Viewing all posts with tag: Women  

A Tale of Two Studies: Measuring Women’s Empowerment Then and Now

In what seems to me an unfortunate conflation, the literature on women’s empowerment frequently relies on the same characterization as pornography: “you have trouble defining it but you know it when you see it.” If “empowerment” is hard to define, it is even harder to measure. This is a problem for researchers trying to establish a clear causal relationship between microfinance interventions and better outcomes for women.

In theory, microcredit could empower women through a number of different channels. For example, giving loans to women could increase their bargaining power within the family, and afford them greater control over household resources and decisions. The peer monitoring component of group-lending could provide protection against abuse, and deter domestic violence. Empirically, however, the picture is quite mixed . . . 

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Grants Double Income but not Empowerment for Ultra-poor in Uganda

A new paper by Chris Blattman (Columbia) and co-authors provides optimistic new evidence on the returns to providing cash grants to impoverished women in northern Uganda.  The new experiment varied whether the ultra-poor, largely women, were offered a business grant worth $150, training and supervision, and found dramatic impacts of the cash grant on entrepreneurship, hours worked, individual earnings, and household consumption.

The paper stands out from previous studies in that it finds strong positive impacts for women, and that it does so among the most impoverished people in the village.  Only those people identified by a local nonprofit as the poorest fifteen people in each village (86 percent of whom were women) were eligible for the study.  Previous studies of cash and in-kind small enterprise grants delivered to women in Sri Lanka and in Ghana find more mixed effects.  Grants to female-owned microenterprises had, on average, no impact in Sri Lanka, and in Ghana, only in-kind grants or grants made to initially more profitable female microenterprises appeared to benefit recipients . . . 

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How to Increase Formal Savings for the Papad-Makers of Dharavi Slum

This post by Mudita Tiwari and Deepti KC.

In Dharavi, Mumbai, the largest urban slum in Asia, groups of women make papad, crispy lentil dough wafers, for Lijjat Papad Company, one of the world’s largest papad retailers.  Lijjat requires any woman who works for the enterprise to first open a savings account, and to encourage savings, the company deposits a small proportion of the women’s earnings (2 rupees of every 32 rupees earned) directly into the savings accounts, adding a bonus during the Diwali festival . . . 

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Fish Oil : Heart Disease :: Microcredit : Women’s Empowerment?

A theme on the social science blogs these days is “everything we know is wrong.”

The frequent citation of drug trials as the basis for sound social science experiments disguises an unsettling fact about medical research in general: it’s often statistically and causally naïve. Political scientist/economist Chris Blattman recently pointed to a piece documenting that a widely influential fish oil/heart disease study that had been used to sell millions of dollars of fish oil never directly measured heart disease in the population of interest. Emily Oster, an economist at the University of Chicago, is now writing regularly for data journalism site fivethirtyeight on the spurious correlations in a lot of medical research. But it’s not just a problem of medical research. “As I teach my students,” Blattman wrote, “the first thing you should say to yourself as you open every book or research paper is, ‘This is almost certainly wrong’…Welcome to science" . . . 

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New Paper on Impact of Savings Groups on Poor African Women

Self-funded groups are an increasingly common way of delivering microfinance services. In India, for example, self-help groups increased their membership dramatically in Andhra Pradesh after the microfinance crisis of 2009-2010. In Africa, several international NGOs are promoting village savings and loans associations (VSLAs) as member-driven, local institutions.

Can these groups “replace” traditional microfinance, in the sense that they do not need the intervention of loan officers or professional managers? An interesting paper contributes to answering this question . . . 

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New Research from the American Economic Review

The American Economic Association (AEA) recently released the Papers and Proceedings issue of its journal American Economic Review, which presents selected papers from the AEA's annual meeting. The AER is one of the premier economics journals and has very broad coverage. For instance, you can learn everything you never knew you wanted to know about income and church attendance in nineteenth century Prussia. Happily, this volume also includes a number of papers relating to mobile money, credit, savings, and insurance.

