Women's Empowerment through Sustainable Microfinance: Rethinking 'Best Practice'

This paper argues that there is a need to make gender 'Best Practice' integral to microfinance design, rather than as a marginal and marginalized add-on to financial sustainability or poverty reduction.

The paper challenges assumptions about the automatic benefits of microfinance for women. It argues that:

• Financial indicators of access cannot be used as indicators of women's empowerment;
• High repayment levels by women do not necessarily indicate that women have used the loans themselves.

The paper make a case that there is a need for a serious rethink of many currently accepted 'tenets of Best Practice' in the light of the existing evidence of gender impact since:

• Microfinance has the potential to enable women to challenge and change gender inequalities at all levels, if there is a strategic gender focus;
• There have also been many important recent innovations in products and services to enable women to better benefit.

The paper gives an overview of three contrasting paradigms of 'Best Practice', each of which have differing understandings of women's empowerment and the aims of microfinance:

• The feminist empowerment paradigm;
• The poverty alleviation paradigm ;
• The financial self-sustainability paradigm.

The paper further:

• Gives an overview of evidence of gender impact;
• Discusses some of the now considerable experience of 'good gender practice';
• Identifies a number of critical elements of a gender strategy for equality and empowerment.