Gender and Microfinance:  Guidelines for Good Practice

Susan Johnson,
Centre for Development Studies
University of Bath

Identifying the problem

Recognising gender issues in microfinance, as in any project intervention, means more than targeting a programme towards women.  It means recognising the position of women in relation to men as actors in society:  in the context of husbands and families; local community and authority and more broadly their position in society at the national level as governed by laws and custom. Then it is necessary to act to support women to overcome the obstacles they face in these relationships which prevent them from achieving what they wish for themselves with financial services.

In order to tackle gender in microfinance it is necessary to recognise and approach it from the outset.  In recent years the success of some microfinance institutions in enlisting large numbers of women as their members has suggested that microfinance is an intervention uniquely beneficial to the needs of women.  This is not so.  Microfinance, no more than any other intervention, is not blessed with the ability to right the power imbalances which result from inequalities in the way society treats men and women.  It may be able to make such a contribution, but to do so requires a clear commitment and strategic approach to ensuring that it does.  

The matrix below identifies constraints which women face in different areas and which can constrain their ability to utilise microfinance to the ends they might wish.  These constraints interact and reinforce each other:
    Individual level refers to constraints that operate because of the woman's own endowment of skills, experience, knowledge, confidence.
    Household refers to the nexus of social relations within the household which are mostly talked of in relation to husbands and wives but usually the household is a broader unit which acts through sons and daughters, parents and other relatives to constrain the set of choices which a woman faces
    It is often the case that analysis stops at the level of the household in the discussion of credit but it is important to recognise the constraints that the wider society imposes in terms of norms of behaviour, legal rights and perceptions of the value of what women do.

The matrix below combines constraints identified from a wide range of cultural contexts and would need to be systematically worked through for a specific cultural context.  Once they have been identified, strategies to address them can be developed.  

 Figure 1: Gender based obstacles in Microfinance and Microenterprise
Individual  Household Wider community/
national context
Financial   women lack access to banks/financial services in own right   men's control over cash income
  men's expenditure patterns   
  perception of men as controllers of money/loans 
Economic   women undertake activities which produce low returns
  women have a heavy domestic work load
  gender division of labour
  unequal access and control of land, labour and inputs
  unequal control of joint household produce and income stream from this
  women underpaid for equal work
  women locked in low paid jobs
  stereotypes of appropriate roles for women in the economy
  women lack access to markets for inputs and outputs if mobility constrained due to social norms 
  women not literate or educated; girls education not prioritised    limited role for women in household decision making 
  polygamy results in conflict/competition and discrimination between wives  
  violence towards women
  banks and financial institutions do not view women as a potential market 
  women's mobility constrained by social norms 
  women lack confidence to claim political/
legal rights
  women lack legal rights to jointly owned household assets   women's legal rights to household assets not defined in law or useful for collateral
  women lack political positions to establish appropriate laws
  women lack legal rights to land both traditional and formal

Thus, where men control the main sources of cash income, for example, because they undertake paid employment, if a programme offers a woman credit which she uses to buy household necessities, it is the husband's income that is the most likely source of repayments.  The woman's ability to access this is often dependent on the quality of her relationship with him.  In this way social norms operate in ways that leave her vulnerable in such a relationship, rather than in one where she has socially sanctioned rights to claim the money for repayment.  There are many more such constraints that she might face.  

Broadly speaking strategies to address these constraints are likely to fall into three categories:
  1. strategies which address women directly with awareness, literacy and related skills development
  2. strategies directed to men in the community in which the project is working in order to affect men's behaviour towards women within the household and local community
  3. strategies aimed at affecting social norms and legal frameworks which might include for example advocacy work through the media and lobby to change, for example, women's rights to property

Organising a microfinance intervention to be aware of these problems means approaching it with a gender aware mindset. Unfortunately there are no quick, easy, fail-safe or cheap solutions.  There is no single checklist that can provide the answers.  Indeed the difficulties of engendering development programming are many and have been shown to encounter widespread organisational resistance.

Engendering microfinance, as any other intervention requires gender awareness on the part of all staff, managerial commitment to gender issues, and managerial ability to adapt systems and procedures in the course of implementation.  In this way it can be thought of very similarly to having a poverty focus to projects.  Ensuring poverty focus requires questions to be continually asked about who is being reached, whether they are able to benefit as anticipated and to continually adjust the project's operations in the light of this perspective.

How then can microfinance interventions be used to benefit women and the gender relations they face?

Gender awareness starts from recognising that a project will always affect men and women differently.  No intervention is neutral when the players do not start as equals.  Even if the project proposes that it treats women equally, the ability of men and women to use and respond to the services offered will differ in practice.  This difference in response may then reinforce existing differences and result in unintended (and usually un-monitored) negative consequences for women. 

