reported an improvement in household income and standard of living of the family. .... 2.3 Sustainable Development Goals and Women's Empowerment. ..... its poorest clients, that is, those who live on less than US$ 1.25/day, are women (Maes & ...... daily incomes after utilising loans from ASA Savings and Loans Limited.
THE ROLE OF MICROFINANCE INSTITUTIONS IN EMPOWERING WOMEN: THE CASE OF ASA SAVINGS & LOANS LIMITED
A Special Study submitted to the Department of Planning, Kwame Nkrumah University of Science and Technology, Kumasi in partial fulfilment of the requirements for the Degree of Bachelor of Science in Development Planning
By SAMUEL DARKWAH MANU TITLE PAGE MAY, 2018
SUPERVISOR Signature:………………………
Signature:………………………
DR. (MRS) T. Y. BAAH-ENNUMH
PROF. DANIEL INKOOM Head, Department of Planning
ABSTRACT There is a widely held view that women are deprived socially, economically and politically in relation to their male counterparts. For socio-cultural and other reasons, women, as girls, would not have had access to education, and those who did would have accessed lower levels of this resource. For that matter, women and girls are disproportionately affected by poverty and discrimination.
However, it has been realised that empowering women to participate fully in economic life across all sectors and throughout all levels of economic activity is essential to building strong economies; establish more stable and just societies; achieve internationally agreed goals for development, sustainability and human rights; improve quality of life for women, men, families and communities; and propel businesses’ operations and goals. Microfinance has emerged to provide financial loans to the poor that are not made available to them through the formal banking system. Microfinance programmes targeting women have been promoted since the mid-1990s as a key strategy for simultaneously addressing both poverty reduction and women’s empowerment.
In the light of this, the main objective of this study was to assess how microfinance services lead to the socio-economic empowerment of women. Taking responses from 93 beneficiaries of ASA Savings and Loans Limited’s (Suame Branch) microfinance programme, it was revealed that access to credit from microfinance has contributed immensely to the economic empowerment of women through improvement in their businesses. The study also shows that access to microfinance has improved the status of women both at the family level and in society as a whole. At the family level, the study reported an improvement in household income and standard of living of the family. The social level, there was a rise in the confidence level of clients, increased degree of socialisation and positive outlook.
It is recommended that the company extends their loans to women as start-up capital and also consider conducting and supporting research in order to monitor and improve their impact on empowering and upgrading the status of women. ii
ACKNOWLEDGEMENTS My profound gratitude goes to the Almighty God for His abundant grace and knowledge throughout the course of this study.
I am most grateful to my supervisor, Dr (Mrs) Theresa Y. Baah-Ennumh, for her careful supervision, dedication, and guidance throughout the study. I also thank Genevieve Kuntu Blankson (Teaching Assistant) in the Department of Planning for her guidance and inputs in making this study a success.
My special thanks to my family for their prayers, support and encouragement during my education. I must express my sincerest appreciation to my parents Mr Yaw Manu and Mrs Comfort Manu for their enormous guidance and financial support which they have given me up to this level of education.
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TABLE OF CONTENTS TITLE PAGE ..................................................................................................................... i ABSTRACT ....................................................................................................................... ii ACKNOWLEDGEMENTS ............................................................................................ iii TABLE OF CONTENTS ................................................................................................ iv LIST OF ACRONYMS .................................................................................................. vii LIST OF TABLES ......................................................................................................... viii LIST OF FIGURES ......................................................................................................... ix CHAPTER ONE BACKGROUND TO THE STUDY 1.1 Introduction ............................................................................................................. 1 1.2 Problem Statement.................................................................................................. 1 1.3 Research Objectives ................................................................................................ 4 1.4 Research Questions ................................................................................................. 4 1.5 Justification of the study ........................................................................................ 5 1.6 Organisation of the study ....................................................................................... 5 CHAPTER TWO THE ROLE OF MICROFINANCE IN WOMEN EMPOWERMENT: A REVIEW OF LITERATURE 2.1 Introduction ............................................................................................................. 6 2.2 Conceptualising Women’s Empowerment ........................................................... 6 2.2.1 Dimensions of Women’s Empowerment ........................................................... 8 2.3 Sustainable Development Goals and Women’s Empowerment........................ 11 2.4 Women’s Empowerment in Ghana ..................................................................... 13 2.5 The Concept of Microfinance .............................................................................. 15 2.5.1 Categories of Microfinance.............................................................................. 15 iv
2.5.2 Microfinance and Development ....................................................................... 16 2.6 Microfinance in Ghana ......................................................................................... 18 2.6.1 Structure and Key Stakeholders of Microfinance in Ghana ............................ 19 2.6.2 Achievements of Microfinance in Ghana ........................................................ 20 2.6.3 Challenges of Microfinance in Ghana ............................................................. 20 2.7 Microfinance and Women’s Empowerment ....................................................... 22 CHAPTER THREE PROFILE OF STUDY AREA AND METHODOLOGY 3.1 Introduction ........................................................................................................... 23 3.2 Brief Profile of Study Area................................................................................... 23 3.2.1 Location and Size ............................................................................................. 23 3.2.2 Demographic Characteristics ........................................................................... 24 3.2.3 Local Economy ................................................................................................ 25 3.2.4 Financial Institutions ........................................................................................ 25 3.2.5 Economic Infrastructure................................................................................... 25 3.3 Methodology .......................................................................................................... 26 3.3.1 Research Method ............................................................................................. 26 3.3.2 Population and Sample .................................................................................... 27 3.3.3 Sampling Technique ........................................................................................ 28 3.3.4 Research Technique ......................................................................................... 28 3.3.5 Sources of Data ................................................................................................ 29 CHAPTER FOUR ANALYSIS OF THE ROLE OF ASA SAVINGS & LOANS LIMITED IN EMPOWERING WOMEN 4.1 Introduction ........................................................................................................... 30
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4.2 Operations of ASA Savings & Loans Limited .................................................... 30 4.2.1 Loan Products .................................................................................................. 31 4.2.2 ASA Savings and Loans Limited Weekly (Group) Loans Lending Methodology ................................................................................................................................... 32 4.3 Analysis on Socio-Demographic Profile of Women Clients .............................. 33 4.4 Loan Facility .......................................................................................................... 35 4.4.1 Repayment of Loan .......................................................................................... 37 4.5 Impact on Business ............................................................................................... 38 4.5.1 Usage of Loans ................................................................................................ 39 4.5.3 Increased Income ............................................................................................. 39 4.5.2 Impact on Capital ............................................................................................. 41 4.6 Impact on the Household and Family Relations ................................................ 42 4.7 Impact on the Community and Women’s Role .................................................. 45 CHAPTER FIVE SUMMARY OF KEY FINDINGS, RECOMMENDATIONS AND CONCLUSION 5.1 Introduction ........................................................................................................... 46 5.2 Summary of Key Findings ................................................................................... 46 5.3 Recommendations ................................................................................................. 47 5.4 Conclusion ............................................................................................................. 48 REFERENCES ................................................................................................................ 49 APPENDICES ................................................................................................................. 53 Appendix 1: Key International Instruments and Frameworks Ratified by Ghana in support of Gender Equality and Women Empowerment ................................... 53 Appendix 2: Research Instruments (Questionnaires) ............................................. 55
