T h i s u n it w a s w r it t e n b y S a n d r a N o w l a nd - F o r e m a n , w ho r a n w o r k s ho p s fo r CID in 200 1 How to use this resource E a c h u n it i n t h i s fo l d e r c o n s i s t s o f t hr e e e l e m e nt s : The cream p a g e s a r e a bo u t d e f i n i t io n s w h a t a n d w h y. The apr ico t p a g e s c o nt a i n s o m e o f t he t o o l s N G O s n e e d ho w . The grey p a g e s a r e t he t o o lk it it s e l f p u l l o u t r e f e r e nc e s h e e t s fo r e x e r c i s e s a nd a c t i v it i e s .

CONTENTS SECTION 1 What is micro finance and how does it fit as a developmentinter vention.................................5 What is Microfinance.........................................................................................7 Sectors involved in the provision of Microfinance......................................................................9 The Grameen bank............................................................................................9 Positive impacts of Microfinance on scheme participants..........................................................10 Negat ive impacts of Microfinance on scheme participants.....................................................................................................11 Microfinance and best practice......................................................................................................12 SECTION 2 Models and Tools........................................................................................................................15 Targeting.....................................................................................................................................17 Gender issues..................................................................................................20 Models: Design features in Micro finance.....................................................................................................26 SECTION 3 Microfinance resources and readings...........................................................................................37 Resources..........................................................................................................39 Appendix 1: A Gender Strategy for Microfinance Linda Mayoux.........................................42 Appendix 2:. How to Assess Gender Impact Susan Johnson..........................................................43 Appendix 3: Grameen Bank The Sixteen Decisions.....................................................................44 Appendix 4: Two Models of Microfinance Provision.........................................................................45 Appendix 5: Banking with the Poor 16 Principles for Self Help Groups..........................................48

SECTION 1 WHAT IS MICROFINANCE ANDH O W D OE S IT F I T A S A DEVELOPMENT INTERVENTION

WHAT IS MICROFINANCE? M i c r o f i n a n c e i s t he p r o v i s io n o f a br o a d r a ng e o f f i n a n c i a l s e r v i c e s t o lo w - i n c o m e ho u s e ho l d s a nd m i c r o e nt e r p r i s e s . T he r a n g e o f f i n a n c i a l s e r v i c e s u s u a l l y i n c l u d e s vo l u nt a r y s a v i n g s a n d lo a n s . O t h e r p r o d u c t s m i g h t a l s o i n c l u d e i n s u r a n c e , l e a s i n g , a nd mo n e y t r a n s f e r s . T he t e r m m i c r o f i n a n c e e n c o u r a g e s e xp lo r a t io n o f t he e nt ir e r a ng e o f f i n a n c i a l n e e d s a n d r e q u i r e m e nt s o f p o o r p e o p le . I t i s i m p o r t a nt t o d i s t i ng u i s h t h i s t e r m f r o m t h e t e r m m i c r o c r e d it . M i c r o c r e d it r e fe r s t o t he p r o v i s io n o f c r e d it s e r v i c e s t o lo w - i n c o m e c l i e nt s , u s u a l l y i n t h e fo r m o f s m a l l lo a n s fo r t h e p u r p o s e o f m i c r o e nt e r p r i s e a n d i n c o m e - g e ne r a t i ng a c t i v it i e s . A fo c u s o n c r e d it o n l y i n f i n a n c i a l d e v e lo p m e nt i nt e r ve nt io n s i g no r e s t he r e a l it y t h a t c r e a t i n g a c c e s s t o c r e d it w i l l no t n e c e s s a r i l y m e e t t he f i n a n c i a l n e e d s o f t h e p o o r e s t o r a l l e v i a t e p o ve r t y. T h i s s t r a t e g y m a y f u r t h e r m a r g i n a l i z e t h o s e p o o r p e o p l e w ho a r e u na b l e o r u n w i l l i n g t o t a k e u p lo a n s a nd r i s k i n c r e a s e d d e bt . KEY CONCERNS IN THE MICROCREDIT DEBATE M i c r o c r e d it s c he m e s r a p i d l y m u lt i p l i e d fr o m o n l y a ha n d f u l i n t h e e a r l y 1 9 7 0 s t o s e ve r a l hu n d r e d b y t he m i d 1 9 9 0 s . A l o ng s i d e s t a nd a lo n e m i c r o c r e d it p r o v i d e r s , m a n y d e v e lo p m e nt a g e nc i e s i nt r o d u c e d m i c r o c r e d it a s a n a d d it i o n a l p a r t o f t he i r p o ve r t y a l l e v i a t io n s t r a t e g y. T h e i nt e r n a t io na l p r o f i l e a n d s u c c e s s r e p o r t e d b y l a r g e m i c r o f i n a n c e o r g a n i s a t io ns i n B a n g l a d e s h, t he i r p o l it i c a l a n d f i n a n c i a l c o n n e c t io n s , a s w e l l a s a b u r g e o n i n g s e c t o r le d t o t he f i r s t i nt e r n a t io n a l s u m m it o n m i c r o f i n a n c e . T h e M i c r o c r e d it S u m m i t w a s he l d i n F e br u a r y 1 9 9 7 i n W a s h i n g t o n D C . T h e s t a t e d g o a l o f t h e s u m m i t w a s t o pr o v i d e a c c e s s t o m i c r o f i n a n c e s e r v i c e s fo r 1 0 0 m i l l i o n p o o r e s t f a m i l i e s b y2 0 0 5 . T h i s u r g e nt a nd e n e r g e t ic a l l y s t a t e d Supp ly-dr ive n g o a l s a w m i c r o c r e d it e m e r g e a s a p o t ent i a l p a na c e a t o p o ve r t y a l l e v i a t io n . T w o k e y i s s u e s c h a l l e n g i n g m i c r o f i n a n c e p r o v i d e r s a nd d e ba t e d a t t he c o n f e r e n c e w e r e , o nt he o ne h a nd , ho w t o e n s u r e a fo c u s o n t ho s e i n g r e a t e s t n e e d / p o v e r t y, a n d o n t he o t he r ho w t o p l a n fo r a nd m a i nt a i n i n s t i t u t io na l v i a b i l it y/ s u s t a i n a b i l i t y. V i a b l e m i c r o f i n a n c e i n s t it u t io n s r e q u i r e v i a b l e c l i e nt s . T h i s mar ket -ba sed

a p p r o a c h h a d l e d p r o v i d e r s t o t a r g e t e x i s t i n g e nt r e p r e n e u r s , a s a n e f f e c t i v e w a y t o m i n i m i s e r i s k a nd m a x i m i s e e f f i c i e n c y. T he A s s o c i a t io n fo r S o c i a l A d v a n c e m e nt i n B a n g l a d e s h s h i ft e d t h e ir e nt ir e fo c u s fr o m r u r a l s o c i a l d e ve l o p m e nt to t hat o f a f i n a n c i a l i n s t it u t io n , b e c o m i n g o ne o f t h e 3 l a r g e s t m i c r o f i n a nc e i n s t it u t io n s i n B a ng l a d e s h . T h e p r i m a r y t a r g e t g r o u p o f t he s e a nd s u b s e q u e nt c r e d it s c h e m e s w a s w o me n . Wo m e n w e r e d i s c o ve r e d t o be mo r e r e l i a b l e , p l i a b l e a n d r e s p o ns i b l e r e p a ye r s , w ho u s e d t h e e xt r a i n c o m e o n t he i r f a m i l i e s w e l f a r e r a t h e r t ha np e r s o na l n e e d s

T h e C a n a d i a n C o u n c i l fo r I nt e r n a t io n a l C o o p e r a t io n u nd e r t o o k a n r e v i e w o f m i c r o f i n a n c e s c he m e s i n t he ye a r o f t he s u m m it . T he r e p o r t s u m m a r i s e s a n d c o n f i r m s s o m e o f t he k e y c o nc e r ns a nd br o a d e r d e ba t e a t t he t i m e . T h e g r o u p u n d e r t a k i n g r e s e a r c h fo u nd t h a t : i t i s N O T u s u a l l y t h e p o o r e s t w ho be ne f it fr o m mic r o - e nt er pr is e de ve lo p me nt ; peo p le t r app ed in po ver t y r eq u ir e a br o ad r a nge o f int er ve nt io ns, fr o m g e ner a l p o l i c y c h a n g e s t o s p e c i f i c fo r m s o f s u p p o r t , i n o r d e r t o mo ve t o s u s t a i n a b l e l i v e l i ho o d s ; a l a r g e s c a l e t r a n s f e r o f r e s o u r c e s t o t h i s k i n d o f a c t i v i t y , s u c h a s p r o p o s e d b y t h e M i c r o c r e d i t S u m m it , m a y a c t u a l l y d i v e r t r e s o u r c e s a w a y f r o m t h o s e i n g r e a t e s t ne e d ; a d d r e s s i n g so c ia l t r a ns fo r mat io n a nd de f in ing t he so c ia l go a ls e xp ect e d fr o m t h e p r o g r a m m e s i s i m p o r t a nt , e g w o m e n s e m p o w e r m e nt ; s t u d i e s o n t h e ge nder imp a ct o f mic r o cr e d it e nt er pr is e ha ve s ho w n t hat t her e is a h i g h l e v e l o f f a i l u r e d u e t o t he u nd e r l y i n g p r o b l e m s o f p o o r w o m e n s l o w p o s it io n o f p o w e r , e xt r e m e l y h i g h w o r k lo a d a n d m u lt ip l e r e s p o n s i b i l it i e s ; t h e p r e o c c u p a t i o n w i t h f i n a n c i a l p e r f o r m a n c e a n d l o a n r e p a y m e n t s m a y d i s t r a c t p e o p l e fro m see ing t he so c ia l imp a ct o f t h e s e a c t i v it i e s : t he i m p a c t o n s o c i a l r e l a t io ns i n t he c o m m u n it y, s i d e e f f e c t s s u c h a s p u t t i ng o t he r s o u t o f w o r k o r r e d u c i n g t he i n c o m e o f e v e r yo n e , a n d t he i m p a c t o f t h e a c t i v i t i e s o n t h e e n v i r o n m e nt ; t h e r e i s a need for infrastructure, market ing, technical advice and m a n a g e m e n t t r a i n i n g a nd a g o o d p o l i c y e n v i r o n m e nt i f m i c r o e nt e r p r i s e

i s g o i n g t o wo r k . C o nc e r n s a t t he i d e o l o g ic a l, p o l it i c a l a n d e c o no m i c l e v e l c e n t r e o n: t h e f e m i n i s a t io n o f i n d e bt e d n e s s ; w h e t h e r it i s t h e r o le o f N G O s t o be c o m e ba nk s ; w ho s e i nt e r e s t s a r e p r i m a r i l ys e r v e d ( fo r e x a m p l e , i n a d e r e g u l a t e d f i n a n c i a l c o nt e xt a r e t h e p o o r t he m e a n s t o r e a l i s e t h e i n t e r e s t o f mo n e y c a p it a l t ha t i s c i r c u l a t i n g g lo b a l l y i n a n e r a o f f i n a n c i a l l i b e r a l i s a t io n ? ) , a n d d e e p e r s t r a t e g i c q u e s t io n i n g o f t he i n f l u e n c e o f l a r g e a m o u nt s o f We s t e r n c a p it a l i n d o m i n a t io n o f I s l a m i c f u n d a m e nt a l i s t i n f l u e n c e

SECTORS INVOLVED IN THE PROVISION OF MICROFINANCE T h e p r o v i s io n o f M i c r o f i n a n c e s e r v i c e s e n c o mp a s s e s a d i v e r s e a r r a y o f f i n a n c i a l i n s t it u t io n s : Table 2 I n fo r m a l s ys t e m s a r e mo r e e a s i l y a d a p t e d t o d i f f e r e nt e c o no m i c c o n d it io n s a nd c ha n g i n g c i r c u m s t a n c e s . T he y a r e mo r e l i k e l y t o be a c c e s s i b l e o r a v a i l a b l e t o p o o r p e o p le a nd p o o r c o m mu n it i e s t h a n mo r e fo r m a l mo d e l s . THE GRAMEEN BANK T h e l a r g e s t a nd mo s t s t u d i e d e x a m p l e o f t h e M i c r o f in a n c e i n s t it u t io n s i s t h e G r a m e e n B a n k i n B a ng l a d e s h. W it h o ve r 2 m i l l io n bo r r o w e r s , it h a s s e r v e d a s a b l u e p r i n t fo r m a n y s u b s e q u e nt M i c r o f i n a n c e s c h e m e s . T he G r a m e e n B a nk w a s e s t a b l i s h e d i n t h e l a t e 1 9 7 0 s b y e c o no m i c s p r o f e s s o r , M u h a m m a d Y u nu s . I n it i a l l y, c r e d it w a s p r o v i d e d t o me n i n p o o r r u r a l f a r m i n g c o m m u n it i e s ne a r t he C h it t a g o ng U n i v e r s i t y, i n o r d e r t o e xt e nd a n d s e c u r e ye a r - r o u nd i n c o m e . Bangladesh had just emerged from the War of Liberat ion which had caused serious social andpolitical disrupt ion. The economy was stagnat ing, the populat ion was rapidly growing, therewas high unemployment and low agricultural productivit y. The Government was looking forinnovat ive so lut ions and together with donors was encouraging government-owned banksto increase their rural development efforts and test innovat ive approaches to rural credit. Thebanking industry had been deregulated and economic liberalisat ion policies were being pursued. As t h e G r a m e e n B a nk d e v e lo p e d , it w a s d i s c o v e r e d t h a t w o m e n m a n a g e d lo a n s w it h a s i g n i f i c a nt l y b e t t e r r at e o f r e p a y m e nt . A s a r e s u lt , r u r a l w o m e n b e c a m e t he p r i ma r y lo a nr e c i p i e nt s . T h i s w i n n i n g fo r m u l a c a u g ht w i d e s p r e a d a t t e nt io n be c a u s e it a c h i e v e d u n c ha r a c t e r i s t i c a l l y h i g h r e p a y m e nt r a t e s o n lo a n s

