MICROFINANCE AND WOMEN EMPOWERMENT

Submitted to Dr. Mahfuz Kabir Course Instructor

Submitted by Md. Rasel Talukder ID- 809

Introduction
There is a general consensus that access to financial services is important if poor people are to raise productivity, create assets, generate income and achieve food security. Microfinance involves smallscale credit, savings and insurance to meet the needs of poor producers. Microfinance programmes also provide skill-based training to enhance productivity and organizational support and consciousness building to empower poor people. It has become an important approach for poverty reduction in many parts of the world, including the Asia and the Pacific region. About 20 per cent of IFADs overall portfolio of loans and grants is focused on rural financial services. Several studies show that access to microfinance contributes to poverty reduction, particularly for women participants and to overall poverty reduction at the village level. It also contributes to womens empowerment, including higher levels of mobility, political participation and decision-making. It is generally agreed that microfinance institutions (MFIs) have the potential to empower women in rural areas through microcredit and related financial services. However, the also face a number of challenges in meeting this objective.

Microfinance and womens empowerment

The focus on womens empowerment in the context of microfinance brings to light t he significance of gender relations in policy developments circles more prominently than ever before. Women are vaunted as a weapon against poverty (DFID 2006, 1). The rationale for providing women access to microfinance services is that gender inequalities inhibit economic growth and development (World Bank, CIDA, UNDP, UNIFEM). Hence, the Canadian International Development Agency (CIDA 1999). The predominant image of empowerment in development is that of women gaining means to empower themselves as individuals, and putting this to the service of their families and communities. This is primarily because empowerment is understood in relation to deliberate and planned interventions such as electoral quotas, education, economic empowerment initiatives, legislative change and nongovernmental public action. The alternative perspective emphasizes that womens empowerment emerges: I. As a result of cultural, economic and other changes, such as the availability of new technologies in their lives II. As womens current opportunities and constraints and III. As a process in time, across generations. Since the context of womens lives matters and the same interventions are not effective everywhere, most of the policies remain ineffective. The reflection in the three paradigms of womens empowerment through microfinance: I. Feminist empowerment paradigm II. Financial self-sustainability paradigm III. Poverty alleviation paradigm (Mayoux 2005, 2006) Microfinance and women empowerment is very relevant. Microfinance refers to a variety of financial services that target low-income clients, particularly women. Since the clients of microfinance institutions (MFIs) have lower incomes and often have limited access to other financial services, microfinance products tend to be for smaller monetary amounts than traditional financial services. These services

include loans, savings, insurance, and remittances. Microloans are given for a variety of purposes, frequently for microenterprise development. The diversity of products and services offered reflects the fact that the financial needs of individuals, households, and enterprises can change significantly over time, especially for those who live in poverty. Because of these varied needs, and because of the industry's focus on the poor, microfinance institutions often use non-traditional methodologies, such as group lending or other forms of collateral not employed by the formal financial sector. Microfinance is a form of financial services for entrepreneurs and small businesses lacking access to banking and related services. The two main mechanisms for the delivery of financial services to such clients are: (1) relationship-based banking for individual entrepreneurs and small businesses and (2) group-based models, where several entrepreneurs come together to apply for loans and other services as a group. Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Microcredit is one of the aspects of microfinance and the two are often confused. Critics may attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and very few studies have tried to assess its full impact. Proponents often claim that microfinance lifts people out of poverty, but the evidence is mixed. What it does do, however, is to enhance financial inclusion.

While much progress has been made in developing a viable, commercial microfinance sector in the last few decades, several issues remain that need to be addressed before the industry will be able to satisfy massive worldwide demand. The obstacles or challenges to building a sound commercial microfinance industry include:

Inappropriate donor subsidies Poor regulation and supervision of deposit-taking MFIs Few MFIs that meet the needs for savings, remittances or insurance Limited management capacity in MFIs Institutional inefficiencies Need for more dissemination and adoption of rural, agricultural microfinance methodologies

Benefits and Limitations of Microfinance

The benefits of microfinance are that it helps to manage the assets of the poor and generates income. Through microfinance institutions such as credit unions, financial non-governmental organizations and even commercial banks poor people can obtain small loans and safeguard their savings. The limitations of microfinance are that through this savings plan participants are losing money by having to pay a fee. The user can also pay back their loans whenever they chose therefore encouraging a borrower to have various outstanding loans. The lender is also vulnerable in that there is no guarantee of the loan being repaid in the given arranged timeframe, and the consequences to defaulting are not defined. An article on Womens empowerment in Bangladesh: looking beyond the MDGs by Neal Walker, a United Nations Resident Coordinator for Bangladesh published in The Daily Star on Monday, March 4, 2013. He quoted, The Millennium Development Goals (MDGs) are coming to an end in 2015. With the deadline fast approaching, countries are taking stock of their achievements to-date and working hard to ensure the next set of goals reflect core requirements of sustainability and equity. Inclusive and equitable growth1 cannot happen without taking into consideration the role of women half of the worlds population who are also economically and socially most vulnerable. It is crucial that the postMillennium Development Goals, beyond 2015 (the Sustainable Development Goals or SDGs) include, as a core component, womens empowerment and gender equality.