The impact of an intervention can be thought of as follows:

Expected  Unexpected
Positive   what is planned for and looked for in evaluation   "hoped for" - some may be identified in evaluation but are rarely systematically assessed
Negative   sometimes identified in log frames as constraints or obstacles but rarely evaluated   wish to minimize these, they may be identified but are rarely systematically assessed
It is often the case that a microfinance intervention is found to have some beneficial effects for women that were not envisaged.  These 'unexpected' but positive effects are applauded and then used to justify the intervention in gender terms.  This still does not mean that the programme has taken on gender concerns.  Gender awareness is a way of working and needs to be systematically incorporated. 

Engendering microfinance 

A gender perspective needs to be brought into all stages of the project cycle from planning and setting objectives, through implementation to monitoring,  evaluation and impact assessment.  

The first stage is usually one of information gathering prior to setting objectives, but which can also be used to develop  a gender baseline (see impact section below)   This might involve:

  • an analysis of the situation of women using a range of techniques such as the Harvard Framework, to establish access and control of resources, spheres of decision making. Particular emphasis needs to be put on the role of women in financial management and decision making, and how this relates to women's economic and income earning responsibilities and activities
  • what existing systems of financial management do women already have access to?  how and where do they save cash?  what are their relationships with local indigenous financial systems  - from ROSCAs, to deposit collectors, money-lenders, sources of trading credit etc.
  • discussing with women (young, old, heads of households, widows, newly married) what role financial services can play for them, what objectives would they seek to meet? how do these objectives differ in terms of their aspirations for services they themselves would like to access and those that their husbands and families might use?
  • discussions with men about the financial services to which they have access and to which they would also like access, how do they use existing services?  how do these services relate to their economic responsibilities?
  • what are men's perceptions of women's roles in financial and economic areas?  how can they be encouraged to take better account of women's existing contributions and act to accommodate women's interests?

There are a number of dimensions to the programme that need to be looked at through a gender perspective:

  • the range of services on offer
  • the group/community structures through which they are delivered
  • the support services which accompany them

Setting objectives:  the objectives set will be a combination of the organisation's objectives and those of the groups consulted, key questions to be asked are:

  • how are the interests of women served by providing financial services to both women and men, women alone or men alone?  what are the needs that have been expressed, how do these needs relate to gender divisions of responsibility in household financial management and economic activity.
  • how is the delivery mechanism ie through the group or community structure, affected by gender relations.
  • What policies need to be in place to ensure that women are enabled to gain access to credit in equal volumes as men?  In mixed programmes how can women be ensured to have an equal role in decision making or on decision making bodies?  In women only programmes what else needs to be done in educating and sensitising men to the delivery of services to women.  How can gender based objectives be made the property of men as much as women?
  • what support services are needed to ensure women can participate eg literacy, skills training, broader social mobilisation and skills training for participation in decision making fora etc.
  • how can women's voices be heard through structuring ongoing input into project decision making.

If the project is to make lasting improvements in women's status in society then the critical issue that needs to be addressed is to examine in what way the project can go beyond contributing to the practical needs of women to tackle strategic constraints.  Ways in which this might occur include, for example:

ensuring women's equal participation in all aspects of decision making over scheme policy and ensuring that a gender perspective is incorporated and that men understand why this is happening taking issues that arise in group discussions or experience eg domestic violence as a result of repayment pressures, and ensuring that they are systematically raised in other groups and discussions.  Such issues if continually treated as isolated incidents fail to render such events as critical gender concerns, such an approach enables the response to an individual event which might respond to the practical needs of a single woman in the group to be converted into a policy to strategically address a concern that effects a larger number of women.
To review objectives within a gender framework the following questions might be asked:
  • how does the project anticipate that women will benefit from participating in the programme (i) for themselves; (ii) in the context of their families; (iii) in the context of the wider community
  • what does the project anticipate to be the possible negative effects on women in each of these arenas arising from their participation (ie explicitly identify the constraints that may be faced that have not been planned)
  • what does the project anticipate will be the benefit to other members of the family of women's participation?
  • what view do the objectives set take of the relationship between women and men in their households?
  • which of women's practical needs does the project address; how does the project propose to address women's strategic needs?

Implementation :  The projects objectives and strategy may look excellent on paper but how will it turn out in practice?

A critical issue is staffing.  Gender sensitive implementation requires developed gender skills in the organisation.  This means male and female staff who understand the gender objectives of the organisation and continuously assess how they are being achieved in the light of implementation experience.   A gender policy in the organisation itself helps present a framework to support gender aware implementation.  

Even if a project is designed in a way that seeks to take account of gender concerns, it is likely to lose this if it is not implemented by gender aware staff since they would fail to recognise the indicators that will suggest whether or not their objectives are being met.

Getting men involved is another key aspect of implementation.  Men must be treated in ways that encourage them to see the intervention as an opportunity to improving their own and their families lives rather than a threat to their status, if at all possible.

