Many of the microfinance programs available are in fact designed for women, who have in many ways proven to be responsible borrowers. Microfinance is the extension of economic opportunities via small but effective loans and other financial services to the poor in poverty-stricken regions of the world. These clients would not have access to financing without microfinance. In many of these regions, gender equality is not enforced, and as a result, many lenders cater to the female populations in these places. The benefits in microfinance for women are life changing and extend beyond finances to the provision of education and training, economic opportunities, and female empowerment, leading to an improved standard of living for poor families including children.
In poor, rural parts of the world where microfinance is most influential, a very small amount of money can go a very long way. Small loans are offered to the poor in order that businesses might be started, households can be run, and families have access to education and medical supplies. In addition to cash, microfinance is also provided in the form of bank savings accounts, which teach the borrower money management skills.
Microfinance for women gives females the tools needed to properly run a household or business. It also gives women in poverty-stricken places the confidence that can only come from having financial success. Women especially can be the targets of abuse or other forms of mistreatment in economically vulnerable places, and by empowering the female segment of the poor population, acts of violence can be reduced.
Other benefits surrounding microfinance for women include opportunities to improve upon credit scores and obtain future financing. Women who make timely payments on microfinance loans to lenders, such as microfinance institutions (MFIs), increase the likelihood that other financial institutions may extend further financing to them. Future financing can help with the expansion of a small business, the financing of a child’s education, or access to medical care in time of need.
Microfinance for women allows poor female residents to become independent in places that are traditionally dominated by men. Access to financing can increase knowledge and give women the support needed to venture out of the home for the first time and start new businesses, for example. This influences communities and improves social practices so that women have a higher status in life. It also prepares future generations to perpetuate this financial independence. For instance, benefits of microfinance for women include mothers sending their daughters to obtain an education when they otherwise would have trained young girls to keep house.