Funding for micro-finance programmes is set to increase further in the years to come, also with the intention to promote gender policies. The access to micro-finance services (credit, savings, insurance and pensions) is still highly unequal between men and women. Considerable advances were made in the 1990s in the design of NGO-managed programmes and poverty-targeted banks to increase women's access to small loans and savings facilities. Literature prepared for the Micro-credit Summit Campaign presents an extremely attractive vision of increasing numbers of expanding micro-finance programmes which not only give many women access to micro-finance services, but also initiate a 'virtuous upward spiral' of empowerment ⁽¹⁾. This optimism about the implicit empowerment potential of credit and savings pervades most donor statements on micro-finance. Donors and NGOs tend to expand their micro-finance activities generally rather than support more explicitly empowerment-focussed interventions for women. At the same time, micro-finance is being promoted as a key poverty alleviation strategy to enable poor women and men to cope with the adverse economic and social impacts of structural adjustment policies and globalization (Mayoux 2001 forthcoming).

Some researchers have questioned how far microfinance benefits women (Goetz and Sen Gupta, 1996). Some argue that micro-finance programmes divert the attention of women from other more effective strategies for empowerment (Ebdon, 1995), and the attention and the resources of donors from alternative, and possibly more effective means of alleviating poverty (Rogaly, 1996).

As much as donors like to see an immediate impact on empowerment and poverty, they are at the same time concerned about the financial self-sufficiency of the intermediary. Funding for micro-finance is increasingly dependent on progress towards financial self-sustainability within a given time-frame. The cost-cutting measures in micro-finance programmes may have potentially negative implications for poverty-reach and contribution to women's empowerment (Mayoux 1998, 2000; Rahman 1999). Even those donor agencies are becoming aware that this may limit the potential of micro-finance for empowerment or poverty alleviation (Buckley 1996, DFID 1998, Rosenberg 1998). This awareness has not however so far led to significant change in practice.

There are four basic views on the link between micro-finance and women's empowerment:

• there are those who stress the positive evidence and are essentially optimistic about the possibility of sustainable micro-finance programmes world-wide empowering women;
• another school of thought recognizes the limitations to empowerment, but explains those with poor programme design;
• others recognize the limitations of micro-finance for promoting empowerment, but see it as a key ingredient as important in themselves within a strategy to alleviate poverty; empowerment in this view needs to be addressed by other means;
• then there are those who see micro-finance programmes as a waste of resources.

This paper aims to clarify these issues within the context of the debate about gender mainstreaming ⁽²⁾. The paper is based on research by the author and secondary source material. 15 case studies form the main basis of the arguments; they are presented in Appendix 1 ⁽³⁾.

The paper concludes that women's empowerment needs to be an integral part of policies. Empowerment cannot be assumed to be an automatic outcome of micro-finance programmes, whether designed for financial sustainability or poverty targeting. More research and innovation on conditions of micro-finance delivery is needed. The paper finds that cost-effective ways of integrating micro-finance with other empowerment interventions, including group development and complementary services are still lacking. Unless empowerment is an integral part of the planning process, the rapid expansion of micro-finance is unlikely to make more than a limited contribution to empowerment.

Women's empowerment and micro-finance: contrasting paradigms

From the early 1970s, women's movements in a number of countries identified credit as a major constraint on women's ability to earn an income and became increasingly interested in the degree to which poverty-focussed credit programmes and credit cooperatives were actually being used by women. SEWA in India, for example, set up credit programmes as part of a multi-pronged strategy for an organization of informal sector women workers. Since the 1970s, many women's organizations world-wide have included credit and savings, both as a way of increasing women's incomes and to bring women together to address wider gender issues. The 1980s saw the emergence of poverty-targeted micro-finance institutions like Grameen Bank and ACCION and others. Many of these programmes see themselves as empowerment-oriented. In the 1990s, a combination of evidence of high female repayment rates and the rising influence of gender lobbies within donor agencies and NGOs led to increasing emphasis on targeting women in micro-finance programmes.

Underlying the current debate are three 'paradigms' on micro-finance and gender (see Box 1):

• Financial self-sustainability paradigm: currently dominant within most donor agencies and in the models of micro-finance promoted in publications by USAID, World Bank, UNDP, CGAP and the Micro-credit Summit Campaign. Here the main consideration in programme design is provision of financially self-sustainable micro-finance services to large numbers of poor people, particularly micro- and small entrepreneurs. The focus is on setting of interest rate "right" to cover costs, to separate micro-finance from other interventions to enable separate accounting, to expand programmes so as to capture economies of scale, to use groups to decrease costs of delivery. Gender lobbies have been able to argue for targeting women on the grounds of high female repayment rates and contribution of women's economic activity to economic growth. In this paradigm, it is assumed that increasing women's access to micro-finance services will in itself lead to individual economic empowerment, well-being and social and political empowerment.
• Poverty alleviation paradigm: underlies poverty-targeted programmes. Here the main considerations are poverty reduction among the poorest, increased well-being and community development. The focus is on small savings and loan provision for consumption and production, group formation, etc. This paradigm justifies some level of subsidy for programmes working with particular client groups or in particular contexts. Some programmes have developed effective methodologies for poverty targeting and/or operating in remote areas. Gender lobbies in this context have argued for targeting women, because of higher levels of female poverty and because of women's responsibility for household well-being. Poverty alleviation and women's empowerment are seen as two sides of the same coin. The assumption is that increasing women's access to micro-finance (together with other interventions to improve household well-being) will in itself increase

Underlying development paradigm: neo-liberal market growth

Strategy: setting up financially self-sustainable micro-finance programmes which increase access to micro-finance services for large numbers of poor people, including women

Instruments: setting of interest rate to cover costs, separation of micro-finance from other interventions to enable separate accounting, programme expansion to increase outreach and economies of scale, ways of using groups to decrease costs of delivery

Reason for targeting women: efficiency considerations because of high female repayment rates and contribution of women's economic activity to economic growth

Definition of empowerment: economic empowerment, expansion of individual choice and capacities for self-reliance

Main focus of gender policy: providing the framework for equal access for women

Definition of sustainability: programme financial self-sufficiency.

Definition of participation: participation as a means to increased efficiency through consultation for 'market relevance', group formation for self-help to decrease costs of service delivery and some participation in decision-making to increase commitment and innovation.

Underlying assumption: increasing women's access to micro-finance will automatically lead to economic empowerment without other complementary interventions or change in the macro-economic growth agenda.

POVERTY ALLEVIATION PARADIGM

Underlying development paradigm: interventionist poverty alleviation and community development

Strategy: micro-finance as part of an integrated programme for alleviation of poverty and vulnerability and increasing wellbeing for the poorest households

Instruments: the importance of small savings and loan provision, group formation for community development, methodologies for poverty targetting and/or operating in remote areas.

Reason for targetting women: because of higher levels of female poverty and women's responsibility for household well-being

Definition of empowerment: increased wellbeing, community development and self-sufficiency

Main focus of gender policy: increasing women's participation in self-help groups

Definition of sustainability: establishment of local level participatory institutions for long-term community self-reliance and self-determination for the poor

Definition of participation: participation as an end in itself, increasing skills through consultation in decision-making, group formation for community development and development of self-owned and self-managed peoples' organisations.

Underlying assumption: women's empowerment, household level poverty alleviation and community development are inherently synergistic; increased well-being and group formation will automatically enable women to empower themselves.

FEMINIST EMPOWERMENT PARADIGM

Underlying development paradigm: structuralist and socialist feminist critique of capitalism

Strategy: micro-finance as an entry point for women's economic, social and political empowerment

Instruments: gender awareness and feminist organization

Reason for targeting women: gender equality and human rights

Definition of empowerment: transformation of power relations throughout society

Main focus of gender policy: gender awareness and feminist organization

Definition of sustainability: development of self-sustaining participatory women's organizations linked to a wider women's movement for transformation of gender relations

Definition of participation: participation as an end in itself to enable women to articulate their collective interests and organise for change in gender relations.

• Household income which will then translate into improved well-being for women and enable women to bring about wider changes in gender inequality.
• feminist empowerment paradigm: underlies the gender policies of many NGOs and the perspectives of some of the consultants and researchers looking at gender impact of micro-finance programmes (eg Johnson, 1997). This paradigm did not originate as a Northern imposition. It is rooted in the development of some of the earliest micro-finance programmes in the South, particularly SEWA and WWF in India. Here the underlying concerns are gender equality ⁽⁴⁾ and women's human rights. Micro-finance is promoted as an entry point in the context of a wider strategy for women's economic and socio-political empowerment. The focus here is on gender awareness and feminist organization. Some programmes have developed very effective means for integrating gender awareness into programmes and for organizing women and men to challenge and change gender discrimination. Some also have legal rights support for women and engage in gender advocacy.

