Association for Public Policy Analysis & Management

The possible development outcomes achievable through providing financial services to women in developing countries should be key considerations in international development policy. Women make up 85% of the poorest microfinance clients. The different financial behavior of women suggests a gendered approach to microfinance. Microfinance institutions prefer female clients because their repayment rates are higher. Society reaps intergenerational benefits from providing financial services to women because they invest more in their families.

Research Questions

This paper analyzes customer centrality at the bottom of the pyramid, the five pillars of customer centrality, gender mainstreaming and women’s empowerment to assess the impact of women centric microfinance on economic development and public policy implications. Specific questions this paper addresses are 1) how do microfinance institutions account for the female perspective 2) what do you do differently with female clients 3) how do women led organizations behave differently, and 4) what effects are women centricity having on women’s empowerment.

Methodology

The first question is explored through comparative analyses of marketing strategies, customer care, gamification of financial services between Kiva, the Women’s Enterprise Fund, Jordan’s Microfund for Women, India’s Janalakshmi, and South Africa’s Absa. These analyses provide insight into how microfinance can decrease the access-service gap for women, thus bolstering international development and creating more social equity. The second and third questions are explored through comparing how women led organizations, Jordan’s Microfund for Women and India’s Bharatiya Mahila Bank, differentiate their financial service offerings and create gender specific products for women. The fourth question is examined through comparing case studies of microfinance’s role in women’s empowerment in Afghanistan, Uganda, and Sri Lanka.

Results and International Development Policy Implications

Moving towards women centricity in microfinance can improve development policy outcomes. When accounting for the female perspective it is crucial to avoid exclusively targeting women, which creates a zero-sum game where men are unable to access loans and use female relatives as intermediaries. Implementing social marketing improves women’s social capital in their communities, encourages women to trust MFI’s, and fosters empowerment. Women value the relationship with their financial service provider and customer care higher than any other aspect of the financial service system. Although women led organizations are frequently recognized for their gender mainstreaming of executive leadership, it is their dedication to designing women centric products and proactive nature as first movers that differentiate them from other microfinance institutions. Female clients require products that meet gender specific needs, such as maternity coverage insurance. The extent to which financial service providers embrace women centricity affects the degree of empowerment women experience. Focusing on creating gender-balanced loan portfolios increase the percentage of women using products with high female dropout rates. MFI’s facilitate women’s empowerment when they help establish a safety net through providing non-financial services. The benefits of providing women with financial services spills over into the economy and their families, making women centricity in microfinance a pertinent international development issue as well as a tool for improving social equity.