About 70% of the world’s poorest people are women. Women are half the world’s population, do 2/3 of the world’s work, yet they earn only a tenth of the world’s income and own less the a hundredth of the world’s assets. In many countries cultural barriers to women’s empowerment add to the problems any poor person faces in trying to obtain credit.

Most of these women will never have a formal paying “job” but must depend on their own ingenuity to scratch out a living. The vast majority of working women in the world are self-employed. They have difficulty obtaining any financial services due to their lack of collateral, property rights, social status, and business skills.

Microfinance – making very small loans to enable thousands poor people to start or expand enterprises -- is an important tool to help impoverished women, who are not able to meet the collateral requirements for even a very small (starting at about $100) business loan from a traditional lenders like banks. Microfinance and enterprise development programs in more than 100 countries are successfully helping to move tens of millions of women out of abject poverty throughout the world.

The IDEAS Approach: 3 Steps toward Empowering Women through Microfinance

The first step in empowering women in developing nations is providing small loans for poor women entrepreneurs in developing nations. Since microfinance has been so important to economic survival, the second step is to help underemployed or unemployed women in developing countries gain the skills and experience they need to become staff and professionals in the field of microfinance. IDEAS has found that when women are doing the market research, impact assessments, and evaluating the effectiveness of microcredit programs, those programs are more likely to address seriously the needs of poor women clients. The visibility of women in leadership positions sends a message that reverses centuries-old patterns of discrimination against women. Women leaders become role models and sources of inspiration for other women struggling to break out of poverty and powerlessness.

The third step of economic empowerment for women in developing nations is for them to become the key decision-makers in the management and the board of financial institutions. Most MFIs are run by male managers and have predominantly majority male boards, even though 70% to 95% of their clients are female. The MFIs argue that there are no women who are qualified to fill these positions. Many organizations are working only on the first step of lending to women micro- entrepreneurs but IDEAS is one of the few working on the vital second and third steps of training women to be consultants, trainers, staff, and board members .