Access = empowerment? Evidence of gender impact

Existing evidence of the impact of micro-finance programmes on gender relations is limited. Research on gender impact is confined to a few programmes in Bangladesh and India. Conclusions differ even for the same programmes ⁽⁵⁾. Most other documented studies are short gender-impact assessments commissioned by NGOs and donors ⁽⁶⁾. The CGAP-sponsored AIMS studies are only in their first round. Although they use a gender-sensitive framework and have included participatory techniques, they do not currently contain detailed information on women's empowerment ⁽⁷⁾. The focus of most studies has been almost exclusively on credit with some discussion on savings. Few studies investigate in any detail the relative impact of different types of micro-finance strategy, programme models, different types of gender policy or linkages with other interventions ⁽⁸⁾. Few studies have included follow-up of drop-outs and the reasons for leaving programmes.

What precisely is empowerment itself ⁽⁹⁾.

• economic empowerment: women's access to savings and credit gives them a greater economic role in decision-making through their decision about savings and credit (see Figure 1). When women control decisions regarding credit and savings, they will optimize their own and the household's welfare. The investment in women's economic activities will improve employment opportunities for women and thus have a 'trickle down and out' effect. The financial sustainability and feminist empowerment paradigms emphasize women's own income-generating activities. In the poverty alleviation paradigm, the emphasis is more on increasing incomes at the household level and the use of loans for consumption. In the feminist empowerment paradigm, individual economic empowerment is seen as dependent on social and political empowerment.
• increased well-being: access to savings and credit facilities and women's decision about what is being done with savings and credit strengthens women's say in economic decisions of the household (Figure 1). This enables women to increase expenditure on the well-being of themselves and their children. This is the main concern in the poverty alleviation paradigm. Women's control over decision-making is also seen as benefitting men through preventing leakage of household income to unproductive and harmful. Other welfare interventions are advocated in addition to micro-finance, typically nutrition, health and literacy campaigns to further decrease vulnerability and improve women's skills. In the financial self-sustainability and feminist empowerment paradigms, improved well-being is an assumed outcome from increasing women's economic activities and incomes.
• social and political empowerment: a combination of women's increased economic activity and control over income resulting from access to micro-finance with improved women's skills, mobility, access to knowledge and support networks (Figure 1). Status within the community is also enhanced. These changes are reinforced by group formation, leading to wider movements for social and political change. The financial self-sustainability paradigm and the poverty alleviation paradigm assume that social and political empowerment will occur without specific interventions to change gender relations at the household, community or macro-levels. By contrast, the feminist empowerment paradigm advocates explicit strategies for supporting women's ability to protect their individual and collective gender interests at the household, community and macro-levels.

The available evidence does point to a considerable potential of micro-finance for empowerment, one way or another: women's demand for credit and savings facilities is high; savings propensity as well as the loan repayment rates equal or exceed those of men; many women, particularly in programmes targeting women entrepreneurs, decide on the loan use and invest in income-earning activities; some are able over a cycle of several loans to increase incomes which they themselves control. Overwhelming evidence indicates that women spend much of their income on household well-being, including daughter's education and their own health. Even where women do not directly control incomes, perceptions of their contribution to the household have changed. Increased confidence through interaction with program staff and groups have improved their role in decision-making within the household. Some programmes with an explicit feminist empowerment focus on gender awareness and organization have also effectively supported women's micro-finance groups to challenge unequal property rights, domestic violence, alcoholism and dowry demands. Local authorities have been brought to provide essential services for women. Some mixed-sex programmes like CODEC in Bangladesh and CGT/CIPCRE in Cameroon built federations of women's and men's groups and were particularly successful in promoting gender-awareness for men and women and helped put an end to extreme forms of gender violence. Programmes like SEWA and Working Women's Forum in India have also been effective in linking members to macro-level gender advocacy. This made informal sector women workers more visible in national and international policy debates.

Still, one needs to question the assumed interlinkages between access to savings and credit per se and empowerment (Figure 2), since in some cases micro-finance programmes may have disempowered women, particularly the disadvantaged, even within 'best case' studies ⁽¹⁰⁾. It especially seems to have occurred in programmes which have not explicitly considered gender issues, or in programmes that rapidly expand their micro-finance portfolios in response to increased funding.

For once, it cannot be assumed that women have control, or even an effective say, over loan use, whether they are targeted or not. Women may simply be used as low-cost and reliable intermediaries between programme staff and male family members. The former find it more convenient to deal with women because they are at home during working hours; the latter have neither the time nor the inclination to attend group meetings ⁽¹¹⁾. In some reported cases, women do not even know that men have taken a loan in their names ⁽¹²⁾.

Even where women control decisions over loan use, this may not result in significantly increased incomes. In South Asia particularly, a combination of male pressure and lack of income-earning opportunities frequently leads women to make an 'economically rational' decision to invest credit or savings in men's activities ⁽¹³⁾. Even where, as is predominantly the case in Africa, women use the loan for their own business, they continue to be overwhelmingly involved in a narrow range of traditionally female activities, i.e. low investment and low return. Micro-finance programmes may accelerate market saturation by increasing the numbers of women competing in the same activities. Very poor women working within the same range of activities may be further disadvantaged, because they do not have the resources or contacts to get access to credit.

Even where there is an increase in income from women's or household economic activities, there may be no effective control by women over income going into the household and no material benefits for women. Men may control the income even from women's economic activities and/or may expect women to use all their income for pre-determined household expenditure. This allows men to use their own previous contributions to the household for their own personal expenditure and, in some cases, for setting up new households. Men may be very supportive of women's micro-finance and other income generation activities for this very reason! ⁽¹⁴⁾

Women may be forced to cut their own -- already -- inadequate expenditure on food and health for savings or to repay loans. Women's expenditure decisions can also be constrained by gender norms of rights within the household. Women may replicate gender inequalities, spending little on themselves and discriminating against girls. Changes in expectations of women's economic contribution to the household may seriously overburden women with adverse implications for their health and their children ⁽¹⁵⁾. The combination of low incomes, lack of control, greater burden of work and repayment pressure may do little to increase women's bargaining power within the household. On the contrary, micro-finance programmes may increase tensions within the household as men withdraw their own incomes and/or women struggle to retain control of their own earnings. In some reported cases, this leads to divorce, abandonment, and domestic violence (see eg Rahman 1999, Mayoux 1999b).

Finally, micro-finance programmes may contribute little to social and political empowerment, for example if group meetings fail to address gender issues or if group repayment pressures increase tensions between women and/or exclude more disadvantaged women from important networks ⁽¹⁶⁾. Time spent in savings and credit meetings automatically decrease women's time for other social and political activities. Programmes may also increase conflicts between men and women within communities and may not have adequate mechanisms to support women.

On the basis of current evidence, it is impossible to say how many women are benefitting and how many are being further disadvantaged. Women in dynamic market contexts may increase their incomes without even needing substantial support services. Women in supportive family situations and communities may also be successful both economically and in bringing about change in gender relations. Where active women's movements have been promoting gender equity, women may use micro-finance to further their own interests in their families and communities. Under the same circumstances, micro-finance has often helped women improve the welfare of their families.

However, there are significant differences in the access to resources and networks to overcome difficulties and constraints. Evidence indicates that those who benefit least from micro-finance, and may be even further disempowered, are those who are already the poorest and/or most disadvantaged by ethnic group and/or who are abused within the household. In some micro-finance programmes, such women become progressively excluded, as programme staff anxious for rapid expansion prefer clients who are easily accessible and able to repay. Women's groups are also unwilling or unable to bear the extra work involved in contacting the most disadvantaged. ⁽¹⁷⁾ One anthropological study of Grameen Bank indicates that the inclusion of drop-outs and villages away from the 'key success areas' would substantially increase estimates of negative impact and reveal more cases of serious disempowerment (Khondkar 1998).

Whatever the degree of social exclusion, gender inequalities at the household and community levels reflect, and are reinforced by, macro economic policies, by legislation and social programmes (Johnson and Kidder 1999; Mayoux 2000a). These inequalities seriously constrain women's access to markets and their ability to negotiate change. Inequalities also underlie entrenched and all-pervasive institutional gender discrimination. These constraints in turn considerably limit the degree to which women can use access to savings and credit to increase incomes and well-being. Serious limitations also reduce group formation to organise for change. These all-pervasive and mutually reinforcing inequalities considerably limit many women's own perceptions of 'the possible' and hence condition their strategies for change, particularly in the short term.