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LIST OF ACRONYMS ARB
-
Association of Rural Banks
ASCAs
-
Accumulating Savings and Credit Associations
ASSFIN
-
Association of Financial NGOs
CEDAW
-
Convention on the Elimination of All Forms of Discrimination against Women
CIDA
-
The Canadian International Development Agency
FNGOs
-
Financial Non-Governmental Organizations
GEWE
-
Gender Equality and Women Empowerment
GHAMFIN
-
Ghana Microfinance Institutions Network
GII
-
Gender Inequality Index
GSCA
-
Ghana Cooperative Susu Collectors Association
GSS
-
Ghana Statistical Service
HDI
-
Human Development Index
ICPD
-
International Conference on Population and Development
MASLOC
-
Microfinance and Small Loans Center
MDGs
-
Millennium Development Goals
MFIs
-
Microfinance Institutions
NGO
-
Non – Governmental Organisation
PNDC
-
Provisional National Defence Council
RCBs
-
Rural and Community Banks
ROSCAs
-
Rotating Savings and Credit Associations
SDGs
-
Sustainable Development Goals
SIGI
-
Social Inclusion and Gender Index
SME
-
Small and Medium Enterprises
WCED
-
World Commission on Environment and Development
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LIST OF TABLES Table
2.1
Commonly
used
dimensions
of
empowerment
and
potential
operationalization in the household, community, and broader arenas...................... 10 Table 3.1 Population of communities in Suame Sub-metro ........................................ 24 Table 4.1 Socio-Demographic Profile of Respondents................................................. 33 Table 4.2 How ASA loans have expanded selected clients’ businesses ...................... 40 This section shows the impact that the loan has made on the working capital of the women who acquire them. .............................................................................................. 41 Table 4.3 Initial working capital.................................................................................... 41 Table 4.4 Increased Working Capital ........................................................................... 42 Table 4.5 Evidence of Increased Financial Contribution of Married Clients to the Upkeep of Household per Week .................................................................................... 43
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LIST OF FIGURES Figure 3.1 Map of Suame Sub-metro in context of Kumasi Metropolis .................... 24 Figure 4.1 Cross-tabulation: Longevity in the programme and initial amount received ........................................................................................................................................... 36 Figure 4.2 Cross-tabulation: Longevity in the programme and last amount received ........................................................................................................................................... 37 Figure 4.3 Usage of Loans .............................................................................................. 39 Figure 4.4 Level of daily incomes before and after loans ............................................ 40
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CHAPTER ONE BACKGROUND TO THE STUDY 1.1 Introduction Amin and Pebley (1994) define microfinance as the provision of a broad range of financial services to poor low-income households and micro enterprises. Research interest in the issue of access to microfinance mainly by women has been on an increasing trend in recent times. Bennett and Golberg (1993) asserted that in developing economies, low-income women are often victims of societal suppression and abuse; while their counterparts in developed economies are victims of lending discrimination. It is therefore argued that lending to women may help empower them economically, socially and politically.
This chapter serves as the introductory phase of the study of the role of microfinance institutions in empowering women taking ASA Savings and Loans Ltd as a case study. The problem to be studied, the research objectives and questions to answered to achieve the said objectives and the justification of the study are all covered in this introductory chapter. The chapter is concluded with a description of how the study is compiled and structured as a report.
1.2 Problem Statement There is a widely held view that women are deprived socially, economically and politically in relation to their male counterparts. For socio-cultural and other reasons, women, as girls, would not have had access to education, and those who did would have accessed lower levels of this resource. For that matter, women and girls are disproportionately affected by poverty and discrimination. They, therefore, find themselves in insecure, low-wage jobs, and have inadequate access to the educational resources and financial tools they need to be successful.
The 2010 Population and Housing Census (Ghana Statistical Service, 2013) shows that majority (74.1%) of the country’s population 11 years and older is literate. In terms of sex, males (80.2%) are more literate than females (68.5%). This means that a whopping proportion (31.5%) of females/women in Ghana are not literate. In terms of formal 1
education, there is also a marked difference between males (9.1%) and females (14.3%) who have never attended school. For those who had attended school before, 53.7 percent of them have Middle or JHS/JSS as their highest level of education while a smaller proportion (15.5%) had attended SSS/SHS or Secondary. There are relatively more females (53.0%) than males (40.5%) with Primary and JSS/JHS as their highest level of education. This implies that it is more likely for females to drop out at the primary and JSS/JHS levels than their male counterparts. This limited access to education and low literacy levels hinder women’s capability to: acquire vocational skills for self-employment; access information on support services for improving their business; and earn an income and, thereby, engage in capital accumulation. Given such limitations, rural women are mostly engaged in mainly subsistence farming activities, and low-income generating activities, while poor urban women operate marginal enterprises in the informal sector. These activities yield little or negative returns on investment because the enterprises experience little or no growth during the lifetime of their owners.
Due to the patriarchal structure of most Ghanaian societies, systemic male domination and female subordination, socio-cultural and discriminatory institutions and structures limit women from access to equal opportunities including productive resources, such as land, credit, education and training opportunities among other support systems. Despite the array of legal provisions in Ghana stressing equality of all persons before the law, there are still significant pieces of evidence to suggest that the rights of vulnerable groups including women are not fully protected when it comes to access and use of land as a productive asset. Article 17 and 18 of the 1992 Constitution, the Intestate Succession Law, 1985, Head of Family Accountability Law, 1985, Customary Marriage and Divorce Law, 1985 were all supposed to ensure the equality of all persons before the law and the protection of the rights of citizens to property, these provisions do not reflect on women’s access and control of land especially those engaged in agriculture in the rural setting. An article by Aduamoah – Addo (2016), takes a critical look at the role culture plays in depriving rural women of their land rights. The article reveals that landowners do not deal directly with women 2
without their husbands and require women to seek the consent of their husbands aside their ability to pay. Inheritance which serves as another mode of owning a land also presents its own biases against women. The two systems of inheritance in Ghana are the Matrilineal (through mother’s lineage) and Patrilineal (through father’s lineage). Both systems make women secondary owners of land since they only enjoy temporary use rights over land, and cannot own these lands. This practice is based on the misconception that women will take family property away from the family.
Situations like these have led to the promulgation of the concept of women empowerment and the fight for gender equality. And as a matter of fact, several international agreements have been set to promote Gender Equality and Women Empowerment (GEWE). Among these are: International Conference on Population and Development (ICPD, also referred to the Cairo Conference)- placed women’s rights, empowerment, and health at the forefront of the effort (United Nations, 1994); Convention on the Elimination of All Forms of Discrimination against Women (CEDAW)(United Nations, 1979); Beijing Declaration and Platform for Action – goals of equality, development and peace for all women(United Nations, 1995); Millennium Development Goal 3- to promote gender equality and empower women; Security Council Resolution 1325- addresses the impact of war on women, and women’s contributions to conflict resolution and sustainable peace; and Protocol to the African Charter on Human and Peoples’ Rights on the Rights of Women. It has become widely accepted that promoting gender equality and women’s empowerment is essential to achieving sustainable human development, poverty eradication, and economic growth on the African continent.
Empowering women to participate fully in economic life across all sectors and throughout all levels of economic activity is essential to: build strong economies; establish more stable and just societies; achieve internationally agreed goals for development, sustainability and human rights; improve quality of life for women, men, families and communities; and propel businesses’ operations and goals. Self-help schemes, “susu”, micro-credit, and microfinance methods have been effective methods through which the poor and vulnerable
3
in society, usually working in the informal sector in developing countries acquire capital and loans to start or expand a business.
Microfinance is a concept that has grown exponentially in the last decade as investors, donors, and banks realize the potential for capital that can be made by banking to the poor (Swope, 2005). The purpose of microfinance is to provide financial loans to the poor that are not made available to them through the formal banking system. Microfinance programmes targeting women have been promoted since the mid-1990s as a key strategy for simultaneously addressing both poverty reduction and women’s empowerment. In this light, this study seeks to explore the roles that microfinance institutions play in economically empowering women and the extent to which this empowerment affect their socio-cultural life.
