Gender and Rural Finance

Access to well-designed financial services can help poor households build assets, engage more effectively with markets, and reduce their vulnerability to crises. Beginning in the 1990s microfinance programs were increasingly directed at women—partly because of evidence that women’s repayment rates were higher than men’s but also because donors supported microfinance for women as an effective gender strategy to increase women’s role in production. However, rural women’s access to financial services remains heavily dependent on microfinance. Women generally receive smaller loans than men, even for the same activities and are vastly underrepresented in programs that finance larger loans. Lacking access to larger loans, their businesses often collapse because they are forced to purchase inferior equipment or materials. Women’s credit needs are more diverse than the initial focus on small group loans: women need longer-term and larger amount of credit to build assets and invest in viable and productive activities.

It is important to mainstreaming gender and women’s empowerment throughout the financial sector, including large-scale rural finance and leasing arrangements for agricultural development and value chain upgrading. This will not only to benefit women but in the process also improve the sustainability of financial services themselves and the dynamism of the rural economy in general.