Financial Inclusion and Gender under AFP An Assessment of Gender in Households and Village Banks

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1 Seite Page 1 1 Financial Inclusion and Gender under AFP An Assessment of Gender in Households and Village Banks

2 Seite Page 22 Table of Content I. What Female Villagers Say I.I Benefits, problems, and participation of women in village banks I.II Household financial decision making, account ownership, and female participation II. What Female Committee Members Say II.I Main impediments to a stronger role of women in village bank committees III. Key Takeaways

3 Seite Page 33 I. What female villagers say: The survey AFP interviewed 141 women from villages that participate in the project The sample of women was balanced between poor, average income and better-off More than three quarter of the sample belong to ethnic minorities! Phong Nhouan Lahu Iewmien Tri Triang Harak Makong Hmong Akha Brao Khmou Phouthay Leu Lao

4 Seite Page 44 I.I Main benefits of village banks for women Academic literature suggests significant benefits for women by financial inclusion Women are said to be better financial managers who prioritize family matters like health and education for their children. Benefits expressed by female clients: 40% 35% 30% 25% 20% 15% 10% 5% 0% Access to Financial Services Personal Independence & Business Family & Community Enables Women Sharing Ideas Capacity Development

5 Seite Page 55 I.I Main problems of village banks for women 25% 21% 17% 13% 24% Dominant Role of Men Female Capacities Female Courage Lack of Specific Provisions and Incentives at village banks Nothing Main problem is capacity and courage (38%) Illiteracy and innumeracy is prevalent among female villagers Women from ethnic minorities face Lao language barriers Courage is a function of capacity Men often drive meetings i.e. propose ideas and make decisions

6 Seite Page 66 I.II Account ownership of women 92% of women have access to village bank accounts Account ownership has different reasons and should not be over-interpreted Reasons for account ownership: Institutional regulations that promote female account holding inherited from previous project Some village banks were taken over from the Lao Women s Union Individual preferences/circumstances Individual Account 21% No own Account 8% Joint Account with Husband 71%

7 I.II Reasons for individual account ownership at village banks Male Account Ownership 12 Female Account Ownership Coincidence Banked at other Institution (Financial) Illiteracy In Charge of Family Finance 0 Personal Independence In Charge of Family Finance Family Reasons Coincidence Own Business Village Rule Seite Page 77

8 I.II Household Financial Decision Making Women and men make their financial decisions together! The Planning Process 100% 80% 60% 40% 20% Level of Support on the Decision Women Planned Alone Joint Planning Women were Excluded 0% Partly Agree Fully Agree Not Agree Saving Product Loan Product Seite Page 88

9 Seite Page 99 I.II Additional credit demand by women: Two out of three women want an additional loan for: 50% 40% 30% 20% 10% 0% Agriculture & Breeding Small-Scale Production & Trade Housing Education Emergency & Health Treatment Consumption

10 Seite Page I.II Effects of account ownership on loan demand Women without account are less likely to express demand for credit But if they do, the requested amount is more than eight times higher than that of women with individual accounts How do we interpret this data? 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 Expressed Loan Demand 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% Real demand or lack of understanding? % No Formal Access Joint Account Own Account Requested Loan Amount (LAK) Share of Respondends Requesting Loan

11 Seite Page I.II Demand for more women in village bank committees We really need more women 29% Some more women would be nice 38% No, now it is OK 33% Currently 22% of committee members in AFP are women. Two thirds of women would like to see more women in village bank committees.

12 Seite Page II. What female village bank committee members say: We interviewed 43 female village bank leaders about: Their own challenges in the decisionmaking process General challenges of women in village banks Position at village bank Head of Village Bank 19% Position at village bank Ledger Officer Loan Officer Saving Officer Cashier Deputy 81%

13 Seite Page II.I Obstacles to female leadership perceived by female leaders Capacity and courage are the main factors that keep more women from becoming village bank leaders! Traditional roles are a secondary obstacle 50% 40% 30% 20% 10% 0% Capacity & Knowledge Lack of Courage Traditional Roles VB Regulations No Interest Low Economic Status

14 Seite Page II.I Decision-making processes in village banks While voice is not guaranteed, more than 50% of women committee members feel well integrated in the decision making processes Did you have voice during the last committee meeting? No A little Yes 70% 60% 50% 40% 30% 20% 10% 0% Did you have same decision-making powers as male committee member? The same Less than No Much more

15 Seite Page II.I Why female leaders feel disadvantaged versus men When women have less voice, they often ascribe it to the fact of being a woman Female leaders do not blame direct exclusion by men Capacity and knowledge is the main problem Main reasons preventing equal voice Courage 9% No Idea 9% If you have less voice, is it because you are a woman? Yes Partly No New Member 18% Lower Position 9% Lower Capacity & Knowled ge 55%

16 Seite Page II. Female leader s view on women s situation in general Not all female leaders consider women to be disadvantaged Main factors are female capacity knowledge and courage Are women disadvantaged in any ways, concerning the Village Bank? Only one out of six women perceives traditional roles and male behaviour as decisive impediments No Idea, 37% Capacities & Knowledge, 27% Traditions & Male Ignorance, 16% Less Courage, 20%

17 Seite Page II. Measures proposed by female leaders 35% Building of capacity and confidence Female committee members emphasize their own importance as role models 30% 25% 20% 15% 10% 5% 0% Capacity Development Encouragement Raising Awareness Being a Role Model No Idea

18 Seite Page Key Takeaways The picture of financial inclusion of women in rural Laos is mixed Women are very well integrated in financial decision making of the household But female participation in village banks is not ideal Low capacity and a lack of courage is the biggest problem for women to play a more active role as clients and leaders of village banks.

19 Thank you very much for your attention Seite Page 19 19

20 Seite Page Published by: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Registered office Bonn and Eschborn, Germany Micro Finance in Rural Areas Access to Finance for the Poor PO Box: 2455, Vientiane, Lao PDR T F E dennis.fischer@giz.de I Author: Dennis Fischer