K e y f e a t u r e s o f t he G r a m e e n B a nk i n c l u d e : t a r g e t i n g w o m e n b o r r o w e r s ; small init ial loans increasing in size over time;the establishment of group lending. G r o u p le n d i n g i s a p r o c e s s w he r e b y m e m b e r s g a i n a c c e s s t o a lo a n w it h i n a s m a l l s e l f s e l e c t e d g r o u p i n w h i c h a l l m e m b e r s g u a r a nt e e t o c o ve r a n i n d i v i d u a l s p a y m e n t i f s h e i s u na b l e t o p a y. T h i s u n i q u e s o c i a l c o l l a t e r a l s e r v e s t o r e d u c e t he r i s k a n d c o s t s t o t he b a nk , a nd e n s u r e s r e p a y m e nt c o m p l i a n c e . L o a n s a r e d i s b u r s e d t o g r o u p m e m b e r s i n r o t a t io n. T h e p r i n c i p l e s o f t h e Bank d i s c i p l i n e , u n it y, c o u r a g e a nd h a r d w o r k a r e r e i n fo r c e d i n a s o c i a l c o nt r a c t o f T h e S i x t e e n D e c i s io n s ( s e e A p p e nd i x 3 ) . P a y m e nt s a r e c o l l e c t e d a nd mo n it o r e d a t w e e k l y g r o u p m e e t i n g s , fo s t e r i n g t r a n s p a r e n c y a n d c o m p l i a n c e . I n s t it u t io n a l f i n a n c i a l v i a b i l i t y w a s a n i m p o r t a nt g o a l fo r t he G r a m e e n B a n k . I t s c lo s e i n i t i a l r e l a t io n s h i p w it h fo r m a l f i n a n c i a l i n s t it u t io n s i n B a n g l a d e s h a nd t h e i r e a r l y s u p p o r t w a s c r u c i a l . I n t he f o l lo w i n g d e c a d e s i g n i f i c a nt e x p a n s i o n i n t h e i n s t it u t io n w a s a c h i e v e d w it h h e a v y fo r e i g n d o no r s u p p o r t . H o w e ve r , t he m o ve t o f i n a n c i a l i n d e p e n d e n c e w a s s i g n i f i c a nt l ys t r e n g t h e ne d , f i r s t t hr o u g h m e m b e r s h i p s u b s c r i p t io n a nd t h e n a s h a r e f lo a t . B a n k v i a b i l i t yh i n g e d o n i n c r e a s i n g t he m e m b e r s h i p , i n c r e a s i n g t he p r o d u c t r a ng e ( w h i c h no w i n c l u d e s m a n y t yp e s o f lo a n s a n d v o l u n t a r y s a v i n g s ) , a n d p r o v i d i n g a c c e s s t o i n c r e a s i n g lo a n s i z e s . POSITIVE IMPACTS OF MICROFINANCE ON SCHEMEPARTICIPANTS R e v i e w i n g t h i r t y i n d e p e nd e nt s t u d i e s o f M i c r o f i n a n c e i n s t it u t io n s a c r o s s t h e g lo b e , R e m e n y i c o n c l u d e s t ha t bo r r o w e r s e xp e r i e n c e d a n a v e r a g e o f 20% incre ase in inco me. 3 While it isa c k no w l e d g e d t h a t w it h i n mo s t lo a n s c he me s bo r r o w e r s d o e x p e r i e n c e i m p r o ve d i n c o m e s , t he r e a r e ma n y va r i a b l e s w h i c h i n f l u e n c e t h e e x t e n t o f s u c c e s s a t a n i n d i v i d u a l , o r g a n i s a t io na l a nd e n v i r o n m e nt a l l e v e l fo r e x a m p l e w ho i s i n i t i a l l y t a r g e t e d , t he ir s k i l l l e v e l , g e nd e r , m a r it a l s t a t u s , a nd w h a t e xt e r na l s u p p o r t i s a v a i l a b l e . O n g o i n g a c c e s s t o lo a n s h a s ha d a p o s it i v e i m p a c t o n bo r r o w e r s ho u s e ho l d s e c u r it y. F o r e x a m p l e , s u c c e s s f u l G r a m e e n B a n k bo r r o w e r s ha v e a c h i e v e d fo o d s e c u r it y a n d a c c u m u l a t io no f a s s e t s s u c h a s g o a t s , d u c k s , p o u lt r y, c o w s a n d r i c k s h a w s . S u c c e s s f u l bo r r o w e r s h a ve a l s o i m p r o v e d t h e i r l i v i n g c o n d it io n s a nd , i n s o m e c a s e s , g a i n e d a c c e s s t o l a nd . T h i s h a s he l p e d mo v e h o u s e h o l d s f r o m h a nd - t o - mo u t h s u r v i v a l t o a mo r e s e c u r e p o s it io n. Ac c e s s t o lo a n s fo r s u c c e s s f u l bo r r o w e r s h a s a l s o me a nt t ha t t he y a r e l e s s l i k e l y t o l i q u i d a t e t he i r a s s e t s w h e n d i s a s t e r s t r ik e s . 4

Expanding employment opportunit ies and increasing hours of employment per week have also been noted amongst successful borrower households in several countries. Some o f the socialchanges in Grameen Bank villages impact posit ively on the communit y as a whole for examplet he increased visibilit y and mobilit y of women. One study found that a significant change inhousehold and communit y status could be derived by women who maint ained control of theirloans. Women reported a direct correlat ion between having money and increased status andrecognit ion resourceful women using the loans to empower themselves

NEGATIVE IMPACTS OF MICROFINANCE ON PARTICIPANTS I n m a n y c o u nt r ie s , t h e t a r g e t i ng o f w o m e n i n m i c r o f i n a n c e s c h e m e s i s a d ir e c t c h a l l e n g e t o c u lt u r a l no r m s . W it ho u t p a r a l l e l p r o g r a m m e s w h i c h a d d r e s s g e n d e r i s s u e s , t h i s h a s r e s u lt e d i n i n c r e a s e d i n t r a - a n d i nt e r h o u s e h o l d t e n s io n. C a s e s o f d o m e s t i c v io l e n c e a g a i n s t f e m a l e G r a m e e n B a nk l o a n r e c i p i e nt s b y t h e i r h u s b a nd s a n d m a l e r e l a t i v e s h a v e b e e n r e p o r t e d . S e v e r a l p e o p l e ha v e c o m m i t t e d s u ic i d e a s a r e s u lt o f g r o u p p r e s s u r e fo r r e p a y m e nt . 7 I f w o m e n a r e s p e nd i n g mo r e t i m e i n p a i d e m p l o y m e nt , it i s i m p o r t a nt t o lo o k a t t he i m p a c t . Ar e t he y a l s o ha v i n g t o d o mo s t o f t he ho u s e w o r k a n d c h i l d c a r e ? Ka b e e r s u g g e s t s t he r e i s m i x e d e v i d e n c e o f g e n d e r i m p a c t s , i n t h a t w h i l e w o m e n g e t t i n g lo a n s a r e mo r e l i k e l y t o ha v e g i r l c h i l d r e n i n s c h o o l t h a n m a l e lo a nr e c i p i e nt s , t h e r e i s g r e a t e r p o t e nt i a l fo r w it h d r a w a l o f g i r l c h i l d r e n fr o m s c ho o l t o me e t i n c r e a s i n g l a bo u r d e m a n d s f r o m lo a n u t i l i s a t io na c t i v it i e s . 8 T h e r e i s a l s o e v i d e n c e o f hu s b a nd s o r o t he r m a l e r e l a t i v e s e x p e c t i ng o r fo r c i n g f i n a n c i a l c o nt r o l o f t h e lo a n s g r a nt e d t o T he r e i s a l s o e v i d e n c e o f h u s b a n d s o r o t he r m a l e r e l a t i v e s e x p e c t i n g o r fo r c i n g f i n a n c i a l c o nt r o l o f t h e lo a n s g r a nt e d t o wo m e n. 9 In such cases womena r e e f f e c t i v e l y be i n g u s e d a s d e bt c o l l e c t o r s fo r t he ir p a r t n e r s d e bt s . O n e s t u d y s ho w e d t h a t 7 o u t o f 1 0 o f t ho s e w o m e n w it h o u t c o n t r o l o f t h e i r lo a n s r e m a i n e d i n p o ve r t y. 10 Anothers t u d y fo u n d t ha t t he l a r g e r t h e l o a n, t he mo r e l i k e l y it w a s t h a t m e n h a d c o nt r o l. 11 T h e r e i s e v i d e nc e o f G r a m e e n B a n k bo r r o w e r s w ho a r e u s i n g t he ir 8 th to 10 th lo a n s b o r r o w i ng f r o m ot her so urc es

t o p a y t h e i r i nt e r e s t . T h e ir r e g u l a r it y o f p a y m e nt r e c o r d s , a n d lo w e r p e r c e nt a g e r e p a y m e nt r a t e s i n t he h i g h e r lo a n c yc l e s a r e a l s o i n d i c a t o r s o f p r o b l e m s r e c i p i e nt s h a ve i n m a n a g i n g t h e s e lo a n s . 12 It can not be assumed thatdisbursing loans to womenmeans eit her that they use themor are empowered. 6 H a s h e m i fo u nd t h a t t ho s e no t jo i n i n g t h e G r a m e e n B a n k w e r e p r i m a r i l y c o n c e r n e d w it h t h e d e bt bu r d e n ( 4 9 % ) , r e l i g io u s a nd s o c i a l s a n c t io n s ( 2 5 % ) , a n d f e a r o f no n- a c c e p t a n c e b e c a u s e o t he r s c o ns i d e r e d t he m a hig hr isk (13%). 13 C r e d i t i s d e bt . T he r e a r e s e r io u s e t h i c a l i s s u e s t h a t a r i s e w h e n w e e n c o u r a g e p e o p l e t o t a k e o nd e bt fr o m r i s k y e nt e r p r is e s . O ft e n t he fo c u s i s o n t h e c r e a t io n o f e nt r e p r e n e u r s ; ye t w e k no w t ha t in a n y s o c i e t y, i n d e e d i n a n y s o c i a l c l a s s , no t e ve r yo ne m a k e s g o o d e nt r e p r e n e u r s .

Targeting microcredit to successful entrepreneurial poor may increase the disparity between thosewith access to loans and those more vulnerable. There is a notable lack of research on increasedrelative poverty and its impact on poorer and more marginalised groups within communities. MICROFINANCE AND BEST PRACTICE T h e p i c t u r e e m e r g i n g o f M i c r o f i n a n c e i n t he l a t e 1 9 9 0 s i s m i x e d , a nd s u g g e s t s t he ne e d fo r a c lo s e r lo o k a t t h e c o mp l e x in t e r r e l a t io n s h i p b e t w e e n t h e f i n a n c i a l n e e d s o f t he p o o r a n d t he i m p a c t o f f i n a n c i a l i n t e r v e n t io ns d e s i g ne d t o e n ha n c e t h e i r e c o no m i c w e l l - be i n g . I n e s t a b l i s h i n g t h e p l a c e o f M i c r o f i n a n c e a s a s u c c e s s f u l d e v e lo p m e nt i n t e r v e n t io n a l l e v i a t i n g p o ve r t y a mo n g t he p o o r e s t ho u s e ho l d s , t he i s s u e s m e n t io n e d i n t he p r e v io u s s e c t io n ne e d t o be a d d r e s s e d . C r it i c a l q u e s t io n s n e e d t o be a s k e d i n t he a r e a s o f t a r g e t i ng , g e nd e r a nd d e s i g n t o a l lo w b e s t p r a c t i c e p r i n c i p l e s t o be e s t a b l i s h e d , w h i l e a c k no w l e d g i n g a nd c o n s i d e r i n g i s s u e s h i g h l i g ht e d i n t h e i d e o lo g i c a l a nd p o l it i c a l d e ba t e

Target ing

W h a t a r e t he f i n a n c i a l n e e d s o f t he p o o r ?H o w c a n t he y b e s t b e m e t ?H o w c a n M i c r o f i n a n c e s c h e m e s e n s u r e t he y a r e e n h a n c i n g t h e c o nd it i o n s o f p o o r p e o p le , no t e xa c e r b a t i ng t h e m ?

G e n d e r a n d E mp o w e r m e nt Ar e w o m e n e x p lo i t e d o r e m p o w e r e d b y M i c r o f i n a n c e ? W h o m a i nt a i n s c o nt r o l o f t he l o a n s ? H o w c a n g e nd e r a w a r e n e s s a nd t r a ns f o r m a t io n be p r o m o t e d t hr o u g h M i c r o f i n a n c e s c h e m e s ?

P o l i c y R e g u l a t io n s a n d R u l e s I n w h o s e i nt e r e s t s i s t h e M i c r o f i n a n c e i n s t i t u t io n p r i m a r i l yo p e r a t i n g ? W h o s e t s t h e p o l i c i e s ? W h a t i s t h e i m p a c t o f p o l i c y a n d r e g u l a t io ns o n b o r r o w e r s e c o no m i c a l l y a n d s o c i a l l y ? W h a t a r e e f f e c t i v e mo d e l s o f M i c r o f i n a n c e s e r v i c e d e l i v e r y? H o w c a n p o l i c i e s e n s u r e g e nd e r i s s u e s a r e a d d r e s s e d ? W h a t p r i n c i p l e s e m e r g e i n s c he m e d e s i g n ? C a n M i c r o f i n a n c e s c h e m e s b e d e v e lo p m e nt a l ? H o w ? Ar e t he y a b l e t o d e ve l o p a s o c i a l a g e n d a b e yo nd f i n a n c e s u c h a s e m p o w e r m e nt , s o c i a l j u s t i c e , s o c i a l t r a n s f o r m a t io n ? H o w c a n N G O s c a p it a l i s e o n t he p o s it i v e a s p e c t s o f g r o u p le nd ing a nd sa ving ?