1.3 Research Objectives The objectives of the study are to: •
Assess how microfinance services lead to the socio-economic empowerment of women
•
Identify the procedures of ASA Savings & Loans Ltd in relation to financing women
•
Examine the loan repayment structure
1.4 Research Questions •
What processes are involved in the acquisition of a loan from ASA Savings & Loans Ltd?
•
How does the loan empower women?
•
What happens to women who are unable to repay their loans?
•
In what other ways does the company help promote the businesses of their customers?
4
1.5 Justification of the study Access to financial services for low-income populations has been greatly transformed by the microfinance revolution. As a result, it has become one of the most deliberated innovations in international development in recent decades. One of the key promises of microfinance has been women empowerment. This based on the fact that 82.3 percent of its poorest clients, that is, those who live on less than US$ 1.25/day, are women (Maes & Reed, 2012). The expansion of this industry has not been without controversy and thus, there have been diverging views on the roles that MFIs play in development. While many hailed it as a way to end global poverty and promote women empowerment, some sceptics see it as a disaster for the poor (Pomeranz, 2014).
In this light, the purpose of this study is to expand knowledge in the field of microfinance and its contribution to women empowerment. The study does not intend to give support to either school of thought of microfinance being a promising and cost-effective tool for fighting global poverty or it being a disaster for the poor. Rather, this study serves as additional knowledge to this ever-growing debate on microfinance. By examining the procedure ASA Savings and Loans Ltd adopts in financing women and the existing repayment structure, the analysis helps to improve upon practice in the microfinance industry.
1.6 Organisation of the study The study is organised into a five-chapter report. The introductory chapter gives a background to the study by clearly giving the problem statement, research objectives and a justification for the study. A literature review on the role of microfinance in empowering women is presented in the second chapter. The chapter explores the concepts of women’s empowerment and microfinance and their revolution over the years. The third chapter gives an overview of the study area and the methodology used for the study. The results of the interviews and data collected are analysed and discussed in the fourth chapter. The study is concluded in the fifth chapter after giving a summary of findings and recommendations for policy and research actions.
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CHAPTER TWO THE ROLE OF MICROFINANCE IN WOMEN EMPOWERMENT: A REVIEW OF LITERATURE 2.1 Introduction This chapter of the study delves into literature to explain the main concepts involved in the study. The concept of women’s empowerment is elaborated and a critical look at its role in realising sustainable development is acknowledged. This chapter also expounds the evolution of the microfinance industry in Ghana and the main challenges the industry has faced in the country as well as the successes it has garnered.
2.2 Conceptualising Women’s Empowerment “Empowerment” has been used to embody a wide range of concepts and to define a proliferation of outcomes. For the purpose of this study, it is important to elucidate what is meant by ‘empowerment’. Empowerment is a concept shared by many disciplines and areas: community development, psychology, education, economics, and studies of social movements and organisations, among others. How empowerment is understood varies among these perspectives. Several scholars have defined the term in diverse ways, so in this section, a critical look at the various definitions will be taken and the unifying point in the definitions will be established. Empowerment can be defined as a “multi-dimensional social process that helps people gain control over their own lives. It is a process that fosters power (that is, the capacity to implement) in people, for use in their own lives, their communities, and in their society, by acting on issues that they define as important” (Page & Czuba, 1999). At the core of the concept of empowerment is the idea of power (Kabeer, 2005). According to Kabeer (2005), one way of thinking about power is in terms of the ability to make choices. To be disempowered means to be denied the ability to make choices. Thus, empowerment refers to the processes by which those who have been denied the ability to make choices acquire such an ability (Kabeer, 2005). Kabeer argues that empowerment should entail change, meaning any person who is empowered should transition from a disempowered state to an empowered state. 6
Concurrently, another school of thought in development promotes social inclusion in institutions as the crucial path to the empowerment of individuals and has often tended to combine empowerment and participation. The traditional top-down approaches to development, capitalism and probably poverty itself can be described as sources of disempowerment that must be countered by bringing the poor and disenfranchised (Chambers, 1997) into the management of community and development processes. The growth of civil society and participatory development methods at both national and local levels of society are often postulated as the mechanisms by which empowerment takes place (Friedmann 1992; Chambers, 1997). For example, Narayan et al. (2000) focus on state and civil society institutions at both national and local levels, including informal institutions such as kinship and neighbourhood networks. Institutions at the local level, such as those of marriage and the household, are not considered part of the state or of civil society, but interpersonal gender dynamics within the household are considered part of the equation of social exclusion and in need of directed efforts at change. Bennet (2002) has developed a framework in which “empowerment” and “social inclusion” are closely related but distinct concepts. Bennett describes empowerment as “the enhancement of assets and capabilities of diverse individuals and groups to engage, influence and hold accountable the institutions which affect them.” Social inclusion is defined as “the removal of institutional barriers and the enhancement of incentives to increase the access of diverse individuals and groups to assets and development opportunities.” Bennett notes that both of these definitions are intended to be operational, and describe processes rather than endpoints. The empowerment process, as she puts it, operates “from below” (household level) and involves agency, as exercised by individuals and groups. Social inclusion, on the other hand, necessitates systemic change which may be originated “from above” (national level).
According to the United Nations (2001), empowerment can overall be defined as all those processes where women take control and ownership of their lives. Therefore, empowerment means that people - both women and men – can take control over their lives: 7
set their own agendas, gain skills (or have their own skills and knowledge recognized), increase self-confidence, solve problems, and develop self-reliance. It is both a process and an outcome. Given the multiplicity of the emphases and agendas in deliberations on women’s empowerment, there seem to be a greater consensus in the literature on its conceptualisation than one could expect. There is a consensus of a few key, overlying terminologies that are most often included in defining empowerment: options, choice, control, and power. Most often these are referring to women’s ability to make decisions and affect outcomes of importance to themselves and their families. Control over one’s own life and over resources is often stressed. Thus, there is frequent reference to some variant of the ability to “affect one’s own well-being,” and “make strategic life choices.” Women’s empowerment can, therefore, be conceptualised as a process by which women who have been denied the ability to make strategic life choices acquire such an ability (Kabeer, 1999).
2.2.1 Dimensions of Women’s Empowerment Kabeer (1999) makes us understand that empowerment is a process by which those who have been denied power gain power, in particular, the ability to make strategic life choices. She notes that for women, these could be the capacity to choose a marriage partner, a livelihood, or whether or not to have children. For this power to come about, Kabeer identifies that three inter-related dimensions are needed: access to and control of resources; agency (the ability to use these resources to bring about new opportunities) and achievements (the attainment of new social outcomes). Empowerment, therefore, is both a process and an end result. This understanding differs greatly from instrumentalist interpretations which view empowerment purely in terms of measurable outcomes. Instrumentalist interpretations are problematic because they carry the belief that social change can be predicted and prescribed in a cause and effect way and destabilise the notion that women’s empowerment should be about the ability of women to make self-determined choices.
