Monday, January 28, 2008

Women Benefit From Microcredit Lending as Do Small Lenders: Big Payback

Microcredit lending: Small loans; big payback

CBS News (Nov. 10, 2006)

While not a strict requirement, the reality is that most of the loan programs are targeted to women. The Microcredit Summit Campaign says it's found that women are more likely to repay their loans in full and are more likely to use the money to improve their families' lives. They are, in the words of the Grameen Bank, "the best poverty fighters."

...A 2005 progress report noted that more than 66 million poor families had been helped as of the end of 2004, representing more than 330 million people. The summit campaign believes the 100-million goal will be reached by the end of 2006 or 2007.

Microcredit lending is now carried out by more than 3,200 organizations in dozens of countries in Africa, Asia, and Latin America. The longest-running microlending enterprise — that of Grameen Bankhas loaned $6 billion US to 6.6 million borrowers in more than 71,000 Bangladeshi villages since 1976 (96 per cent of the clients are women).

... What is microcredit?

The Microcredit Summit of 1997 defined microcredit as any program that extends small loans to very poor people for self-employment projects that generate income. Definitions of what constitutes a "small loan" may vary from one country to the next, but many of the loans are as small as the equivalent of $30. Most loans are under $200.

A typical loan might see a woman borrow $50 to buy chickens. The chickens would produce eggs and, eventually, more chickens — all of which she could sell in the marketplace. Every week, she and other local loan recipients will gather to make loan payments — tiny weekly installments that makes repayment much easier for the borrower. The clients also share success stories. Peer support is an integral part of the microfinance system. The loan will be fully repaid in six to 12 months and the money will then be re-lent to someone else in the community.

The loans are usually fronted by non-profit groups that are typically owned by the borrowers themselves. One becomes an owner simply by borrowing. The loans granted by microfinance institutions (MFIs) usually carry an annual interest rate of 15 to 35 per cent (although some loans are interest-free). That may seem high to Western borrowers, but it reflects the high costs they face in running their programs and meeting every week with their clients in the clients' home villages. For most of the borrowers, the only alternative to a microloan is the local moneylender and interest rates that can quadruple the cost of a loan in just one year.

MFIs also don't just loan money. They also offer entrepreneurship and life-skills training, such as literacy and nutrition counselling.

...What are the lending criteria?

The typical recipient of a microloan is very poor. They struggle to survive every day, often living on less than the equivalent of $1 US a day.

Unlike other types of loans, microcredit loans never require collateral. Being desperately poor is all it takes to qualify. Formal contracts are usually not drawn up. The loans are based on the premise that credit is a human right and that everyone has skills that can be harnessed. Even beggars can get loans.

"Conventional banks look at what has already been acquired by a person," Yunus wrote. "Grameen looks at the potential that is waiting to be unleashed."

Lending to Women Makes Good Business Sense -- and Lifts Up Whole Communities

Published: July 27, 2005 in Knowledge@Wharton

Attending a conference on women's health and safety at the global level, one might expect to hear reports from doctors and scientists talking about new technologies and medications to address specific health issues. If only it were that simple. Instead, participants at the recent "Penn Summit: Safe Womanhood in an Unsafe World," organized by the Schools of Nursing and Medicine, heard a complex story of poverty, illiteracy, limited access to the formal economy and inadequate property rights -- some of the conditions that most directly affect women's health and their ability to care for themselves and their families. It is among these seemingly ancillary problems, said Summit speakers, that we will find solutions to the greatest health challenges facing women today.

Poverty and Illiteracy: A Lethal Combination

When asked to pinpoint the most detrimental causes of ill health among women, speaker May Rihani, director of the Global Learning Group and Center for Gender Equity, Academy for Educational Development, said that without doubt it is the combination of illiteracy and poverty. As such, said Rihani, "girls' education at the primary and secondary level might just be the most powerful strategy to improve the socioeconomic environments in which women live, and improve the health of women and their families." She provided the audience with statistics from numerous studies that linked education to better health:

• A 63-country study showed that higher education levels for women increased productive farming and accounted for 43% of the decline in malnutrition achieved between 1970 and 1995.

