It is hard not to believe we’re in a time of empowerment of those less powerful, and to be swept up in the fervor escalating the world over. In 2011, we witnessed the Arab Spring, the Occupy Wall Street protests and most recently, one of the largest protests of women in Egypt’s long history against the military rule and the treatment of women. Time magazine proclaimed 2011 as the year of the protestor.
Large scale protests, especially those by and on behalf of women, might make us think about the situation of women in a society and the power women may or may not have to affect real and lasting change.
So much of what underlies recent protests has been economic disempowerment. In this time of upheaval, we might look at what has worked in the empowerment of women and of those at the bottom of a society’s socio-economic strata, and look to strengthen these core advancements as we imagine true change.
Microfinance began in large part with Bangladeshi economist, Muhammad Yunus, who won the Nobel Peace Prize in 2006 for his pioneering work in giving very small loans to people with no hope of being considered by traditional financial institutions. These borrowers are single parents, widows and widowers, refugees and the working poor. They are, very often, women. In a population considered too risky by traditional banks, women are extremely reliable re-payers, as countless accounts of microfinance organizations attest, and as many studies show. They also overwhelming invest in their children’s education and future development, which can produce lasting effects for a country’s next generation.
Though they have no financial collateral, the women borrowers of microfinance institutions have “social collateral” says Mary Ellen Iskenderian, President and CEO of Women’s World Banking. They have the “ability to come together and borrow as a group [which] is a way of getting over this enormous hurdle to access.”
Yunus’ group model of lending with the Grameen Bank was in good measure what was so truly innovative about his approach. The group’s ability to borrow more money is made contingent on the group’s repayment of its existing loans, which makes each group member accountable to the others and invested in each other’s success. Women borrowers own businesses that range from making clothes to selling their own freshly prepared food, to childcare and beyond.
Women’s Empowerment International (WE) is a membership-based non-profit organization based in San Diego, California, which supports partner microfinance institutions in Mexico, Ghana and Honduras. WE’s partner organizations have already navigated the national regulatory frameworks, and WE gathers U.S. supporters for their mission.
WE is an excellent example of an organization that supports comprehensive services to women in poverty, as it ensures that its partner microfinance institutions offer more than just loans to help its borrowers succeed. Here in the U.S., WE created the STAR Center, a one-stop-shop to help refugee and low-income women start a business.
WE is right in step with the trend in microfinance and poverty alleviation, where organizations and institutions are striving to provide products that bolster women’s chances for success, such as savings products, health care and insurance.
From the beginning, Leigh Fenly and Winifred Cox, WE’s co-founders, wanted the member supporters of WE to have a say and help guide the organization, and they wanted to have as much communication with the microcredit borrowers as possible, which is why WE organizes yearly trips to the sites of their partner organizations.
Hasno Ali: Refugee Borrower, Successful Entrepreneur
Hasno Ali is a WE and STAR Center client from Somalia. When the Somali Civil War broke out, Ali and her family fled to a Kenyan refugee camp and then found themselves in San Diego.
Ali had married a Somali tribal chief and community leader when she was just 13 years old. She had her first child when she was 14. She now has 11 children, ages 26 to 11. Ali’s husband died of a heart attack in 1997, which left her as the sole provider for her children.
Ali first learned to cook from her Ethiopian grandmother, who taught her how to make injera, an Ethiopian spongy bread, when she was only 7-years-old.
With help from the WE STAR Center, Ali has been able to obtain the licenses and permits necessary to sell her food at local farmers’ markets and was recently able to buy a food truck.
Women’s Empowerment International Co-founder Leigh Fenly, on the Impact of Microfinance and its Future
Her Circle spoke with WE’s co-founder Leigh Fenly about women and microfinance. Here are some of her insights into this important tool for empowering women, which can have so many far-reaching societal effects.
Q: Why is it so important to extend microfinance to women?
A: When Winifred Cox and I were first investigating and learning about microfinance, we learned that all of the studies show that when you help women start their own businesses, the money they make goes directly to their families. Our own experience shows that women are very good stewards of the money they make, they are good caretakers, and they are a good credit risk; we find that they repay their loans at a rate of over 98%. They are incredibly industrious. In many very poor countries, starting one’s own business is the only way to get ahead. Women in many countries do not have access to institutional lenders because they have no collateral.
Women served by our partner microfinance institutions can do so much with even a $50 loan. Many of these women have never dreamed of having $50 in one place at one time; it’s like us dreaming of right now of going to the moon. It can take just a small amount in the way of a beginner loan to get a business started, and this amount can mean such a dramatic difference in these women’s lives.
These loans are dutifully repaid and the money goes to the women’s families. Overwhelmingly, women are paying for their children’s education with the proceeds from their businesses. Some are even sending their kids to college. It costs a lot of money, for instance, in Mexico, to buy uniforms, supplies, and bus passes for children to attend school. Typically, whatever money there is goes to send the boys to school and if the money runs out, the girls are not able to attend school.
But more money in the hands of mothers means more children, boys and girls, are able to attend school. I think that the people who will benefit most from microfinance are the children of the borrowers. Our partner in Sonora, Mexico, Grameen de la Frontera offers scholarships for the daughters of the borrowers to attend school. Through a competitive process, the daughters of borrowers show that they can achieve the grades needed to excel in school. This will have far-reaching effects.
Q: Can you describe the business services provided by the STAR Center and how they have helped WE clients?
A: In addition to microloans, when a woman comes to the STAR Center, she can expect comprehensive help in starting her business, no matter what her idea, be it a home childcare business, selling food she makes at farmers’ markets, or selling clothes she has made. For instance, if a client wants to start a childcare business, the STAR Center will help her with licensing and fingerprinting requirements, the inspection of her facility and publicizing her business. If she wants to prepare food for sale, the STAR Center helps her find a commercial kitchen she can afford for the preparation, helps with her website and with navigating the competitive process for obtaining a booth at a farmers’ market.
Many of the women in San Diego are resettled refugees from Iraq, Somalia and Myanmar (Burma). We work with the International Rescue Committee to help these women get on their feet.
Q: What do you see as new trends in the microfinance sector?
A: Microfinance institutions are now offering so much more than just loans. Microfinance is one piece, now we are looking at what else our clients need. We are now launching “WE Initiatives” which allow us to support financial training, healthcare and scholarships, outside our traditional realm of micro loans. We’re so excited about the prospects of these new horizons.
It is organizations like WE that will assist women in true measures of change. In this era of social unrest and change, we will do well to look to organizations like WE who can help to structure new generations of empowered women and families by offering them practical means of advancement. As WE’s oft-repeated motto goes, “One woman can change anything; Many women can change everything.”