The Impact of Microfinance on Women and Economic Development: A Client Study
This paper presents five key massages from a study that examined whether clients from different institutions use their loans differently.
Commercialization of microfinance and the media have challenged the impact of microfinance. In response to this challenge, Women’s World Banking (WWB) commissioned Accenture Development Partnerships to conduct a study with two WWB partners, Muthoot Fincorp Ltd in India and Fundación Mundo MujerPopayán in Colombia, to understand how clients of these two different institutions use their loans. The study showed that small business loans nurture investments, foster growth and create additional jobs in the community. The paper presents the following five messages from the study:
- Loans help family businesses survive emergency situations or manage seasonal cash flow fluctuations;
- Small family business loans nurture investments, foster growth and create jobs within the community;
- Microfinance has expanded from the traditional group lending model to individual lending to small businesses;
- Women tend to invest more of their business earnings into their families;
- Women are as entrepreneurial as men, and often better business managers.
The paper provides anecdotal and data-driven evidence of the power of microfinance in the hands of women.