In Africa, children of mothers who receive five years of primary education are 45% more likely to live beyond the age of 5.

• Multi-country data show that educated mothers are about 50% more likely to immunize their children than uneducated mothers.

She also presented statistics that show the effects of illiteracy and lack of education:

• Countries with lower than 20% of girls enrolled in secondary school have the highest rates of teen birth rates.

• A study from Zambia finds that AIDS spreads twice as fast among undereducated girls.

• A study in Brazil shows that illiterate women have an average of 6 children, while literate women have an average of 2.5.

Lack of education, coupled with poverty, sets up a secondary problem - that of women being forced to seek financial stability through unsafe means. Geeta Rao Gupta, president of the International Center for Research on Women, told Summit participants that the asset gap, particularly with land ownership, places women in extremely precarious financial situations.

Statistics of land ownership among women in many countries, she reported, is dismally low. In Brazil, just 11% of women own land; in Pakistan that figure is only 3%. "The asset gap pushes women into the informal sector," said Rao Gupta. "This means insecure, low-paying jobs -- the kind of work that is not protected by laws or governments." By far the greatest threat, agreed participants, is the often inevitable slide into prostitution.

"Far from being the oldest profession in the world," said speaker Esohe Aghatise, executive director of Associazione Iroko Onlus, a group in Italy that addresses human trafficking, "prostitution is the oldest form of oppression in the world." Laura Lederer, a senior advisor with the U.S. State Department, said that their research has uncovered numerous health issues associated with women involved in the sex trade: 64% had been threatened by a weapon, 80% had substance abuse problems, and 68% suffered from post-traumatic stress disorder.

Ameporn Ratinthorn, a member of the nursing faculty at Siriraj Mahidol University in Thailand, has worked directly with prostitutes. She reported that among nearly all of the prostitutes she spoke with during a recent research study, economic instability and lack of education were the two key factors leading women to the sex trade. The portrait of a prostitute, at least in the area of Thailand where Ratinthorn conducted her research, is that of a woman with little education (65% had less than six years of formal education), who is a mother (60% have children), is the sole bread winner in the family (if there is a husband, he tends to be absent), is in debt, and whose family has at least one member who is sick and unable to work.

What these women tend to have in common, said Ratinthorn, is that they are highly economically disadvantaged and at the same time have enormous family responsibilities. Not surprisingly, the women in Ratinthorn's study suffered from high rates of sexually transmitted diseases, including HIV/AIDS, and had suffered physical injury and even death due to violence by customers, partners, pimps, and even law enforcement personnel.

Opening Doors to Wealth Generation

While women are often kept out of the formal economy, they have proven -- when given a chance -- to be highly adept at improving their financial situations and in turn, the well-being of their families.

This fact was the catalyst for the creation of microfinance organizations more than 20 years ago. As C. K. Prahalad notes in his book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits, "Women are central to the entire development process. They are also at the vanguard of social transformation." He attributes the success of Grameen Bank, a microfinance pioneer in Bangladesh, to its policy of lending only to women. Indeed, the default rate at the Grameen Bank is less than 1.5%.

Speaker Hans Dellien, manager of microlending services for Women's World Banking, said that investing in women "is a secure bet." And the connection to women's health is clear. "If you empower women through economic means, they will invest in their children (by sending them to school) and in their households. Good health follows."

WWB's web site answers the question of "Why lend to women?" this way:

Women are major actors in the global economy. Women's roles as the farmers, traders, and informal sector industrialists are major and often overlooked.

• Global experience with microlending demonstrates that women are better credit risks than men, and that low-income entrepreneurs have higher repayment rates than large bank clients.

Investing in low-income women entrepreneurs is a highly efficient means to achieve economic and social objectives. Women manage household finances in most of the developing world. As more cash and assets get into the hands of women, most of these earnings are spent on food, medicine and schoolbooks for their children.

Women tend to be honest, practical and reliable. This results in a low percentage of business failures and loan defaults among women business owners.