Gender mainstreaming for empowerment: essential elements

Member agencies of CGAP as well as many NGOs have committed themselves to gender mainstreaming, empowerment and poverty alleviation. However, CGAP 'Best Practice' guidelines focus solely on financial sustainability. Gender receives no mention, beyond collecting statistics on numbers of women accessing loans and depositing savings ⁽¹⁸⁾. Gender guidelines and manuals produced by donor agencies, generally relegated to separate publications, have focused on increasing women's access to programmes designed for financial sustainability. Distinctions between poverty alleviation and women's empowerment become blurred. Such gender guidelines focus mainly on:

• changes in collateral requirements to include female forms of property;
• reduction in loan sizes and more flexibility in savings requirements (timing and location of service delivery);
• group formation to decrease administrative costs and increase women's 'social capital'.

Micro-finance networking and advocacy fail to directly address empowerment issues. Even where women are participants, participation may mean little more than mobilizing their skills and resources to decrease programme costs. Where women are involved in advocacy networks, they do not necessarily feel able to raise gender issues. This is part of a wider marginalization of women's empowerment as a 'gender mainstreaming' process in many organizations. Despite the comprehensive guidelines produced by gender staff, gender mainstreaming in practice is often reduced to minor changes in language, collecting statistics on women's access to programmes and increasing employment of women staff. These have been seen as a way of placating gender lobbies without entailing additional costs for women's programmes and without disturbing vested interests.

Some women are able to turn opportunities offered by micro-finance to their advantage and bring about change. Women are not just the inevitable victims. In order to transform micro-finance into a genuine gender strategy, women's empowerment needs to be understood as more than a marginal increase in access to income and/or consultation in limited areas of household decision-making and/or occasional meetings with a small group of other women. While such advances may be useful first steps in a process, change at both the micro- and macro-levels is required. In order to justify their role as a key element of a poverty alleviation agenda, micro-finance interventions also need to be massified and make a quantum leap beyond the limited outreach of those few women who already enjoy more privileged access to resources and skills.

Such a 'gender policy for empowerment' would make micro-finance more empowering for more women. Empowerment is conceived as a multidimensional process. It operates at different and interlinked levels and is based on an analysis of power relations (see Box 2) ⁽¹⁹⁾. This multidimensional process implies trade-offs for individual women between different dimensions and levels. The inherently complex and potentially conflict-ridden nature of empowerment itself means that any one intervention, whether micro-finance or other, will inevitably make only a limited contribution in isolation.

Some empowerment strategies produce 'win-win' situations benefitting all concerned. Still there are often conflicts of interests between women, as well as between women and men. If empowerment strategies are to really address entrenched inequalities in power and resources, they will inevitably be contested by different interest groups and entail the 'disempowerment' of current vested interests.

A genuine empowerment strategy must be defined by women themselves, and not imposed by external agencies (See Note 21). Empowerment is a long-term process, not a 'one-off end-product' decided at one focus group meeting or assessed in a one-off impact assessment.

Gender mainstreaming involves equality of women's access to services and mechanisms to ensure translation of this access into empowerment. Evidence indicates a clear linkage between contribution to women's empowerment, and even women's access to micro-finance, and levels of female staff. Some micro-finance programmes are women-only and the majority of staff are women. Others have equal opportunities policies and set quotas for employment of female staff. Again, although equal employment rights are an essential element of women's human rights and non-discriminatory development, they do not in themselves necessarily lead to women's empowerment. The experience of many programmes with equal opportunities policies indicates that recruiting women, particularly to senior positions, is often difficult. This is due to the gender constraints under which female staff as well as clients are operating. Fundamental changes in recruitment procedures may be necessary as well as organisational culture, recruitment criteria and conditions of work. ⁽²⁰⁾ In addition to equal employment staff frequently lack expertise in gender analysis and may not have sufficient knowledge or experience of the situation of very poor women; they may need training. There is also a need for clear guidelines and concrete incentives for implementation of empowerment policies. Women and men staff are to feel confident about spending scarce time and resources on these issues. Crucially, male staff need to have clear incentives for promoting women's empowerment in their interactions with both male and female programme participants. Creating these incentives in turn requires integration of empowerment indicators into programme monitoring and impact evaluation.

There are a range of micro-finance models in which elements of this gender policy could be implemented to increase contribution to empowerment, from mainstream banks and financial service providers through large poverty-targeted banks to smaller micro-finance programmes providing savings and credit to members of women's movements and labour organisations.

Finally, the degree to which any one programme can achieve significant change is likely to be severely limited in view of the many mutually reinforcing constraints. The implications of an integrated approach are not that any one organisation should provide an infinite range of services and overstretch its capacity. It is rather to think through the range of support needed by women for empowerment, identify the potential contribution of their particular expertise and organisational context and link strategically with other forces for change. Women's own networks, women's movements, advocacy organisations and gender lobbies within donor agencies should be considered as potential allies for change.

On the whole financially sustainable micro-finance models are being promoted by donors to combat poverty and to enhance empowerment. In this context targeting women is justified on efficiency grounds. Many policies currently advocated for financial sustainability have potentially adverse implications for empowerment (see box 4). In their attempt to comply with donor funding guidelines, many programmes are rapidly expanding their range of micro-finance services and decreasing other services and empowerment strategies. Some micro-finance programmes able to offer larger amounts of credit, because of their leverage with donors, push aside smaller, integrated empowerment programmes by taking over groups already formed. (Ebdon 1995).

Poverty targeting does not necessarily contribute to empowerment as poverty targeting may leave out many disadvantaged women who do not belong to very poor households. It may also bypass women who have skills and experience to contribute as role models for other women. The emphasis on small savings and small consumption loans fails to enable women to graduate to higher income activities. It also risks making women responsible for savings mobilization and loan repayment, leaving men's responsibilities unchanged. The emphasis on 'self-help' often fails to recognize the costs to women of participation in terms of time and resources. It does not necessarily provide the opportunity for them to articulate and develop strategies for empowerment. The mix-up of gender and poverty concerns confines women to group based programmes with marginal contribution to incomes growth.

Moreover, the neglect of empowerment concerns is seriously misplaced, since women's empowerment contributes to financial sustainability and poverty alleviation. Women in some programmes have expressed a clear preference for compulsory savings and directed loans to enable them to protect their incomes from men through reference to programme regulations. Some programmes have some special targeted and closely monitored loans for women's enterprise development. Others, including Grameen Bank, insist on registration of assets purchased with loans in women's names. It would also be possible to ensure that special categories of 'social loans' are equally available to both men and women for education, marriage expenses and health. This would encourage men to fulfil their household responsibilities.

Complementary services in some programmes are limited to essential training for access to credit and group formation. In others, they include a range of different types of training including business training and literacy, different types of business development services, such as legal advice and registration. Many donors and programmes also engage in micro-finance advocacy and networking. In most cases however, women's issues and programmes are confined to a very narrow range of services. Gender and empowerment questions are not raised in services involving either women or men or in advocacy or networking. An empowerment approach requires integration of gender and empowerment concerns into all areas of service provision, both to provide adequate support to women and to engage men in questioning and changing gender inequality. Gender awareness needs to be an integral part of all training for women and men, rather than be relegated to separate training. Training on eg women's legal rights and other issues will continue to be needed.

Group-based delivery of savings and credit is advocated to reduce the costs of service delivery ⁽²¹⁾ and to provide the basis for women's participation in self-help community development. The precise structure and function of groups varies considerably. For example, the Grameen Bank methodology, credit co-operatives and some programmes have women-only groups while others have mixed-sex groups. An empowerment approach requires working with these groups to develop collective strategies to overcome gender inequality and to have gender equality as a constitutional element of decision-making in programmes.

This empowerment approach can increase financial sustainability and poverty alleviation. For example, a successful loan graduation programme would over time increase women's ability to take and repay larger loans which are cheaper to administer. Insisting on registration of key assets purchased with loans in women's names would decrease the risk of loan default in cases of divorce or domestic tension. Increasing market relevance of services through participatory assessment (a recommendation even within mainstream micro-finance guidelines) would both more fully address women's needs and increase repayment. Further research is needed to consider ways of reaching the most disadvantaged women in a whole range of different programme models.

