An assessment of the outreach of microfinance Institutions to Rural Women in Zambia

Abstract

The objective of this study was to assess the outreach of microfinance institutions to rural women in Zambia in terms of, services provided, number of female and male clients, and availability of women tailored product designs and programme approaches. The findings can not only be used by microfinance institutions to give valuable business and social information to improve outreach and service to women but it can also give government an insight leading to the building of a gender perspective into agricultural policies and projects The study assessed six (6) of major microfinance institutions providing services on the rural market. Key informant interviews at each of the institutions were carried out using a semi-structured interview guide. Findings revealed that a large proportion of the rural population still remains to be served as none of the MFIs operated in Luapula and Muchinga provinces. Most of the institutions have taken affirmative action on lending to more women because they are generally poorer than men and more vulnerable. Results indicated that 63.5% of women were being served compared to 34.5% of men. However, despite the yearly increase in total client numbers, the proportion of women clients decreased, this can be attributed to the MFIs search for better financial returns. A l l of the respondent MFIs did not require the signature of a man for a woman to be able to apply for a loan. The study revealed that group loans were popular amongst women firstly because there is no collateral involved, and secondly because it makes them feel more secure in case of default. None of the reviewed institutions offered women tailored products or programme approaches, which is necessary in order to efficiently serve women. Based on the research findings it is recommended that the proven business case for targeting female borrowers must be emphasized, while at the same time strengthening MFI strategies for reaching women. In addition, MFIs should tailor product specifications, such as loan amounts and repayment schedules to cater for the diverse needs of women clients. Women's groups should also be utilized to promote and strengthen women's networks and not merely as a means of lowering costs.