Dellien said that he and his colleagues within WWB, which doesn't lend money but serves as an advocate and provides technical assistance for microfinance, spend a lot of time explaining to banks and potential lenders that this isn't charity, but rather a highly effective, smart way to invest resources.

That idea is at the core of Prahalad's book, which notes that more than 4 billion people live at the bottom of the pyramid on less than $2 per day. Rather than pity them or treat them like "poor" people, imagine what we could do if we involve and respect them by opening doors to financial stability, suggests the author. This kind of limited thinking -- that poor people are all the same -- held back even microfinancing organizations, added Dellien. "Twenty years ago we had a one-product-fits-all approach." Groups like his eventually began to see that their clients, though all poor, had very different situations.

"Our clients were running small, medium, and large enterprises," he said, "which means they had different financing needs." That realization has led to a variety of new products and services, which Dellien hopes will soon include health insurance and pension funds. By recognizing the power at the bottom of the pyramid, microfinancing organizations have moved their focus from just helping women subsist to helping them (and in turn, their families) create long-term financial stability.

As Judith Rodin, past president of Penn and current president of the Rockefeller Foundation, said in her welcoming remarks at the Summit, "This is a multidisciplinary problem .... Education and employment affect women's health." That theme played out during the two-day summit where participants heard over and over that a woman's economic position directly affects her ability to pay for needed improvements in health, housing and education; impacts her power and status in the family and community; and plays a major role in her ability to act against violence directed toward herself and her family.

Micro-Loans Alleviate the Pressure to Emigrate

Alleviating the Pressure to Emigrate: Microloans Help the Poor in their Home Countries

By Brenda Walker

Limits to Growth

While much of the liberal establishment regards immigration as an excellent example of its noble missionary work, the efficacy of immigration as rescue is limited. Like much about the issue, it boils down to basic numbers. Simply put, there are entirely too many poor people on earth to be rescued by immigration to the United States. Do-gooders should study better ways to help the poor where they live, since those billions cannot all come here.

One important answer already exists and has had the kinks worked out through years of trial and error in many small communities throughout the Third World. Microloans have been shown to be an effective way to improve the living standard of the poor where they live. This approach for aiding the world's poor is clearly superior to the rescue fantasy underlying liberal support for current immigration policy. Microlending is inexpensive and it works.

Microloans are very small loans made to women so that they can start their own businesses. It was started by an economics professor, Muhammed Yunus, who believed that the poor needed credit, not charity. Starting in 1976, Yunus created the Grameen Bank and secured donations to fund its lending programs. (Grameen is a Bangladeshi word that means rural.) Today the bank is self-supporting from the interest paid on its loans to the poor. Repayment rates are very high because Grameen has learned how to structure its program for maximum success.

Microloans are aimed at women, since across most cultures women consistently deal more responsibly with the loans than men. An individual woman might buy a sewing machine or a loom, or perhaps a simple handcart to start a delivery business. Although the money is loaned to individual women, every loan must be repaid in order for others in the local group to get any additional loans. In addition, there is a social contract to which every participant must agree. Among other things, members pledge to drink only safe water, limit the size of their families, educate their children, grow vegetables and refuse any participation in dowry customs (which are the source of much violence against women).

This is a prescription that should be welcomed by all political persuasions. Conservatives appreciate that microloans take little or no government involvement and become self-supporting in a very short time. Feminists like the “women's empowerment” in cultures where women have been subjugated by customs like purdah for centuries. In running their own small enterprises, the women gain more standing in the home and community.

For environmentalists, the emphasis on small, sustainable development is a welcome change from the large, often ecologically destructive engineering projects that the World Bank has promoted. In addition, the organizational structure promotes democratic involvement in the village. Women involved in microloans often vote in higher numbers and run for public office themselves. In countries like Bangladesh, this civic involvement is a far cry from the lives of their mothers, who may never have left their home compounds in their lifetimes.