FOOTNOTES 1 Akhter, F.: Microcredit: T h e D e v e lo p m e nt D e va s t a t io n o f t he P o o r , U b i n i g , B a n g l a d e s h. C o n f e r e nc e P a p e r AP R N I nd o ne s i a , 2 0 0 0 . 2 C o r n fo r d , R . : C o r n fo r d , R : M i c r o c r e d it , M i c r o f i n a n c e o r S i m p l y A c c e s s t o F i n a nc i a l S e r v i c e s : W h a t Do Pac ific Peo p le N eed ? T h e F o u nd a t io n fo r D e ve lo p m e nt C o o p e r a t io n, B r i s b a n e , 1 9 9 8 . Conference Paper, Povert y, Prosperit y and Progress Wellington NZ 2000.h t t p : / / w w w . d e v n e t . o r g . nz / c o n f / c o n f e r e n c e 2 0 0 0 . ht m l . 3 Re me n yi, J.: W h e r e C r e d it i s D u e ; I nc o m e - g e n e r a t i n g p r o g r a m m e s fo r t h e p o o r i n d e v e lo p i n g c o u nt r ie s , Intermediate Technology, UK, 1993. 4 Todd, H.: Wo m e n a t t he C e nt r e ; G r a m e e n B a n k B o r r o w e r s a ft e r o n e D e c a d e , West view,U S A / U K, 1 9 9 6 . 5 Todd, 1996. 6 J o h n s o n , S . & R o g a l y, B . : M i c r o f i n a n c e a n d P o v e r t y R e d u c t io n , O x f a m, U K , 1 9 9 7 . 7 Schuler, S., Hashemi, S. & Badal, S.: M e n s V io l e n c e A g a i n s t Wo m e n i n R u r a l B a n g l a d e s h: U nd e r m i n e d o r E x a c e r b a t e d b y M i c r o c r e d it P r o g r a m m e s ? , D e v e lo p m e nt i n P r a c t i c e , V o l. 8 N o . 2 , U K, M a y 1 9 9 8 . 8 Kabeer, N.: M o n e y C a n t B u y M e L o ve ? R e e va l u a t i ng G e n d e r , C r e d it a nd E mp o w e r m e nt i n R u r a l B a n g l a d e s h , I n t e r n a t io na l D e ve l o p m e nt S t u d i e s D i s c u s s io n P a p e r , N o . 3 6 3 . 9 T o d d , 1 9 9 6 , p 2 2 1 a nd G o e t z , A. & G u p t a , R . : W h o T a k e s C r e d it ? G e n d e r , P o w e r a nd C o nt r o l o ve r L o a n U s e i n R u r a l C r e d it P r o g r a m m e s i n B a n g l a d e s h , Wo r ld D e v e lo p m e nt , V o l. 2 4 N o . 1 , U K, 1 9 9 6 . 10 Todd, 1996. 11 Goetz & Gupta 1996.

12 Todd, 1996. 13 Hashe mi, S: B u i l d i n g U p C a p a c i t y F o r B a nk i n g W it h T he P o o r in S c hne ider (Ed) M i c r o f i n a n c e F o r T he P o o r , OECD, Par is, 19 97. 14 M icro e nt erpr is e Le sso ns: Q u e s t io n i n g t h e p a n a c e a : l e s s o n s f r o m a C C I C L e a r n in g C ir c l e o n M i c r o Ent erpr is e, C a n a d i a n C o u nc i l fo r I nt e r na t io n a l C o o p e r a t io n P o l ic y T e a m, C a n a d a , 1996

S E CT I ON 2 MODELS AND TOOLS INMICROFINANCE

ARGETING T a r g e t i n g i s o n e o f t he k e y i s s u e s i n t h e M i c r o f i n a n c e d e b a t e . T he c h a l l e n g e t o d e ve lo p m e nt p r a c t it io ne r s , N G O s a nd i m p l e m e nt i n g o r g a n i s a t io n s i s t o l e a r n a bo u t t he c i r c u m s t a nc e s a nd t he f i n a n c i a l ne e d s o f t h e p o o r , a nd t o d e v e lo p d e m a n d - d r i v e n i nt e r ve nt io n s u s i n g a d e v e lo p m e nt w it h r a t h e r t h a n a d e v e l o p m e nt fo r a p p r o a c h. T h e fo c u s o f t h i s s e c t io n i s o n t he d e v e lo p m e nt o f i n t e r v e n t io ns ( s o c i a l , e c o no m i c , p o l it i c a l ) w h i c h a r e r e l e v a nt , e f f e c t i v e a n d e m p o w e r i n g t o po o r p e o p le . Development intervent ions have to flowout of the development process for thoseseeking to develop. If development intervent ions are designed by thirdpart ies, and not through the freeint eract ion between developmentworker and client then it mustcategorically be stated that the result isnot development work: it becomes atbest a patronising collusion, at worst, acynical manipulat ion. 1 P u r p o s e o f D e v e l o p m e nt : d e v e lo p m e nt m e a n s mo r e t ha n j u s t he l p i n g p e o p l e . I t i s a p r o c e s s o f e n l a r g i n g c ho i c e s fo r bo t h m e n a nd w o me n. I t e n c o u r a g e s a nd e n a b l e s m e n a n d w o m e n t o t a k e a na c t i v e p a r t i n d e c i s io n s a f f e c t i n g t he ir l i v e s a n d t o ma k e t h e m o s t o f o p p o r t u n it i e s t o r e a l i s e t h e ir o w n p o t e nt i a l a n d t he p o t e nt i a l o f t h e i r c o m m u n it y. I t i s a p r o c e s s w h i c h a i m s t o p r o mo t e d ig n it y a n d s e l f - r e l i a n c e .

Remenyis Poverty Pyramid H o w mu c h d o yo u k no w a bo u t t he f i n a n c i a l n e e d s o f p e o p l e l i v i n g i n p o v e r t y ? I n o r d e r t o u nd e r s t a nd t h e i s s u e s a nd ne e d s o f p o o r p e o p l e , R e m e n y i h a s d e ve lo p e d a mo d e l w h i c h e xp r e s s e s t he d iv e r s it y o f e c o no m i c s t a t u s a mo ng s t t he p o o r ( s e e n e xt p a g e ) . H i s mo d e l i s d e p i c t e d a s a p yr a m i d s ha p e t o r e p r e s e nt 5 s u b- g r o u p i n g s o r l e v e l s o f p o v e r t y . T h e b o t t o m o f t he p yr a m i d r e p r e s e nt s t h e l a r g e s t s u b- g r o u p o f p o o r p e o p l e , w h i l e t h e a p e xr e p r e s e nt s t h e s m a l l e s t s u b- g r o u p o f p o o r p e o p le . 3 POVERTY PYRAMID

Near Poor M o n e y r e q u ir e d fo r PRODUCTIVE NEEDS N e e d fo r f i n a n c i a l s e r v i c e s fo r i n c o m e p r o mo t io n e g e xt e nd i n g t h e e m p lo y m e nt ho u r s w it h i n a nd o u t s i d e t h e f a m i l y, e xp a nd i n g e a r n i n g c a p a c it y / p o t e nt i a l E nt r e p r e n e u r i a l P o o r S e l f - e m p lo ye d P o o r L a bo u r i n g Poor M o n e y r e q u ir e d fo r CONSUMPTIVE NEEDS N e e d fo r f i n a n c i a l s e r v i c e s fo r i n c o m e p r o t e c t io n - s e c u r e s a v i n g s t h a t m a i n t a i n va l u e , e g i n s u r a nc e i n t h e fo r m o f s m a l l a s s e t a c q u i s i t io n w h i c h c a n b e s o l d i n a n e m e r g e n c y t o m e e t u n e xp e c t e d e x p e n s e s . Vulnerable Poor

Near Poor M o n e y r e q u ir e d fo r PRODUCTIVE NEEDS N e e d fo r f i n a n c i a l s e r v i c e s fo r i n c o m e p r o mo t io n e g e xt e nd i n g t h e e m p lo y m e nt ho u r s w it h i n a nd o u t s i d e t h e f a m i l y, e xp a nd i n g e a r n i n g c a p a c it y / p o t e nt i a

Ent repre neur ia l Po o r S e l f- e m p l o ye d P o o r La bo ur ing Po o r M o n e y r e q u ir e d fo r CONSUMPTIVE NEEDS N e e d fo r f i n a n c i a l s e r v i c e s fo r i n c o m e p r o t e c t io n - s e c u r e s a v i n g s t h a t m a i n t a i n va l u e , e g i n s u r a nc e i n t h e fo r m o f s m a l l a s s e t a c q u i s i t io n w h i c h c a n b e s o l d i n a n e m e r g e n c y t o m e e t u n e xp e c t e d e x p e n s e s

Vulnerable Poor Near Poor: S u b s t a n t i a l e m p lo ye r s o f t h e p o o r , w it h ho u s e ho l d m e m b e r s i n r e g u l a r p a i d e m p lo y m e nt . T he near poor live in poor neighbourhoods and consume wage goods produced by the poor.E xa m p l e s c o u l d i n c l u d e g u a r d s , g a r d e ne r s , d r i v e r s , c l e a ne r s , hu m a n s e r v i c e p r o v i d e r s , ba s i c a d m i n i s t r a t i v e w o r k e r s , g o v e r n m e nt a n d m i l it a r y w o r k e r s . Ent repre neur ia l Po o r: T h e m a jo r it y a r e m e n w ho a r e s e l f - e m p lo ye d , r u n n i n g e nt e r p r i s e s w h i c h p r o v i d e s e r v i c e s t o t he p o o r a nd e m p lo y mo r e t ha n f i v e p e o p l e . T r a d e e x a m p l e s i n c l u d e s ho e m a k i n g a n d r e p a ir s , t e xt i l e t r a d e s , c o s m e t i c m a n u f a c t u r e , m e t a l f a b r i c a t io n, a n d s o m e s m a l l p r o d u c t io n f a c t o r ie s . S e l f- E m p lo ye d P o o r : T h e m a jo r it y a r e w o m e n w ho w o r k fo r t he m s e l v e s o n l y, o r ma y e m p lo y u p t o f i v e p e o p l e ( no t fu l l t i m e ) . T he y p r o v i d e d a i l y s e r v i c e s s u c h a s t a i lo r i n g , f u r n it u r e m a k i n g , s t r e e t ve n d i n g a n d fo o d s a l e s . La bo ur ing Po o r: S ig n i f i c a nt nu m b e r s o f m e n, w o m e n a n d c h i l d r e n w ho a r e s e l f - e m p lo ye d a n d it i n e r a nt e m p l o ye e s . T he m a jo r it y r e l y d a i l y o n t h e s a l e o f t h e i r l a b o u r a s u n s k i l l e d w o r k e r s fo r c a s h o r o t he r i n c o m e . T he y a r e c o n s i d e r e d u n d e r e m p l o ye d , a s e m p l o y m e nt i s no t s t a b l e & r e g u l a r . E xa m p l e s i n c l u d e s c a v e ng e r s , p i e c e w o r k e r s , c o n s t r u c t io n a n d f a r m w o r k e r s . Vu lner a ble Po o r:

P r e d o m i n a nt l y w o m e n, c h i l d r e n, t he f r a i l a nd t he o ld . T he y a r e d e p e n d e n t o n t h e e a r n i n g s o f o t he r s , d e s p it e t h e i r e c o no m i c c o nt r i bu t io n f r o m p a r t t i m e d a i l y s e r v i c e e m p lo y m e nt . P o o r p e o p le i n e a c h o f t he s u b- g r o u p s h a v e d i f f e r e n t n e e d s a n d e x p e nd it u r e p a t t e r n s , w h i c h a l s o v a r y a c c o r d i n g t o g e n d e r , a g e , f a m i l y s t a t u s , e n v i r o n m e n t ( r u r a l / u r ba n ) , e t h n i c b a c k g r o u n d e t c . D r a w i n g a br o a d d i s t i n c t io n, J o h n s o n d e s c r i b e s t ho s e a t t he bo t t o m o f t h e p y r a m i d a s p r i m a r i l y n e e d i n g i n c o m e p r o t e c t io n t o g a i n e c o no m i c s e c u r it y , w h i l e t ho s e c lo s e r t o t he t o p o f t he p yr a m i d r e q u i r e i n c o m e p r o mo t io n. A c o m mo n l y he l d a s s u m p t i o n i n e a r l y m i c r o c r e d it s c h e m e s w a s t h a t t he p o o r w e r e no t a b l e t o s a ve . I n f a c t , s e c u r e s a v i n g s w h i c h m a i n t a i n t he i r va l u e , a nd fo r m s o f i n s u r a nc e , a r e q u it e c r u c i a l t o t he p o o r e s t i n p r o t e c t i n g w h a t t he y e a r n, w he n t h e y e a r n it . T ho s e w ho a r e s e l f - e m p lo ye d i n s o m e fo r m o f t r a d i n g o r s e r v i c e a ls o r e q u i r e a c c e s s t o c a p it a l t o p r o mo t e e a r n i n g p o t e nt i a l t hr o u g h a s s e t a c q u i s it io n, bu s i n e s s e xpa ns io n et c. GENDER ISSUES I t i s c r it i c a l t o e xa m i n e t h e c o nt e xt o f a p r o p o s e d M i c r o f i n a n c e i n it i a t i v e f r o m a g e nd e r p e r s p e c t i v e p r io r t o d e ve lo p m e nt a nd d e s i g n. N o i n t e r ve nt io n c a n ha v e ne u t r a l e f f e c t s w h e n t he p l a ye r s d o no t s t a r t a s e q u a l s . G e n d e r r e l a t io ns t he m s e l v e s a f f e c t a p r o je c t s a b i l it y t o d e l i v e r t h e o u t co m e s a nd i m p a c t it p r o p o s e s . G e nd e r a w a r e ne s s [ ] s t a r t s fr o m r e c o g n i s i n g t h a t a p r o j e c t w i l l a l w a ys a f f e c t me n a nd w o m e nd i f f e r e nt l y . Wo m e n f a c e a va r i e t y o f o b s t a c l e s o r c o ns t r a i nt s t o t a k i ng a n d r e p a y i n g c r e d it , s t a r t i n g u p a n d d e v e lo p i n g t h e i r bu s i n e s s e s , a n d r e s p o n d i n g t o p o l i c y i n c e nt i v e s . T h e s e o b s t a c l e s a r e t h e o u t c o me o f e x i s t i n g g e nd e r r e l a t io n s .

h e fo l lo w i n g m a t r i x w a s d e v e l o p e d b y S u s a n J o h n s o n. 5 It ident ifies various obstacles whichw o m e n ma y f a c e i n t he d i f f e r e nt s p h e r e s o f t h e i r l i v e s , t ha t ha v e a n i m p a c t o n t h e i r a b i l i t y t o t a k e u p m i c r o f i n a n c e a n d u s e it a s t h e y c ho o s e . G E N D E R - B AS E D O B S T A C L E S I N M I C R O F I N A N C E AN D MICROENTERPRISE:

Individual Women lack access tobanks/financial servicesin own right. Househo ld Mens control over cashincome; mensexpenditure patterns. Wider Co mmunit y/Nat ional Context Percept ions of men ascontrollers of money/loans F i n a n c i a l / E c o no m i c Women undertakeactivities which producelow returns; womenhave a heavy domesticworkload. Gender division of labour; unequal accessand control of land,labour and inputs,unequal control of joint household produce andincome stream from this. Women underpaid forequal work, womenlocked in low-paid jobs;stereotypes of appropriate roles forwomen in the economy;lack of access to marketsfor inputs and outputs if mobility constrainedbecause of social norms.

