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Microfinance: A tool for improving the situation of women in Haiti
Photo: Développement international Desjardins.
On Oct. 25, 2010, Canada’s minister of international co-operation, Beverley J. Oda, announced the Canadian International Development Agency (CIDA) Sustainable Economic Growth Strategy. In order to help developing countries reduce poverty, the Canadian government intends to strengthen support for the development and growth of micro, small and medium-sized private-sector businesses with a special emphasis on those managed by women. The government also intends to strengthen products and services offered by financial institutions, as well as increase their availability. Microfinance will be an integral component of this strategy and will certainly contribute to the empowerment and financial well-being of Haitian women, whose financial vulnerability has increased since the January 2010 earthquake.
Microfinance: Serving the poorest
Without a doubt, improving access to financial services and increasing their diversity is a significant means of stimulating the private sector in developing countries. In addition to the provision of immediate access to savings and credit services, there are other effective ways of supporting private sector development. The following are but a few examples: strengthening the microfinance sector and its operators, automating operations to extend the reach of institutions and limit access fees, and deploying funding to small agricultural businesses.
Aside from these tools, which help the poor access financial services, the economic growth of developing countries is not possible without providing specific support to promote the economic development of women. Women in developing countries face several challenges in securing their economic well-being. The most important of these include limited access to goods and productive resources, and to training necessary for their proper utilization, as well as the inequality of the distribution of economic responsibility, as women assume a preponderant role in running a household. Finally, women often lack economic or political power equivalent to the importance of their contribution in funds or their use of resources.
The financial vulnerability of Haitian women
When compared to the financial vulnerability of women in other countries in the Americas, the situation is likely the most acute in Haiti. The country is the poorest in the region, ranking 149th out of 182 countries on the Human Development Index. Prior to the Jan. 12, 2010 earthquake, 80 per cent of Haitians lived below the poverty line. Inevitably, the situation worsened following the disaster. Economic activity plummeted by 80 per cent in the weeks that followed, causing a rise in the unemployment rate, which already sat at 65 per cent before the earthquake hit.
The economic impact of the earthquake has had a devastating effect on the female population, as Haitian women are far more financially vulnerable than Haitian men. In the economic sphere, women occupy the majority of informal and precarious positions in the country’s petty-trade sector. On a domestic level, 39 per cent of underprivileged households are headed by women. In the face of economic stagnation and a lack of well-paying jobs for women, some have qualified the situation in Haiti —exacerbated by the earthquake— as the feminization of poverty.
The role of the Haitian Federation of Credit Unions Le Levier
For several years, microfinance institutions (MFIs) have been developing innovative products to promote the full economic integration of women. For example, Développement international Desjardins (DID), a subsidiary of Desjardins —the largest co-operative financial group in Canada—, has been supporting the creation, development and strengthening of financial institutions in several developing countries for the past 40 years. Today, DID supports financial co-operative partners, serving more than six million members and clients, of whom nearly a third (32.6 per cent) are women. Thanks to the support of DID, more than two million women now have access to financial services.
Within Haiti’s financial landscape, the Federation of Haitian Credit Unions Le Levier —a long-standing partner of DID— is the country’s dominant financial institution in terms of microfinance. Le Levier has 50 credit unions and 24 additional outlets located throughout the couthe ntry. These credit unions offer savings and credit services to approximately 363,000 members, and indirectly benefit approximately 1.5 million individuals. In June 2010, 147,000 of the network’s members were women.
The savings, credit and funds transfer services offered by Le Levier are contributing to the improvement of Haitian women’s economic situation and to their empowerment. The progress made, although modest, is nonetheless tangible. Génia Patrice, merchant and member of the credit union in Kotelam (Pétion-Ville) for several years, can attest to this fact. Patrice says that the credit union has helped her become more financially stable, as she is able to put money aside for times of need. In the past, she would keep her savings in a cupboard at home, open to the risk of frequent theft. Since then, she has deposited all her assets in the credit union, where her money accumulates interest and is safe. In addition, Patrice states that the advised use of credit enabled her to seize business opportunities that would otherwise have been out of the question, due to insufficient funds.
In this way, microfinance enables Haitian women, often the poorest of the poor, to improve their situation and take full control of their development and their financial well-being. Microfinance, in its own way, makes it possible not only to dream, but also to plan a better future for women entrepreneurs or heads of households. It is also helping to build a brighter future for girls. For example, in Haiti, school credit allows children from underprivileged families to have access to education through loans intended to help these families pay tuition fees on time. At the beginning of the 2009 academic year, eight Haitian credit unions offered this financing product and 27 schools participated in the program, enabling hundreds of girls to go to school.
Of course, it would be an exaggeration to believe that microfinance is a cure-all solution to solve all of the developing countries’ problems. Microfinance alone cannot effectively accomplish its objective or ensure the development of the most underprivileged countries by providing access to basic financial services. These efforts must be complemented by adequate policies and infrastructures along with a genuine willingness and a firm commitment on the part of both beneficiary and donor countries of foreign aid, to co-operate in order to improve the future of underprivileged people.
Anne Gaboury is President and CEO of Développement international Desjardins.