Microfinance and food securityIFAD's experiences in empowering rural women

Maria Hartl, Senior Technical SpecialistThe International Fund for Agricultural Development (IFAD)

IFAD - who we work for and how• 1,4 billion people in the world who live on less than US$ 1,25 a day.

• About 1 billion of these women, men and children live in the rural areas ofdeveloping countries.

• Partnership with developing country governments, poor rural people’sorganizations, non-governmental organizations and the private sector too.

• United Nations agencies and multilateral financial organizations.• Women account for almost half of beneficiaries receiving services from IFAD-

supported projects.

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“Poor rural women and men areempowered to achieve higher incomes

and improved food security”

Support for rural finance systems

Emphasis is on rural microfinance

Gender equality and women’sempowerment

Microfinance and food security

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Focus on rural finance

Specific challenges• Dispersed populations• Poor infrastructure, high information

and transaction costs• Limited capacity of rural finance

providers• Crowding out by subsidized and

targeted lending• Seasonality of agricultural activities

and risks• Lack of property rights

• IFAD’s goal in rural finance: increase access of rural poor to widevariety of financial services on sustainable basis for on and off-farmactivities

FINANCIAL MARKET

MICROFINANCE

RURAL FINANCE

AGRICULTURALFINANCE

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IFAD and rural finance

• Focus: enabling rural poor to overcome poverty• Ongoing 240 projects in around 100 countries• Current IFAD loan portfolio: USD 4 billion – 20% rural finance

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Enabling conditions for women’s empowerment

• gender-sensitiveextension andresearch

• female field staff

EconomicEmpowerment

ofRural Women

• customs andtraditions• curricula• media

• basic education• skills training

• Clinics• Water• Electricity• Roads

• Incomegeneratingactivities

• Off-farmwork

• Equal rights• Access to assets

The people we work for

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Gender and rural microfinance

Loans:− Small loans that yield quick returns− Target loans to productive activity− Initiate regular repayments asap− Relax collateral requirements− Accessible services− Reduce interest rates

Savings:− to improve financial management− For asset-building and risk mitigation

Group-based rural finance activities− Reduce costs− increase empowerment through group-based delivery

Increasing women’s access to rural microfinance

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Gender and rural microfinance

Insurance− Reduce risks associated with livestock and other

types of loans− Health insurance

Remittance transfer− Availability− Security− Investment opportunities

Demand-driven product development− Market research− Financial literacy

Demand-driven financial products

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How to improve women’s access to rural microfinance

Issues•Low education levels•Lack of knowledge•Financially excluded•Lack of collateral•Limited access to credit orinsurance products

•Face legal barriers anddiscrimination

•More risk adverse

What can be done• Promote financial literacy• Increase awareness of policy

makers and other stakeholders• Identify policy champions on

women’s financial inclusion• Modify legal, regulatory and

supervisory frameworks• Remove discriminatory legal

provisions• Foster innovation - new products

and delivery channels• Collect sex-disaggregated data

IFAD. Gender and rural microfinance: Reaching and empowering women, a guide for practitioners http://www.ifad.org/gender/pub/gender_finance.pdf

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Rural finance : Food security through improved production,household consumption and marketing

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www.ifad.org/gender

Small ruminantsand livestock

Investingin familybusiness

Fishpondsand

aquaculture

Horticultureand youth

employment

Thank you!m.hartl@ifad.org