S o c ia l / C u lt u r a l Women not literate oreducated; girls educat ion not priorit ized Limited role for womenin household decisionmaking; polygamyresults in conflict/compet it ion anddiscriminat ion betweenwives; violence towardswomen Banks and financialinst itut ions do not viewwomen as potentialmarket; womensmobilit y constrained bysocial norms P o l it i c a l / l e g a l Women lack confidenceto claim polit ical/legalrights Women lack legal rightsto joint ly ownedhousehold assets Womens legal rights tohouseho ld assets notdefined in law or usefulfor collateral; womenlack polit ical posit ions toestablish appropriatelaws; women lack bothtraditional and formalrights to own land

ACTIVITY TWO Micro fina nce D es ig n U sing in fo r mat io n fro m t he a bo ve t able , list a s ma n y a spe ct s o f p r o g r a m m e d e s i g n yo u c a n t h i n k o f w h i c h c o u ld a d d r e s s t he s e r e a l it i e s ? ( e g , e d u c a t io n) W h a t s t r a t e g i e s a n d t a r g e t g r o u p s m i g h t b e u s e d t o a d d r e s s g e n d e r i s s u e s ? ( e g , g e nd e r t r a i n i n g i n t he c o m m u n it y

ACTIVITY THREE I n mo s t c r e d i t s c h e m e s it i s fo u n d t ha t wo me n a r e be t t e r r e p a ye r s . T he y p a y mo r e p u nc t u a l l y a nd d e f a u l t l e s s o ft e n t ha n m e n , he n c e t he t a r g e t i n g o f w o m e n i s no t o n l y s o c i a l l y d e s i r a b l e , bu t a l s o ma k e s e c o no m i c s e n s e . 6 What a s su mpt io ns ar e e mbe dd ed in t his r at io na le fo r t ar g et ing wo men? A r e t h e y d e v e l o p m e n t a l l y s o u n d ?

C o n t r o l & d o m e s t i c v io l e n c e T h e c o mp l e x w e b o f r e l a t io n s h i p s a n d i n t e r a c t io n s in ho u s e ho l d , v i l l a g e a n d c o m m u n it y n e e d t o be u nd e r s t o o d and m o n it o r e d a s a n y d e v e lo p m e n t i n t e r v e n t io n i s b e i n g i m p l e m e nt e d , p a r t i c u l a r l y w he r e mo n e y i s c o n c e r n e d . I s s u e s o f p o w e r a nd c o nt r o l i m p a c t o n r e l a t io ns h i p s a t a l l l e v e l s . T h e r e a r e m a n y d a n g e r s fo r bo t h m e n a n d w o m e n i n e x c l u d i n g m e n fr o m a c c e s s t o c r e d it o r no t d e a l i n g e x p l i c it l y w i t h t h e s e i s s u e s i n fo r m a t io n, p l a n n i n g a n d o n g o i n g d e l i v e r y o f p r o g r a m m e s . E x c l u d i n g m e n f r o m c r e d it o p p o r t u n it i e s m a y i nt e n s i f y t he e x p lo it a t io n o f w o me n w i t h i n ho u s e ho l d s , a n d a t t h e s a m e t i m e l i m it t h e p o s s i b i l i t i e s fo r a c h i e v i n g br o a d e r a t t it u d i n a l c h a n g e a mo n g m e n

ACTIVITY FOUR R e a d t h e fo l l o w i n g q u o t e : In a context such as Bangladesh, men retain by far the greater balance of sociocultural power. The small gains which women might make part icipat ing indevelopment programmes cannot be protected from male control, unless mensattitudes change or men perceive a tangible benefit for themselves. This couldbe achieved through intensive qualitat ive invest ment in changing menspercept ions of womens worth which is often beyond the capacit y orcommit ment of development programmes or through ensuring that mensaccess to resources is not constrained in proportion to womens increasingaccess, in an apparent ly zero sum manner. Ideally the two should go together. 7 W h a t k e y i s s u e s a r e r a i s e d i n t h i s q u o t e ? W ha t a r e t h e i m p l i c a t io n s o f t h e s e i s s u e s fo r yo u r o r g a n i s a t io n s w o r k i n Microfinance? (think about appraisal/monitoring/evaluat ion). W h a t a r e t h e k e y a s p e c t s t o c o n s i d e r i n c ha l l e n g i n g c u lt u r a l no r m s a n d va l u e s ? ACTIVITY FIVE Y o u a r e o n a mo n it o r i n g v i s it t o a p r o g r a m m e a r e a a n d d i s c o ve r t h e fo l l o w i n g i n fo r m a t io n : 6 0 % o f a l l w o m e n o f r e p r o d u c t i v e a g e i n t h i s v i l l a g e s a i d t h e y ha d be e n b e a t e n b y t h e ir h u s b a n d s d u r i n g t h e p r e c e d i n g

y e a r . T h i s v i l l a g e a l s o h a d t he h i g h e s t p e r c e nt a g e o f w o m e n w ho w e r e c o n t r i b u t i ng t o f a m i l y s u p p o r t ( 4 1 % ) . T h e r e w a s f r e q u e nt c o n f l i c t o v e r r ig h t s t o a s s e t s , a nd o ne t h i r d o f t he w o m e n s a i d t ha t t he i r hu s b a nd s o r o t h e r r e l a t i v e s h a d s e i z e d t h e i r mo n e y o r a s s e t s w it ho u t p e r m i s s io n d u r i n g t h e y e a r p r e c e d i n g t he i n t e r v i e w . A s k e d t o e xp l a i nt h e h i g h i n c i d e n c e o f w i f e b e a t i ng i n h i s v i l l a g e , a n e l d e r l y m a n s a i d : O u r w i v e s w o u l d no t b e b e a t e n s o m u c h i f t h e y w e r e o b e d i e nt a nd fo l lo w e d o u r o r d e r s , bu t w o m e n d o n o t l i s t e n t o u s , s o t he y g e t be a t e n o ft e n. 8 What mig ht be so me o f t he o pt io ns ( s ho r t and lo ng t er m) yo u a n d p r o g r a m m e s t a f f c o u l d c o ns i d e r i n a d d r e s s i n g t h e c o nc e r n s o f t h e m e n a ndt he wo me n? E x a m i n e t h e a d v a n t a g e s a n d l i m i t a t i o n s o f e a c h s t r a t e g y f r o m t h e v i e w p o i nt o f e a c h o f: t h e o ld e r w o me n, t he yo u ng e r w o me n , t h e o ld e r m e n a n d t h e yo u ng e r m e n

ACTIVITY SIX F a c t o r s i n G e nd e r R o l e s F o r i n d i v i d u a l r e f l e c t io n: W h a t f a c t o r s i n f l u e n c e c h a n g e i n r o l e s a n d r e s p o n s i b i l i t i e s ( i n c l u d i n g f i n a n c i a l a s p e c t s ) be t w e e n a d u lt s i n yo u r h o u s e h o l d , o r a ho u s e ho l d yo u a r e q u it e fa m i l i a r w it h ? T h i n k o f a r e c e n t c h a n g e a n d be s p e c i f i c i n i d e nt i f y i n g t h e f a c t o r s . I n y o u r o b s e r v a t i o n o r k n o w l e d g e o f p o o r c o m m u n i t i e s y o u r a g e n c y w o r k s w i t h, w ha t f a c t o r s i n f l u e nc e c h a ng e i n g e n d e r r o le s i n ho u s e ho l d s ? T h i n k o f s p e c i f i c e x a m p l e s t o he l p yo u i d e nt i f y t he f a c t o r s . A r e t h e r e a n y s i m i l a r i t i e s bet we e n t he a nsw er s t o t he t wo qu est io ns ? D is cu s s w it h c o l l e a g u e s yo u r a n s w e r s t o t h e s e c o n d q u e s t io n a n d p r io r it i s e each a n s w e r i n o r d e r o f s i g n i f i c a nc e fr o m M O S T s i g n i f i c a nt f a c t o r t o L E AS T s i g n i f i c a nt f a c t o r . W ha t d i f f e r e n c e s i n p r io r it y d o fe m a l e a n d m a l e st aff o bser ve? N e x t t i m e y o u u n d e r t a k e a m o n i t o r i n g v i s i t , e n g a g e p a r t n e r a g e n c y s t a f f a nd p r o g r a m m e p a r t ic i p a nt s i n t h i s e x e r c i s e . B e s u r e t o d i f f e r e nt i a t e m a l e a nd f e m a l e r e s p o n s e s , a n d t h i n k a bo u t o t he r d i m e n s io n s t o o s u c h a s a g e , s t a t u s i n t he c o m m u n it y e t c

ACTIVITY SEVEN A g e n d e r s t r a t e g y fo r m i c r o f i n a n c e S c e n a r io : Y o u ha v e be e n i n v it e d t o a m e e t i n g o f i nt e r n a t io na l d e v e lo p m e nt p o l i c y a na l ys t s t o d i s c u s s t he f i n d i n g s o f s o m e i n - d e p t h r e s e a r c h o n g e n d e r i s s u e s i n M i c r o f i n a n c e d e l i v e r y. T he g r o u p i s w o r k i n g w it h t h e fo l l o w i n g i n fo r m a t io n : S o m e w o m e n d o u nd o u bt e d l y b e ne f it s u b s t a nt ia l l y fr o m s o m e p r o g r a m m e s , i n c r e a s i n g t h e i r i n c o m e s a nd u s i n g t h i s t o r a i s e t h e i r b a r g a i n i n g p o w e r i n t h e ho u s e ho ld a nd t he i r s t a t u s i n t he c o m m u n it y. I n mo s t p r o g r a m m e s ho w e v e r , t he r e w e r e s e r i o u s l i m i t a t io n s t o t he d e g r e e t o w h i c h w o me n b e n e f it e d : - i n s o m e c a s e s , s i g n i f i c a n t n u m b e r s o f

wo me n d id no t co nt r o l lo a n us e ;- mo st wo me n wer e in vo lve d in l o w - p a i d t r a d i t i o n a l l y f e m a l e a c t i v i t i e s , a n d inc rease s in inco me were sma ll;- w o m e n s r e s p o n s i b i l i t y f o r e x p e n d i t u r e o n h o u s e h o l d c o n s u m p t i o n a n d f o r u np a i d d o m e s t i c w o r k l i m it e d t h e r e s o u r c e s a nd t i m e t h e y c o u l d i n v e s t i n e c o no m i c a c t i v i t y; - M i c r o f i n a n c e p r o g r a m m e s w e r e s o m e t i m e s i n c r e a s i n g d o m e s t i c t e n s i o n , a s m e n w it hd r e w t h e ir o w n i n c o m e s o n c e w o m e n w e r e e a r n i n g o r wo m e n s t r u g g l e d t o r et a i n c o n t r o l o f t h e i r e a r n i n g s . T h i s h a d i n s o m e c a s e s le d t o d i vo r c e , a b a n d o n m e nt , a nd d o m e s t i c v io l e n c e ; - G r o u p r e p a y m e n t p r e s s u r e s w e r e s o m e t i m e s i n c r e a s i n g t e n s i o n s b e t w e e n wo me n;- M a n y ( t h o u g h b y n o m e a n s a l l ) w o m e n s m a i n c o n c e r n w a s t o i n c r e a s e t he ir inco me a n d w e l f a r e o f t h e i r f a m i l y r a t he r t h a n w id e r s o c i a l a nd p o l it i c a l a c t i v it y . T he s e l i m i t a t io n s p o i nt t o t he w i d e s p r e a d n e e d fo r mo r e e xp l i c it m e a s u r e s t o a d d r e s s g e nd e r s u bo r d i n a t i o n bo t h a t t he e nt e r p r i s e a nd h o u s e h o l d l e v e l s . T h e y a l s o i n d i c a t e t ha t w o me n s o w n p e r c e i v e d n e e d s m u s t b e a d d r e s s e d a lo n g w it h u n d e r l y i ng g e nd e r i n e q u a l i t i e s . 9 What ar e t he po lic y imp lic at io ns o f t he s e f ind ing s fo r t he d e v e l o p m e n t a n d d e l i v e r y o f M i c r o f i n a nc e ? D e v e l o p s e v e r a l p o l i c y r eco mme nd at io ns t o addr e s s t he se co ncer ns .

