It is interesting to see the increase in publicity recently on microfinancing projects around the world that cater to women, especially in Africa and Asia. Many of these programs are touted as solutions to poverty and oppression – by giving a woman enough money to run a microenterprise, microlenders not only improve her economic situation but also promote her independence in a repressive male-dominated society. However, does microlending really alleviate poverty in a meaningful way?
Sri Lanka has an economy that is hampered by slow privatization, an uninterested business community, a 30 year civil war, and the destruction caused by the December 2004 tsunami. It is also a culture that is traditionally patriarchal in nature. Over the years, women have designed an informal microlending network, as reported by the BBC:
In the late 1980s, grassroots women’s groups in villages throughout the impoverished Hambantota province set up informal banks, where village girls studying A-levels handled all transactions. These groups became the Janashakthi Bank Society, where to join a woman must have an income below the official poverty line.
Other microlending organizations have come to Sri Lanka and are helping women to sustain micro and small enterprises. However, these loans only bring women to a level above the poverty line. Little progress is made past that point, as a significant investment would be necessary to acquire the capital and equipment to expand the business. Also, these loans do little to improve the situation of women in a social sense. Husbands allow wives to have a ‘side job’, but many female enterpreneurs find their spouses unable to reconcile themselves to a woman bringing in a salary:
[One lender] has been chased down the street by a knife-wielding husband, irate that food had not been appearing on the table ever since his wife was diverted into self-employment. …wifely earnings do not magically summon up reason if dearly-held patriarchal structures are undermined.
So, the question remains – are the microfinancing institutions helping or hurting women? The small expansion in business raises them above the poverty line, but profits go directly to the men of the family, who gamble hard-earned money down the drain. Has the formalized lending system brought more grief to female entrepreneurs? Or is there a value-added to the presence of institutions?
Published Date: April 14, 2006