Although in the past some support services in some programmes, including gender awareness, have been expensive and with minimal impact, this does not mean they are not needed or would not make a substantial contribution if they were better designed. There are ways in which costs could be reduced again through mainstreaming gender into all service provision, cross-subsidy and\or through charging for some services. For example, in Port Sudan some women's centres supported by ACORD became able to function virtually independently. They provided a wide range of training courses aimed at individual and group capacity-building, such as credit and business management, leadership, group organisation and vocational skills. They dealt with help issues through fundraising and established links with other relevant institutions. They also provided advocacy, referrals and informal advice. Since the decision to reduce the level of community development activities, direct ACORD support for women's centre activities has been gradually phased out. However, as a result of the indirect support given by ACORD, many of these activities are now being provided by local NGOs in co-operation with local community structures and/or individual women community leaders.

Underlying is a change of emphasis from viewing groups simply as a repayment mechanism to looking at ways of 'building on social capital' (Mayoux 1999b). Groups would be used as an entry point for wider empowerment interventions. There is an important role for groups as a forum for information exchange and mutual learning between women. This includes for example successful women entrepreneurs within programmes sharing their experiences with others, skills exchange and discussion of empowerment strategies as in the case of 'how to manage your husband and mother-in-law' from Zambuko. In CGT, for example, interviews with groups found that many women would be prepared to help train other women and groups would be prepared to pay for such training. This would require programmes to play a facilitating role eg collecting information on training needs and training skills as part of programme registration and compiling this into a register in the MIS. Both SEF and CARE-PROSPECT were developing ways of using PLA methods to facilitate this information exchange.

Inter-organizational collaboration is also a way of reducing costs of developing new strategies and services: joint methodologies for gender mainstreaming, training courses, advertising availability of services, information networks about legal rights from local women's movements, client referred systems, etc. This would increase impact of micro-finance at minimum cost and improve the sustainability and outreach of the service providers to poor women.

Beyond blueprints: the challenge for donors

There is a need to promote a much more diversified micro-finance sector than that implied by current Best Practice Guidelines (Box 7). Firstly, there is a need to develop services for very disadvantaged groups of women and increase poverty reach. Although micro-finance provision for very disadvantaged groups is inevitably more costly, micro-finance services are all the more so a useful contribution to empowerment of these groups: agricultural labourers may need savings facilities to prevent high seasonal fluctuations in incomes; savings facilities are necessary for women to prevent large harvest-time earnings lost to alcohol consumption, gambling, cosmetics, etc. Women labourers may need loans for purchase of labour-saving technology or improved housing.

Secondly, there is a need to look for alternatives to large-scale poverty-targeted programmes. There is a need for much more attention to gender mainstreaming within financial institutions like banks, pension funds and insurance corporations. Gender mainstreaming must be reflected in regulatory frameworks, conditions for loan guarantee funds and poverty-targeted savings and credit windows.

There is also a need to develop effective structures for participatory management which combine requirements of efficient service delivery and contribution to empowerment. New participatory management styles have to some extent been introduced in some of the most well-known proponents of the financial sustainability approach like Grameen Bank, Banco Sol, SANASA and PRADAN. Setting up systems for client monitoring together with information exchange could also be a cost-effective long-term strategy combining capacity-building and empowerment with sustainability aims (Mayoux 1998b).

Micro-finance services can be a very useful part of integrated empowerment and poverty alleviation interventions (see eg Chen et al 1996). Contrary to financial self-sustainability orthodoxy, where repayment incentives are built into credit delivery, there is an interesting complementarity of micro-finance and other human development and empowerment interventions.

Finally, the micro-finance programmes targeting women are often promoted as a component of packages to absorb the shock of structural adjustment programmes and globalisation, with macro-economic and social policy prescriptions which seriously disadvantage women, decrease public sector availability of complementary services and remove any existing welfare nets for the very poor. The assumptions of automatic beneficial impacts of micro-finance can thus at worst be used as a pretext for withdrawing support for other empowerment and poverty alleviation measures.

The development of an innovative and diversified micro-finance sector which makes a real contribution to women's empowerment will require much more commitment from donors than has been the case to date. It is crucial that donors make their commitment to women's empowerment explicit through inclusion of questions on gender policy and empowerment as an integral part of Best Practice guidelines and the criteria for funding. A suggested checklist of questions is given in Box 8, drawing on the gender guidelines of donor agencies.

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Mayoux, L. 1999. Questioning Virtuous Spirals: micro-finance and women's empowerment in Africa. Journal of International Development 11:957-984.

Mayoux, L. 2000a forthcoming. Selected Programme Case Studies: SHDF, Zambuko Trust, SEF, CGT and SCF-UK Vietnam Programme, ILO.

Mayoux, L. 2000b forthcoming Sustainable Micro-finance for Women's Empowerment: A Participatory Learning and Action Approach, UNIFEM

Mayoux, L. 2001 forthcoming Beyond Rhetoric: Women's Empowerment and Micro-enterprise Development London and New York, Zed Press.

Otero, M., and E. e. Rhyne. Editors. 1994. The New World of Microenterprise Finance: Building Healthy Financial Institutions for the Poor. London: IT Publications.

Rahman, A. (1999). "Micro-credit Initiatives for Equitable and Sustainable Development: Who Pays?" World Development 27(1): 67-82.

RESULTS. 1997. The Micro-credit Summit February 2-4, 1997 Declaration and Plan of Action. RESULTS.

Rogaly, B. 1996. Micro-finance Evangelism,'destitute women' and the hard selling of a new anti-poverty formula. Development in Practice 6: 100-112.

Rosenberg, R. 1998. Internal Review of UNCDF Micro-finance Activities. CGAP.

Rowlands, J. 1997. Questioning Empowerment: Working with Women in Honduras. Oxford: Oxfam.

Sebstad, J. 1998. Toward guidelines for lower-cost impact assessment methodologies for micro-enterprise programmes. Management Systems International.

WorldBank. 1996. Implementing the World Bank's Gender Policies: Progress Report No 1. World Bank.

1. For example in the Declaration at the Micro-credit summit in a section entitled 'Micro-credit: Empowering Poor People to End their Own Poverty' one finds the following: 'empirical evidence has shown that women, as a group, are consistently better in promptness and reliability of repayment. Targeting women as clients of micro-credit programs has also been a very effective method of ensuring that the benefits of increased income accrue to the general welfare of the family, and particularly the children. At the same time, women themselves benefit from the higher status they achieve when they are able to provide new income.'(RESULTS, 1997 p8)

2. It draws particularly on work by the author on micro-finance programmes in Asia and Africa. Firstly a series of regional workshops in India, Ethiopia, Ghana and Zimbabwe funded by DFID-UK and Hivos and sponsored by a steering committee of UK-based NGOs managed by Action Aid. Secondly it discusses research on donor policy under a research fellowship at the Open University, Milton Keynes. The paper also draws on a series of independent consultancies in Bangladesh and Cameroon. The evidence and issues are discussed in greater detail by the author elsewhere (Mayoux 1998a,b, 1999a,b, 2000 forthcoming).

3. Detailed discussion some of these programmes and their contribution to empowerment can be found in the accompanying ILO Programme Case Studies in Mayoux 2000a (SHDF, Zambuko Trust, SEF, CGT and SCF-UK Vietnam Programme). Other programmes (Port Sudan, CODEC, Mbonweh, BEWDA and SEWA) are discussed in detail in Programme Case Studies included in Mayoux 2000b forthcoming available on the UNIFEM Internet web-site.

4. The term equality is used here, not in the sense of sameness but of equality of choice and opportunity. It is used in preference to the term 'equity' which became hijacked by the conservative right to justify existing gender differences and divisions.

5. For a critical overview of the Bangladesh literature see Kabeer 1998.

6. For an overview of the AIMS studies see Appendix in Sebstad 1998.

7. For detailed Bibliography see Mayoux 2000 forthcoming.

8. Detailed references to particular studies and particular programmes are given in Mayoux 1998a. It is likely that more evidence will become available over the next year or so through doctoral theses and further CGAP-sponsored studies.

9. For discussion of the conceptual background to the concept of empowerment see Rowlands 1997; Kabeer and 1999 and summary in Mayoux 2000. For discussion of the implications for impact assessment of micro-finance programmes see Mayoux 1998b, 2000, Kabeer 1998).

10. Of the Programme Case Studies in the Appendix these are seen to be particularly SEWA, CODEC, Zambuko Trust, SEF, Mbonweh, CGT/CIPCRE, and the ACORD-sponsored programmes.

11. This has been a critique of BRAC ( Goetz 1996) and was also expressed as a concern in other programmes in Asia at the South asia workshop faclitated by the author. The predominance of women in group rather than individual programmes is frequently a result not only of programme policy, but also the reluctance of men to spend time in group meetings.