8
As a matter of fact, several authors have proposed varying but quite similar dimensions of women’s empowerment. The Canadian International Development Agency (CIDA) measures women’s empowerment in four dimensions: legal empowerment, political empowerment, economic empowerment, social empowerment (CIDA, 1997). According to Jejeebhoy (1995), people are empowered when they become autonomous. Thus, the empowered persons should have knowledge autonomy, decision-making autonomy, physical autonomy, emotional autonomy, economic and social autonomy and self-reliance. Kishor (2000) also recognises that financial autonomy, participation in the modern sector, lifetime exposure to employment, sharing of roles and decision-making, family structure amenable to empowerment, equality in marriage, lack of devaluation of women, women’s emancipation, marital advantage, and traditional marriage are key dimensions in assessing women’s empowerment. Mobility and visibility, economic security. status and decisionmaking power within the household, ability to interact effectively in the public sphere and participation in non-family groups are all ways of measuring women’s empowerment. (Hashemi & Schuler, 1993; Hashemi, Schuler, & Riley, 1996; Schuler, Hashemi, & Riley., 1997; Schuler, Hashemi, Riley, & Akhter, 1996) Stromquist’s (1995) dimensions of empowerment are cognitive, psychological, economic and political. Sen (1999) also believes that there is empowerment in situations where there is the absence of gender inequality in mortality rates, natality rates, access to basic facilities such as schooling, access to professional training and higher education, employment, property ownership, household work and decision-making. Table 2.1 shows a list of the most commonly used dimensions of women’s empowerment, drawing from the frameworks developed by these various authors. These frameworks propose that women’s empowerment needs to occur along the following dimensions: economic, socio-cultural, familial/interpersonal, legal, political, and psychological. However, these dimensions are very broad in scope, and within each dimension, there is a range of sub-domains within which women may be empowered. So, for example, the “socio-cultural” dimension covers a range of empowerment sub-domains, from marriage systems to norms regarding women’s physical mobility, to non-familial social support systems and networks available to women. 9
Table 2.1 Commonly used dimensions of empowerment and potential operationalization in the household, community, and broader arenas. Dimension Economic
Household Women’s control over income; relative contribution to family support; access to and control of family resources
Community Women’s access to employment; ownership of assets and land; access to credit; involvement and/or representation in local trade associations; access to markets
Socio-Cultural
Women’s freedom of movement; lack of discrimination against daughters; commitment to educating daughters
Familial/ Interpersonal
Participation in domestic decisionmaking; control over sexual relations; ability to make childbearing decisions, use contraception, access abortion; control over spouse selection and marriage timing; freedom from domestic violence
Women’s visibility in and access to social spaces; access to modern transportation; participation in extrafamilial groups and social networks; shift in patriarchal norms (such as son preference); symbolic representation of the female in myth and ritual Shifts in marriage and kinship systems indicating greater value and autonomy for women (e.g. later marriages, selfselection of spouses, reduction in the practice of dowry; acceptability of divorce); local campaigns against domestic violence
10
Broader Arenas Women’s representation in high paying jobs; women CEO’s; representation of women’s economic interests in macroeconomic policies, state and federal budgets Women’s literacy and access to a broad range of educational options; Positive media images of women, their roles and contributions
Regional/national trends in timing of marriage, options for divorce; political, legal, religious support for (or lack of active opposition to) such shifts; systems providing easy access to contraception, safe abortion, reproductive health services
Legal
Knowledge of legal rights; domestic support for exercising rights
Political
Knowledge of political system and means of access to it; domestic support for political engagement; exercising the right to vote
Psychological
Self-esteem; efficacy; psychological being
Community mobilization for rights; campaigns for rights awareness; effective local enforcement of legal rights
Women’s involvement or mobilization in the local political system/campaigns; support for specific candidates or legislation; representation in local bodies of government self- Collective awareness of injustice, potential well- of mobilization
Laws supporting women’s rights, access to resources and options; Advocacy for rights and legislation; use of judicial system to redress rights violations Women’s representation in regional and national bodies of government; strength as a voting bloc; representation of women’s interests in effective lobbies and interest groups Women’s sense of inclusion and entitlement; systemic acceptance of women’s entitlement and inclusion
Source: (Malhotra, 2002)
2.3 Sustainable Development Goals and Women’s Empowerment In the late 1980s, the report Our Common Future by the World Commission on Environment and Development defined the concept “sustainable development” as development which "meets the needs of the present without compromising the ability of future generations to meet their own needs”(WCED, 1987). As we aim to maximise the well-being of today’s generation, it is imperative to take a long-term perspective, considering the consequences of our actions for our children, their children and grandchildren, guaranteeing that the resources they will require for their own well-being are not depleted, and that the natural environment into which they will be born will not be polluted or destroyed.
11
Sustainable development aims at eliminating poverty through creating greater opportunities for all, reducing inequalities, raising basic standards of living and fostering equitable social development and inclusion (WCED, 1987). In order to achieve sustainable development, there are three core elements that need to be harmonised: economic growth, social inclusion and environmental protection. The empowerment of women and the improvement of their political, social, economic and health status is a highly important end in itself in addition to being essential in the achievement of sustainable development (United Nations, 1994). In this light, the United Nations first made the Millennium Declaration. The Millennium Declaration was adopted by 191 UN Member States at the 2000 Millennium Summit during the 55th General Assembly. Eight MDGs were to be achieved by 2015, together with 18 quantifiable targets and 48 indicators, were derived from this Declaration; the underlying aim of the MDGs was to reduce/halve poverty. Goal no. 3 – gender equality and empowerment of women – called for the elimination of gender disparity in primary and secondary schools. Indicators for the achievement of this goal were the ratio of girls to boys in primary and secondary school (two indicators), the share of women in wage employment in the non-agricultural sector, and the proportion of seats held by women in national parliaments. Apart from education, there were no quantifiable targets specified, so these indicators remained non-binding. Other goals directly affecting girls and women were Goal no. 2 (providing primary school education for boys and girls), Goal no. 5 (improving maternal health) and Goal no. 6 (combating HIV/AIDS, malaria and other diseases). The MDGs came to an end in 2015.
The UN General Assembly adopted in New York on 25 September 2015 the resolution on the post-2015 development agenda entitled "Transforming our world: the 2030 Agenda for Sustainable Development". The 2030 Agenda for Sustainable Development involves 17 Sustainable Development Goals (SDGs) and 169 targets which came into force on the 1st of January 2016. The specific targets of each SDG are to be achieved by 2030. The SDGs are built on the Millennium Development Goals (MDGs). However, contrarily to the MDGs that were intended for action in developing countries only, the SDGs apply to all countries (UN Women, 2015). They cover the three dimensions of sustainable development mentioned earlier: economic growth, social inclusion and environmental protection. 12
The SDGs seek to transform the course of the 21st century, addressing pertinent challenges such as poverty, inequality, and violence against women and girls. Women’s empowerment is considered to be a pre-condition for this. For that reason, achieving gender equality and women’s empowerment is a separate goal (Goal 5) of the SDGs. It is also integrated into the other goals, with many targets explicitly recognising women’s equality and empowerment as both the objective and as part of the solution.
2.4 Women’s Empowerment in Ghana Gender Equality and Women’s Empowerment are seen as strategies for plummeting poverty levels, social injustices among women and men, ameliorating health standards and tackling other development issues. Thus, attaining gender equality is regarded as the achievement of human rights and a pre-requisite for sustainable development. Ghana’s goals towards reaching gender equality targets are guided by its commitment to International Instruments (see Appendix 1), the 1992 Constitution of the Republic and national development frameworks. Precisely, Article 17(1) and (2) of the 1992 Constitution guarantees gender equality and freedom of women and men, girls and boys from discrimination on the basis of social or economic status among others. Efforts of Ghana in the promotion of gender equality and the empowerment of women, men, girls and boys are evident in its recent achievements as contained in various international indices such as HDI (0.579), GII (0.547) (UNDP, 2016) and the SIGI (0.2988)(OECD, 2014). In an attempt to promote women’s empowerment and achieve gender equality, successive governments of Ghana have made conscious efforts by promoting girl-child education, social development and protection initiative such as distributing free exercise books, free school uniforms, vocational training for young women, free healthcare (ante-natal services) for pregnant women, access to credit in the form of programmes such as the Livelihood Empowerment against Poverty among others. The Government has also improved the legal setting through the enactment of statutes including the Domestic Violence Act, 2007 (Act
13
732) to aggressively tackle gender inequality and the advancement of the welfare of women and girls.