It is also notable that the basic strategy carries over across cultural differences. A Grameen newsletter article announced the successful launch of a microloan program in Sonora Mexico in March 2000. Another branch has been started in Chiapas. The initial reports are very positive, showing that Mexicans do not need to relocate en masse to the U.S. in order to attain a better life. Now will someone tell Mexican President Fox that an open border is not necessary? Of course, Mr. Fox has a more complicated agenda than merely improving the lives of poor Mexicans, which is a minor sidebar to his globalist goals.

In his book, “Banker to the Poor,” microloan creator Yunus makes an astounding statement (pg. 221), “In Bangladesh, there is no reason why people should remain poor.” If the poster country for poverty is seen as a likely candidate for successful self-help, then any country can be.

The remarkable success of the Grameen Bank shows that appropriate self-help programs for the people of impoverished countries can effectively lessen Third World poverty. The poor do not need to be rescued by means of immigration to the United States in a paternalistic display of American elitism.

To Have and To Hold: Women’s Property and Inheritance Rights in the Context of HIV/AIDS in Sub-Saharan Africa

International Center for Research on Women

Information Brief (June 2004)

In 2004, UNAIDS launched the Global Coalition on Women and AIDS to call more global attention to HIV/AIDS-related abuses of women’s and girls’ rights and to promote action to counter abuses. The Global Coalition focuses on preventing new HIV infections among women and girls, promoting equal access to HIV care and treatment, accelerating microbicides research, protecting women’s property and inheritance rights, and reducing violence against women. For each issue, the Global Coalition works through a convening agency to raise awareness and promote action. The International Center for Research on Women (ICRW) is the convening agency for the realization of women’s and girls’ property and inheritance rights. This bulletin is based on research, undertaken for ICRW by Dr. Richard Strickland, examining the linkages between women’s property rights and HIV/AIDS in sub-Saharan Africa.

Research and intervention strategies are just beginning to consider the role that women’s property ownership and inheritance rights might play in potentially breaking the cycle of HIV/AIDS and poverty. There is growing evidence to suggest that where women’s property and inheritance rights are upheld, women acting as heads and/or primary caregivers of HIV/AIDS-affected households are better able to manage the impact of AIDS. Additionally, preliminary evidence indicates that such rights may help prevent further spread of HIV/AIDS by promoting women’s economic security and empowerment, thereby reducing their vulnerability to domestic violence, unsafe sex, and other AIDS-related risk factors.

Obstacles to Women’s Property Rights in Sub-Saharan Africa

In sub-Saharan Africa, women are adversely affected by acute discrimination in matters of property and inheritance, and they suffer disproportionately from the effects of discriminatory and oppressive laws, customs, and traditions regarding access to and control of housing and land (COHRE 2003). This can be attributed to a range of legal, institutional, and socio-economic factors (UN-HABITAT 2002; Walker 2002; Human Rights Watch 2003b).

Legal issues may include patriarchal laws and traditions that, in effect, deny women the ability to own and inherit land. Additionally, the relationship between traditional or customary law and statutory or de jure law may allow for gaps in implementation, monitoring, and enforcement of those laws that do recognize women’s equal rights to tenure. These gaps may be exacerbated by women’s lack of awareness of their rights.

Institutional factors such as cumbersome regulatory frameworks, costly procedures, lack of information, and corruption can undermine women’s ability to claim their rights, especially where women are underrepresented in structures of local and national governance and their needs and perspectives are inadequately incorporated into policies and programs.

Socio-economic factors affecting women’s secure tenure include poverty, urbanization, domestic violence, and natural and human-made disasters. As many as 41 percent of female-headed households live below local poverty levels and lack resources to buy land or property or develop land allocated to them (UN-HABITAT 2002). Women lacking rights to rural land may migrate to urban areas in hopes of securing property there, though often with tenuous results. Violence against women is sometimes used to threaten their eviction during family disputes or to break their claim to family property upon the death of the spouse (associated with the phenomenon of property grabbing). Further complicating the picture, a variety of tenure systems, legally or customarily defined, establish how property rights and the associated responsibilities and restraints concerning property are to be distributed within societies.