12. In Harper's study of AKRSP out of 31 micro-enterprise loan- takers interviewed only 7 loans were controlled by women and 16 were used by men and women had not been involved in the loan-taking process. In a further 8 cases women did not even know the loan had been taken. (Harper 1995,6).

13. This is particularly the case in Bangladesh. In Goetz and Sengupta's study of 275 loans in large-scale credit programmes in Bangladesh (106 BRAC; Grameen Bank 53; TMSS 39 and RD-12 (55) they found that women had full control of loans in only 17.8% of cases and in as many as 21.7% they had no control. A survey of 26 women in the SCF Bangladesh programmes found that 68% of loans had been used by the husbands or the sons and all except one first time loan. (Basnet 1995)

14. This is a serious problem in many of the African cases like Mbonweh, CGT and also other programmes visited by the author in Southern Africa. The survival of many of the enterprises is dependent on continuing injections of funds from the micro-finance programme because all of women's incomes were spent on the household. Men were very supportive of the programme because women now no longer 'nagged' them for their contribution to the household. There were also reports from both Eirtrea and West Africa that men had then used the income freed to marry other wives.

15. This was a serious concern of many of the programmes attending the workshops facilitated by the author in Africa.

16. Many studies of self-selecting groups point to the problem of exclusion of poor and disadvantaged women. This is discussed in detail for SEF and CGT in Mayoux 2000.

17. There has been no systematic research on whether the poorest and most disadvantaged are in fact more of a risk. Anecdotal evidence suggests that on the contrary the poorest strive against all odds to repay and in some groups it is the better off and more powerful who default.

18. CGAP 1998.

19. The process of 'empowerment' is seen as inherently linked with equality in the sense discussed in Note 5. However for the author the term 'empowerment' connotes a much greater emphasis on women's own agency in bringing about and defining the parameters of equality.

20. For a discussion of some of the issues see Goetz, 1992; Macdonald et al, 1997.

21. For example, building on earlier work by Stiglitz (1990,1993) Otero and Rhyne write: "Group formation is often employed by micro-enterprise programmes particularly for the poorest clientele. The group plays a role in reducing the cost of gathering information about the borrower, but its more important role is in repayments through shared liability for default. Lenders can shift some of the loan-processing and loan-approval tasks onto the group because the groups have better access to information on the character and creditworthiness of potential borrowers...When very poor clients care more about access to credit than the terms on which it is offered, groups can be used without significantly impairing demand." (Otero and Rhyne 1994 p 16)

PROGRAMME CASE STUDIES: ZIMBABWE 1 and 2 ⁽¹⁾

PROGRAMME CASE STUDY 1: SELF-HELP DEVELOPMENT FOUNDATION

PROGRAMME CASE STUDY 2: ZAMBUKO TRUST

INTRODUCTION: ZIMBABWE CONTEXT

The Zimbabwean government has had a stated commitment to gender equality since Independence in 1980. ⁽²⁾ In 1981, a Ministry of Community Development and Women's Affairs (MCDWA) was set up to ' facilitate the involvement of women in national development through the removal of all legal, cultural and socio-economic barriers that hinder the full participation of women.'

One of its first projects was a massive data collection exercise which identified the issues that women themselves saw as priorities for change: land alienation, agriculture production, lack of skills and formal employment opportunities, and their heavy work burden (MCDWA 1982).

In 1992, the Department of Women's Affairs was restructured and placed within the Ministry of National Affairs Cooperatives and Employment. Both MCDWA and its successor gender unit have had limited staff and resources ⁽³⁾, seriously limiting their scope for action. They have been supported by dynamic grass-roots women's groups, which have campaigned on women's issues since Independence ⁽⁴⁾.

In the initial years following Independence, the main focus was on legislation for women's equality. Under Customary Law, black women were considered minors for the whole of their lives, under the perpetual jurisdiction of men. Women were generally excluded from control of property (land) or exchangeable wealth (such as cattle or agricultural surpluses). Their only inalienable property rights were to some of the products of their own hands, and the surplus food from the fields or plots allocated to them by their husband or father. The MCDWA spearheaded the introduction of a series of laws aiming to change this situation. It tried to give women rights to full adult status ⁽⁵⁾. Nevertheless, legislation still contained numerous double standards ⁽⁶⁾ and was largely ignored in the rural areas as Customary Law was not abolished. Equal inheritance rights for daughters and wives were not granted till 1997. Even then, cases continued to be decided against women. ⁽⁷⁾ There was also a series of amendments to Labour legislation. Maternity rights and the right to equal pay were granted, but they only applied to a small percentage of women. Women's rights were again under review in the revised Constitution proposed (but defeated) by Robert Mugabe in February 2000.

The legislation has nevertheless provided an important focus for women's organizations in urban and rural areas. Women workers in some industries have organized women's forums to defend women's rights (Batezat et al 1986).

In the 1980s, girls benefited greatly from educational reform. Female attendants primary schools increased nearly 200%. Women's attendance at secondary and agricultural colleges also rose. ⁽⁸⁾ Women were granted improved access to agricultural advice from government extension services and other services like credit and marketing cards.

As in other countries, there was a mushrooming of women's projects. By December 1984, there were 8 237 such projects; total membership was 163,000 of which approximately 70 percent were women. Many more projects were started following the 1985 Nairobi International Conference on Women. A number of organizations provided grants or soft loans to women and men, often as part of their social outreach program ⁽⁹⁾. As elsewhere, projects were mainly concentrated in traditional female activities, such as dressmaking, gardening, small livestock, bakery, handicrafts and tree planting; they were largely unsuccessful. Significantly, women's access to land allocated under government programmes remained limited. In both the resettlement programme and communal areas, land was allocated to the man as head of household and married couples did not have joint tenure. Only widowed and divorced women could obtain land in their own right. This was despite pressure from the MCDWA and from grass-roots women's groups. Moreover, there has been a consistent neglect of development of women's traditional crops in favour of cash crops, further reinforcing men's advantage (Batezat et al 1986, Jacobs and Howard 1987).

Many of the still limited gains which women had made, came under threat in the economic hardship of the 1990s. A Structural Adjustment Program introduced in 1990 was followed by a period of severe, widespread drought. Agricultural production fell and (now deregulated) consumer prices rose. The annual inflation rate continued to be about 20%. There were increases in the costs of health care and education, with the re-introduction of school fees in 1991. SAP saw retrenchment from public sector employment. ⁽¹⁰⁾

In 1997, prices and production costs coupled. Real disposable incomes decreased. By mid-1997, despite improvements in agricultural production, consumer buying power was at only about two thirds of its 1990 level ⁽¹¹⁾. Unemployment continued to rise (USAID/Zimbabwe, 1997 quoted Barnes and Keogh 1999). Safety nets to assist low-income families with health care of school fees were not very accessible. An estimated 46% of women aged 15-24 could not afford to attend school. School enrolment fell, particularly in higher education, with men three times more likely to be formally educated (Nichols Marcucci 1998).

In response to the increasing cost of living, women began assuming more financial responsibility within the household. This was especially the case when husbands lost their jobs. Women relied mainly on their micro-enterprise activities to meet the financial needs of their households (Brand et al 1995, Horn 1994). Employment in MSEs in urban areas rose ⁽¹²⁾. There was however a decrease in the number of MSEs in rural areas. Most of the increase has been in low profit activities, such as vending farm products and vending used clothes ⁽¹³⁾. There was also a decline in the percentage of MSEs owned by women, indicating a further erosion of their control over income ⁽¹⁴⁾. A possible reason for this is the fact that some female owned businesses were driven out by retrenched men starting MSEs. Some retrenched men may have become joint owners of enterprises previously owned by their wives. There has also been a rapid decline in manufacturing activities dominated by women, such as crocheting, knitting, textiles and tailoring (Barnes and Keogh 1999). In the mid-1990s, the majority of MSEs made less profit than either men or women could earn in other types of employment. ⁽¹⁵⁾

Micro enterprise development programmes have been a major focus of poverty alleviation policies. Until the 1990s, zoning and licensing regulations posed serious impediments to development of small business (Daniels, 1994). Micro-enterprises, and women in particular, were subject to frequent harassment and raids as part of government attempts to 'clean up' urban areas (Jacobs and Howard 1987). Moreover, programs undertaken by the government and banks focused on development of indigenous businesses have largely by-passed micro-entrepreneurs because of eligibility and application requirements ⁽¹⁶⁾.