Irrespective of the strides made so far, inequalities are still deeply rooted in the social system and manifest particularly in matters of access to justice, finance, education, security, health, politics, energy, agricultural practices, environmental management processes among others. According to the Ministry of Gender, Children and Social Protection of the Government of Ghana, there are myriad issues of concern in Ghana’s fight to empower women and achieve gender equality. These issues of concern include (Ministry of Gender, Children and Social Protection, 2015): ▪
Inequality in access to social protection by the marginalized, vulnerable and the poor.
▪
Inequalities in the burden of extreme poverty, education, skilled training gaps and excess maternal mortality.
▪
Unequal access to social, economic power and justice including lack of respect for and inadequate protection and promotion of human rights of women and girls.
▪
Inequalities between women and men in sharing of power and decision making at all levels and in dealing with all kinds of conflicts, insecurities and threats on women and girls.
▪
Inequality in macroeconomic issues including trade, industry structures and productive resources.
▪
Stereotyping and persistent discrimination against women and girls that manifest in negative gender relations, and value for gender roles and responsibilities with severe implication for maternal health and mortality.
Assessments have shown that these shortfalls can be attributed to the ancient legacy of patriarchal influences and the form of socialisation received from homes to public settings. In an attempt to address the challenges posed by these inequities, the Government in the year 2015 formulated a coherent National Gender Policy which focuses on mainstreaming gender equality, women empowerment and social protection concerns by strongly concentrating on the implementation of five policy commitments: Women’s 14
Empowerment and Livelihood; Women’s Rights and Access to Justice; Women’s Leadership and Accountable Governance; Economic Opportunities for Women; and Gender Roles and Relations.
2.5 The Concept of Microfinance Microfinance encompasses the provision of financial services and the management of small amounts of money through a range of products and a system of intermediary functions that are targeted at low-income clients (United Nations, 2005). Microfinance refers to the provision of small loans and other facilities like savings, insurance, transfer services to poor low-income household and microenterprises. Microfinance and microcredit are sometimes used interchangeably. However, microcredit refers to a small loan to a client made by a bank or other institutions and belongs to the group of financial service innovations under the term of microfinance. Other services according to microfinance include micro savings, money transfer vehicles and microinsurance. Microfinance can be said to be an innovation for developing countries. Microfinance is a service for poor people that are unemployed, entrepreneurs or farmers who are not bankable (Maanen, 2004). The reason why they are not bankable is the lack of collateral, steady employment, income and a verifiable credit history, because of these reasons they can’t even meet the minimal qualifications for credit or loan through the formal banking system. By helping people with microcredits, it gives them more available choices and opportunities with a reduced risk. It has successfully enabled poor people to start their own business, generate or sustain an income and often begin to build up wealth and exit poverty.
2.5.1 Categories of Microfinance Microfinance can be divided into three broad categories: microcredit, micro savings and microinsurance. •
The promise of microcredit is to provide small loans to micro-entrepreneurs to invest in their businesses, reinvest the returns and allow them to grow out of poverty (Pomeranz, 2014).
•
Microsavings products aim to provide accessible and safe avenues to save, either for future investments or as a precaution against economic shocks. Microsavings 15
products can include simple no-frills bank accounts, as well as commitment-based products that encourage deposits or limit withdrawal in order to help savers reach their savings goals (Pomeranz, 2014). •
Microinsurance products are designed to mitigate different types of risks, such as agricultural or health risks (Pomeranz, 2014).
2.5.2 Microfinance and Development Microfinance plays a crucial role in fighting the multi-dimensional aspects of poverty. Microfinance increases household income, which leads to associated benefits such as increased food security, the building of assets, and an increased possibility of educating one’s children. Microfinance is also a means for self-empowerment. By providing material capital to the poor person, their sense of dignity is strengthened and this can help to empower the person to participate in the economy and society. It enables the poor to increase income, become business owners and reduce their vulnerability to external shocks like illness, weather and more. Microfinance is thus one of the critical dimensions of the broad range of financial tools for the poor, and its increasing role in development as identified by the United Nations (2000) has emanated from a number of key factors which include: ▪
The fact that the poor need access to productive resources, with financial services being a key resource, if they are to be able to improve their conditions of life;
▪
The realization that the poor have the capacity to use loans effectively for incomegeneration, to save and repay loans;
▪
The observation that the formal financial sector has provided very little or no services to low-income people, creating a high demand for credit and savings services amongst the poor;
▪
The view that microfinance is viable and can become sustainable and achieve full cost recovery;
▪
The recognition that microfinance can have a significant impact on cross-cutting issues such as women's empowerment, reducing the spread of HIV/AIDS and environmental degradation as well as improving social indicators such as education, housing and health. 16
Studies have shown that microfinance plays three broad roles in development: 1. It helps very poor households meet basic needs and protects against risks, 2. It is associated with improvements in household economic welfare, 3. It helps to empower women by supporting women's economic participation and so promotes gender equity.
The literature suggests that microfinance creates access to productive capital for the poor, which together with human capital, addressed through education and training, and social capital, achieved through local organisation building, helps emancipate people from poverty.
The aim of microfinance is not just about providing capital to the poor to combat poverty on an individual level, it also plays a role at an institutional level (Otero, 1999). It seeks to create institutions that deliver financial services to the poor, who are incessantly ignored by the formal banking sector. Littlefield & Rosenberg (2004) contend that the poor are normally excluded from the financial services sector of the economy so MFIs have emerged to address this market failure. By addressing this gap in the market in a financially sustainable manner, an MFI can become part of the formal financial system of a country and so can access capital markets to fund their lending portfolios, allowing them to dramatically increase the number of poor people they can reach (Otero, 1999).
It is not all rosy as some schools of thought remain sceptical about the role of microfinance in development. For example, while recognising the role microfinance can play in helping to reduce poverty, a research on microfinance by Hulme & Mosley (1996) concluded that "most contemporary schemes are less effective than they might be". The authors argued that microcredit is not a remedy for poverty-alleviation and that in some cases the poorest people have been made worse-off.
This notwithstanding, microfinance has emerged globally as a leading and effective strategy for poverty reduction with the potential for far-reaching impact in transforming the lives of poor people for the better. It is argued that microfinance can facilitate the 17
achievement of the SDGs as well as National Policies that target poverty reduction, empowering women, assisting vulnerable groups, and improving standards of living.
2.6 Microfinance in Ghana The concept of microfinance cannot be said to be a new phenomenon in Ghana. The tradition of people saving and/or taking small loans from individuals and groups within the context of self-help to start businesses or farming ventures has always been in the country. Available evidence suggests that the first credit union in Africa was established in Northern Ghana in 1955 by Canadian Catholic missionaries (MoFEP-Ghana, 2015). However, Susu, which is one of the microfinance schemes in Ghana, is thought to have originated from Nigeria and spread to Ghana in the early twentieth century (MoFEP-Ghana, 2015). The various financial sector policies and programmes undertook by different governments since independence have enabled the microfinance industry to thrive and evolve into its current state. Among these are: ▪
Provision of subsidised credits in the 1950s;
▪
Establishment of the Agricultural Development Bank in 1965 specifically to address the financial needs of the fisheries and agricultural sector;
▪
Establishment of Rural and Community Banks (RCBs), and the introduction of regulations such as commercial banks being required to set aside 20% of total portfolio, to promote lending to agriculture and small-scale industries in the 1970s and early 1980s;
▪
Shifting from a restrictive financial sector regime to a liberalised regime in 1986;
▪
Promulgation of PNDC Law 328 in 1991 to allow the establishment of different categories of non-bank financial institutions, including savings and loans companies, and credit unions.