MODELS: DESIGN FEATURES IN MICROFINANCE P o o r p e o p l e s ne e d s a nd c o nt e xt a r e c r it i c a l d e t e r m i n a nt s i n t he d e s i g n o f m i c r o f i n a n c e s c h e m e s . W h i l e t he r e a r e a n u m b e r o f d e s i g n f e a t u r e s t h a t h a v e e v o l v e d , t he a p p l i c a t io n o f a n y s e t o f f e a t u r e s m u s t be c a r e f u l l y c o n s i d e r e d i n l i g ht o f t he o ve r a l l o b j e c t i v e s a nd lo c a l s o c i a l a nd e c o no m i c c ir c u m s t a nc e s . I n it i a l a s s e s s m e nt s ho u l d i n c l u d e q u e s t io n s s u c h a s W h a t a lr e a d y e x i s t s ? W h e r e a r e t h e g a p s ? W h a t a r e t he ne e d s ? L o w l e v e l, s e l f m a n a g e d a n d o w n e d s c h e m e s c o s t mu c h l e s s t o r u n. L a r g e s c a l e i n s t i t u t io ns c a n p r o v i d e a c c e s s t o l a r g e r a mo u nt s o f mo ne y mo r e q u i c k l y , b u t a r e c o s t l y a nd c a n r e q u i r e i n s t it u t io n a l fo r m s w h i c h r e s t r i c t lo c a l c o n t r o l, d e c i s io n- m a k i n g a nd o w ne r s h i p . I t is c r u c ia lt h a t t he d e s i g n f e a t u r e s a r e e x a m i n e d a t a n u m b e r o f l e ve l s . W h y a r e t he y t he b e s t f e a t u r e s fo r t h i s s it u a t io n ? W ho s e i nt e r e s t s d o t he y s e r v e ? W h a t a r e t he i m p l i c a t io n s fo r e m p o w e r m e n t o f t he t a r g e t g r o u p / w ha t i m p l i c a t io ns d o t h e y h a v e fo r no n- t a r g e t g r o u p s ? W h a t a r e t he d i s a d v a nt a g e s ? D o t he y f i t w it h i n t h e o r g a n i s a t io n s o b j e c t i v e s ? W ho w a s i n vo lv e d i n t h e i r d e v e l o p m e nt ?S o m e p r i n c i p l e s , i d e nt i f i e d b y J o h n s o n & R o g a l y, 10 which underlie key design features inM i c r o f i n a n c e a r e : Po vert y Targ et ing: m a n y s c h e m e s no w p r a c t i c e s e l f - s e l e c t io n t hr o u g h k e e p i n g lo a n s i z e s s m a l l , a nd d e m a n d i n g r e g u l a r a t t end a n c e a t m e e t i n g s w h i c h be t t e r o f f p e o p l e w o u l d f i n d t i m e - c o n s u m i n g o r s o c i a l l y d i f f i c u lt t o a t t e nd . S o me s c h e m e s u s e m e a s u r e s t o d ir e c t l y t a r g e t p o o r p eo p le , s u c h a s w e a l t h

r a n k i n g . S e l f - s e l e c t io n lo w e r s t he c o s t s bu t c a n no t be a s s u m e d t o e xc l u d e t h e b e t t e r - o f f e nt ir e l y, e s p e c i a l l y i f lo a n s i z e s s t a r t t o r i s e a s t he s c h e m e p r o g r e s s e s . L o a n s i z e a s a f e a t u r e o f t a r g e t in g c a n c r e a t e a d i l e m m a i f it p r e ve nt s p o o r p e o p l e e v e r t a k i ng o n l a r g e r lo a n s . Wo m e n a s s c h e m e u s e r s : m a n y s c h e m e s a r e d e s i g n e d t o p r o v i d e w o me n w it h c r e d it . H o w e v e r , a s p r e v io u s l y s t a t e d , it c a n no t be a s s u m e d t ha t d i s bu r s i n g l o a n s t o wo me n m e a n s e it he r t h a t t he y u s e t he m o r t ha t t he y a r e e m p o w e r e d . S c he m e i m p l e m e nt e r s n e e d t o be c l e a r a bo u t t he o b j e c t i v e s o f g e n d e r - r e l a t e d i n t e r v e n t io n, a nd u nd e r s t a n d t he i m p l i c a t io ns t ha t t h i s c a n h a ve i n r e l a t io n s b e t w e e n m e n a n d w o m e n. T h e y s ho u l d a l s o f i n d w a ys o f s u p p o r t i ng w o m e n s o w n s t r a t e g i e s fo r e n h a n c i n g t he i r p o s it i o n. L e n d i n g t hr o u g h g r o u p s : g r o u p s h a v e be e n a c o m mo n c o m p o n e n t o f m e t ho d o lo g i e s fo r l e n d i n g t o t h e p o o r a nd a r e a u n i q u e a n d k e y f e a t u r e o f t he m a j o r it y o f M i c r o f i n a n c e s c h e m e s . T he y a r e s e e n a s a n e c o no m i c a l w a y t o d e l i v e r M i c r o f i n a n c e b y r e d u c i n g s c r e e n i n g c o s t s a n d f i n a n c ia l r i s k , be c a u s e o f g r o u p p r e s s u r e t o i nt e r n a l l y mo d e r a t e c o mp l i a n c e . H o w e v e r bu i l d i n g , d e v e lo p i n g a nd m a i nt a i n i n g e f f e c t i v e g r o u p d yn a m i c s i s a n a r t i n it s e l f . Y u nu s , t he fo u n d e r o f t he g r o u p c o nc e p t w it h i n M i c r o f i n a n c e s c h e m e s , p r o v i d e s a r a t io na l e a n d s o m e g u i d e l i n e s : S a v i n g s p l u s c r e d i t c a n b e a g o o d s t a r t i n g p o i nt fo r g r o u p fo r m a t io n. T h e r e i s a g r e a t i n c e nt i v e t o fo r m a g r o u p i f p e o p l e s e e t h a t it i s t h e o n l y w a y o ne c a n g e t a c c e s s t o cr e d it . B y r e s t r i c t i ng t h e s i z e o f t h e g r o u p t o a s ma l l n u m b e r , t h e c o n c e nt r a t io n o f p o w e r i n a s i n g l e p e r s o n (t he gro up lead er) ca n be redu ce d. In s ma ller gro up s sa y o f 5 ea c h m e m b e r h a s b e t t e r a c c e s s t o i n fo r m a t io n a n d t o t he l e a d e r t h a n w o u l d b e t he ca s e in a

l a r g e r g r o u p . G r o u p s s ho u l d b e fo r m e d b y t h e m s e l v e s r a t h e r t ha n b y t h e b a n k a g e nt . G r o u p s o l i d a r it y w i l l b e s t r o ng e r i f t he g r o u p c a m e i nt o be i n g t h r o u g h t h e i r o w n n e g o t ia t io n s . 11 T h e s e c o n d r e g io n a l w o r k s ho p o n B a n k i n g w i t h t he P o o r i d e n t i f i e d 1 6 p r i n c i p l e s fo r b e s t p r a c t ic e i n s e l f - h e l p g r o u p s , m a n y o f w h i c h r e i n fo r c e t ho s e h i g h l i g ht e d b y Y u n u s . ( s e e Appendix 5.)I s s u e s o f Power, Purpose, Process and P a r t ic i p a t io n a r e a mo n g t he m a n y k e y a r e a s t ha t n e e d t o be a d d r e s s e d i n c o n s i d e r i n g a n d p r o mo t i n g t he g r o u p c r e d it c o n c e p t . Sa ving s:

V o l u n t a r y a nd f l e x i b l e s a v i n g s f a c i l it i e s h a ve s o fa r be e n a l a r g e l y u n m e t n e e d o f p o o r p e o p le . C o ns i d e r a t io n s ho u l d be g i v e n t o d e ve l o p i n g f l e x i b l e s a v i n g s m e c h a n i s m s , i n c l u d i n g g r o u p c o m mo n f u nd s a v i n g s . T h e e x i s t e n c e o f a c o m mo n f u n d g i v e s t he g r o u p e x p e r ie n c e i n mo n e y m a n a g e m e nt w h i c h i s i m p o r t a nt fo r a n y jo i nt e xp e r i e n c e . T h i s c o m mo n f u n d a l s o e n c o u r a g e s t h e m t o t a k e u p l a r g e r p r o j e c t s c o l l e c t i v e l y. 12 However, to operate as a v i n g s f a c i l it y i s t o t a k e r e s p o ns i b i l it y fo r o t he r p e o p l e s mo n e y, a n d s ho u l d no t be undertaken light ly. Int ere st Rat es: t h e r e i s no w w i d e s p r e a d a c c e p t a nc e o f t he ne e d t o c ha r g e i nt e r e s t r a t e s w h i c h c o ve r i n f l a t io n a nd m a k e a c o nt r i b u t io n t o t he c o s t s o f p r o v i d i n g t he s e r v i c e . T h i s r e a s s e s s m e n t ha s r e c o g n i s e d t h a t is o ft e n t h e a v a i l a b i l i t y r a t h e r t ha n t he c o s t o f c r e d it t o po o r p e o p l e w h i c h i s t he c o n s t r a i n i n g f a c t o r . L o ng - t e r m a va i l a b i l i t y r e q u ir e s t ha t t he lo a n f u n d d o e s no t be c o me e r o d e d t hr o u g h i n f l a t io n, a n d t ha t a d e g r e e o f c o s t r e c o v e r y e n s u r e s sustainabilit y. 13 G o o d p r a c t i c e i n m i c r o f i n a n c e i s b a s e d o n a l lo w i n g p e o p l e t o a r t ic u l a t e t h e i r n e e d s a nd e ng a g e i n t he p r o c e s s o f f i n d i n g s o l u t io ns w h i c h a r e lo c a l l y r e l e v a nt , a nd e m p o w e r i n g . Ad o p t i ng a b l u e - p r i n t a p p r o a c h w it h o u t c o n s i d e r a t io n o f c o nt e xt , ne e d s a nd i s s u e s a nd p a r t ic i p a t io n o f i nt e nd e d b e n e f i c i a r i e s c a n u n d e r m i n e d e ve l o p m e nt a l o b j e c t i v e s fo r t h e m a nd t he i r c o m m u n it i e s . D e s i g n f e a t u r e s s ho u l d b e c r it i c a l l y e xa m i n e d a nd t h e i r i m p a c t mo n it o r e d a n d r e v i e w e d ( s e e Ap p e nd i x 2 ) . T he fo l l o w i n g a c t i v it i e s h i g h l i g h t s o m e o f t h e s e i s s u e s a nd concerns in a pract ical way

ACTIVITY EIGHT Pro ble ms in gro ups R e a d t h e fo l l o w i n g e x c e r p t a nd a n s w e r t he q u e s t io ns o n t he fo l l o w i n g page: O n e o f t he f i r s t p r o b l e m s w e i d e nt i f i e d a t t he be g in n i n g o f t he ye a r w a s a m i s i n t e r p r e t a t io n o f t he g r o u p c o nc e p t . G r o u p fo r ma t io n w a s ( i s ) i n m a n y c a s e s j u s t a p r a c t i c a l m e a ns t o g e t a c c e s s t o c r e d it . W he n t he r e f o r e a g r o u p ha d t o d e c id e w ho s e m e m b e r s s ho u l d be f i r s t t o s u b m it a l o a n a p p l i c a t io n, s o m e g r o u p s d r e w lo t s . T h e s a v i n g s w e r e s e e n a s a no t h e r m e a n s t o g e t e a r l y a c c e s s t o lo a n s ( a t a m a x i m u m l i m it ) , a nd no t a s t he g l u e w h i c h h e l d t h e g r o u p t o g e t he r . We u s e d a lo t o f e f fo r t t o d e a l w it h t h i s p r o b l e m t hr o u g h m u c h b e t t e r i n fo r m a t io n t o t he s c h e m e m e m b e r s a b o u t t h e i m p o r t a n c e o f g r o u p fo r m a t i o n a nd d e ve l o p m e nt . Ac t u a l l y o u r o w n s t a f f a nd lo c a l l e a d e r s i n a r e a s fo r s c h e m e e x p a n s i o n ha d t o g r a s p t h e c o n c e p t b e t t e r . N u m e r o u s m e e t i n g s w e r e h e l d . W e l l - f u n c t io n i n g a n d c o h e s i v e g r o u p s a r e t he fo u n d a t io n o f t he w ho l e s c h e m e . W h i l e it i s t r u e t h a t i n d i v i d u a l s i n t he c o m m u n it i e s w e r e m a nd a t e d t o c ho o s e t he i r p e e r s ( fo r g r o u p m e m b e r s h i p ) , t he c o m m u n i t i e s w e r e no t g ive n t he m a n d a t e t o

h a v e a s a y o n t he g u a r a nt e e s ys t e m t he y w o u l d l i k e t o u s e . G r o u p g u a r a nt e e w a s r a t he r s o r t o f i m p o s e d , t ha n t h e c o m m u n it i e s o p t io n . T h i s i s b e i n g t e s t i f i e d t hr o u g h a p p l i c a t io n f o r d i s s o l v i n g t h e g r o u p s c o m i n g f r o m t h e d i f f e r e nt a r e a s . M o r e o ve r , no ne o f t he g r o u p s h a ve b y l a w s w h i c h b i n d t he m t o g e t he r . T he r e a r e c a s e s i n w h i c h t he m e m b e r s r e q u e s t fo r d i s s o l u t io n be fo r e e v e n t he f i r s t 2 m e mb e r s o f t h e g r o u p r e p a y t h e i r lo a n s .

W h e n a s k e d w h y t he g r o u p w a s d i s s o l v e d m e m b e r s g a v e t he fo l l o w i n g r e a s o ns , i n p r io r it y o r d e r : 1 . N o t g e t t i n g l o a n s ( a s e x p e c t e d ) o r w a i t i n g t o o l o n g b e f o r e e n t i t l e m e n t ( e g m i s s i n g t he p l a nt i n g se aso n) ;2 . L o a n s i z e ; 3 . N o t f i n d i n g t h e m a r k e t e n c o u r a g i n g f o r pr e se nt pr o du ct io n;4. I nt er na l d is a gr e e me nt in t he gr o up ;5 . N o b u s i n e s s p r e m i s e s ; 6. Do nt k no w w hat t o do wit h a lo a n ( la c k o f invest ment ideas). 14 H o w v a l u e d w a s t h e p a r t i c i p a t i o n o f m e m b e r s ? Which dec is io ns d id gr o up bo r r o wer s ha v e co nt r o l o ver , a nd w h i c h d e c i s io n s d i d t he o r g a n i s a t io n c o nt r o l ? W h y? W h a t i n f l u e n c e d id t h is h a v e o n g r o u p c o he s io n ? Does group pressure work fo r /a ga inst gr o up su ppo r t a nd co he s io n? What ar e t he ad va nt ag e s a n d d i s a d v a n t a g e s f o r b o t h t h e b o r r o w e r a n d le nder o f wo rk ing in groups? W h a t g r o u p d e v e lo p m e n t w o r k w o u ld b e n e c e s s a r y p r i o r t o t h e i n t r o d u c t io n o f a c c e s s t o lo a n s ? W h a t a r e t h e r i s k s o f i n t r o d u c i n g cr e d it int o a lr e ad y fo r me d gr o u ps ?

ACTIVITY NINE Scenario: You have been invited into an organisation which has been working withwomens self-help groups. They have been using a Self-Help Group AuditChecklist (as below) to ensure effect ive monitoring and accountabilit y in thegroup. They want some help to look at monitoring group processes to address theirconcerns regarding womens empowerment. A new section entitled AssessingEmpowerment in the Group may need to be developed in the Audit tool. W h a t p r o c e s s w o u l d y o u s u g g e s t f o r d e a l i n g w i t h t h i s r equ e st ? What su gg est io ns wo u ld yo u ma ke in d e ve lo p ing t he que st io ns ?