...The Importance of Property Rights

Throughout the world, ownership of land, housing, and other property provides direct and indirect benefits including a secure place to live, the means to a livelihood, and a measure of wealth or capital by which additional economic resources can be leveraged (land can serve as collateral for credit, for instance). Land has long been recognized as a primary source of wealth, social status, and power, providing the basis for shelter, food, and economic activities. Access to resources such as water and to services such as sanitation and electricity, as well as the ability to make long-term investments in land and housing, are often conditioned by access to land rights (FAO 2002).

... HIV/AIDS-affected households that enjoy rights to land and property are better-positioned to cope, as they have a stable, secure environment in which to provide care as well as a resource base that can generate much needed income to help compensate for lost wages of an ill person or a caregiver who forgoes a wage-earning job, and to cover various AIDS-related costs.

Unfortunately, the benefits of land ownership that can help mitigate the impact of HIV/AIDS often are simply not available to women in sub-Saharan Africa. For instance, title deeds to land or house are normally issued to male heads of household, leaving women with a lack of secure tenure in case of divorce from or death of their husband. This may lead them to endure an abusive relationship or infidelity to safeguard their access to property through their husband, rather than seeking a divorce. Efforts to promote joint titling are underway in many countries, though the practical effects of the joint title have yet to be thoroughly tested or assessed.

If widowed, women may be victimized by others (such as in-laws and their relatives) through manipulative decision-making that denies rightful inheritance. They may be forced to forfeit their assets, including their land and house, to relatives of the deceased spouse through customary practices involving property grabbing or asset stripping. Such practices, fueled increasingly by the stigma and discrimination commonly experienced by survivors of AIDS victims, leave affected households destitute and more vulnerable to further consequences of HIV/AIDS (Drimie 2002a; FAO 2003; Human Rights Watch

Protecting Women's Property and Land Rights to Protect Families in AIDS-affected Communities

International Women's Day 2004 Focuses on Women and HIV/AIDS

Food and Agricultural Organization (FAO) Rome

March 8, 2004

Protecting the property and land tenure rights of women in AIDS-ravaged parts of Africa is vital to prevent rural households slipping into a spiral of poverty.

Losing land or property can unravel the whole fabric of a family, limiting access to safe, inexpensive and nutritious food and forcing children out of school and into employment.

"Family and community structures crumble in the wake of HIV/AIDS. Already facing poverty, the needs of many households become more acute and assets -- like land, property and tools -- become critical resources," says Marcella Villarreal, AIDS focal point at FAO.

In Namibia and Uganda, for example, where land law and property rights are made up of a complex system of overlapping official and traditional law, the rights of women to inherit, own and manage land can fall through the cracks.

Widespread illiteracy and a lack of access to formal court systems, lawyers and other legal resources can make matters worse. FAO is working with local authorities and communities to guarantee that women's rights are protected, by ensuring they have access to sources that explain their rights and the means to defend them.

For many women in AIDS-affected households, losing a husband is the first of many losses she will face. She risks being thrown off her farm, perhaps her only source of income and security, by relatives and robbed of her assets.

A recent FAO study found that over 40 percent of widows had lost cattle and tools, seized by relatives after the male head of household had died.

"HIV/AIDS can tip the balance into poverty," Villarreal adds. "The phenomenon we are witnessing in countries like Namibia, where women widowed and children orphaned by HIV/AIDS are stripped of property and the right to own and farm land, could spread further."

When women lack title to land or housing they have to face a narrower choice of economic options. They may have to deal with homelessness, poverty and violence, contributing both to their and their children's impoverishment. Poverty can also encourage high-risk behaviour such as engaging in unsafe sex for money, housing, food or education.

FAO is working with the Namibian Ministry of Women Affairs and Child-Welfare and the Legal Assistance Centre to raise awareness in rural communities of women's rights and how they can be protected by the law.

About three-quarter's of Namibia's 1.83 million people live in rural areas, and AIDS is the leading cause of death in the country, accounting for 28 percent of all deaths each year.