There was a rise in the numbers of organizations providing services to micro-entrepreneurs. Particularly from the mid-1990s, there has been an expansion in micro-finance services for micro enterprises from commercial banks ⁽¹⁷⁾ and especially from non-banking organizations. These organizations were stimulated by increased funding from donors, such as DFID, CIDA, AUSAID, GTZ and USAID ⁽¹⁸⁾. An umbrella organization, the Zimbabwe Association of Micro-finance Institutions (ZAMFI), was established in 1997 to provide a forum for these non-banking organisations to discuss common issues. Such issues included government policies and techniques for preventing defaulters from accessing other programs and borrowers from accessing loans from more than one program at the same time. In 1999, ZAMFI's member institutions included Zambuko Trust, Opportunity International, Masvingo Credit Against Poverty, Canadian Co-operative Association, National Association of Co-op Savings and Credit Unions, Phakama Economic Development Company (Pvt) Ltd, Zimbabwe Ecumenical Church Loan Fund, Mennonite Economic Development Association, CARE International, World Vision Zimbabwe and the Collective Self Finance Scheme.

Many of these programmes are women-only and most are increasingly targeting women. Until at least 1998, gender issues had not been raised as part of ZAMFI's advocacy and lobbying activities. These have focused on regulatory frameworks and 'Best Practice' following standard financial sustainability guidelines. Gender policy concerns have been reinforced by the priorities of the main donors involved. Recently, as a result of pressure from some of the programmes, including the Case Studies presented here and their supporting international NGOs, ways of incorporating empowerment concerns into mainstream programme functioning are now an area of considerable interest. The issue was further catalysed by a workshop facilitated by the author in Harare in March 1998. Part of the discussion in the following Case Studies is based on it ⁽¹⁹⁾

.

PROGRAMME CASE STUDY 1: SELF-HELP DEVELOPMENT FOUNDATION

L.Mayoux

INTRODUCTION

Self-Help Development Foundation (SHDF) is a large women-targeted savings-based programme to which credit and other training components have been added. The programme has grown out of the Savings Development Movement (SDM). This movement was started in 1963 by a Catholic priest, Frere Waddelove, with the help of Agritex, the government Agricultural Extension Service. Savings Clubs were set up as a collective self-help exercise among groups of farmers. The goal was to help mitigate the effects of drought through pooling resources to order inputs in bulk and take advantage of cheaper transport costs. After Zimbabwean Independence in 1980, the number of Savings Clubs expanded rapidly at over 1,000 per year. Since 1982, SHDF has been supported technically and financially by Konrad Adenauer Foundation, mainly for training. In 1996, SHDF started a woman-targeted credit programme on a pilot basis in Matabeleland and Mashonaland. The purpose of the programme was to extend loans to Savings Clubs which run viable projects, but lack adequate capital. With USAID funding from October 1998, CARE-International has assisted with the credit programme. It provided technical assistance and training to significantly expand the programme and to strengthen the organization to make the transition to a financial intermediary. ADRAI, a Belgium NGO, has also supported the expansion of the credit activities since September 1998.

By 1997, there were approximately 10,000 Savings Clubs (SCs) with 200,000 members of whom about 93% were women. 392 loans had been disbursed worth Z$1 093, of which 97% were to women. It is anticipated that with USAID funding, the credit programme will expand to 5 provinces over five years. Repayment rates in 1998 were 100%. In 1997, fees were covering 86.4% of operating costs (ZDCM 1997). The programme does not have a formal gender policy and as can be seen from Box 1, the stated aims do not include empowerment as such. Yet, increased incomes, skills and mutual support for members (of whom the majority are women) are contemplated. At the time of writing, one of the main supporting international NGOs, CARE-International, was about to embark on a participatory consultation to develop a gender policy which would also have implications for SHDF.

SECTION 1: STRUCTURE OF THE SAVINGS AND CREDIT PROGRAMME

The basis of the SHDF programme are the self-managed Savings Clubs. These comprise 10 to 30 members, generally from the same locality. Rural savings clubs remain predominant; nevertheless, other clubs have branched out into more diverse income generation projects, such as poultry, farming, piggeries, cattle fattening, garment making, crochet, horticulture, peanut butter production, tie and dye, bakery, weaving, soap and candle-making. The Savings Clubs are largely autonomous. With the introduction of the credit programme, they have been federated at Ward, District and Provincial levels.The credit programme is intended mainly for productive purposes. It is monitored by SHDF staff with assistance from SC committees at various levels.

SHDF itself is a registered non-profit company. Its role is mainly to provide financial guidance, training and advice for savings and credit services and income-generation. SHDF currently has about 35 full-time staff who liaise with SCs through 12 provincial co-ordinators. It has offices in all Provinces of Zimbabwe: Greater Harare, Manicaland, Mashonaland East, West, Central, Midlands, Matabeleland North,South, Masvingo and the Districts of Hwange, Gokwe South and Zaka. It also has 3 training centres in Harare, Rusape and Bulawayo. Much of the training and administrative activities are conducted by volunteers from Peace Corps and other organisations. Institutional strengthening activities include support and development of systems and procedures in Human Resources, Finance, Accounting and Administration areas as well as strategic directions and governance. SHDF also collaborates with the Community Development Workers and the Agricultural Extension Service (AGRITEX). Weaving and craft experts provide technical training and assistance to members. This has included training in women's rights. SCs themselves also contact speakers and trainers directly to address some meetings.

SECTION 2: ECONOMIC AND SOCIAL IMPACT: CASE STUDIES

There has been no detailed impact study of SHDF focusing on women's empowerment. However, there have been two general impact studies:

• an analysis of SHDF's loan portfolio was conducted by Konrad Adenauer Foundation (KAF) in 1997. It was followed by a survey of 59 borrowers ⁽²⁰⁾. Information collected covered demographic data, information on SCs and interviewee membership, details of private savings, type of business, extent of experience and other sources of income, differences between loan amounts and actual amounts invested, problems faced in repayment.

• a survey by CARE-International Zimbabwe of 96 Savings Club members was carried out in 1999. It investigated the impact of credit on members'quality of life (Bohn 1999).

In what follows, these analyses are supplemented by case study material from interviews by the author and SHDF staff in 1998. Interviewees were 15 out of 22 members in one rural Savings Club, Zhenje Nseke, 55 km East of Harare ⁽²¹⁾, and in one urban Savings Club, Budiriro, in Harare where members were applying for their first loans. These were informal exploratory qualitative interviews looking at loan use, intra-household decision-making, women's perceptions of economic opportunities and group decision-making. Three contrasting case studies from this research are summarized in Box 2.

She decided to join the Club and faced no opposition from her husband. She has been very active in the management of the Club, being secretary in 1996 and chair woman in 1998. She used 3 loans totaling Z$ 4,500 to establish a piggery and poultry. At the time of interview, she had 2 pigs and 30 hens. She earns about Z$600 a month from which she controls the income, putting most into the household pool and keeping some for herself. She is responsible for most of the household expenses. She bought a wardrobe with the proceeds from one of the loans. She normally has a savings balance of Z$300 with SHDF, Z$1,000 in the bank and Z$800 with ROSCA. Despite her training and responsibility, and the fact that her husband knows her financial affairs and savings balance, she does not know how much her husband earns, what he spends it on or the amount of his savings. But she knows he spends about Z$30 per week on alcohol.

She is also SHDF Ward representative and is active in other women's and church organisations including Zimbabwe Women's Bureau, Zimbabwe Farmers Union, ZIMRIGHTS and Zimbabwe Women's Finance Trust. She has received training in sewing, leadership and has a certificate as Advanced Master Farmer. She values the sharing of ideas at Club meetings. She sees women's knowledge of their rights and role as the most important change in recent years. She sees 'spouse oppression' as the most serious problem.

'Mrs B' age 30, married. She attended Junior school. They are one of the better-off households in the community. Her husband was a teacher earning Z$3,000 and is now an accountant earning Z$7,000 per month. He has 3 acres of land in his name. They have TV.

She joined the Savings Club in 1986 and is currently the Secretary. She decided to join with the full support of her husband. She has taken two loans: one $2000 for poultry and one $3000 for trading. She also has two pigs. She earns Z$200 a month and since the loan, she has been able to work throughout the year. Despite these activities, she describes herself as a 'housewife' who 'does nothing'. Questions about her daily routine are mainly answered with details about housework and cultivation. She normally has a balance of about Z$100 with SHDF, Z$700 in the bank and Z$400 contribution to ROSCAs. She does not know how much savings her husband has, but he knows about her account. Of her income, she keeps Z$100 for herself and puts Z$100 into the household budget. She also purchased an asbestos roof for the house with her income. This compares with her husband who keeps Z$300 from his monthly salary, gives her Z$300 and gives the remaining amount to the household budget. Neither husband nor wife drink alcohol.