These policies over the years have led to the emergence of three broad categories of microfinance institutions in Ghana. These are: 1. Formal suppliers such as savings and loans companies, rural and community banks, as well as some development and commercial banks; 2. Semi-formal suppliers such as credit unions, financial non-governmental organizations (FNGOs), and cooperatives; 18
3. Informal suppliers such as susu collectors and clubs, rotating and accumulating savings and credit associations (ROSCAs and ASCAs), traders, moneylenders and other individuals. 2.6.1 Structure and Key Stakeholders of Microfinance in Ghana The structure and key microfinance stakeholders in Ghana consist of the following: 1. Microfinance Institutions, including ▪
The Rural and Community Banks,
▪
Savings and Loans Companies
▪
Financial NGOs
▪
Primary Societies of GCUA
▪
Susu Collectors Association of GCSCA
▪
Development and commercial banks with microfinance programs and linkages
▪
Micro-insurance and micro-leasing services.
2. Microfinance Apex Bodies, namely: ▪
Association of Rural Banks (ARB)
▪
ARB Apex Bank
▪
Association of Financial NGOs (ASSFIN)
▪
Ghana Cooperative Credit Unions Association (GCUA)
▪
Ghana Cooperative Susu Collectors Association (GCSCA)
3. End Users The economically active poor who are clients of microfinance products and services.
4. Technical Service Providers Business Development Service Providers to MFIs and their clients.
5. Supporting Institutions ▪
Microfinance and Small Loans Centre (MASLOC);
▪
The Ghana Microfinance Institutions Network (GHAMFIN);
▪
Development partners and international non-governmental organisations 19
▪
Universities, training and research institutions.
Government Institutions ▪
Ministry of Finance and Economic Planning
▪
Ministries, Departments, Agencies (MDAs) and Metropolitan, Municipal and District Assemblies (MMDAs)
▪
Bank of Ghana.
2.6.2 Achievements of Microfinance in Ghana Microfinance in Ghana has made some remarkable strides in the Country especially within the private sector. Among these achievements are as follows: 1. Provision of Working Capital: The introduction of microfinance into the country has made it possible for operators of small and medium scale businesses to access credit facilities which previously were difficult to access due to difficult modalities by the formal financial institutions. Even though the amount involved is modest, not huge, it supports their businesses to some extent. 2. Provision of Employment: Microfinance provides people with capital to start and or expand their businesses. Small businesses with microfinance support have grown into Medium Enterprises creating employment opportunities for others. 3. Capacity Building: Microfinance projects and programmes have gone a long way in building the capacity of clients in the areas of loan management, customer care, pricing, marketing and selling on credit as well as on social and community issues.
2.6.3 Challenges of Microfinance in Ghana Microfinance Institutions (MFIs) play a crucial role in the provision of services to the financially excluded population, particularly the poor and the informal sector. The Ghanaian microfinance sector has had its fair share of challenges in recent timeschallenges that seem to have lacerated its existing wounds and has hence, unfortunately, incited some loss of faith and confidence in the sector. In spite of the achievements chalked by the MFIs in Ghana in poverty alleviation and wealth creation, the industry has recently suffered nationwide collapses of some of its once vibrant institutions. 20
In recent times, the nemesis of DKM Microfinance and several negative developments in the sector, particularly in Sunyani, have cost people their life-savings, and livelihoods have been destroyed. Hence the sector has lost some credibility and confidence of the Ghanaian populace. Another case in point is the collapse of Noble Dream Microfinance Limited in 2014. A study by Antwi (2015) revealed that diversion of funds was the leading cause of the collapse of Noble Dream Microfinance Limited in 2014. According to him, diversion of funds refers to the reallocation of funds for purposes other than the intended. For instance, funds intended to be invested in Treasury bill may be considered diverted when it used to pay staff salaries and allowances. Other factors leading to the collapse of the company included: the high interest rate on investment; overtrading; poor credit appraisal; inadequate monitoring of loans; wilful loan default; and lack of qualified staff.
It has been observed that microfinance in Ghana encounters the following challenges among others (MoFEP-Ghana, 2015): • The current strategies for credit delivery by some microfinance institutions are not adequately diversified or efficient as they fail to fully meet the varying demands of the market and different categories of end-users. • In most cases, the interest rate charged by the microfinance institutions are higher than the formal banking institutions due to the default risk which forms part of the interest rate build up. This drives away potential customers and makes microfinance products/services too expensive sometimes. • There is lack of funds to run microfinance sufficiently as the demand for microfinance assistance keeps on increasing. • Commercial banks in Ghana have failed to serve the microfinance sector as much as they have done for the formal sector. These banks cite the high risk of default, high operational costs, and socio-economic and cultural barriers as responsible for their negative attitude to the microfinance sector.
21
2.7 Microfinance and Women’s Empowerment In many nations around the world, especially developing countries, cultural factors and sometimes regulations have traditionally restricted women’s ability to access and utilise financial services. According to World Bank data, only 22% of females represent adults with an account at a formal financial institution in Sub-Saharan Africa (Demirguc-Kunt & Klapper, 2012). In the Middle East and North Africa, the figure is woefully only 13% of female adults. However, it has been realised that over 80% of the microfinance industry’s poorest clients are women. (Maes & Reed, 2012). This large share of female participants in the microfinance industry is thought to offset some of the imbalances of current access to financial services for women. Providing financial products that benefit the poor could empower women in two ways. First, if the financial products are promoted and designed in a way that provides women with an easy access and direct benefits, this may increase their business opportunities, ability to cope with shocks, bargaining power within the household and overall independence (Pomeranz, 2014). Secondly, gender inequality tends to decline as poverty reduces (Duflo, 2012). For these reasons, providing financial products that help households escape poverty could also advance gender equality.
Delving into literature, it can be realised that microfinance has made great contributions to the quest for empowering women. A study by Hashemi, Schuler, & Riley (1996) in Bangladesh looking at the variables microcredit participation and women’s contribution to household revealed that microcredit empowers women by giving them greater economic value to their families. Studying women’s involvement in market activities funded by loans, the findings of Kabeer (1998) were that microcredit decreased the trade-offs that women have to make in various dimensions of their wellbeing. Kabeer looked at perceived changes in women’s self-worth, agency, contribution to the household, and confidence in community interactions. On another side, it is sad to note that men often control loans given to women. That is why Goetz & Gupta (1996) are of the view that microcredit programs are not necessarily empowering women. This notwithstanding, it can be seen that microfinance has made enviable strides in the cause of emancipating the poorest of people and most vulnerable people from abject poverty and empowered people especially women to achieve more than they could initially achieve. 22
CHAPTER THREE PROFILE OF STUDY AREA AND METHODOLOGY 3.1 Introduction This chapter presents the analytical framework of the study by which the research questions would be answered as well as a profile of the study area. The sub-sections of the chapter entail the research method used, methods of data collection, sampling method and technique, the data collection process and how data will be analysed. The source from which the data is gathered is also provided.
3.2 Brief Profile of Study Area The study area is limited to Suame sub-metropolis in the Kumasi, Ashanti Region. This area is purposefully selected due to the proliferation of small-scale enterprises in which women are massively engaged, the presence of financial institutions and it being an operational area of ASA Savings and Loans Limited.
