Gender Action Mainstreaming for Empowerment to Change

nonfinancial services

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Financial sustainability pressure to cut costs to a minimum has led many programmes to drastically cut non-financial services. In the past some support services in some programmes, including business training and gender awareness, have been expensive and have had minimal impact.

However this does not mean that non-financial services are not needed or would not make a substantial contribution to all aspects of empowerment (and also to repayment rates) if they were better designed.

Recently there has been increasing interest in 'credit plus' and use of 'smart subsidies'. But these have been mainly used for welfare srvices rather than empowerment strategies for gender justice.

'credit plus' and 'smart subsidies'

It is now widely accepted that financial services alone will be limited in their benefits for many women and men clients.

It is again increasingly being argued that micro-finance, particularly group-based micro-finance, can be an effective vehicle for delivery of other development interventions like health, HIV/AIDS prevention, literacy and other types of training. Some studies have shown limited benefits from combining training with finance - if the training itself is not effective and/or the financial services are not well-designed.

However other studies have shown that combining financial and nonfinancial services can significantly increase the effectiveness of both.

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financial education

Particular emphasis is now being given to financial education in order to increase the ability of women and men clients to benefit from financial services.

Microfinance Opportunities and Freedom From Hunger, with support from Citigroup Foundation, developed a financial education curriculum for low-income households in developing countries. The Financial Education for the Poor Project has partnered with a number of organisations including: Pro Mujer (Bolivia), Teba Bank (South Africa), Al Amana (Morocco), CARD Bank (the Philippines) and the Microfinance Centre (Poland). The curriculum consists of modules on budgeting, savings, debt management, bank services, and financial negotiations. Each module has a basic overview of the topic, a trainer’s guide with step-by-step instructions, and a training of trainer’s manual to prepare financial education trainers.

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The challenge of sustainability

The question for any programme is how to ensure that these services are delivered in the most cost-efficient and also sustainable way to ensure sustainability of the benefits for women. There are a range of ways in which costs could be reduced whilst increasing effectiveness:

•  fully integrating gender concerns into client\member and staff training would entail costs in the short term to redesign courses but these costs would be minimal in the longer term

•  mutual learning and self-expansion by women's groups

•  cross-subsidy from charging better-off clients for some services, particularly business services, registration etc.

•  inter-organisational collaboration between micro-finance programmes and specialist providers of other types of service. This could take the form of advertising availability of other services, for example, advice and information about legal rights from local women's movements, referring clients or programme/group/ individual payment for particular services. It could also take the form of sharing costs of developing innovations or research.

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From fragmentation to joined-up delivery

There is also a need to rethink current orthodoxy on the separation of micro-finance from other interventions. This has largely been driven by accounting needs to separate out the costs to calculate the financial sustainability of the micro-finance services.

In many contexts and programmes it is both more cost-efficient and developmentally effective to integrate some non-financial services with micro-finance delivery. This is particularly the case where micro-finance products have inbuilt incentives to ensure client discipline.

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innovative services for empowerment

The types of non-financial services needed by women and to enable women to increase benefits from financial services include:

•  integration of gender awareness into all training programmes and design of all services for women and men

•  gender specific services for women, for example, training/mutual learning for women to increase organizational as well as business skills, legal aid support.

•  services for both women and men: services to reduce the burden of unpaid domestic work, including childcare.

WEMAN MFI partners have been implementing the Gender Action Learning System (GALS) methodology in Uganda, Pakistan and Latin America. A current innovation is the Financial Action Learning System (FALS) which uses the GALS tools to use market research by FSPs as a catalyst to developing financial planning skills. The information generated by these two processes can then be used as input to social performance monitoring. The methodology is financially sustainable over the longer term as an investment to business expansion to new and reliable clients.

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