Monitoring:  The project will need to set indicators for monitoring gender outputs and outcomes depending on objectives.  Essentially this means ensuring a gender dimension to all existing components of project monitoring.
A minimum package would include:

        a) Programme coverage:
                - membership by gender 
                - group composition by gender and where mixed groups allowed
                - positions of decision making held by men and women in group executives
                - monitoring of group by-laws relating to women (if these are explicity being encouraged)
        b) The ability to disaggregate financial information eg
                - volume and frequency of savings (deposits, withdrawals and balances) by gender
                - volume and frequency of loan taking by gender 
                - repayment, arrears and default rates by gender
        c)  Support services accessed by gender

Outcomes are likely to be monitored on a time to time basis eg annually, and may include:

  • studies of loan utilisation which ensure a gender perspective on the ways in which loans to women are used by them or are passed on to other members of the household
  • qualitative studies of households utilising the service and the ways in which men and women are involved in making deposits, taking loans and making repayments
Critical issues for monitoring:
  • what is the feedback loop from the MIS into management decision making? ie. how is information about gender concerns revealed in monitoring, fed back into project management
  • how is MIS information made available to members as stakeholders?

Evaluation:  Referring back to the matrix of expected and unexpected outcomes above.  Although the dividing line between evaluation and impact assessment is not always clear,  some of the key questions for evaluation are :
  • how well have gender aspects of the programme's design been supported in the course of implementation
  • how have women responded to the services on offer?  how have they benefited (i) for themselves; (ii) in the context of their household/families; (iii) in relation to wider society
  • which women have been reached/not reached?
  • to what extent have expected positive and negative effects on women occurred in practice?
  • to what extent have there been unexpected positive and negative impacts on women themselves and gender relations more widely?
  • how have men's perceptions of women's role changed and how has their behaviour changed in practice?
Impact Assessment:  while evaluation is about establishing whether the positive objectives planned by the project have been achieved, impact assessment has to look both to the positive and negative impact both expected and unexpected.   'What you don't look out for you don't see' and this is especially the case with gender.  Impacts may be  'unexpected' as far as one particular project's planning is concerned, but they may not be unexpected when compared with experience elsewhere and that experience may suggest areas of potential impact to be watched out for.  Further, positive and negative effects can exist alongside each other and it is important to understand how women themselves assess the balance between them.  This may also throw up ideas about how negative impacts might be addressed in the future through changing the design of the programme or putting strategies and policies in place. 

(i) establish a gender baseline:  that is, establish the nature of gender relations in spheres relevant to the project's operations.  So areas such as the control of individual and household incomes; responsibilities for different types of family/household/individual expenditure; access and control of resources required for income generation etc.  It is these gender relations that are most likely to affect the impact of the project.  Techniques such as the Harvard Framework help to systematically collect this type of information.  

(ii) establish the information and indicators required: having baseline against which these changes can be assessed is of course preferable, but if the project did not carry out its own baseline study then it may be possible to construct one using secondary sources as well as using 'now' and 'before' techniques which ask members to recall the situation before the project.  Listening to how things have changed and members' own perceptions of the causes are also useful and important. Some data can be collected using recall techniques in which members compare the situation now to how it was some time in the past and discuss their views of what has caused the changes.
    first, disaggregate all data collected to consider how the situation may have changed differently for women compared to men. Indicators such as job creation; income and well-being have different characteristics for men and women. Jobs for women may be more likely to be part time, seasonal or temporary, be in sectors which are traditionally those in which women work and attract lower wages compared to men. Incomes can have very different characteristics (e.g. amount, cash flow, seasonality etc.) dependent on the type of enterprise and women are more likely to take up certain types of enterprise than men and vice versa. Well-being indicators can be prioritised quite differently by men and women, and incomes which are small and regular and come directly into the hands of women are more likely to be used for household and family welfare expenditures.
    second, consider the impact on gender relations, for example, have expenditure responsibilities shifted in the household in response to increases in income of individual members? Have work hours increased for all members of the household or do additional hours worked in an enterprise result in additional workloads for women? How has access and control of resources vital to the enterprise changed?

(iii) collect and analyse the data using tools and techniques appropriate to the task.  This means using both quantitative and qualitative tools to collect gender related information.  Data on the nature of women's employment might best be collected through  a quantitative survey but information about underlying relationships is probably best collected using a range of qualitative tools especially those from the Participatory Learning and Action (PLA) tool kit.   The beauty of these techniques is that once the question being researched has been decided then it is usually possible to devise a means of answering it using these techniques. But obvious examples are the gender division of labour in productive and reproductive work; asset ownership profiles, and responsibility and task profiles.  Alongside these, which are mainly used to explore intra-household changes, are tools such as enterprise maps which can indicate the types and numbers of women's and men's businesses in an area or market.  All of these techniques can be done on a 'now' and 'before'  basis (eg asking what the situation was 10 years earlier) to get a sense of what is changing.  A crucial issue with these techniques is that they focus the discussion, and the debates and explanations occurring during the exercise are vitally important to an understanding of what exactly has caused the changes.

