As CEO of a global microfinance network I spent much of 2010 answering questions about the crisis in India and advocating for the continued relevance of microfinance as a model. This year’s challenges, however, gave me an opportunity to talk about theessential role of transparency and good governance and the importance of building on a deep understanding of client needs to tailoring products to fit those needs.
While the crisis dominated the media for much of the year, it would be regrettable if we didn’t acknowledge some of the important positive developments in the last 12 months. As an organization focused on increasing women’s access to financial services, we at Women’s World Banking (WWB) have a few things to cheer:
- In the wake of the crisis, there has been a more urgent call for microfinanceinstitutions to offer a broader range of financial services. This is particularly good news for women whose interactions with financial institutions often parallel their life cycle needs. Financial institutions that understand those needs and create related products—for example programmed savings, insurance and pensions—can be successful and establish a significant competitive advantage.
- Women’s financial needs have assumed a greater importance in the international financial inclusion agenda. For example, the G-20 created a subgroup to address the challenges women entrepreneurs face in growing their businesses, which thegroup acknowledged as “major bottlenecks to growth and development.” According to the subgroup, “In many countries, half or more microbusinesses are owned by women. But research shows that a disproportionate share of these businesses fail to grow and evidence so far suggests that access to finance is one major constraint for growth.” I am looking forward to the research and policy recommendations that come from the working group and a heightened awareness of these issues among policymakers.
- As regulators seriously turn their attention to issues of financial inclusion, we are delighted to see that they are extending a seat at the table to microfinancepractitioners. Notably, in this past year we have seen the appointments of two women from the microfinance sector to Central Bank governance positions. Ela Bhatt, founder of SEWA (and WWB’s founding Chair) was recently appointed to theBoard of Governors of the Reserve Bank of India. Likewise, Georgette Jean-Louis, formerly of Fonkoze and a graduate of WWB’s Center for Microfinance Leadership Advanced Leadership Program, was appointed to the Board of Governors of theHaitian Central Bank. For microfinance to have a voice at the Central Bank level is remarkable; that they are both women’s voices is inspiring.
Amidst the general desire to go “back to basics” in microfinance, the rediscovery of theneed to serve women and girls is a particularly hopeful sign for the future. As the industry returns its focus to client needs we should bear in mind that the industry was built on women clients (and by women leaders) and deliver on the full potential of microfinance by including women and girls.
Mary Ellen Iskenderian is President and CEO of Women’s World Banking. FAI invited Ms. Iskenderian to offer her insights and reflections on the important events, opportunities and challenges facing microfinance this past year. This post is part of an ongoing series featuring Elisabeth Rhyne, Susan Davis, Jake Kendall, and others still to come on the "Year in Microfinance." These contributions will be posted weekly on the FAI site into the New Year. FAI also invites you to participate by telling us your own thoughts and opinions about the year in microfinance via comments.