Women are less likely to be employed and a greater percentage of employed women are likely to be in the informal sector. The might be restricted by societal notions of financial independence and may be restricted from owning or inheriting certain assets. Thus, another issue is an increase in the debts for women with very little access to assets, as they are the primary targets of microfinance. This may contribute towards making their overall net- worth negative at a basic level. Microfinance considers women less of a credit risk. It thus pushes the debt and poverty burden almost solely on women.
Traditionally, microfinance has supported women in settings such as self-help groups, joint liability groups, solidarity groups, etc – but hasn’t made a sufficient impact on enhancing women’s access to greater individual loans that are required for setting up and managing small and medium- sized enterprises (SMEs).
Gender oppression is another obstacle. Majority of MFIs deliver services through officials, who tend to be men. The fact that there are fewer women who are chief executive officers, in senior management positions and heads of MFIs add to the problem. Male loan officers are commonly biased against female customers and women report that they feel uneasy and unwelcome at bank branches. To save and repay regularly is a precondition for most microfinance programmes. But since households managed by women as well as members of marginalised communities are often unable to do so, there might be an exclusion of the poorest.
A high incidence of illiteracy amongst woman, especially financial illiteracy means women have a lower understanding of, and trust in financial institutions.
Therefore, on several levels, the microfinance industry’s managed reach out to women clients, but there needs to be a much deeper understanding of ways to provide services in many MFIs. As the microfinance industry develops, there will be new challenges to deal with, and it is necessary to ensure that elementary knowledge about the nature and functioning of women’s businesses and the best ways to provide financial services to them and that this knowledge isn’t lost during the testing of newer waters. Microfinance could be make a much greater difference in women run enterprises with some more focus on gender disparities.
This can only happen if all those involved participate holistically and commit to quick redressal of the gender challenges mentioned here.