Women, Microfinance and Savings: Lessons and Proposals
This paper suggests that the shift in terms from microcredit to microfinance reflects the acknowledgment that saving services – and not just loans – may help to improve well-being of the poor in general and of women in particular. Although microfinance often targets women and although women often use microfinance, it is noted here that product design rarely addresses gender-specific aspects of the use of financial services. Indeed, despite the pervasive belief that microfinance helps women, few programs have developed concrete ways to meet the distinct demands of poor women for saving services.
How can saving services best serve poor women? A source of lessons are the informal savings mechanisms that poor women already use all over the world: door-to-door deposit collectors, Rotating Savings and Credit Associations, and Annual Saving Clubs. Examples of practical uses of these lessons cited in this paper are the creation of the SafeSave organization in Bangladesh and the design of savings products at Bank Rakyat Indonesia (Robinson, 1994). These efforts are not gender-specific, but they do combine some of the strengths of informal and formal savings mechanisms.
This paper derives lessons from informal finance for the design of formal savings services that respond to women’s responsibilities for market production and for household reproduction and that respond to issues of cultural patriarchy and domestic violence. Two specific services are discussed. The first – safe-deposit boxes – allows women to maintain independent savings. It is argued that this boosts their freedom and bargaining power within the household and cushions the shock of divorce or abandonment. The second – matched-savings accounts – structures saving, promotes peer support among women savers, and subsidizes savings targeted to women-specific concerns such as health care or school fees.