own and manage successful microfinance programs, this could help them gain a greater voice in formulating the country's financial policy.

Sapin emphasized the importance of Women's Union participation in this process. If the WU cannot be a part of national financial policy making, "Its role would be essentially limited to facilitating micro-level changes within a larger framework over which it would have little influence."


1. What kinds of skills are needed to be a viable and credible financial intermediary? At national and district levels?

2. Which type(s) of ownership are most important in the long-run? Why?

3. What opportunities and constrains exist in transferring ownership front an INGO to the WU? Give examples.


The skills most important to promoting ownership are the ability to increase the program's savings, combined with a solid financial strategy, Depending on their position within the organization, potential owners will need different types of skills, including:

� technical skills;

� training and management skills;

� savings mobilization

� financial skills; and

� accounting skills.

Characteristics that a financially-sound program should have:

� transparency for both donors and beneficiaries-

� ability to gather accurate data and statistics about the program, and

� participants have confidence in the program.

of 15

Skills development was cited as key for developing real ownership. Many people felt that once the local partner had the knowledge and experience of running the program, other forms of ownership could be more easily attained. But ensuring that ownership is credible also entails capital ownership; a sense of responsibility; and agreed-upon objectives between relevant parties, a point Sapin brings up in her paper. One group felt that management boards need at least three to four years to develop and assimilate all the skills needed to assume a significant amount of ownership.

The WU's structure and strength provide many opportunities for transferring ownership and creating economic changes in poor, rural areas. As noted in the Synthesis Report, the WU's deep institutional structure, reaching from the central to the commune level in Vietnam, has offered opportunities for many international organizations to cooperate with them in order to promote the creation/improvement of financial services for rural dwellers. However, there are some difficulties: the Women's Union normally operates in a legal "gray area"; its programs are neither legal nor illegal. Writing legislation which "legalizes" these programs is a key element of encouraging the formation of a stronger, more capable Women's Union in rural areas.

Most WU cadre have limited skills, as they are not professional financial intermediaries. Most Women's Union cadre are selected because of their enthusiasm and dedication, not because they are Professional microbankers. Intensive capacity building efforts must be made with local practitioners. In addition, consideration should be given to hiring non-WU staff for key technical positions which cannot be filled by existing cadre (this already occurs in the UNICEF – Central WU savings/credit program).

4. CONCLUSIONS

Empowerment is a relevant issue for microfinance today. However, there is little agreement regarding exactly if, and how, microfinance contributes to women's empowerment. Much more household-level research (related to microfinance) is needed in Viet Nam, hopefully linking up with work being undertaken elsewhere in the world.

Empowerment is not a "stand-alone" issue. Empowerment can be viewed as the nexus between the macro environment, laws governing microfinance legislation, international "best practice", program "philosophy", capacity building, and ownership. Specifically, empowerment through microfinance activities cannot take place in an unstable macro environment. A stable macroeconomic environment is key to facilitating the creation/expansion of microfinance programs. Hyperinflation, instability, or recession can severely hinder their development.

Microfinance programs require an appropriate legal framework within which to operate. Ideally, "enabling" legislation will include: a) a framework ensuring that financial institutions must follow minimum fiduciary requirements; b) creation of an effective supervisory agency to monitor financial institutions; and c) flexibility regarding interest rate and savings mobilization policies.

International "best practice", though not explicitly cited by many participants during the workshop, had a strong effect on shaping opinions, Most participants are aware of the Grameen Bank, BRI, BancoSol, and other well-known microfinance efforts, and many have visited one or more of these institutions. Specifically, "best practice" themes were raised when participants discussed interest rate structure, minimalist vs. credit-plus", -capacity building and ownership. Programs will benefit women best when they are, in general, well-managed and sustainable.

Assumptions made about program objectives and about the ability of microfinance to change people's lives implies that program philosophy (minimalist vs. "credit plus") affects microfinance program design. Minimalists do not deny the importance of reaching individual clients, but they argue that microfinance programs cannot add additional training/technical components AND achieve sustainability – providing additional services without additional income is not sustainable.

On the other hand, "empowermentalists" argue that high repayment rates combined and good financial data do not imply good impact – many people may borrow from different sources to pay off first loans, possibly putting clients deeper into debt. If programs do not provide additional training, the poorest (Who are often the least skilled) may continue to languish at the bottom of the economic ladder – providing credit without additional services is not enough.

Related to this, capacity building was cited by almost all participants as a fundamental building block for building strong microfinance programs and for empowering women. Why? As programs are primarily based on

of 15

building skills (the people are the institution), if managers cannot make strategies, evaluate their own work, supervise other, keep records, maintain financial discipline, then continued inputs of donor funds will probably NOT result in long-term improved outcomes for program clients. In addition, as noted above, clients often do not have the basic business acumen or technical skills necessary to successfully use credit to improve their lives.

Programs should strive for financial and institutional sustainability. INGOs should emphasize accountability and cost-consciousness in their programs. Donor funds will not last forever, Well-managed programs will survive, while others (and with them, their clients' savings deposits) will perish.

It is not clear that the REAL costs of INGO-supported programs are normally included in financial reports. If additional costs (supervision, training) are included, then "profitable" programs may turn out to be unprofitable.