G R O U P AU D I T C H E C K L I S T AP P L I C AT I O N O F R U L E S W a s a t t e n d a n c e r e g u l a r ? D id t he gr o up ap p l y s a nct io ns in cases o f absenteeis m? D i d m e m b e r s s a v e a s p e r t h e r u l e s ? Did

t he gr o u p ap p ly s a nct io ns fo r ir r eg u lar sa v ing s ? D i d m e m b e r s r e p a y l o a n s a s p e r r u l e s ? D id t he gr o up a pp ly s a nct io ns o n irregular repayments?

D E C I S I O N - M A KI N G P R O C E S S E S A N D L O A N M A N A G E M E N T Wer e lo a n r e qu e st s t ho r o ug hly d is cu s se d a nd de c id e d ? D i d m e m b e r s h a v e c l e a r p l a n s f o r u s i n g l o a n s ? Wer e lo a ns pr io r it is e d ba s ed o n t he g e nu ine ne s s a nd ur g e nc y o f ne ed s ? W e r e decisions made collectively?Did poorer members get the l o a n s t h e y a s k e d f o r ? Did the group have large amounts o f cash o n h a n d f o r l o n g p e r i o d s ? A r e t h e r e a n y p r o b l e m s in u sing t he gro up f u n d ? D o p e o p l e ha v e e no u g h i d e a s t o m a k e u s e o f t h e f u nd s a v a i l a b l e w it h i n t he g r o u p ? W e r e t h e r e a n y u n a u t h o r i s e d u s e s o f funds? Are t here any r eported mis use o f cash in hand?

L O A N U T I L I S AT I O N W e r e l o a n s u t i l i s e d f o r t h e s t a t e d p u r p o s e s ? Does t he group ha ve a s yst e m fo r p h ys ic a l ver if ic at io n o f as s et s br o ug ht by m e m b e r s w i t h lo a n s ? D i d t he g r o u p u s e t h i s s ys t e m t o ve r i f y lo a n u t i l i s a t io n d u r i n g t h i s p e r io d ? D o l o a n s h a v e a n a d v e r s e i m p a c t o n a ny o f t he me mbe r s ? What d id t he gr o up do a bo ut it ? W e r e t h e r e any instances of sub-lending?Were there any cases of proxy borrowing?How did the members repay large instalments?

AS S E S S I N G WO M E N M E M B E R S E M P O WE R M E N T I N T H E G R O U P e g, D id me mbe r s ha ve ac ce s s t o t ra in ing in lo a n ut ilis at io n? ACTIVITY TEN M o n it o r i n g b e ne f i c i a r y e m p o w e r m e nt S c e n a r io : Y o u ha v e be e n a s k e d t o co nd u c t a mo n it o r ing v i s i t t o a M i c r o f i n a n c e p r o g r a m m e . As p a r t o f t h e v i s i t yo u w i l l h a v e s e ve r a l m e e t i n g s w it h d i f f e r e nt b e n e f i c i a r y g r o u p s . U s i n g t h e f o l l o w i n g F r a m e w o r k f o r A n a l y s i n g E m p o w e r m e n t t a b l e a n d yo u r o w n e x p e r i e n c e , d e v e lo p q u e s t io ns w h i c h w o u ld a s s i s t yo u t o a s s e s s t he l e v e l s o f e m p o w e r m e nt o f i n d i v i d u a l b e n e f i c i a r i e s a nd t h e ir g r o u p s ( e g , w ho m a k e s f i n a n c i a l d e c i s io n s i n t h e ho u s e ho l d ? H a s t h is c ha n g e d s i n c e t he p r o g r a m m e b e g a n ? W h a t f a c t o r s ha v e i n f l u e n c e d t h i s ? ) Z

ACTIVITY ELEVEN M o d e l s o f M i c r o f i n a n c e P r o v i s io n R e a d Ap p e nd i x 4 a nd a n s w e r t h e fo l lo w i n g q u e s t io n s : W h a t a r e t h e strengt hs and weaknesses o f t he models fro m a m e m b e r s p e r s p e c t i v e ? F r o m a n N G O s / o r g a n i s a t io n s p e r s p e c t i v e ? H o w wo u ld yo u r at e ea c h i n t er ms o f ge nder , e mpo w er me nt a nd s o c i a l d e ve l o p m e nt ? B o t h m o d e l s o r i g i n a t e d i n S o u t h A s i a w o u l d t h e y b e s u i t a b l e i n a d i f f e r e nt c o nt e x t , e g , t he P a c i f i c ? W h a t o t h e r f a c t o r s w o u l d n e e d t o b e c o n s i d e r e d t o m a k e t h e m r e l e v a n t t o t he Pac ific ? G r a m e e n B a n k s t a t e s t h a t t h e i r o b j e c t i v e i s a l s o s o c i a l i n t e r m e d i a t i o n ( t hr o u g h T h e S i x t e e n D e c i s io n s ) , h o w e v e r t h i s a s p e c t i s no t mo n it o r e d c lo s e l y a nd i n f a c t G B o p e r a t e s mo r e l i k e a ba n k . I s it p o s s i b l e t o ha ve a b a l a n c e be t w e e n f i n a n c i a l a nd s o c i a l o b j e c t i v e s ? I f s o , ho w w o u l d t h i s be e n s u r e d ? W h a t s c o p e d o y o u s e e i n N G O s t a k i n g a l i n k a g e r o l e b e t w e e n i n f o r m a l a n d fo r m a l fina nc ia l st ruct ures?

ACTIVITY TWELVE G u i d i n g p r i n c i p l e s a n d q u e s t io n s i n d e v e lo p i n g M i c r o f i n a n c e p r o g r a m m e s S c e n a r io : Y o u a r e w o r k i n g w i t h a n N G O p a r t n e r w ho s e b e ne f i c i a r i e s n o w w i s h t o s t a r t a M ic r o c r e d i t p r o g r a m m e . T he N G O h a s no e xp e r i e n c e i n t h i s f i e l d . T h e y h a ve r e q u e s t e d i n fo r m a t io n o n a va i l a b l e f u nd i n g a n d w a nt t o k n o w w h a t q u e s t io n s w o u l d b e he l p f u l t o g u id e t h e m t hr o u g h t h e p r o c e s s o f a n a l y s i n g n e e d a n d w h a t f a c t o r s t o c o ns i d e r i n d e v e l o p i n g a pro gra mme. B r a i n s t o r m a n d l i s t q u e s t i o n s , i s s u e s a n d p r i n c i p l e s w h i c h w o u l d b e h e l p f u l t o t he N G O p a r t ne r ( e g , i n w ha t w a ys d o m e m b e r s o f t he c o m m u n it yp r o v i d e fo r u n e xp e c t e d e x p e n s e s ? )

ACTIVITY THIRTEEN M i c r o c r e d it P e r fo r m a n c e M e a s u r e s S c e n a r io : Y o u ha v e be e n i n v it e d i nt o a n o r g a n i s a t io n w h i c h h a s b e e n r u n n i n g a l a r g e M i c r o c r e d it p r o g r a m m e fo r w o m e n. T h e y h a ve e s t a b l i s h e d s y s t e m s a n d s u c c e s s , a n d ha v e be e n d i s c u s s i n g ho w g e nd e r c o n c e r n s c a n b e r e f l e c t e d i nt h e i r o r g a n i s a t io n. L o o k a t t h e M i c r o c r e d i t P e r f o r m a n c e Measures table 16 b e lo w a n d br a i n s t o r m w h a t a d d it io n a l m e a s u r e s ( o r i nd i c a t o r s ) w i l l n e e d t o b e a d d e d i n o r d e r t o mo n it o r g e n d e r i s s u e s a c r o s s t he p r o g r a m m e . A d d r e s s b o t h q u a n t it a t i v e nu mber s a n d q u a l it a t i v e words

FOOTNOTES 1 C a p l a n , A. ; T h e D e v e lo p m e nt o f C a p a c it y , NGLS, US A 1999. p 16 2 V AS S H a n d bo o k : V o l u nt a r y A g e n c i e s S u p p o r t S c he m e , D e v e lo p m e nt C o o p e r a t io n D i v i s i o n( no w N Z A I D ) M i n i s t r y o f F o r e i g n A f f a i r s a nd T r a d e 1999 3 Re me n yi, 199 3 4 Ibid p 90 5 Jo hnso n, S.; G e n d e r I m p a c t As s e s s m e nt i n M i c r o f i n a nc e a nd M i c r o e nt e r p r i s e : W h y a n d How , D e v e lo p m e nt i n P r a c t i c e , V o l. 1 0 N o . 1 , F e br u a r y 2 0 0 0 6 w w w . g d r c . o r g . ic m 7 Groetz, 1996 8 Schuler, Hashemi & Badal, 1998, p 151 9 Ma yo u x, L. ; Wo m e n s E m p o w e r m e nt a n d M i c r o f i n a n c e p r o g r a m m e s : S t r a t e g i e s fo r I n c r e a s i n g I m p a c t , D e v e lo p m e nt i n P r a c t i c e , V o l 8 N o . 2 , M a y 1 9 9 8 10 Johnson & Rogaly, 1997, pp56-57 11 Yunus, ACORD, R e s e a r c h o n G r o u p D e ve lo p m e nt i n S e r a ye C r e d it a nd S a v i n g s S c h e m e , A s m a r a / L o nd o n, M a r c h 1 9 9 5 , P a r t i c i p a t o r y R u r a l Ap p r a i s a l ( P R A) T o p i c P a c k 1 , p 6 12 Ibid p 102 13 Johnson & Rogaly, 1997 14

A G r a m e e n B a nk r e p l i c a s c h e m e w it h p r o b l e m s P a r t ic i p a t o r y R u r a l A p p r a i s a l ( P R A) T o p ic P a c k 1 9 9 8 , p 7 - 1 0 15 Ma yo u x, L. ; I mp a c t A s s e s s m e nt a nd Wo m e n s E m p o w e r m e nt i n M i c r o f i n a n c e P r o g r a m m e s : I s s u e s fo r P a r t i c i p a t o r y A c t io n a n d L e a r n i n g Ap p r o a c h , B a c k g r o u nd p a p e r fo r C G AP m e e t i n g A p r i l 7 - 1 9 , 1 9 9 7 i n S o r e n s o n, C . ; M i c r o f i n a n c e & M i c r o e nt e r p r i s e D e v e l o p me nt , PRA TopicP a c k 2 , I n s t it u t e o f D e ve l o p m e nt S t u d i e s 1 9 9 8 16 w w w . g d r c . o r g / ic m / g o v e r n/ o e c d - p e r fo r m a n c e . ht m l

SECTION 3RESOURCES& APPENDICES

RESOURCESBooks Conro y, J., Taylor, .K & Thapa, G.; B e s t P r a c t ic e o f B a n k i n g W it h t h e P o o r , The Foundat ion forD e v e lo p m e nt C o o p e r a t io n, B r i s b a n e , 1 9 9 4 Getubig, I., Remenyi, J. & Quinones, B. (eds); C r e a t i n g t h e V i s io n ; M i c r o f i n a n c i n g t h e p o o r i n A s ia - P a c i f i c i s s u e s , c o n s t r a i n t s a nd c a p a c it y b u i l d i n g , A s i a n & P a c i f i c D e v e lo p m e n t C e nt r e , M a l a ys i a , 1 9 9 7 Harper, M.; P r o f it fo r t h e P o o r : C a s e s i n M i c r o f i n a n c e , Intermediate Technology Publicat ions, London, 1998Harper, M. & Finnegan, G.; V a l u e F o r M o n e y ? I m p a c t o f S m a l l E nt e r p r i s e D e v e lo p m e nt , I n t e r m e d i a t e Technology Publicat ions, London, 1998Johnson, S. & Rogaly, B.; M i c r o f i n a n c e a n d P o v e r t y R e d u c t io n , O x f a m, U K , 1 9 9 7 MFAT, Development Cooperation Division, M i c r o c r e d it i n t he P a c i f i c I s l a n d s , W e l l i n g t o n, J u n e 1 9 9 8 Rutherford, S.; T h e P o o r a nd T h e i r M o ne y , Department of Internat ional Development, Oxford Universit yP r e s s , N e w D e l h i , 2 0 0 0 Remenyi, J; W h e r e C r e d it i s D u e i n c o m e - g e n e r a t i ng p r o g r a m m e s f o r t he p o o r i n d e v e lo p i n g c o u nt r ie s , Intermediate Technology, UK, 1993Todd, H.; Wo men at the Centre; Grameen Bank borrowers after one decade, Westview, USA/UK, 1996 Articles P r o mo t i n g I n s t it u t io n a l I n no va t io n i n M i c r o f i n a n c e ; R e p l i c a t i ng B e s t P r a c t i c e i s no t E no u g h M. Zeller, D+C Development and Cooperation, No.1, 2001 M i c r o c r e d it , M i c r o f i n a n c e o r S i m p l y A c c e s s t o F i na n c i a l S e r v i c e s : W h a t do Pac ific Peo p leN ee d ?