As a result of this FAO-assisted project, traditional leaders, church leaders, councillors and senior figures in the community are made aware of how land-grabbing can affect families already struggling to cope after the loss of a member to HIV/AIDS.

Volunteers are trained to be able to inform women on how to write a will so that their intent is legally expressed and followed after their death, thereby protecting their children's future. They are also taught about inheritance rights and women's rights in relevant legislation such as the Married Persons Equality Act.

For a woman, owning land or understanding her legal rights over a piece of land she farms also has environmental benefits. Women with secure land tenure are more likely to invest in their land than those without legal land rights, through irrigation, for example, or by farming in a more sustainable manner rather than for short-term gain. According to a recent World Bank report, increased land tenure security increases the value of the land and can greatly increase poor people's wealth, in some cases doubling it

Intellectual Property Rights of Indigenous Women Recognized

Intellectual Property Rights of Indigenous Women Recognized

by Carmel Jorgensen

Alaska Native Knowledge Network

4th WCW, Beijing, China

September 14, 1995

The 4th World Conference on Women accepted a paragraph in the Platform of Action that agrees to "safeguard the existing intellectual property rights" of Indigenous women. Delegates also agreed to ensure that these rights and their use are protected, respected, and maintained. The language covers "knowledge, innovations and practices... including practices relating to traditional medicines, biodiversity and indigenous technologies".

Marge Friedel of the Canadian Metis Women's Organization said that the inclusion of intellectual property rights has provided " ... safeguards we didn't have before." One portion of the statement that can be construed in a negative way is "encouraging the wider application of... " traditional indigenous knowledge. Some indigenous women view this statement as allowing further exploitation and use of traditional indigenous knowledge without adequate consent. Friedel states that we (the Indigenous Women's Caucus) didn't particularly like that [portion], but we can work with it."

The official delegates of Indonesia and India are still stating their opposition to the inclusion of the term "existing" with intellectual property rights. They believe that "existing" limits the applicability of the definition, because it may not cover future intellectual property rights. Just having traditional indigenous knowledge retained in the document is "a step forward," Friedel says. "We forced this whole paragraph in the document." As indigenous women from around the world become more involved in the international decision making processes, she says, they are better able to ensure their concerns are addressed. Friedel hopes that "as long as we keep participating ... we will make progress, we all just have to take tiny steps forward". Victoria Tauli-Corpu, coordinator of the Asian Indigenous Women's Network, stated "realistically this is what we can achieve here."

Indigenous women at the conference, including Sue Heron-Herbert of the Canadian Delegation think the language should go further than this is now, and that it will with time. Tauli-Corpus emphasized this paragraph will be the only one in existing international law that most accurately reflects an Indigenous definition of intellectual property rights. The usage employed in GATT contradicts the indigenous definition. It privatizes the knowledge; not making use of the knowledge for the common good. The applicability of the paragraph may be limited because it is "subject to national legislation and consistent with the Convention on Biological Diversity". This is problematic in places like B.C. where the provincial government does not think national legislation on resources and the Convention on Biological Diversity applies to them.

Steps indigenous women were not able to take at this conference were to gain recognition of the existence of Indigenous Peoples in the plural, not just People in the singular. The issue was not discussed formally at this Conference. The "s" in peoples is so important asserts Tauli-Corpus, "because it implies self determination". Accepting the distinctness and diversity of Indigenous Peoples within nation-states becomes a legal issue under international law. The "s" means that Indigenous Peoples will have collective rights. These rights would include rights to land, natural resources, and to develop economic systems. Most Governments in the world, including Canada, do not recognize Indigenous Peoples as having rights to social, human, cultural, civil and political self determination.

An indigenous women in Canada said she "doesn't think we should hold on breath on this, not from the Canadian government." Future world conferences will focus on the issue of Indigenous People vs. Indigenous Peoples and the right of Indigenous Peoples to self determination.

Indigenous women at this conference express hope that the UN Commission on Human Rights will address their demands and include them in the Declaration on the Rights of the Worlds Indigenous People.

The University of Alaska Fairbanks