Ownership can be defined in many ways, but participants felt that possession of relevant SKILLS is a precondition for development of all other types of local ownership – legal, institutional, or attitudinal.

ANNEX: List of Participants

"WOMEN AND MICROFINANCE: PROJECTS, POLICIES AND POW ER" MAY 19, 1997

Organisation Name

1 ActionAid Mr. William Smith

ActionAid Ms. Nguyen Minh Thu

AusAID Ms. Nguyen Hong Nga

Bread for the World Ms. Nguyen Thi Tinh

Bread for the World Ms. Pham Thi Thu Thuy

CAMA Services Ms. Do Thi Hanh

CAMA Services Ms. Alison

CARE Ms. Linda

CARITAS Ms. Margrit Schlosser

10 Center for Family & Women's Studies DT 8263-088 Ms. Nguyen Kim Ha

CGFED Ms. Dao Xuan Dung

Center for Reproductive and Family Health Ms. Ngo Thuy Nga

Center for Reproductive and Family Health Ms. Vu Van Manh

Center for Research and Training on Women Ms. Nguyen Bich Ha (836-1704)

Center for Rural Development Dr. Nguyen Thanh Hien

Center for Social Sciences & Humanities (NR 854-2936)

Ms. Do Thi Ngoc Nga

Center, for Women's Studies, Open University, HCMC Prof. Bui Thi Kim Quy

CIDA. Ms. Ingrid Knutson

CIDSE Ms. Than Thi Chung

20 CIEM Dr. Chu Tien Quang

Catholic Relief Services Ms. Maureen Quigley

Danish Red Cross Dr. Nguyen Viet

of 15

EED (Nha Trang fax 058 824763) Ms. Nguyen Thi Man

GRET Mr. Christian Klebert

Inter-ICAT Ms. Bonnie Mulholland

JICA Ms. Nguyen Thi Hang

JIVC Mr. Inami Kei

Lao Cai Women's Union Ms. Le Thi Thu Ha

30 Ky Anh Women's Union Ms. Tran Thi Tuyet

MARD Ms. Le Thinh Thuan,

MCC Mr. Bruce McCrae

NCFAW (Fax 971-1348) Ms. Mia Hyun

Oxfam Belgique Ms. Do Minh Hang

Oxfam Hong Kong Ms. Susannah Hopkins

Oxfam Hong Kong Mr. Tran Thanh Binh

Oxfam Hong Kong Mr. Toan

Oxfam Quebec Ms. Lam Thuy Lan

Oxfam Quebec Ms. Nguyen Hien Thi

40 Oxfam Quebec Mr. Nguyen Tri Dung

Oxfam Quebec Mr. Le Xuan Hieu

Oxfam UK/I Ms. Heather Grady

Oxfam UK/I Mr. Stefan Nachuk

Oxfam UK/I Ms. Nguyen Thi Ha

Oxfam UK/I Ms. Le Kim Dung

Oxfam UK/I Mr. Nguyen Ngoc Diep

Oxfam UK/I Ms. Tran Bang Tam

Radda Barnen Ms. Van Anh

RDSC Mr. Dang Ngoc Quang

50 RDSC Ms. Tran Huong Lien

RDSC Ms. Nguyen Khanh Quy

NGO Resource Center Ms. Odile Ruijs

PACCOM Mr. Don Tuan Phong

PDI Mr. Jim Kurtz

Reproductive Health Information & Research Center Dr. Khong Ngoc Am

Reproductive Health Information & Research Center Dr. Tong

Royal Netherlands Embassy Ms. Nguyen Nu Hoai Van (AM) Ms. Marieke Boot (PM)

SCF/UK Mr. Joachim Theis

SCF/UK Ms. Trinh Thi Huong

60 SIDI Mr. Orin Ginzburg

of 15

1 A different interpretation of intra-household income distribution is put forth in a recent Action Aid paper, Gender Impact Assessment: Uong Bi Savings and Credit Programme, Quang Ninh Province, Viet Nam, by Natasha Pairaudeau and Nguyen Minh Thu (10-11/96). This paper concludes that, "providing Women with credit in Uong Bi does not adversely affect Their position within tile household. Nor, however, does it noticeably and directly enhance Their status." (P. 8)

SNV Ms. Vu Thi Quynh Anh

SNV Ms. Anne Marie van Swinderen

SNV (Hue DT 054 830117 Fax 054 820257) Ms. Nguyen Thi Tam Thanh

Toward Ethnic Women (Fax 7331103) Ms. Tran Thi Hoa

Toward Ethnic Women Ms. Helen Broekkamp

UNICEF Ms. Pham Ngoc Anh

UNICEF Ms. Samantha Hung

VCFMF 826-5570/5052 Ms. Christine Ouellette

VCFMF Ms. Carolyn Petersen

70 VCFMF Ms. Nguyen Nam Phuong

VCFMF Ms. Tran Huu Uy

VCFMF Ms. Le Huy Du

VCFMF Ms. Tran Quang Tien

World Concern Mr. Bill Kompare

World Concern Ms. To Thi Bay

--- Ms. Ruth Bowen

77 --- Ms. Andrea Esser

of 15

women and microfinance: projects, policies, and power · women and microfinance: projects,...

Documents