In December 2006, Muhammad Yunus and Grameen Bank were awarded the Nobel Peace Prize for their thirty years of pioneering work in microfinance and community development in Bangladesh. Grameen Bank has provided nearly 6 billion US dollars in microfinance services to millions of poor people, mostly women.
 | "We are interested in having all of our efforts be pro-poor women and pro-financial sustainability," says Grameen Foundation Chair Susan Davis. |
A few days after the Nobel Prize ceremony, we spoke to Susan Davis, who chairs the US-based Grameen Foundation and heads Ashoka's Global Academy for Social Entrepreneurship. We asked her about why 97 percent of Grameen's clients are women.
Ms. Davis, in all the attention that Grameen has gotten in recent weeks, how much of it has acknowledged Grameen's focus on women empowerment?
There has been considerable attention in the media. While targeting women for microfinance - for anyone who knows microfinance - may not be a new idea, it was important enough to highlight by the Nobel Committee, particularly Muslim women. Certainly at the Nobel ceremony itself, it was underscored because nine of the twelve members of the Grameen Bank board of directors are village women, and they were all there. One of the board members, a village woman borrower named Mosammat Taslima Begum, was chosen to represent Grameen Bank to receive the prize along with Yunus. She also spoke briefly, and for her to do that as an illiterate village woman made history. It was quite something.
Are women really better financial managers than men when it comes to looking after the well-being of their households, families and communities?
There has been research that shows that when women make financial decisions, greater disposable income goes into improved nutrition, health status, and housing for their children and families. That's why the industry shifted. When Grameen started, it was just trying to reach 50-50 parity between men and women, but then they noticed the difference.
When did Grameen start focusing on women?
In the 1990's. There are still several hundred thousand male borrowers of Grameen, but they stopped being prioritized; the same thing happened at BRAC and other microfinance institutions. A report that came out earlier this year shows that at the end of 2005 there were 3,133 microcredit institutions reporting worldwide. They reach 113 million people of whom 82 million were among the poorest when they took their first loan. Among the poorest, 84.2 percent or 69 million were women.
How would you describe Grameen's approach to microfinance and women?
We are interested in having all of our efforts be pro-poor women and pro-financial sustainability. Those are Grameen essentials. We think it's irresponsible to try to start providing credit, but to do it in a subsidized way so that you run out. People need regular access to working capital. Growing your business and building your assets is a process over time. You don't get rich off of a little loan. One goat won't do it.
Nobel Laureate Mosammat Taslima Begum started with a goat, but then she borrowed for different things. She diversified her income. She now has a mango garden that gives her income from selling the fruit. She started selling decorated fabric. With a bigger loan, she bought a three-wheel taxi for her husband to operate. Before he had been fishing, so she got a loan for better fishing nets to increase the catch. You look at a household economy and how they move from being heavily indebted to gradually building assets and diversifying the things they can do to earn an income. How do you make sure that the families really cross the poverty line? They have to have a place to borrow, but also a place to save and build their assets.
How has Grameen gone beyond savings and loans to serve women?
Following through on Grameen's strategies in the "Sixteen Decisions," it has created separate companies to respond to various needs, such as health, education, nutrition, and energy. So, there is an intersection between loans and savings and the other value-added opportunities created through social enterprise intervention. This helps the poor get greater market access, new technologies, and new ways to make money.
I say microfinance is a platform for development. If you have social entrepreneurs who are running the institutions and their motivation is a development orientation - in other words, they are worried about helping people get out of poverty - then you have many possible organizational forms: you can create strategic alliances, you can create stand-alone enterprises, or you can do it under an NGO umbrella.
There are 24 companies and organizations in the Grameen family. There are around 500 other microfinance groups in Bangladesh. Because you have healthy competition, you have incredible innovation, and that is what women need. Poor women need choices. They need to be able to vote with their feet and join whatever group feels best for them. They need to be able to look at the most competitive terms they are being offered. When women have choice, that's real development in my opinion.
publishing date: January 9, 2007
editor: VW
