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THEME: Poorer women’s multiple constraints restrict their access to rural financial services.
IFAD loan assistance has made credit available to Yemeni women for livestock production. The project’s goal was to benefit women from acutely poor households who engaged in agricultural or fisheries activities. The women targeted were either single, married, divorced or widowed.
Findings from 1997 show that targeting of poorer women has been difficult to achieve. Borrowers have tended to be the better-off women who are better able to overcome the various constraints involved. The loans they have taken out have been primarily for dairy cattle (82%). When women have borrowed, their repayment rate has been better than that of men (76%, compared with 67%).
The lessons from this experience are worth noting for future credit projects or components, especially if such projects target the poorer and more traditional rural women. Targeting of rural financial services in Yemen faces a number of constraints, not the least of which are the newness of credit itself and the fact that banking is predominantly a male domain. But there are also a number of other barriers to access and use of credit that need to be addressed with all borrowers, but particularly with poorer women. These include:
- Poor women lack collateral, such as a land deeds or access to appropriate males to guarantee their loans.
- Intimidating procedural requirements, such as the completing of complicated forms and that borrowers sign credit documents in court, intimidate women (and even men).
- There is a scarcity of female bank staff. The IFAD project did try to encourage the recruitment of women, but with limited success, particularly in the branch offices of the banks. Where they can do business with female bank personnel, women find the process less intimidating.
- Travel requirements and expenses add to problems and costs of application. Therefore, if extension agents are able to visit the women’s homes, the procedure becomes both less costly and less intimidating.
- There is lack of information on what is available and how to proceed to obtain loans.
- There is insufficient information on loan use, including on how to safeguard investments – in this case, the health of their livestock.
A study of use and impact of credit also found that women, and particularly poorer women, needed time to get used to the idea of being borrowers and to overcome their fear of the concept. Additionally, the study noted that women wanted loans for a wider range of investments than only livestock. They were particularly interested in purchasing time-saving and income-generating technologies such as milk processors, grain-grinders and baking ovens.
Initial involvement of the better-off rural women will help them to overcome some of the fear attached to formal borrowing. But formal financial services will also need to undergo considerable adaptation if they are effectively to reach poorer rural women.
Adapted from:
Hashem, Mouna H. 1997. Thematic Study on Rural Women Development in Yemen: Lessons Learned from IFAD, Government and other Donors’ Experiences with Gender Issues. Rome: IFAD.