R. Cornford, Foundat ion for Development Cooperation, Brisbane, conference paperPovert y, Prosperit y & Progress, Wellington, 2000 Wo mens Empowerment and Microfinance programmes: Strategies for Increasing Impact L . M a yo u x, D e ve lo p m e nt i n P r a c t ic e , V o l. 8 , N o 2 M a y 1 9 9 8 L o c a l V e r s u s F u n d e r N o t io n s o f P r o s p e r it y i n a M i c r o c r e d i t S c h e m e i n t h e K i n g d o m o f T o ng a : A case study about culture and development J. Horan, Department of Anthropology, Auckland Universit y, conference paper Povert y Prosperit y & Progress, Wellington, 2000. W h o T a k e s C r e d it ? G e n d e r , P o w e r a nd C o nt r o l o ve r L o a n U s e i n R u r a l C r e d it P r o g r a m m e s i n Bangladesh A. Goetz, & R. Gupta, World Development, Vol. 24 No. 1, 1996

Mens Violence Against Women In Rural Bangladesh: Undermined or Exacerbated byM i c r o c r e d it P r o g r a m m e s ? S. Schuler, S. Hashemi & S. Badal, Development in Pract ice, Vol. 8 No. 2, May 1998 M i c r o c r e d it : T he D e ve l o p m e nt D e v a s t a t io n o f t he P o o r F. Akhter, Ubinig, Bangladesh, conference paper APRN, Indonesia, 2000 G e n d e r I m p a c t As s e s s m e nt i n M i c r o f i n a nc e a nd M i c r o e nt e r p r i s e : W h y a n d How S. Johnson, Development in Pract ice, Vol. 10 No. 1, February 2000 NGO-Promoted Microcredit Programs and Womens Empowerment in Rural Bangladesh:Q u a nt it a t i v e a nd Q u a l it a t i v e E v i d e nc e R . A m i n , S . B e c k e r & A. B a ye s , T h e J o u r na l o f D e ve l o p i n g A r e a s , W i n t e r 1998 Websites DEV-ZONE.ORG (Also known as The Development Resource Centre)PO Box 12440WellingtonNew ZealandInternet: http://www.dev-zone.org D e v Z o ne K no w l e d g e C e nt r e o n M i c r o f i n a n c e ; Ar t i c l e s , o r g a n i s a t io ns , e m a i l u p d a t e s t o s u b s c r i b e t o . http://www.devzone.org/links/Economic_Development/Microfinance/ T h e V i r t u a l L i b r a r y o n M i c r o c r e d it by the Global Development Research CentreThe VLM was set up to be a repository of informat ion on microcredit NGOs, poverty, environment,m i c r o e nt e r p r i s e s e t c . ) . I t s ma i n a i m i s t o s u p p o r t m i c r o f i n a n c e a n d r e l a t e d a c t i v i t i e s w it h i n f o r m a t io n o np o l i c i e s , s t r a t e g i e s , t o o l s , c a s e s t u d i e s e t c . http://www.gdrc.org/icm/ S u s a n J o h n s o n: L e c t u r e r i n D e v e lo p m e nt E c o no m i c s Depart ment of Economics & Internat ional DevelopmentU n i v e r s it y o f B a t h, U K. Microfinance North & South: Contrasting Current Debates - Feb 97http://staff.bath.ac.uk/hsssaj/northsou.htmG e nd e r & M i c r o f i n a n c e : G u i d e l i n e s fo r G o o d P r a c t ic e ( no d a t e ) http://staff.bath.ac.uk/hsssaj/gender.htmProgramme Impact Assessment in

Micro finance: the need for analysis of real markets - May 1998http://staff.bath.ac.uk/hsssaj/idsbulle.htmDevelopment Studies Network (DSN)R e s e a r c h S c ho o l o f S o c i a l S c i e n c e s , Au s t r a l i a n N a t io na l U n i v e r s it yht t p : / / d e v n e t . a nu . e d u . a u S e l e c t e d jo u r na l a r t ic l e s f r o m Micro finance for Poverty Reduct ionD e v e lo p m e nt B u l l e t i n No. 57 February 2002Table of contents:http://devnet.anu.edu.au/contents57.pdf

Publishers with New Books on Microfinance: Ku mar ia n Pre ss http://www.kpbooks.com Zed Books http://www.zedbooks.demon.co.uk/ O x fo r d U n i v e r s it y P r e s s http://www.oup.co.uk L a s t F ir s t N e t w o r k ITDG Pu blish ing http://www.itdgpublishing.org.uk/ Westview Press http://www.westviewpress.com/

APPENDIX 1 A GENDER STRATEGY FOR MICROFINANCE ( fr o m L i n d a M a yo u x, Wo m e n s E m p o w e r m e nt A nd M i c r o f i n a n c e P r o g r a m m e s : S t r a t e g i e s Fo r Increa sing I mp a ct , D e v e lo p m e nt i n P r a c t i c e , M a y 1 9 9 8 ) C o nd i t io n s o f M i c r o f i n a n c e d e l i v e r y s h o u l d b e f l e x i b l e t o w o m e n s a s p i r a t i o ns , ne e d s a nd e x i s t i n g s t r a t e g i e s . T h i s i n c l u d e s c o n s i d e r i n g t h e t yp e s o f lo a n s a nd s a v i n g s c o nd it io n s t h a t w o u ld m a x i m i s e w o m e n s c o nt r o l o v e r lo a n a nd s a v i n g s d e c i s i o n s , u s e a n d i n c o m e g e ne r a t e d . T h e e v i d e n c e i n d i c a t e s t ha t s u c h c o nt r o l va r i e s w it h s i z e o f lo a n s , a c t i v it i e s fo r w h i c h t he y a r e g i v e n , a nd t h e p a t t e r n s o f s a v i n g s . I t m a y a l s o b e i n f l u e n c e d b y t h e t yp e s o f c o nd it i o n s i m p o s e d b y d e v e lo p m e nt a g e n c i e s t o p r o t e c t lo a n s a nd s a v i n g s f r o m b e i n g c o mp l e t e l ya b s o r b e d i n t h e ho u s e ho l d c o ns u m p t io n, e g , a p o r t fo l i o o f s p e c i f i e d p r o d u c t io n a nd c o n s u m p t io n l o a n s w it h a s s e t s r e g i s t e r e d i n w o me n s na m e s . A l l t he s e f a c t o r s a r e , ho w e v e r , c o nt e xt - s p e c i f i c a n d c a n o n l y b e d e c i d e d t hr o u g h p r o p e r c o ns u lt a t io n. C o mp l e me nt a r y s e r v i c e s t o inc lud e: Aw a r e n e s s t r a i n i n g i n g e n d e r i s s u e s fo r m e n a nd w o m e n t o e n s u r e t h a t M i c r o f i n a n c e l e a d s t o po s it i v e c h a ng e s i n w o m e n s p o s it io n r a t h e r t h a n e xa c e r b a t i ng d o m e s t i c c o n f l i c t ; Pro visio n o f ser vic e s t o decrea se r epro duct ive wo rk

t o g i v e w o m e n mo r e t i m e fo r i n c o m e - e a r n i n g a nd fo r w i d e r s o c i a l a n d p o l it i c a l a c t i v it i e s . D e c r e a s i n g w o m e n s w o r k lo a d , in c l u d i n g bo t h c ha n g e s i n h o u s e ho l d g e n d e r d i v i s i o n o f l a bo u r a n d s e r v i c e p r o v i s io n, i s a l s o e s s e nt i a l t o a vo id i n g t he p o t e nt i a l l y n e g a t i v e i m p a c t s o n c h i l d r e n, p a r t ic u l a r l y g ir l s ; G e n d e r a d vo c a c y a t lo c a l a nd n a t io n a l l e v e l s b o t h t o s u p p o r t w o me n w ho h a ve f a c e d s e r io u s d o m e s t i c v io l e n c e a nd a b a n d o n m e nt a n d t o co nt r i bu t e t o w id e r c h a ng e s i n le g i s l a t io n, a c c e s s t o r e s o u r c e s , a nd p e r c e p t io ns o f w o m e n s r o le , w h i c h c o n s t r a i n w o m e n i n a llpro gra mme s; S t r u c t u r e s F o r P a r t ic i p a t io n B y Wo m e n B o r r o w e r s I n D e c i s io n- m a k i n g a n d s t r a t e g i e s t o i n c r e a s e t he c o nt r i b u t i o n o f g r o u p s t o e mp o w e r m e nt , r a t h e r t h a n m e r e l y u s i n g t h e s e g r o u p s a s m e c h a n i s m s fo r r e p a y m e nt . A n i n s t i t u t io na l i s e d g e n d e r p o l i c y w i t h i n t he N G O s i n vo l v e d i n c l u d i n g a c o m m it m e nt t o g e n d e r e q u it y i n s t a f f r e c r u it m e nt a n d p r o mo t io n. T h i s i s e s s e nt ia l t o ma k i n g t he a bo ve c ha n g e s w it h i n pro gra mme s.

APPENDIX 2 HOW TO ASSESS GENDER IMPACT ( fr o m S u s a n J o h n s o n, G e n d e r I m p a c t As s e s s m e nt i n M i c r o f i n a nc e a nd M i c r o - e nt e r p r i s e : Why a n d H o w , D e v e lo p m e nt i n P r a c t i c e , F e b 2 0 0 0 ) U nd e r s t a n d i n g t h e w a y a p r o je c t h a s a p p r o a c h e d g e n d e r i s a g o o d s t a r t i ng p o i nt i n d e s i g n i n g a n i m p a c t a s s e s s m e nt a nd a nu m b e r o f q u e s t io n s c a n b e a s k e d i n o r d e r t o e s t a b l i s h t his: 1 . W h a t a n a l y s i s h a d t h e p r o j e c t m a d e o f g e n d e r r e l a t i o n s i n t h e s p e c i f i c c o nt e xt i n w h i c h it i s w o r k i n g ? W h a t a p p r o a c h d o e s it t a k e as a re su lt o f t h i s a n a l ys i s ? 2. Who h a s t h e p r o j e c t t a r g e t e d w o m e n o n l y, w o m e n a n d m e n, m e n o n l y a n d why ?3 . W h a t p o s it i v e i m p a c t d o e s t h e p r o j e c t e xp e c t t o ha ve o n a ) w o me n fo r t h e m s e l v e s , b) w o me n i n t h e c o n t e xt o f t h e i r f a m i l i e s / ho u s e ho l d s , c ) w o m e n i n t h e c o nt e xt o f t he irco mmu nit ie s ? How a r e t h e s e i m p a c t s e xp e c t e d t o co me a b o u t ? H a ve a n y p o t e n t ia lo b s t a c l e s

t o a c h i e v i n g t he s e i m p a c t s b e e n i d e nt i f i e d ? How w a s i t a n t i c i p a t e d t h a t t he yw o u l d be o v e r c o m e ? 4 . W h a t i m p a c t d o e s t h e pro ject ant ic ipate for o t h e r m e m b e r s o f t he ho u s e ho l d / f a m i l y ?W h a t d o e s t h i s assu me a b o u t t h e w a y g e n d e r r e l a t io n s o p e r a t e ?5 . D o e s t h e p r o j e c t anticipate negat ive imp act s o n g e n d e r r e l a t io n s ?6 . W h a t i n d i c a t o r s w e r e i d e nt i f i e d t o m e a s u r e t he p r o j e c t s p r o g r e s s ? How d o t h e s e i n d i c a t o r s r e la t e t o g e n d e r r e l a t io n s ?7. What steps has t he pro ject t aken t o e v a l u a t e it s i m p a c t o n w o me n a nd g e nd e r r e l a t io n s ?8. What steps has t he pro ject t aken a s a n i n s t it u t io n it s e l f t o i m p l e m e nt a g e nd e r p o l i c y i n it s s t a f f i n g , o r g a n is a t io n a n d m a n a g e m e nt ? I mp a c t A s s e s s m e nt w o r k c a n be a p p r o a c he d i n t he fo l l o w i ng m a n n e r : a ) E s t a b l i s h a g e n d e r b a s e l i n e b)Co ns ider the potent ial impacts o f t he pro ject on gender r e lat io ns c) E st a blis h t he in fo r mat io n a nd ind ic at o r s r e q u i r e d D i s a g g r e g a t e a l l d a t a C o n s i d e r t he i m p a c t o n g e nd e r r e l a t io n s d ) C o l l e c t a nd a na l ys e t he d a t a u s i n g t o o l s a nd t e c h n i q u e s a p p r o p r i a t e t o t he t a s k

APPENDIX 3 GRAMEEN BANK THE SIXTEEN DECISIONS 1. We sha ll fo llo w a nd ad va nc e t he fo ur pr inc ip le s o f t he G B d i s c i p l i n e , u n it y, c o u r a g e & ha r d w o r k in a ll wa lks o f o ur live s.2 . P r o s p e r i t y w e s h a l l b r i n g t o o u r f a m i l i e s . 3 . W e s h a l l no t l i v e i n d i l a p i d a t e d ho u s e s . We s ha l l r e p a ir o u r h o u s e s a nd w o r k t o w a r d s c o n s t r u c t i n g n e w ho u s e s a s s o o n a s p o s s i b l e . 4 . We s h a l l g r o w v e g e t a b l e s a l l ye a r r o u n d . W e s h a l l e a t p l e nt y o f t h e m a n d s e l l t he s u r p l u s . 5 . D u r i n g t h e p l a n t a t i o n s e a s o n w e s h a l l p l a n t a s m a n y s e e d l i n g s a s p o s s i b l e . 6 . We s ha l l p l a n t o k e e p o u r

f a m i l i e s s m a l l . W e s h a l l m i n i m i s e o u r e xp e n d it u r e . We s ha l l l o o k a ft e r o u r h e a l t h. 7 . We s h a l l e d u c a t e o u r c h i l d r e n & e n s u r e t ha t w e c a n e a r n t o p a y fo r t he i r e d u c a t io n. 8 . W e s h a l l a l w a y s k e e p o u r c h i l d r e n & t h e i r e n v i r o n m e n t c l e a n . 9 . W e s h a l l b u i l d & u s e p it l a t r i n e s . 10.We shall d r i n k w a t e r fr o m t u b e w e l l s . I f i t i s no t a v a i l a b l e , w e s h a l l bo i l w a t e r o r u s e a l u m . 1 1 . W e s h a l l no t t a k e d o w r y a t o u r s o n s w e d d i n g s , no r s ha l l w e g i v e a n y d o w r y a t o u r d a u g ht e r s w e d d i ng s . W e s h a l l k e e p o u r c e nt r e fr e e f r o m t h e c u r s e o f d o w r y. We s ha l l no t p r a c t ic e c h i l d m a r r i a g e . 1 2 . W e s h a l l n o t i n f l i c t i n j u s t ic e o n a n yo n e , no r s h a l l w e a l l o w a n yo ne e l s e t o do s o . 1 3 . W e s h a l l c o l l e c t i v e l y u n d e r t a k e l a r g e r i n v e s t m e nt s fo r h i g h e r i n c o m e s . 1 4 . We s ha l l a l w a ys b e r e a d y t o he l p e a c h o t he r . I f a n yo n e i s i n d i f f i c u lt y w e s ha l l h e l p h i m o r her.1 5 . I f w e c o m e t o k no w o f a n y br e a c h o f d i s c i p l i n e i n a n y c e nt r e , w e s ha l l g o t he r e & he l p r e s t o r e d i s c i p l i n e . 1 6 . W e s h a l l i n t r o d u c e p h ys i c a l e x e r c i s e s i n a l l o u r c e nt r e s . W e s h a l l t a k e p a r t i n a l l s o c i a l a c t i v it i e s c o l l e c t i v e l y. N B : t h e s e 1 6 d e c i s io n s w e r e fo r m u l a t e d i n a na t io na l w o r k s ho p o f 1 0 0 w o me n C e nt r e C h i e f s i n M a r c h 1 9 8 4 , & fo r m t h e s o c i a l d e v e lo p m e nt p r o g r a m m e o f G B . A l l m e m b e r s a r e e x p e c t e d t o me mo r is e & i m p l e m e nt t he m.

