Be The Change: Empowering Women Through Microfinance

Note: This was a guest post I wrote originally for Akhila Kolisetty’s Be The Change series. The series is filled with profound writers, so be sure to check it out. My original post is here.

When Akhila asked me to write about a social cause I was passionate about I was eager to join in. I consider myself a philanthropist, but I often spread myself thin. I carry the weight of the world on my shoulders and am sometimes (too) empathetic to the point where it hurts every piece of my body.

I digress: I’m an animal rights activist and long-time horseback rider, so I’ve volunteered with Colorado Horse Rescue, United States Pony Club and with sea turtles in a science program in Costa Rica. I’ve volunteered at local soup kitchens, donated to cancer research, spent time weekly with children in an after-school program for African resettlement refugees, volunteer with Ladies Who Launch to help women entrepreneurs launch their business idea and worked at a non-profit for environmental studies and local sustainability.

Alas, when I try to focus my efforts and dive deep to find a beating pulse of my passion for social change it reverts to women and the lack of opportunity and inequality they’re faced with worldwide.

I see a large part of the solution toward empowering women through microfinance and socially responsible business.

The empowerment and combination of entrepreneurship is a piece of why it inspires me so much. Although I continually give time and effort toward a cause, I like the “teach them how to fish,” analogy and microfinance does just that.

What is Microfinance?

Microfinance is the “extension of very small loans to those in poverty designed to spur entrepreneurship.”

Non-Government organizations (NGOs), community-based development institutions, credit unions, commercial/state banks and microfinance institutions offer possibilities for financial services to the poor.

Bangladeshi banker and Grameen Bank founder and recent Nobel Peace Prize recipient, Muhammad Yunus is largely known as the pioneer of microfinance.

Poverty’s Greatest Victim: Women

Recently, at Clinton Global Initiative, Bill Clinton pronounced: “Women do 66% of world’s work, produce 50% of world’s food, earn 10% of world’s income & own 1% of the world’s property.”

More than 2/3 of the world’s unpaid work is done by women-the equivalent of $11 trillion or almost 50% of the world GDP, according to a global UNFP study.

Half the world’s population lives on less than $2 a day. 1.8 billion of these people live on less than $1 a day…70% of them are women. Around the world, 340 million women are not expected to live to the age of 40.

Microfinance As A Solution

Comprehensive impact studies have demonstrated that:

• Microfinance helps very poor households meet basic needs and protect against risks;
• The use of financial services by low-income households is associated with improvements in household economic welfare and enterprise stability or growth;
• By supporting women’s economic participation, microfinance helps to empower women, thus promoting gender-equity and improving household well-being;
• For almost all significant impacts, the magnitude of impact is positively related to the length of time that clients have been in the programe.” (UNCDF Microfinance)

My friend Ali worked at Pro Mujer (“for women,” in Spanish) for over two years at a Financial Analyst for the microfinance, Spanish nonprofit that supported women in Latin-America. I’ve written about microfinance a few times before on my blog, maybe now you can see why. Their historical loan repayment rate in 18 years was 99%. Women want to succeed and create a better life for the family; they just needed access to credit and a lending hand; someone to invest in their dreams.

Ali told me a story about Angela Narváez. She is pottery maker and a client with Pro Mujer Nicaragua. Angela’s first loan was $80. Today, almost nine years later, her loan is $670. Angela uses her loans to buy clay, pieces of wood, paint and cement and to travel to larger markets where she can get a better price for her pieces. Angela said her family has also benefited. Her daughters attend school, everyone is eating better, and they bought furniture and appliances that have raised their quality of life.

So my “teach them to fish” theory comes to rest. I like to think about paying it forward, but in this case, you’re investing in the future, that will benefit beyond the ‘one-time donation.’ It’s like you’re a social venture capitalist, helping women with their own startup, worldwide.

Action

If you’re interested in learning more or even donating a loan for a specific woman in a specific country here are some great organizations (I’ve donated with) to get started: Pro Mujer, Kiva, and The International Alliance For Women.

“Poverty is not created by the poor. It is created by the structures of society and the policies pursued by society. Change the structure as we are doing in Bangladesh, and you will see that the poor change their own lives. Grameen’s experience demonstrates that, given the support of financial capital, however small, the poor are fully capable of improving their lives.”- Banker to the Poor – Muhammad Yunus, Grameen Bank, Founder