By Paul Ndiho
May 6, 2010
Over the last three decades, microfinance has spread to every continent and affected some 100 million families. And experts say microfinance can be an important liberating force in societies where women may struggle against social and economic conditions.
Millions of Africa’s rural poor people have no access to small loans, and as a result cannot begin a small business. The nonprofit Women’s Microfinance Initiative has been operating in Eastern Uganda for the last two years. The group has given out more than one thousand small loans in about 50 villages in Eastern Uganda and just expanded to Kenya. Robyn Nietert is president of the Initiative:
“These women are incredibly responsible, they are focused, they are enthusiastic and they are very committed to pay back their loans, and growing their businesses.”
Nietert says that her group’s goal is to empower rural women in East Africa.
“Listening to the women and making it a true grassroots operation. We listen to them and take a lead from them. That I think has been the most important aspect of this program and that’s why it has a 100% repayment program.”
The poor are often denied credit from commercial banks because the amounts they need to borrow are too small or they lack collateral to secure a loan. Nora O’ Connell is vice president of Women Thrive Worldwide, a non-profit organization shaping U.S. policy to help women in developing countries lift themselves out of poverty. She says many women in rural Africa also have limited access to education and land ownership.
“Rural women in Africa are the real backbone of taking care of their families. They are the ones that put the food on the table and are the ones that make sure their kids go to school.”
Muhammad Yunus won the Nobel Peace Prize in 2006 for championing microcredit. Yunus attended this year’s annual microcredit summit in Kenya, and he says women in Africa are good candidates for microfinance.
“African women are very active compared to any women anywhere in the world. If you compare the African women with the Asian women or Bangladeshi women, there is a world of difference.”
Studies indicate that women are more likely than men to reinvest their small business profits, or to use their additional income to meet household needs. However critics at a recent regional Microcredit Summit in Kenya’s capital Nairobi said that some microcredit lenders are scamming the poor, and in some countries micro-loan interest rates vary widely.