Never the less in the context of gender relations there remains much ground which can often not be openly discussed.  The discussion of how people organise their financial and economic affairs inside the household is usually delicate ground.  Approaches to difficult issues, such as violent incidents perhaps caused by disputes over money, have to be extremely carefully handled.  Ideas include asking project officers about incidents they know of and following them up on a case study basis but understanding that not all women will be prepared to talk about their experience.  It is also difficult to raise these kinds of issues in group discussions unless groups already have had some prior discussions about it - this is why it is important to know whether such discussions have already been part of the project's approach.  

(iv) carry out the impact in gender sensitive ways:  that is, in using male and female researchers appropriately; finding a location for the interview -  can a location be found where women feel comfortable but are not likely to be interrupted; and when is an appropriate time of day between tasks?    The dynamics of group discussions have to be carefully handled and it is probably best to separate men and women dependent on the types of questions being asked even if the groups are usually mixed.  

Finally, is the composition and dynamics of the research team itself. Considering the skills needed to properly incorporate gender - does it require a 'gender specialist' or is gender the responsibility of the whole team?  How can sufficient female researchers be recruited and what special arrangements need to be made (especially for example in Islamic communities) to enable this to happen smoothly?

References and useful resources:

Chen M A
- Beyond Credit:  A subsector approach to promoting women's enterprises, Agha Khan Foundation Canada, 1996
Goetz A M and R Sen Gupta - 'Who takes the credit?' Gender, power and control over loan use in rural credit programmes in Bangladesh, World Development, January 1995 Vol 24(1)
Longwe S - The Evaporation of Gender Policies in the Patriarchal Cooking Pot, Development in Practice, 1997
Johnson S and Rogaly B - Microfinance and Poverty Reduction, Oxfam: Oxford 1997
Mayoux L -  Microfinance and Women's Empowerment:  Approaches, Evidence and Ways Forward, Open University Development Policy and Practice Discussion Paper No. 41,  August 1998
Smyth I and March C - A Guide to Gender Analysis Frameworks, Oxfam, 1999
Examples of addressing gender issues in microfinance

(i) Care Zambia

In Zambia a husbands family come and take over household assets as soon as a husband dies.  This means that women who have taken loans and started businesses are likely to lose these if her husband dies.  Given the high prevalence of AIDS related deaths in the urban areas which therefore affected their programme, the project had to work out a strategy to address the issue.  Group members decided to support a woman member if her husband died.  This included for example going and running her business while she was dealing with the family so that she did not lose it in the mean time.  This avoided the woman losing her livelihood and the likelihood that the project would also lose the loan.

[Source:  Ezra Anyango, personal communication]

(ii)  ACTIONAID in Sierra Leone

In Sierra Leone women identified vegetable gardening as an activity they wished to undertake when returning to their areas after rebel activity had driven them away.  ACTIONAID facilitated the provision of vegetable seeds on credit but as discussions with the women proceeded realised that the major problem they faced was in gaining access to good quality land.  Traditionally women were always allocated the less fertile upland plots by the local chiefs.  After both the women's groups themselves and ACTIONAID had engaged in discussions with the Chiefs they were allocated a portion of the land near the river which was well suited to vegetable gardening.  Under normal circumstances they would have been evicted by the men from the area once the season for rice cultivation started, this time they were allowed to continue for the whole year.

Comment:  what is essentially a practical need for women to gain access to land, could as a result of this action become a strategic advance if, once the precedent had been set it was continually referred to to gain women access on a long term basis.

(iii)  ACTIONAID Bangladesh

On Bhola Island in the Bay of Bengal, ACTIONAID has been supporting women's shomitis (savings and credit groups) since 1986.  It became apparent that most women did not have literacy or numeracy skills and that they were handing over their loans to their husbands without having a say in how the money was spent.  In 1994 ACTIONAID introduced its new adult education programme called REFLECT, to the shomitis.  Women attended the meetings in the open air surrounded by curious children and at the beginning suspicious men!  One woman who attended said: "Now we are more involved in decisions than before.  Before we just took a loan and gave the money to our husbands.  Our husbands still take the money but now they ask us what we think because they know that we have learnt things and may have some useful ideas."

Comment:  literacy and numeracy were important to enable women to be seen as more than simply channels through which loans could be accessed and to give them a greater role in decision making within the household. 

Susan Johnson: [ email ][ Homepage ]
Hari Srinivas -
Return to the Improving Women's Access to Credit Page
Return to the Virtual Library on Microcredit