She feels very insecure in her relationship and does not know what her husband does when he goes to Harare. She has also faced continual resistance from her father-in-law to her earning an income and becoming more financially independent. She is a member of the Zimbabwe Women's Bureau. She sees increased financial independence as the most important advance for women in recent years and (reflecting her own experience) opposition by fathers-in-law as the most significant obstacle. The group meetings which she found most interesting were cooking and singing. She would like them to do some sport like netball.

'Mrs C' age 23, married with two children who both go to school. She herself was only educated to Form 3 and her husband to O'level. Her husband owns 1 acre of land on which they grow vegetables. They both go to sell them in Harare and earn about Z$700 a month. This year, the rains were bad so they did not grow enough to keep any back for their own consumption. Her husband also has occasional work in a pottery factory where earnings are Z$800 a month. He keeps all the money and she has to ask him for money for food and other household needs. He drinks every day, spending Z$100 a month and is very violent towards her. She cannot leave him because she would have to leave the children and anyway it is too difficult for a woman on her own.

As indicated in Box 1, one of the four stated aims of SHDF is to 'provide accessible credit to Savings clubs and\or members undertaking viable self-help projects, thereby leading to increased incomes, savings and investment'. Particularly the 1990s women have been increasingly assuming more financial responsibility within the household. In both Zhenje and Budiriro, women said that nowadays if women did not earn an income, for husbands were likely to divorce them. In the absence of ownership of productive resources, particularly land, women have been largely dependent on micro-enterprise and small livestock production. As discussed in the Introduction and illustrated by the cases in Box 2, incomes from these activities are generally very low and significantly below those of men. It is against this background that programme impact must be assessed.

SHDF loans are intended primarily for productive purposes. Records are kept for all loans with details of the purpose, the total amount of investment of a client, total costs and net profits. The initial loan amounts of Z$3,000 are the equivalent of about one month's salary for a teacher (see Note 22 above) rising to the equivalent of 4 month's salary; such an amount is therefore not neglectable. It does appear that most loans have been used for economic activities, although the data need to be treated with some caution. ⁽²⁴⁾ Estimates of proportion of loans actually used for production vary, as does the sectoral variation ⁽²⁵⁾. Nevertheless, it is clear that most investment has been in 'traditional female skills' which are generally not as lucrative as those of men. One other woman not interviewed in Zhenje, had used a loan to purchase an ox, normally only owned by men, a rare challenge to dominant gender roles. It was also clear from comparisons of men's and women's loans in Zhenje and the applications of women and men in Budiriro, that men were aspiring to much larger loans in more lucrative crops and industries than women were.

Loans have generally led to some increase in income, but these are not high even compared with incomes of factory workers or even the daily food requirement of a family (about Z$800 per month and Z$200 per day see Note 22 above). Again, the data must be treated with some caution. Estimates of average net additional income in the KAF survey came to Z$106 per month or 152% of loan amount, adjusting for interest payments. 51% of respondents had higher returns than 20%. 28% were able at least to double the amount they invested. 26% made slight profits between 100-120% of investment. In the CARE study, 96% of loan recipients said their income from the primary project had increased since taking the loan. In Zhenje Nseke, all women interviewed reported increases in income, either one-off payments on sale of livestock or less easily quantifiable increases from contribution to raw materials. However, in the KAF study, for most interviewees loans from the programme met only part of investment requirement, 68% of cases filled the gap with business profits, 19% with savings deposits, 6% from family assistance, 3% from ROSCAs and 3% with salary from another job.

Importantly, not all women had gained. 23% of borrowers in the KAF study made a loss and even for other interviewees, actual profits were 27% lower on average than those anticipated by SHDF credit officer or borrower. Despite the optimism of the CARE study, 14% of new clients and 18% of repeat clients said their income had decreased over the past year. Yet, this was compared with 54% in a control group ⁽²⁶⁾. The CARE study also notes an increase in respondents being owed money by customers. 66% of those interviewed were owed money. Lending to customers increases as numbers of loans increase, rising to 91% of those having taken 3 or more loans. The CARE study interprets this as a worrying risk to the loan recipients. It may however signify an increase in money lending activity by borrowers, once they have met their own immediate production needs, as occurs in other contexts like South Africa. ⁽²⁷⁾

As noted above, levels of loan repayment were high. Loan repayment was generally from business profits in the KAF survey. 76% of those interviewed used profits from their own business for repayment and 17% income from other businesses. Only a few financed the loan repayment through help of family members or friends (7%), ROSCAs (5%) or other savings held (5%) or collateral (2%). ⁽²⁸⁾ 34% repaid the loan earlier than they had expected. Of these, 80% repaid punctually in order to get a second loan, 14% because they wanted to get rid of the burden, others because they wanted to keep a good reputation. A considerable number expressed fears of being unable to repay. A sizeable proportion (22%) of interviewees said they had difficulties repaying the first loan instalment.

The loan program has made some contribution to increasing incomes for most borrowers. However, increases have not been large; there has been little change in the prevailing gender division of labour, whereby women are mainly consigned to low profit activities. Moreover, there are some worrying signs of possibly as much as a fifth of women who make a loss and/or have difficulties repaying at least initial loan instalment. Particularly in the context of increasing expectations and pressures on women to earn an income, the failure of micro-finance programmes to assist women in diversification of activities and significantly increasing incomes must be questioned.

Control over income and intra-household decision-making

Women have traditionally had rights to keep and control income from their own work. All women interviewed in Zhenje said they controlled the income they earned from the activity financed by the loan. A number of women (8 out of 11) also mentioned women's increased 'financial independence' as one of the major significant changes in women's status in recent years. This was seen as a major contribution of the programme.

However, even where women controlled their incomes and were prominent in decision-making, gender inequality was still evident and largely unquestioned. Men invariably earned more than women. Interviews in both Zhenje and Budiriro indicated that contributions to household expenditure and decision-making were generally a complex negotiation within households. They depended on availability of income from particular sources, in relation to particular needs at the time, rather than on a fixed allocation of rights and responsibilities. Households differed in the ways in which incomes from husbands and wives were allocated. Interviews with 9 married women members found that in all households, both spouses contributed some money to a household pool from which some consumption expenses were met. All women also kept at least part of their own income. Women saw themselves as solely responsible for decisions about food. Expenditure on food could take the major part of their earnings. There was no clear pattern of responsibility in other areas ⁽²⁹⁾. In general, men contributed more to the household, but also kept considerably more for themselves ⁽³⁰⁾.

Despite legislation, women face considerable insecurity because of lack of ownership rights, in case of divorce or widowhood. This limits women's power to exercise control over their incomes, in the face of opposition from husbands or in-laws. As indicated in the Case of Mrs B in Box 2, women may feel very vulnerable and have serious worries about their husband's fidelity. In some cases, men's expenditure on things like drink amounted to a significant proportion of household income. Mrs B. was in one of only two households in the community, where men did not drink. In extreme cases like that of Mrs C, women may have very little access to husband's earnings. He may also attempt to squander her earnings on drink. Women could not therefore always rely on male incomes. They had no accepted right to know about men's financial affairs in they way men expected to know about those of women. In 3 households, women did not know how much their husbands earned or kept for themselves. This included even very educated women like Mrs A..

In this context, not only loans and earning an income were important, but also the ability to save independently. Both the KAF survey and the author's own research found that the SHDF savings programme was highly valued by the women. The ability to save was mentioned by women interviewed in Zhenje as an important positive change in women's position in recent years. The SHDF programme was not however the only savings facilities to which women had access. Many members also save with banks and/or ROSCAs ⁽³¹⁾. Amount saved here are often greater than contributions to SCs. As a result of increasing mortality with the spread of AIDS/HIV, people are increasingly joining funeral funds (ASCAs). They accrue savings, so that in case of death, they can provide food and utensils. These different savings institutions were used for different purposes. This also varied between women. It appears that for better-off women, other financial institutions give an easier or faster means of answering needs. Bank accounts were used for saving larger less accessible amounts and ROSCAs for saving relatively large amounts for particular purposes. Nevertheless, women in both the KAF study and Zhenje said that Savings Clubs provided better social security against unforeseen events. Giving quick access to funds, The Savings Clubs enable them to save very small amounts which otherwise would not be able to be deposited with financial institutions. Half the members interviewed in the KAF study had joined SCs for this reason.

