Empowering Women Through Microcredit: Progress and Possibilities

21 August 2002

Good morning. I would like to thank the United Nations Development Fund for Women (UNIFEM) and the Microcredit Summit Campaign for inviting me to participate in today's panel discussion. I would also like to thank Susy Cheston and Lisa Kuhn for their report, entitled, Empowering Women through Microcredit, which I found stimulating and extremely worthwhile. The microcredit campaign is an exciting and innovative initiative that has made substantial progress since it began, and holds great promise to do even more good. As many of you know, the empowerment of women and girls-through education, health care and increased opportunities and freedom-is a cornerstone of the work of the United Nations Population Fund (UNFPA).

At UNFPA, we realize that action must be taken to attack poverty and powerlessness directly and that one way to do this is by bringing credit and social services directly to the poor. We know that economic growth and income are not the only measurements of well-being and that choice, freedom, equality and opportunity all have vital roles to play.

The report provides an excellent analysis of the relationship of microcredit to empowerment of women and courageously raises many questions that require additional research and investigation. I would like to point out some of the issues that the report raises with regard to empowerment and microcredit because they replicate the issues that are often raised in relation to empowerment of women and access to reproductive health services, including family planning. The same conclusions merely strengthen the argument for approaching development in general and poverty eradication in particular as well as the empowerment of women in a comprehensive approach that has mutually reinforcing interventions.

1. The seeming contradiction between economic profit and social objectives: We should assert in all our publications and work that such a contradiction does not exist in reality. Rather, these goals reinforce each other. As the report indicates, there is no reason to think that "portfolio quality should have to suffer or that social objectives and technical competence cannot go hand in hand".

2. The human rights basis of ensuring access of women to resources and services: The report rightly points out that women's access to financial resources is a human rights issue; similarly, the Programme of Action of the International Conference on Population and Development (ICPD) established firmly that women's access to reproductive health services is well founded on human rights. When women can determine the number and spacing of their children, they are exercising a basic human right. That is why universal access to reproductive health services by 2015 has become a very important benchmark. Access to resources and to social services is a human right, and access to resources and services are mutually supportive.

3. The entry points for empowering women: Just as microfinance is considered an effective means or entry point for empowering women, so are education and health. Without women's ability to have basic education and access to basic social services, especially reproductive health services, we cannot speak about empowerment. It is a package that has many components, of which access to resources is an important aspect.

4. Change, choice and power are what empowerment is all about: The ability of women to make choices in their lives and their ability to negotiate their relationships within the context in which they function are manifestations of empowerment. The ICPD consensus is based on the principle of choice- empowering women to make choices in their lives, to begin with their ability to determine the number and spacing of their children and to negotiate their positions and relationships within the family, household, and community. An essential component of the prevention of teenage pregnancy or HIV/AIDs is, basically, the empowerment of women to negotiate their sexual relations and to bring about change in the behaviour of both women and men. Access to resources would add another perspective to women's empowerment and expand the space and the means for the exercise of this empowerment.

5. The empowerment of women and social change: The report rightly points out that, to bring about change by the poor, the microfinance "approach encompasses social, economic, political and spiritual empowerment within the individual, household, business and community". Throughout our work to ensure women's access to reproductive health services, we at UNFPA have learned that it is not sufficient for women, as individuals, to have choice and become empowered; they need the understanding, support and commitment of their families and communities. For change to take place and become sustainable, individuals, families and communities need to be empowered and able to exercise choices. But, we also reached the same conclusion clearly stated in the report that the empowerment of women at the individual level helps build a base for social change. And the collective action of women and their engagement in their societies would increase their status and provide the basis for an enabling environment that supports them and the process of change itself.

I believe that the stories of ordinary women presented in the report as well as those we know from UNFPA's programmes in several countries provide evidence of the benefits of microcredit.

For example, Fatima, a 38-year-old woman from the Sudan, received her first loan through a UNFPA-supported project. With that, she began a small enterprise, buying clothes from the market and selling them to women in their homes. With the profits, she bought two goats and a few chickens and eventually built a new home for herself and her family. She repaid the loan ahead of schedule and gradually returned her eldest daughter, Siham, to school. The latter got such high grades that she was admitted into Khartoum University's School of Medicine.

This story about Fatima illustrates the positive contributions microcredit can make to women's lives and those of their families. The story illustrates microcredit's cross-generational benefits and shows that such interventions can break the chains of illiteracy and poverty.

UNFPA is very gratified to note that more and more countries are making microfinance available through their own local banks targeting women. Such moves illustrate that microcredit has come of age as an important development tool. But, given the large numbers of women like Fatima who, unfortunately, do not have the benefit of accessing microcredits, we must redouble our efforts to reach more and more of the very poor and vulnerable girls and women. It is imperative that we use our individual strengths collaboratively to truly demonstrate the potential of microcredit to transform lives and eradicate poverty. Towards this end, UNFPA has collaborated with the Microcredit Summit Campaign for many years and expects such cooperation to continue and expand.

Currently, UNFPA supports microcredit initiatives in a number of countries, including Bangladesh, Chad, Kenya, Morocco, and in Palestinian women's centres. In the slums of Nairobi, a project helps disenfranchised youth and young women gain the skills and confidence they need to improve their situations. We are extremely interested in integrated programming where microcredit is combined with other vital social services such as literacy training and family planning.

As we speak, UNFPA is developing a paper on the basis of which we expect to refine our approach to microcredit and integrate it more coherently in more of our country programmes. In this manner, we hope that we shall have made the Millennium Development Goals a reality in the lives of other women like Fatima.

In closing, I would like to stress that microcredit is much more than simple income-generating activities through revolving funds. As my colleague, Wariara Mbugua, says in the report, it is also a tool for other elements of empowerment, such as leadership, self-management, networking and entrepreneurship.

Thank you.

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