Mobile Money

In their study, William Jack, Adam Ray, and Tavneet Suri investigate how households using M-PESA interact with and exploit their informal networks when making transactions. The authors find M-PESA users have more remittance activity, make transfers over distances greater than 100 km, and have more reciprocal transactions than non-users.

While Jack et al. looked at volume of transactions, David Weil and Isaac Mbiti used aggregate data in their research on the velocity of mobile money. One of the more intriguing findings is that withdrawals are made frequently and in small amounts, even though users can reduce fees if they group withdrawals. As the use of mobile money grows in other countries (M-PESA recently launched in India, for instance) it will be interesting to see how similar these (and previous) findings are in different cultural contexts.

Gender and Finance

Using data from over 30,000 firms in 90 developing countries, Elizabeth Asiedu, Isaac Kalonda-Kanyama, Leonce Ndikumana, and Akwasi Nti-Adde analyze whether gender is a determinant in financing constraints and access to credit for firms. They find that indeed, female-owned firms are more likely to be financially constrained than male-owned counterparts but only in the sub-Saharan African region. There is no gender gap in other regions but small firms are more likely to be financially constrained than larger firms, and foreign-owned firms are less likely to be constrained than domestically owned firms.

Moving from the macro to the micro level, Carolina Castilla and Thomas Walker investigate gendered dynamics of intra-household financial decisions in their paper. In a field experiment in Southern Ghana, researchers conducted public and private lotteries with cash and in-kind prizes to observe the effects of these windfalls on household allocations. They found “husbands' public windfalls increase investment in assets and social capital, while there is no such effect when wives win. Private windfalls of both spouses are committed to cash (wives) or in-kind gifts (husband) which are either difficult to monitor or to reverse if discovered by the other spouse.”


We return to Kenya with Michael Kremer, Jean Lee, Jonathan Robinson, and Olga Rostapshova in their study on behavioral biases and firm behavior. Among a sample of Kenyan shopkeepers, those with lower math skills were less accepting of small-scale risk and were also less likely to have larger inventories than those with higher scores. There are some interesting observations in the paper on the connection between loss aversion and microfinance, suggesting that small business owners are less likely to access microcredit if risk averse and social safety nets could possibly help increase investment in these enterprises.

Similarly, Ahmed Mushfiq Mobarak and Mark R. Rosenzweig look at risk in the context of the Indian insurance market, specifically rainfall insurance. Their findings show that when insured farmers took greater risks, wage levels increased but so did the volatility of labor demand, creating a threat to landless workers. When offered the choice, landless workers also purchased insurance when contracts were offered to farmers.


Lastly, Suresh de Mel, Craig McIntosh, and Christopher Woodruff report the findings of their field experiment in rural Sri Lanka that tested the efficacy of various methods of collecting deposits in formal bank accounts. Although their research shows frequent, face-to-face collection increases aggregate household savings, collections using community lock boxes affected the number of transactions but not the overall level of savings.

The Death and Life of Cash

Cash is all the rage in development circles right now—whether it’s trying to drastically reduce the use of cash by the poor or drastically increase the use of cash by development agencies (both public and private). There isn’t an actual conflict here. In the first case, the idea is to reduce the use of the physical artifact of cash; the latter is all about increasing the direct transfer of money to the poor. So the two efforts are actually complementary: reducing the use of physical cash makes transferring money cheaper and more feasible.

The cost and risk of transporting, transferring and tracking physical cash has always been one of the major objections to cash transfer programs. Another is the idea that poor households won’t use cash well. At various times and places you can find someone arguing that the poor lack the training, education, sophistication, access to quality goods and services, impulse control, security, or moral sensibility to make cash transfers a good use of funds.

That position has always had little evidence on its side . . . 

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What is the Impact of Muhammad Yunus?

Muhammad Yunus spoke to an overflowing crowd at NYU on April 15, an event jointly sponsored by the Wagner School of Public Service, Stern School of Business, and Financial Access Initiative.

Professor Yunus is known for fighting to improve the lives of millions of poor families around the world, the quest that was celebrated by the 2006 Nobel Peace Prize. These days there is a lot of talk about the impact of microcredit. But here was an opportunity to ask: what is the impact of Yunus? Given where we were, more specifically, how has Yunus changed the way we--economists, academics, policy makers and influencers--think about problems?