3.2.1 Location and Size Suame sub-metro is located in the north-western part of Kumasi Metropolis. The area is bounded to the North by the Afigya Sekyere district to the east by the Tafo sub-metro and west by the Bantama sub-metro. Suame sub-metro is located on the geographic coordinate 6.7226 N, 1.6445 W. The location of the study area is exhibited in Figure 3.1 in the context of the Kumasi Metropolis. Communities that make up the sub-metro include Suame, Tarkwa Maakro, Anomangye, Breman, Kronum, and others.
23
Source: (https://www.researchgate.net) Figure 3.1 Map of Suame Sub-metro in context of Kumasi Metropolis 3.2.2 Demographic Characteristics The Suame sub-metro serves as a home to approximately 218,954 people. More than half of the population are females (52.7%) while males constitute 47.3 percent of the population. The most populous community is Breman whiles Tarkwa Maakro has the least number of inhabitants in the sub-metro. Table 3.1 Population of communities in Suame Sub-metro COMMUNITY
MALE
FEMALE
BREMAN 43,152 SUAME 23,275 KRONOM 21,394 TARKWA MAAKRO 15,740 TOTAL 103561 (47.3%) Source: (Ghana Statistical Service, 2014)
24
47,853 25,820 23,540 18,180 115393 (52.7%)
TOTAL 91,005 49,095 44,934 33,920 218954
3.2.3 Local Economy The major economic activity in the Suame sub-metro is the Artisan Engineering Cluster: mechanical, electrical and car body building workshops. It happens to be the largest artisan engineering cluster in Sub-Saharan Africa (Newman et al., 2016). It occupies about 20 square miles which brings the total land area for commercial activities to about 25 square miles. There are two fully constructed markets in the sub-metro which happens to be located in Kronum and Anomangye. Other open spaced markets can be found in Maakro, Breman and Suame. Other commercial activities such as ice water selling and food vendors have also sprung up in the area.
3.2.4 Financial Institutions There is the existence of financial institutions to support the economic activities of the area. These institutions provide financial aid in the form of loans, savings for individuals and businesses as well as financial knowledge aimed at expansion of their economic activities. Among the financial institutions present in the area are Barclays, Fidelity Bank, Pro-credit, Ghana Commercial Bank, First Allied Savings and Loans Limited, Odotobri Rural Bank, ASA Savings and Loans Limited, Garden City Savings and Loans, Access Bank, UniBank, Ghabsy Microfinance, among others. Susu collectors are also found in the area. These institutions are there to lend a hand to aid the growth of businesses for the troublefree transaction of monetary assets in the area. Despite the existence of these financial institutions some of the business operators lack access to credit facilities due to the inadequate knowledge in accessing the facility and other attached stringent to prevent them from doing so.
3.2.5 Economic Infrastructure Roads The Town Council has only one first-class road being the Kronum-Offinso road which also leads to the three northern regions of the country. However, the internal road network system is very poor with gullies all over thus about 85% of the roads are untarred (KMA, 2010). This makes accessibility of these roads very difficult as both vehicles and
25
pedestrians mostly encounter a lot of problems in travelling on it thus waste a lot of productive hours.
Telecommunication All the five mobile networks are present in the area and they include MTN, Tigo, Vodafone, Glo and Expresso as well as the fixed line service provided by Vodafone. This has therefore provided the people of the area a chance to embark on various promotional activities ranging from the sale of rechargeable cards, starter parks, phones and others for these networks and thus creating employment for quite a number of people.
Energy All the communities in the area have been connected to the National Grid. This helps to tighten up security in the area especially in the night. The presence of electricity assists the people to carry out their commercial and domestic activities with ease. Activities such as the manufacturing of cosmetics are predominant in the area and this is boosted by the presence of electricity. A major problem with the use of this facility is frequent power outages and fluctuations. However, some of the streets have no lights and therefore serve as a platform for social vices.
3.3 Methodology The study uses the survey method to analyse the role of microfinance institutions in empowering women. Statistical techniques such as frequency, percentages and statistical tools such as tables and bar graph are used to analyse the responses to the questionnaire. The research method, research technique, sampling methods adopted and sources of data used are elaborated in the following sub-sections.
3.3.1 Research Method The study adopts the survey method as the main research technique. Particularly the crosssectional survey method is used in this study. Cross-sectional surveys are used to gather information on a population at a single point in time (Macdonald & Headlam, 2009). Survey research a research method involving the use of standardized questionnaires or 26
interviews to collect data about people and their preferences, thoughts, and behaviours in a systematic manner (Bhattacherjee, 2012). The selection of the survey method is informed by the fact that it best describes the opinions, personal characteristics, perceptions, preferences and attitudes of respondents. The choice of the survey method is further informed by the fact that it is best suited for studies that have individual people as the unit of analysis (Bhattacherjee, 2012). Besides, the survey method is deemed appropriate since it enables one to gather data on a relatively large number of people at the same time and can be done using structured questionnaires.
3.3.2 Population and Sample For the purpose of this study, population is defined as a group of individuals that share one or more characteristics from which data is been gathered and analysed. Since the focus of this study is to explore the role of microfinance in the empowerment of women, all women who assess microfinance services from ASA Savings and Loans Limited, Suame branch, constitute the population of the study. Since this population is very large, it is prohibitively expensive to conduct a complete enumeration of all the women who have benefited from ASA Savings and Loans Limited’s credit facilities due to time and financial constraints. Hence, a sample which is representative of the population is considered for the study. The statistical process of selecting a subset (called a “sample”) of a population of interest for purposes of making observations and statistical inferences about that population is termed as sampling (Bhattacherjee, 2012). Sampling, according to Cooper & Schindler (2001) involves selecting some of the elements in a population and drawing conclusions about the entire population. The compelling reasons behind the decision to sample include the lower cost, greater accuracy of results and greater ease of data collection associated with sampling. For the purposes of this study, the sample frame from which the sample population is taken includes all women clients of ASA Savings and Loans Limited branch in Suame sub-metropolis. So, with a total of 1415 women clients of the MFI, the sample size is calculated as follows:
𝑛=
𝑁 1+𝑁𝑒 2
𝑛=
1415 1+1415(0.1)2
27
𝑛 = 93.3 93
Where: n= the sample size, N= the sample frame, e= margin of error (0.1), 0.1= confidence level at 90%
3.3.3 Sampling Technique The study employs both probability and non-probability sampling methods. Probability sampling, according to Jankowicz (2000), involves identifying and questioning people because they are members of some population to ensure that your assertions are valid for your respondents and directly generalisable without further inference, to that population. Stratified random sampling, which is one of the probability sampling methods, is used in this study. The technique is a modification of random sampling in which the population is divided into two or more relevant and significant strata based on one or a number of attributes (Saunders, Lewis, & Thornhill, 2007). The non-probability sampling method adopted is the purposive sampling. The choice of purposive sampling method is motivated by the fact that it aids the study to focus only on women clients of ASA Savings and Loans Limited microfinance programme who are in at least their third loan cycle with the assumption that after that cycle the financial services should have had an impact on their lives. This technique adopted helped to arrive at a population of 1415 women out of which a sample of 93 respondents was calculated from.
3.3.4 Research Technique Research techniques are particular, step-by-step procedures which you can follow in order to gather data, and analyse them for the information they contain (Jankowicz, 2000). The structured technique which entails the use of structured questionnaires and a face-to-face interview is adopted in this study. The main research instrument adopted in collecting the data for the study is the use of questionnaires, taking into consideration the specific objectives of the study and the sample size. Majority of the items on the questionnaire are close-ended questions, requiring the respondent to choose among alternatives or make multiple selections. Open-ended questions are also asked to enable respondents to express their views on certain matters pertaining to the study. Questionnaires are used because they are easier for respondents to answer and also facilitates interpretation of data by 28
standardising alternative responses. The questionnaires are administered to the sample population/size as determined in subsection 3.2.2 Population and Sample. Questionnaires are also directed to four credit officers and an operational manager of ASA Savings and Loans Limited gathering data on the operations of the institution and challenges faced in extending credit facilities to clients.