In Zhenje, the compulsory nature of the savings was said to be valuable, too. Women appreciated the fact that they were able to save cash, preventing other family members from having access to it. SCs provided a backing for economic undertakings against the wishes of husbands. Men are often reluctant to permit their wives to use household funds for their businesses. In Zhenje, a continuing gender asymmetry was evident. Women had lower levels of personal savings than men and men had much greater knowledge of women's financial affairs than women had of men's ⁽³²⁾.

It was clear therefore that the 'financial independence' women valued was very limited. The degree to which increased incomes and savings led to any significant shift in economic decision-making in the household was very variable. Significantly, men interviewed valued women's contribution to the household, because this freed them from some of their responsibility. As one old man explained to the author 'It is good now women have their own savings because men are irresponsible and women are the backbone of the family'. When asked whether it would not be better to make men responsible, both he and the women present laughed and said this was unlikely. Women in both Zhenje and Budiriro said that now men expected women to have their own income and use this for household needs. They said that nowadays if women were not able to make significant contributions to the household, then their husbands were likely to divorce them. Although women undoubtedly need to control their income and to have savings facilities, these must be accompanied by measures which also address inequalities within the household. If not so, targeting such facilities solely to women risks further increasing pressures on them.

Social and political empowerment

SHDF has as a stated aim 'to provide savings clubs\members with a mechanism for interaction, mutual support and training in income generating activities'. Women valued the training they received. The CARE study reports increased self-confidence among borrowers. In the KAF study, about two thirds of the borrowers interviewed had received additional training of various types ⁽³³⁾. Almost half of these courses were organised by SHDF, while others were run by churches, schools, various ministries. Most of the women interviewed who had had training had found it useful. Many requested more training. In Zhenje, some women wanted more discussions on issues like women's rights.

The Clubs provided a basis for various forms of economic collaboration. The KAF survey found that members of a savings club get together before a cropping season; they decide on their requirements for seed, fertiliser, insecticide etc.. These are then ordered in bulk and paid for in cash. Members thus get the benefit of discounts and bulk delivery. Correct use of the package of instructions together with the necessary inputs usually results in large increases in agricultural production.20% of those interviewed gave this as their main reason for joining. Women mentioned financial assistance from other members and provision of free labour on farms in times of sickness as particular benefits of the Savings Clubs compared with other savings institutions like banks.

In Zhenje, the Savings Clubs were also valued socially for the skills members gained and for the discussions within the groups. It was obvious that the Savings Clubs provided a valuable social network. In the case of 'A', a dynamic older and better-off woman, the Club has provided one of a number of activities for broadening her experience and networks. It has also given her a source of credit to increase income which she controls. In the case of 'Mrs C', the savings programme in particular has provided a vital source of support and means of securing control over her low income. Nevertheless, she has to cope with a violent relationship and her level of control over her own life is still very limited.

Yet, there were also clear limits to co-operation. Firstly, in at least some Clubs, it is probable that committee members are getting the bulk of the loans in the 'democratic system'. The KAF survey suspected that committee members might be using the weight and influence of their posts to get priority in loan disbursal. 58% of those interviewed (i.e. all borrowers in SCs studied) held committee posts or were Ward\district SC representatives. In Zhenje Nseke, there were reports of leadership problems. It seems that there was also the need for leadership training for members and for greater democracy. The same committee of secretary, chairperson, treasurer, vice-chairperson and vice-secretary held office from 1980 to 1996, when SHDF introduced the loan programme. There was also a very rapid succession of treasurers for reasons which are unclear. The degree to which loan disbursal favoured the better-off was also unclear. Those who had received most loans were office-holders or their relatives. However, SC members who had not received loans were said not to have applied because they had no project. Some very poor women had anyway had loans or were going to be given them. Only one member (male) had been refused, because he did not have sufficient collateral and they did not trust him. These potential inequalities on the programme do require greater investigation.

SECTION 3: CHALLENGES FOR THE FUTURE

The programme has undoubtedly made some contribution to increasing women's incomes and their control over them (which they have by and large achieved). The programme has also provided a forum for training and networking. Nevertheless, there are clearly a numberof challenges for the future which are related to some wider issues and by no means unique to SHDF:

· how can micro-finance programmes better assist women to increasing their incomes and diversifying the activities in which they are involved?

· how far can or should programmes intervene in existing relationships within groups to ensure fairness and equity? What types of group formation and regulation are required? In particular, can this be done through self-selecting groups or is there a need for close targeting? Can this be done cost-effectively without incurring huge administrative costs, or are such costs inevitable if poverty reach is to be ensured?

· how can micro-finance programmes move beyond helping women cope better within existing limitations of gender inequality to being capable of really challenging these inequalities?

· can contribution to empowerment be increased within the current goals of financial sustainability? If so, how? Or is there a need for some modification of financial sustainability requirements?

PROGRAMME CASE STUDY 2: ZAMBUKO TRUST

INTRODUCTION

Zambuko Trust, a partner in the Opportunity International Network, is primarily a micro-loan program targeting poor entrepreneurs, particularly women. It was formed in February 1992 as a micro-enterprise lending organization by a group of Zimbabwean business, community and church leaders worried about the impact of the 1990 Structural Adjustment Programme. Since 1992, it has grown from a small program operating in Harare, the capital city, to having offices in all of the major cities in Zimbabwe. Zambuko had grown from 9 centres and 1 branch in 1991 to 144 centres and 23 branches in 1998. It had received donor support totaling $3,335,000 from AUSAID, USAID, SDF (government) and RNE. It provided micro loans totaling Z$ 9.7 million to 15, 867 borrowers,more clients than any other organization providing services to micro-entrepreneurs in Zimbabwe. Zambuko aims to become a self-sustaining organization, but its operating self-sufficiency rate in March 1997 was only 58%.Zambuko leads the Zimbabwe Association of Micro-finance Institutions.

Zambuko has a stated aim of women's empowerment. Although Zambuko did not begin with a policy of targeting women in the mid-1990s, it made a strategic decision to target women (World Bank, 1997). This was partly because of the good repayment performance of women compared to men and PARTLY BECAUSE OF the large numbers of female micro-entrepreneurs in Zimbabwe. By 1997, 76% of its borrowers were women. As a member of the Opportunity International Network, it has agreed to the organisational gender policy adopted in 1997. It provides gender awareness as an integral part of its credit delivery and encourages women's groups to exchange experiences and information.

SECTION 1: THE PROGRAMME: STRUCTURE, SERVICES AND GENDER POLICY

Zambuko is a micro-loan programme with three different levels of services:

Individual lending:

Group loans: started in 1995

Women's Trust Bank: started as a variant of the village banking model aimed at poorer women.

Details of the program services are given in Box 1. As can be seen, it has no savings programme, but clients have savings with other institutions including banks and ROSCAs. It has a Family Assurance Programme. It integrates business advice and awareness on gender and other issues with the credit programme. The Trust is governed by a local Board of Directors who make the major decisions about policy. The programme is implemented through staff at regional branches.

Over the years, Zambuko has changed in a number of ways in its attempt to both increase repayment rates and financial sustainability. Like many micro-finance organizations, Zambuko has encountered relatively high delinquency and default rates. In its initial years, this was related to agricultural problems caused by the drought. Then in 1995, the uncertainty of future program funding led a number of clients to default. After the appointment in 1996 of the current Executive Director, a series of structural changes and changes in loan delivery were made, in order to improve repayment rates and increase financial sustainability:

Fees and interest rates: The nominal interest rate on loans has remained relatively steady in spite of the relatively high inflation rate. This, however, has been off-set by other fees, such as the application and processing fees which are adjusted periodically to keep up with inflationary pressures. In 1997, a number of other measures were introduced to increase repayment:

incentives system for clients with 100% on-time payments: discount of two percent interest applied on completion of the loan, and an automatic re-loan which is activated by the last installment.

strict policy of dealing with late payments: starting with warnings after one week, applying the insurance fund after 30 days, asking the guarantor to pay instead of the client after week 5, and legal action before week 8.

Organizational restructuring

setting up of Basic Business Units (See Box 1)

appointment of a team of debt collectors to track down very late loans which are too difficult for loan officers to handle

revision of the client screening procedures

formalizing the content of the training given to clients

periodic training of loan officers.

Changes in group loans and structure:

· Group loans: By late 1996, the policy was to provide loans only to members of groups, but continue with individual loans to repeat, individual loan clients. However, due to resistance to group loans outside of Harare and Chitungwiza, individual loans to new borrowers tend to be the norm. For subsequent loans, a person who had a group loan might be approved by the loan officer for an individual loan product. Where feasible, however, individual loans are provided to a cluster of individuals who are either resident or