09 May 2011

Breaking News: One Dimensional Loans Are Problematic

Oxfam and Concern Worldwide have a report which examines the impact of targeting women with microfinance programs, reports The Guardian.
The report found many NGO programmes in Zimbabwe and Kenya targeted women, but did not actively involve men – a policy that can alienate or disempower men or negate feelings of responsibility.

Amina Abdulla, programme manager at Concern in Kenya, said men shied away from requesting assistance when food prices spiked in 2009 because their cash transfers targeted women, assuming men would not spend it wisely. However, the 10% of men who did receive cash in hand spent the money quite responsibly, contradicting stereotypes, she said.

Though Molyneux believes women should be the recipients of cash transfers, she said policies that failed to address gender inequalities could deepen gender divisions.

"Men are usually completely marginalised from the activities of the cash transfer programmes, which sends the message that they have no responsibility for care in the family," Molyneux said. "I would recommend men are integrated into these programmes and encouraged to think of their role in the family in more positive ways."

Kukrety added: "Empowerment is not just about handing over a resource to a man or a woman, it is much more than that. You can marry humanitarian response with long-term development and then you can change gender roles."
The Guardian presents this as breaking news, but it is not at all. Timothy Ogden wrote about it two months ago and includes research from David McKenzie of the World Bank which was presented last fall at the Microfinance Innovation and Impact Conference in NYC this past fall.
Consider the undeniable costs of a caricatured bias toward women. David McKenzie's research in Sri Lanka, Mexico, Brazil and Ghana has shown that urban male entrepreneurs typically earn far higher returns from microfinance than women do (in Sri Lanka average returns on capital for women were 0%, for men 10%). If we are trying to fight poverty, shouldn't we at least consider what strategies are most likely to raise household income the most?

Does that mean that we should not focus on women and girls? Of course not. We should focus on women and girls. But we need to base the focus on the fact that women and girls are marginalized — and therefore empowering them can have significant benefits — not because they are women and girls. That may seem to be just a matter of semantics, but it is far from that. By defining programs in terms of the wrong criteria we create institutional inertia that will inevitably continue to pour resources into an area long after it is no longer appropriate. Just look at affirmative action programs in the United States that continue while a flood of research shows that the important distinction to deal with is class not race (though of course the two do overlap).

A focus on the marginalized, regardless of their sex, ethnicity, location, or other essential characteristics will do far more to combat poverty than a blind focus on women and girls.
On the most basic level, it cannot be surprising that excluding men can miss business opportunities and potentially lead to unintended negative consequences. Instead of excluding one sex, why not look for ways to encourage better behaviors by those receiving the loans. That way, we can be sure that the money is being used effectively.

If we accept that women generally make better decisions with loans, we should not give up on the men; rather find ways to make them better clients. By creating the excuse, it allows men to think that they are only capable of spending money on items like booze and cigarettes. Why not encourage a shift to expectations that money will be spent on growing a business or investing in the education of a father's children?

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