Women Empowerment in Bangladesh

Empowerment the process of giving power of authority to the powerless. Empowerment of women is a process through which women in general and poor women in particular get the opportunity to join the workforce and contribute to family income and interfere on family as well as social affairs. Women in Bangladesh work in rural areas and do most of the manufacturing labor as well as most of the harvesting. This traditional practice needs to stop. The violence against women must also stop. Women need to gain a lot more power over their decision making process. They should not be seen as fertility machines that have only the goal of reproducing. Global NGOs that are working towards helping women get empowered in Bangladesh are still facing difficulties because Bangladesh is a closed society which allows very few changes. In Bangladesh, gender inequalities are a social construction that can be eliminated with time.

Steps in women empowerment

Bangladesh is taking different kinds of steps to empower the women. Such as, quota system including women including women in local government by ratio system, scholarship system in education for women. In parliament 45 reserved seats are for women members, in primary sector 60% women are recruited as teacher. In garment sector many women are working and being solvent. By micro-credit system many women are bringing economical solvency in their family. BRDB besides Grameen Bank, Proshika, Asha etc and non-government organizations are playing role in the development of women from rural area. In this way these institutions helps in women empowerment in Bangladesh. A description given here showing the present situation of women Women representation is very limited in different level of government especially in ministries. Regularly women in mass representative organizations is scarcely as candidates. Women does not exercise the power of decision making in every sphere of politics and bureaucracy. Different wage rate for women. We keep a great role in garments sector as wager They are playing important roles in education Their participation in politics are increasing The women are being solvent by the opportunity of micro credit.

Recommendation
Women should participate more and more in politics to establish their rights in politics. The working field of women should be extended to increase the economic power of women. Social attitude towards men and women should be changed. Through social movement along with political parties women organizations should come forward along for this. The Govt. should be cordial and active to implement the effective steps in the rules and regulation committee. Women should be appointed in the higher administration with post of cabinet secretary and in the ministry and department. To eradicate the disparity of men and women wage, reformation in wage distribution is necessary. Women workers cant protest against the injustice of the higher authority for the lack of the help in law. Political and lawful rights of women should be included in the education syllabus. All the

international agreements against women persecution including extinction of all discriminatory activities against women should be implemented fully or to take steps to implement. Reserve seat for women should be maintained for UP level to all sectors. They should not be nominated for reserve seat, rather should be elected directly. We should behave with the female child equally in the house and outside the house and the positive aspect of female child should be shown.

Conclusion
According to the State of the Microcredit Summit Campaign 2001 Report, 14.2 million of the worlds poorest women now have access to financial services through specialized microfinance institutions (MFIs), banks, NGOs, and other nonbank financial institutions. These women account for nearly 74 percent of the 19.3 million of the worlds poorest people now being served by microfinance institutions. Microfinance institutions around the world have been quite creative in developing products and services that avoid barriers that have traditionally kept women from accessing formal financial services such as collateral requirements, male or salaried guarantor requirements, documentation requirements, cultural barriers, limited mobility, and literacy. Nevertheless, in a number of countries and areas few or no institutions offer financial services under terms and conditions that are favorable to women. Together, these findings confirm that the type of products offered, their conditions of access, and the distribution of an institutions portfolio among different products and services affect womens access to financial services. They also suggest that much more can be done to serve poor women in certain cultural and economic contexts.

Reference

1. http://www.thedailystar.net/beta2/news/womens-empowerment-in-bangladesh-lookingbeyond-the-mdgs/ 2. http://www.undp.org/content/undp/en/home/ourwork/povertyreduction/successstories/bangl adesh--empowering-women-to-fight-poverty-/ 3. http://www.grameen-info.org/dialogue/dialogue46/specialfeature.html 4. http://www.thedailystar.net/beta2/news/bangladesh-overtakes-india-in-overall-prosperity/ 5. http://www.thedailystar.net/beta2/news/womens-empowerment-in-bangladesh-lookingbeyond-the-mdgs/ 6. http://www.thatknowledge.com/empowerment-of-women-in-bangladesh/ 7. Womens empowerment and microfinance- An Asian perspective study by Vani S. Kulkarni, Department of Sociology, Yale University