APPENDIX4 TW MO ELSOFMICR O D OFINA EPRO NC VISION (Comp iled from: Cornford, R.; Microcredit, Microfinance or Simply Access to Financial Services: What Do Pacific People Need? (see footnote 2) Johnson, S. & Rogaly, B.: Micro finance and Povert y Reduct ion , Oxfam, UK, 1997 Nowland-Foreman, S. Grameen Bank Case Study(unpublished masters paper) 1999. Conroy, J, Taylor, K, & Thapa, G,; Best Practice of Banking wit h the Poor , The Foundat ion for Development Cooperation, Brisbane 1994.) 1 ) G r a m e e n B a nk O bje ct ive: F i n a n c i a l & s o c i a l i nt e r m e d i a t io n t o p r o v i d e a c c e s s t o c r e d it , i n o r d e r t o i n c r e a s e i n c o m e s o f rural poor. Target ing: P o o r r u r a l w o m e n o w n i n g l e s s t ha n h a l f a n a c r e ( 5 0 d e c i m a l s ) o f l a nd , o r a s s e t s l e s s t ha n t he e q u i v a l e nt va l u e . H o u s e ho l d s d e p e n d e nt o n d a y l a bo u r & i n c o m e e q u i v a l e nt t o e a t i ng r i c e once a day. Cap it a l: O r i g i n a l l y f r o m fo r e i g n d o no r s & g o v e r n m e nt , t h i s i s no w l e s s t ha n 5 % o f t h e i n c o m e ; 1 9 9 5 9 2 % m e m b e r o w n e d t hr o u g h s h a r e s . G B ha s e f f e c t i v e l y

mo b i l i s e d m e m b e r s h i p s a v i n g s a n d s o ld G o ve r n m e nt b a c k e d bo n d s o n t h e s har e mark et . Structure: At t h e lo c a l l e v e l m u lt i p l e g r o u p s o f 5 w o m e n. O r g a n i s a t io n w o r k s t h r o u g h p a i d b a nk s t a f f a t lo c a l , d i s t r i c t r e g io na l a n d na t io na l l e v e l s . S e l e c t io n p r o c e s s : I n it i a l s o c i a l s u r ve y c o nd u c t e d b y a B a nk o f f i c e r , fo l lo w e d b y a v i l l a g e m e e t i n g . I n f o r m a t io na n d t r a i n i n g g i v e n P L U S a s a v i n g s r e q u ir e m e nt o v e r a p e r io d o f w e e k s a n d s u c c e s s f u l r e c it a lo f T he S i xt e e n D e c i s io n s ( s e e A p p e n d i x 3 ) . S e l f - s e l e c t io n o f p e o p l e n o t r e la t e d b y b lo o d & o f s i m i l a r s o c io - e c o no m i c ba c k g r o u nd w ho agree to work as a group and elect a leader. Me et ing s: W e e k l y m e e t i ng s o f 5 - 8 bo r r o w e r g r o u p s w h i c h a r e he l d i n a ba n k b u i l d i n g ( C e nt r e ) d u r i n g w h i c h s m a l l w e e k l y r e p a y m e nt s a n d c o m p u l s o r y s a v i n g s a r e c o l l e c t e d a nd mo n it o r i n g & v e t t i ng o f lo a n p r o p o s a l s o c c u r s . T h e m e e t i n g p r o v i d e s a n o p p o r t u n it y t o r e i n fo r c e t he r it u a l s a n d p r i n c i p l e s o f d i s c i p l i n e , u n it y, c o u r a g e a nd h a r d w o r k . Ru le s & Pro cedur es: 1 l o a n p e r y e a r . 50 payme nts plus interest of 20% must be pa id be fo r e ne xt lo a n is r e le a se d. Lo a ns sp ir a l in a mo u nt o n su cc e s s fu l r ep a yme nt o f t he pr e vio us lo a n. A lo a n pr o po sa l is su b mit t e d t o t he me et ing , r eq u ir es t he su ppo r t o f t he me mbe r s a nd i s approved or reduced by bank officer, depending on the borrowers capacit y to repay. Thisr e q u i r e s f u r t h e r a p p r o va l b y t he a r e a m a n a g e r p r i o r t o t he re lea se o f fu nds

Loans are dis bursed at the Branch office 4 days a week and t y p i c a l l y i n v o l v e t h e r e c i p i e n t , c e nt r e c h i e f a n d g r o u p c h a i r p e r s o n. G r o u p g u a r a n t e e s e r v e s a s c o l l a t e r a l s u b s t i t u t e o n lo a n de fa u lt . 1 t ak a per we ek is d e po s it ed int o t he co mpu lso r y group savings fund. 5% o f every general loan and s e a s o n a l / i r r i g a t i o n l o a n i s d e p o s i t e d i n t o a s a f e t y f u n d f o r the borrower. 5 t a k a p e r 1 , 0 0 0 t a k a r e c e i v e d a s a l o a n a r e p u t i n t o a n e m e r g e n c y f u n d a c t i n g a s a k i n d o f i n s u r a n c e c o v e r fo r d e a t h, d e f a u l t , d i s a s t e r o r a c c i d e nt . O t he r t yp e s o f lo a n s fo r s u c c e s s f u l bo r r o w e r s i n c l u d e ho u s i n g lo a n s w h i c h r e q u i r e l e g a l t it l e i n t he w o m a n s na m e i r r i g a t io n lo a n s a n d t u b e w e l l lo a n s . T h e r e i s a l s o p o t e nt i a l a c c e s s t o g r o u p lo a n s . O r g a n i s a t io n a l F r a m e w o r k : S t r o n g c e nt r a l i s e d c o nt r o l o f v i s io n a n d v a l u e s , a n d d e c e nt r a l i s a t io n o f d e c i s io n - m a k i n g & p e r fo r m a n c e c o nt r o l s t o r e g io na l a nd d i s t r i c t s t a f f. C r e a t io n o f a c u lt u r e o f c o mp l i a n c e w i t h i n G B ba s e d o n g o o d ha b it s & peer in flu e nce. M a n a g e m e nt :

S t a f f ( p r e d o m i n a nt l y m a l e ) a r e mo t i v a t e d b y w i d e d is s e m i n a t io n o f p e r fo r m a n c e r e s u l t s , a s w e l l a s r e w a r d s t o c r e a t e a s e n s e o f c o m p e t it io n & a c h i e v e m e nt . S u p p o r t & mo n i t o r i ng : L o c a l , d i s t r i c t , r e g io n a l a nd n a t io na l S o c ia l I nt e r me d i a t io n i n t h e G r a m e e n B a n k i s e n c a p s u l a t e d i n T h e S i xt e e n D e c i s io n s ( s e e Ap p e n d i x 3 ) . P o t e n t i a l bo r r o w e r s m u s t r e c it e t he s e b y m e mo r y, a n d e s t a b l i s h a r e g u l a r savings pattern before being accepted as a member. 2 ) R o t at i ng S a v i n g s & C r e d it A s s o c i a t i o ns O bje ct ive: T h e r e g u l a r p r o v i s io n o f w o r k i n g c a p i t a l o n a p r e d ic t a b l e b a s i s t o e a c h me mber. Target ing: P o o r h o u s e ho l d s . Cap it a l: Or ig ina lly fro m regu lar gro up sa v ing s o f t he me mbe rsh ip (o n a d a i l y / w e e k l y b a s i s ) o r N G O p r o v i s i o n o f i n it i a l c a p it a l a s a r e vo l v i n g d e p o s it . N G O s m a y s e r v e a s a l i n k t o m a i n s t r e a m b a n k i n g s e r v i c e s fo r a c c e s s t o l a r g e r a m o u nt s o f c a p it a l. Structure: G r o u p s o f a t le a s t 5 m e m b e r s . ( T yp i c a l l y 8 - 1 5 ) S e l e c t io n P r o c e s s : S e l f s e l e c t io n, o r me m b e r s m a y a l r e a d y b e w o r k i n g a s p a r t o f a mo b i l i s e d g r o u p . M e m b e r s s ho u l d be r e s i d e nt i n t h e s a m e a r e a a n d be ho mo g e ne o u s .

Me et ing s: R e g u l a r m e e t i n g s , t yp i c a l l y o n c e a w e e k . Ru le s & Pro cedur es: S a ving s ar e link ed t o cr ed it s a ving s f ir st , cr ed it ne xt . T he sa v ing s ar e mo b ilis e d int o a co mmo n fu nd w h ic h t he me mbe r s c o n t r o l . T r a i n i n g i s p r o v i d e d i n t h e f i n a nc i a l d i s c i p l i n e s o f s i m p l e bo o k k e e p i n g & a c c o u nt a b i l it y. V o l u n t a r y l a b o u r i n p u t a n d p e e r p r e s s u r e ser ve a s co l lat er a l su bst it ut es. O w ner s hip & d ec is io n- ma k ing is pr imar ily w it h t he gr o up, w ho e st a b lis h ba s ic r u le s & r e g u l a t io n s . T h e r e i s r o t a t i o n o f l e a d e r s h i p t h r o u g h a n n u a l e l e c t i o n s a n d i n t e r e s t r a t e s a r e s e l f - d et er mined. A t t h e e n d o f e a c h sa v ing s per io d t he s u m sa ved is lo a ne d t o a me mbe r o f t he gr o up f o r u s e a s i n v e s t m e nt f i n a n c e . R e p a y m e n t s r e q u i r e d a r e i n a d d i t i o n t o t h e r e g u l a r s a v i n g s d e m a n d e d a s m e m b e r s o f t h e a s s o c i a t io n. T h e borrowing right passes to each perso n in turn, and t he cyc le r e p e a t s i t s e l f s o l o n g a s p a y m e nt s h a v e be e n m a i n t a in e d . F a i l u r e t o meet repayme nt schedule is pena lised by denia l o f access to the n e x t r o u n d o f bo r r o w e r e nt it l e m e nt . ( I n s o me g r o u p s a bo r r o w e r ne e d s t o d e mo n s t r a t e a v i a b l e proposal.)

O r g a n i s a t io n a l F r a m e w o r k : T r a i n i n g a n d s k i l l - bu i l d i n g a r e i m p o r t a nt i np u t s . N G O s a l s o a s s i s t i n t h e e s t a b l i s h m e nt o f a p p r o p r i a t e a d m i n i s t r a t i ve s t r u c t u r e s & p r o c e d u r e s . L i n k s t o fo r m a l b a n k i n g i n s t i t u t io ns o r a lt e r n a t i v e f i n a n c e s o u r c e s a r e f a c i l it a t e d b y N G O s , w ho m a y f a c i l it a t e t he l i n k i n g o f g r o u p s i nt o f e d e r a t io n s i n o r d e r t o s t r e ng t h e n m e m b e r s h i p a n d r e s o u r c e mo b i l i s a t io n . M a n a g e m e nt : Au t o n o m y o f t he g r o u p i s a p r i m a r y g o a l. S u p p o r t & M o n it o r i n g : L o c a l a c c o u nt a b i l it y, mo n it o r i n g a nd m a n a g e m e nt

APPENDIX 5 BANKING WITH THE POOR 16 PRINCIPLES FOR SELF-HELP GROUPS (from J.D. Conroy, K.W. Taylor & G.B. Thapa; B e s t P r a c t ic e o f B a n k i n g W it h T he P o o r ,F o u n d a t io n fo r D e v e lo p m e nt C o o p e r a t io n, 1 9 9 5 , B r i s b a n e , Au s t r a l i a , p 7 5 ) 1 . S H G m e m b e r s h i p s ho u l d b e r e s i d e nt i n t h e s a m e a r e a , be h o mo g e n o u s a n d nu m b e r a t l e a s t 5 p e r s o ns . 2 . S H G s s h o u l d p r o m o t e sa v ing s mo b ilis at io n. 3. S a ving s s ho u ld be link ed t o cr ed it s a v i n g s f i r s t , c r e d i t n e x t . 4 . T he d e v e lo p m e nt o f f i n a n c i a l d i s c i p l i n e s a n d s y s t e m s s ho u l d b e e n c o u r a g e d . 5 . S H G s s h o u l d b e g i n w i t h a s i m p l e bookkeep ing system. 6.SHGs should ho ld regular meet ings (o nce a week if po ss ible)7.T hey should have basic rules and bylaws ( w r i t t e n o r u n w r i t t e n ) . 8 . G r o u p l e a d e r s s ho u l d b e e l e c t e d b y t h e m e m b e r s , w it h g r o u p f u n c t io n s o r p o s i t io ns b e i n g r o t a t e d a mo ng t h e m e m b e r s . 9 . T r a n s p a r e n c y i n bu s i n e s s o p e r a t io ns a nd t h e o ve r a l l c o nd u c t o f g r o u p s s ho u l d b e m a i nt a i n e d a t a l l t i m e s . 1 0 . B a s i c t r a i n i n g a n d g u i d a n c e s h o u l d b e p r o v i d e d t o me m b e r s o f S H G s . 1 1 . T he a u t o no m y o f S H G s s ho u l d b e r e s p e c t e d . 1 2 . G r o u p l i a b i l i t y a n d p e e r p r e s s u r e s ho u l d b e s u b s t it u t e s fo r c o l l a t e r a l . 1 3 . L o a n s s ho u l d b e k e p t s m a l l i n it i a l l y a n d r e p a y m e nt s m a d e f r e q u e nt l y a n d r e g u l a r l y. 1 4 . T r a n s a c t io n c o s t s s ho u l d be k e p t t o a m i n i m u m t hr o u g h s i m p l i f i e d g r o u p p r o c e d u r e s a nd c o nt r o l. 1 5 . M a r k e t r a t e s o f i n t e r e s t s ho u l d a p p l y t o bo t h s a v i n g s a nd c r e d it , t o a c h i e v e f i n a n c i a l v i a b i l i t y a s s o o n a s p o s s i b l e . 1 6 . C o m m e r c i a l b a n k s s ho u l d be a s k e d t o p r o v i d e a p p r o p r i a t e a d v a nc e s o r l i n e s o f c r e d it t o s u p p l e m e nt t h e g r o u p s f i n a n c i a l r e s o u r c e s a n d e n a b l e it t o le n d fo r p r o d u c t i v e p u r p o s e s .