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Gender and Mobile Money

The mobile money revolution has been greeted with great excitement in some circles for the potential it holds to increase financial access for the world’s poorest. Women may especially benefit from expanding financial inclusion through mobile financial services (MFS). Women not only handle a lot of cash to provide for household needs in many societies, but they may be explicitly or implicitly discouraged from using bank branches.  A new report (sponsored by Visa and the GSMA mWomenProgramme) by FAI affiliate Daryl Collins explores just this theme. In “Unlocking the Potential: Women and Mobile Financial Services in Emerging Markets,”  Collins and her coauthors explore the untapped potential of woman as a strategic consumer base for MFS providers.

A summary of the report’s conclusions . . . 

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Managing the Difficult Trade-offs in Microfinance Regulation

A few weeks ago M-CRIL, an Indian microfinance ratings firm, published a white paper on India's evolving microfinance regulations. The overall message is that while the proposed regulatory framework is improving, it still needs work. One particular point caught my eye: 

"The prevailing pricing regime – average cost of funds plus a margin cap – penalizes those MFIs that incur a high cost due to their commitment to responsible finance as well as those who are innovative in raising funds at low cost.  Those that do both suffer a double 'whammy'."

While there is widespread agreement around the world that people should be protected from usurious interest rates on loans, there is little consensus on how to determine, and enforce, a cap on interest rates charged to the poor. The debate is as hot in the US (where it's fought over credit card and payday lending rates) as it is in India, Nicaragua and Bangladesh . . . 

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Women in Banking

Bringing the unbanked into the formal financial system requires innovation—but sometimes the innovation required is far from what we spend most of our time thinking about.  A post at the New York Fed’s Liberty Street Economics blog details an important innovation required to bring women into bank branches at the turn of the 20th century: a private room for extracting cash from their stockings. 

The post notes other important milestones in banking women—a long term process that began around the time of the U.S. Civil War when California established the financial independence of women regardless of marital status. Still, more than a century later, the “ridiculous” idea of women managing their own bank accounts was being used for easy laughs on television shows . . . 

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Chris Dunford on the Books and Papers that Influenced his Thinking on Savings

FAI asked Chris Dunford to tell us about books and papers that really made a difference in how he thought about savings and the poor. This is his response:

Portfolios of the Poor: This book has changed the “narrative” in the microfinance community more than any other since the founding of the microfinance industry. Though the effort to promote a “client-centered” approach (a.k.a. demand-driven rather supply- or product-driven) has been concerted for over a decade, this book is what made clear and compelling both the importance and implications of starting with an understanding of what the client is already doing. But it goes further to help us understand what the poor are doing, not just those who step forward to be clients of current microfinance services. The book’s orientation and messages liberate us from the institutional straightjacket to revisit fundamental questions of what we might do to help the poor help themselves deal with financial issues. For me and my colleagues at Freedom from Hunger, and apparently for so many others, the book resonates with the stories we’ve been hearing from clients for decades and gives us a broader perspective in which to situate those stories.

What has this to do with savings? The composite picture from financial diaries gives us vivid understanding of the roles and variety of savings in the financial management tool kit of the poor . . . 

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Mary Ellen Iskenderian: The Year in Microfinance

As CEO of a global microfinance network I spent much of 2010 answering questions about the crisis in India and advocating for the continued relevance of microfinance as a model. This year’s challenges, however, gave me an opportunity to talk about theessential role of transparency and good governance and the importance of building on a deep understanding of client needs to tailoring products to fit those needs.

While the crisis dominated the media for much of the year, it would be regrettable if we didn’t acknowledge some of the important positive developments in the last 12 months. As an organization focused on increasing women’s access to financial services, we at Women’s World Banking (WWB) have a few things to cheer . . . 

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How do Women Weather Economic Shocks?

A new paper from the World Bank explores what we know about how women weather economic shocks. Here’s the main result:

In the past, women from low-income households have typically entered the labor force, while women from high-income households have often exited the labor market in response to economic crises. Evidence also suggests that women defer fertility during economic crises and that child schooling and child survival are adversely affected, mainly in low-income countries, with girls suffering more adverse health effects than boys.

