Microfinance Introduction Traditionally, women have been at disadvantage in acquiring credit from banks and financial institutions as commercial banks focus more on formal businesses. In poor countries, women constitute a large proportion of the informal economy and due to this reason Microfinance comes handy to meet the needs of women clients in such countries…
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The paper focuses on microfinance activities meeting the cause of women in the countries like Kenya, South Africa, and Ghana. Microfinance in Kenya ACCA (2011) states that the microfinance activities in Kenya got its foothold in '80s but it expanded rapidly after Microfinance Intermediaries Act came into force in the year 2006. The microfinance intermediaries (MFIs) operate under regulatory framework called Economist Intelligence Unit (EIU). As per EIU, Kenya offers one of the best business environments for MFIs. Reece (2011) describes about the organizational power of women in Kenya who without enough government help are building financial resources and security for them. As such, only 20 percent of the population in Kenya is in the position to open a bank account or do any transaction with the banks. Rose Olouch, a village woman, is quite vocal in stating that Kenyan women are capable of empowering themselves. She leads the group of 20 women who among themselves save, loan and contribute towards group insurance fund to meet emergencies. Women dominate in decision making process with regard to village and home finances. Small savings and loan groups provide basic level of financing to the low-income groups. Such groups meet monthly to carry out essential activities maintaining a strict discipline in the gathering. The Women’s Enterprise Development Institute (WEDI) is the largest organization serving some 20,000 clients. The WEDI's operations are based on the managed-ASCA model. Women take loan from the ASCA. Each member contributes Ksh100 as monthly saving and they can withdraw it on notice. Members are eligible for the dividend at the end of the year. The ASCA does charge management fees depending upon the funds handled. At least 45% of WEDI groups operate in areas with population density of 200 persons per square km. Further, most of the WEDI groups operate in the areas where poverty incidence is between 20 and 40 percent of the population. Johnson, et al. argues that decentralized models have advantages in reaching poorer and remote areas. WEDI client portfolio includes women from the poorest strata of the society. WEDI’s clients are involved in the activities of farming and producing cash crops such as coffee, beans. They also run retail shops in and indulge into buying and selling of fruits and cereals. Usually, women clients save nearly Ksh 100 per month and take the benefit of small loans from WEDI. WEDI generates enough income from the loans offered so as to sustain its operational expenses (Johnson, Malkamak, and Wanjau, p.11) The Women’s Enterprise Development Company Ltd (WEDCO) is another NGO Microfinance institution operating in the Kenya. Women in rural areas are offered credits by them for their small business activities. WEDCO provides loans for varied purpose including school fees loans and to meet other contingencies. WEDCO serves approximately 12,000 clients in a large geographical area (Johnson, Malkamak, & Wanjau, p.10). Status of Microfinance in South Africa The Microfinance market in South Africa started in the '80s and then it was made up of NGOs and for-profit companies. Until at least 1994 microfinance market in South Africa had a few commercial and not-for-profit lenders but there after microfinance mark
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