7. Women and microcredit

Women in microcredit and in entrepreneurship

Authors: Peter Futo, Marton Gosztonyi, Mehdi Hasan

The challenge of female poverty. Seventy percent of the world’s poor are women. Women are often excluded from employment in industries, or they need to remain at home to manage the family, and therefore they frequently engage in small, home-based enterprises. This is the type of business, which is predominantly financed by microcredit. Traditionally women have been disadvantaged in access to credit and other financial services, because commercial banks often focus on men and formal businesses. Microfinance on the other hand often targets women, in some cases exclusively.

Why microcredit targets women. Microcredit is firmly associated with poor women who are the principal borrowers and, therefore, the principal beneficiaries of the programs. Female clients represent eighty-five percent of the poorest microfinance clients reached worldwide. The main reason of targeting women is because they are usually one of the most vulnerable and poorest segments of society. Microcredit provides women with more choices and a greater voice in family and community matters. Studies have shown that women are more reliable borrowers and are more likely to repay promptly than men. Moreover, women are more willing to follow the rules of group borrowing, such as attendance at meetings and participate at training courses.

• Are women in disadvantaged position in your country?
• Are women better borrowers than men?
• Do women have a different entrepreneurial approach, a different entrepreneurial culture than men?

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