Papers like this can go a long way toward providing the foundation for the case for insurance. It has nothing to do with insurance per see—just about the inability to cope with risk . . . 

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Research recap Part 4: the first results from the first microcredit impact RCT

We're live-blogging the Innovations for Poverty Action/Financial Access Initiative Microfinance Conference 2008.

Ever since micro-credit entered the popular imagination as a “silver bullet” poverty intervention, there have been lots of assumptions about what it accomplishes for the poor: Micro-loans alleviate poverty; They allow poor people (especially women) to start businesses and become financially self-sufficient; They correlate with increased spending on education for children and health care, etc.

The reality is that there has not yet been a controlled trial on the impact of the standard microfinance product – a small loan given to a group of women who meet together weekly for repayment. Put another way, all of the above-mentioned “received facts” about what is accomplished by giving people access to small lines of credit have been based on anecdote. The reality is that no one knows what impact, if any, micro-credit has on the lives of the poor . . . 

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Barbara Magnoni on microfinance product design

The vast majority of microfinance programs -- particularly group lending efforts -- explicitly target women. This focus grew in part out of the belief, supported by some research, that women are more likely to invest in the household as a whole, particularly in the children. Given that, what can we do to improve women’s financial self-sufficiency, either through employment, entrepreneurial success or thoughtful risk management tools?

Barbara Magnoni, President of EA Consultants, a development consultancy that advises on microfinance product design, thinks we could start by taking a more differentiated view of men and women as microfinance customers . . . 

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Research recap Part 3: in preparation for next week's Microfinance Impact & Innovation Conference

We're live-blogging the Innovations for Poverty Action/Financial Access Initiative Microfinance Conference 2008.

There is no tenet of microfinance theory more fundamental than the focus on women. The marketing narrative is replete with reasons why a focus on women is sacrosanct. To quote Muhammad Yunus: “Women have greater long-term vision and are ready to bring changes in their life step by step. They are also excellent managers of scarce resources, stretching the use of every resource to the maximum.” And of course, we all "know" that women invest more in their households and children than men do . . . 

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Self Help Groups in India: Living up to their promise?

This month Frances Sinha is writing about lessons from her important new book, Microfinance Self-Help Groups in India: Living Up to Their Promise. Her first postintroduced the book. Today's post describes some of the most striking lessons.

The social promise of Self Help Groups (SHGs) lies in the potential of the group medium, and the potential of wider networks of such groups to provide an empowering community platform for their women members.  

We used the data from 214 SHGs in four states of India to see: In how many groups has a member been elected to the village panchayat (local council)?  How effective are such elected women members in village governance? How many groups have played a role to improve community decisions and action – on, for example, delivery and maintenance of services (schools, health care, roads, veterinary care) and on issues of social justice, especially those of concern to women (domestic violence, dowry, bigamy, treatment of widows)?  How effective or successful have such actions been?  And, when SHGs undertake group based enterprises, how viable are such enterprises?

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First insights from Mongolian microfinance impact study

The blog over at the European Bank for Reconstruction and Development (EBRD)recently featured a post by Senior Economist Ralph De Haas, who describes a randomized evaluation of microfinance in Mongolia that recently completed fieldwork.  Although analysis is ongoing, with full results expected in July of this year, data from the baseline is already providing interesting insights.  Dr. De Haas points out three particularly interesting stats:

1. Almost half of the women in the study, who were identified to participate specifically because they were in need of access to finance, already had loans at the time of baseline. (46%) 

2. Most women have long term debts-the majority of loans reported had been taken out in 2007-2008.

3. The majority of this debt (70-80%) was reported to have been spent on consumption, not business activities.

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Getting cash out from under the mattress and into the bank

Cash under your mattress?  These days it’s easy to feel like keeping our money at home—literally– may be the safest place for it. The Bill & Melinda Gates Foundation, though, is making a global push to get money into savings accounts, and Pascaline Dupas and Jonathan Robinson have just finished a paper that makes the cleanest case yet for getting money out from under the mattress...

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