3.3.5 Sources of Data The study being basically a survey research relies mainly on primary data. The women clients of ASA Savings and Loans Limited are interviewed using questionnaires to extract the primary data. The study specifically targets clients who are in at least their third loan cycle. This group is appropriate for the study since it will afford the researcher to assess the contribution of microfinance to women empowerment, both socially and economically. The study also relied on some secondary sources of information such as journals, textbooks, conference proceedings, working papers, web pages and articles to conduct the study.
29
CHAPTER FOUR ANALYSIS OF THE ROLE OF ASA SAVINGS & LOANS LIMITED IN EMPOWERING WOMEN 4.1 Introduction This chapter serves as the crux of the study. It presents an understanding of the study by linking the theoretical analysis which has been undertaken already to the realities. That is, whether microfinance by ASA Savings and Loans Limited has had an influence on the lives of women and their household lies therein. “ASA” means “HOPE”. In this study, women’s empowerment is interpreted as the process in which women challenge the existing norms and culture of the society in which they live to effectively improve their well-being.
4.2 Operations of ASA Savings & Loans Limited ASA Savings & Loans Company Limited incorporated in Ghana and engaged in the process of empowering the poor (the landless, the labourers and the marginal people) for the improvement of their socio-economic condition. ASA Savings & Loans Limited, incorporated on 19th June 2009 under registration number CA-60,423 and having “approval in principle” from Bank of Ghana, is a company limited by shares with its headquarters in Accra. The objectives of ASA Savings & Loans Limited are: •
To create an enabling environment to offer easy access to credit facility to over 350,000 low-income entrepreneurs to support their businesses so as to empower them to be self-reliant and reduce poverty in rural and urban areas in Ghana.
•
To contribute to accelerated and sustainable development of Savings and Loans in Ghana
•
To create employment opportunities for jobless Ghanaian nationals and offer professional training to 1,600 Ghanaians by 2017
•
To develop ASA Savings and Loans in Ghana by following the highly efficient microfinance model of ASA in Bangladesh which is widely considered as the most successful self-reliant microfinance institution in the world with six million customers (www.asabd.org) 30
ASA Savings & Loans Limited is entirely funded by ASA International, an international holding company with offices in the Netherlands and Mauritius and technical support office in Dhaka, investing in ASA replicas in Africa and Asia. “ASA” means “HOPE”. ASA believes that economic emancipation could be developed through a regular savings habit and undertaking income generating activities. For that matter, the company is relentlessly working towards the goal of empowering the poor by utilising their savings and loans to generate more income. In this regard, ASA Savings & Loans Limited have introduced a savings and credit programme for the poor who remained excluded from the traditional banking system. The goal is to provide financial assistance to the low-income entrepreneurs through a systematic process under a well-structured organisation. The objectives of this goal are: •
To form groups of the poor and oppressed and to attain the improvement of their socio-economic condition through economic activities.
•
To give priority to women and to involve them directly in productive activities so that the opportunities are created for extra income.
As a result, the company utilises the Group Model in giving credit to women who are their primary clients. The Group Model’s basic philosophy lies in the fact that shortcomings and weaknesses at the individual level are overcome by the collective responsibility and security afforded by the formation of a group of such individuals. The groups consist of 10-15 women entrepreneurs who meet once a week to share personal and business advice, receive financial training, and vote on loan-related topics. The coming together of individual members is also used for a number of purposes: educating and awareness building, collective bargaining power, peer pressure among others. These groups build a safety net by guaranteeing each other’s loans -- if one member defaults on a weekly payment, everyone else must contribute to cover the costs.
4.2.1 Loan Products ASA Savings & Loans Limited have three loan products available to women. These are Small Loans, Individual Loans and SME Loans.
31
Small Loans: The Small Loans are also known as Weekly Loans. These loans are exclusively offered to women. The minimum loan amount which is currently offered is GH₵ 700 with the maximum being GH₵ 5,000. The tenure is six (6) months with a 20% interest rate. In order to acquire this loan product a client needs to be part of a group, possess a Ghanaian voter’s ID card, 2 passport pictures, and have a guarantor for the loan. Ten percent (10%) cash collateral is taken out of the amount to be taken as loan. Small loans are paid strictly in weekly instalments. However, large amounts can be upgraded to a monthly repayment structure if a client cannot afford the weekly instalment.
Individual Loan: The Individual Loans are taken by individuals as the name connotes. This means that unlike the Small Loans a client does not need to be part of a group in order to acquire this loan. The amount of money that can be granted as loan is from GH₵ 1,500 to GH₵ 10,000. The tenure is 10 months with interest rate set at 30% for the period. Twenty percent (20%) cash collateral is taken from the loan amount. In order to acquire this loan, the individual needs to have an already operating business that has a permanent structure, two guarantors and an operating permit from the MMDA. An Individual Loan can be repaid in daily or monthly instalments.
SME Loans: These are loans exclusively for Small and Medium Enterprises (SME). SMEs require an operating permit from the MMDA and should be operating in a permanent structure in order to acquire this loan. Twenty percent (20%) cash collateral is taken. The tenure is between three to twelve months coming with an interest rate of 3.5% per month. SME Loans can be repaid in daily or monthly instalments.
4.2.2 ASA Savings and Loans Limited Weekly (Group) Loans Lending Methodology ASA Savings and Loans Limited’s primary lending methodology is the group lending chiefly for women. The groups at ASA Savings and Loans Limited are composed, on average, of 10 to 15 poor members who may or may not be involved in the same business enterprise or working in the same community. Loan officers are usually assisted in the recruitment of new members by the group leaders and members of existing groups
32
operating in the area. All members should be engaged in a commercial activity and have at least some business experience before they join the group.
Women joining these groups participate in an extensive orientation on the conditions and requirements of the loan facility before receiving their first loan. Group leaders are elected and play an important role in the management of loan disbursement and repayment as well as in arranging the programme at the weekly meetings. Loans to individuals are guaranteed by an individual who is actively employed and not a loan-taking client of ASA Savings and Loans Limited. Repayments are made weekly. In addition to loan management activities, a programme is held at each meeting. Topics are chosen by the women themselves in conjunction with their loan officer. Women receive training in business skills such as customer care, pricing, marketing, and selling on credit, and they have the opportunity to exchange business tips among themselves. They also discuss social and community issues.
4.3 Analysis of Socio-Demographic Profile of Women Clients Table 4.1 Socio-Demographic Profile of Respondents Variable
Category
Frequency
Percentage
Age of
20-29
16
17.2
Respondents
30-39
44
47.3
40-49
18
19.4
50-59
12
12.9
60+
3
3.2
TOTAL
93
100
Divorced
3
3.2
Married
64
68.8
Separated
4
4.3
Single
14
15.1
Widowed
8
8.6
TOTAL
93
100
Marital Status
33
Educational Status No Formal Education
7
7.5
Basic
65
69.9
Secondary
17
18.3
Tertiary
4
4.3
TOTAL
93
100
Service
85
91.4
Manufacturing
7
7.5
Agric
1
1.1
TOTAL
93
100
Longevity in the < 1 year
3
3.23
programme
1-2 years
34
36.56
3-4 years
43
46.24
5+ years
13
13.98
TOTAL
93
100
Economic Activity
Source: Field Survey, March 2018 The age of respondents, their marital status, educational status, business activities undertaken by respondents and the longevity of the respondents in the ASA loan programme are depicted in Table 4.1. The dominant age group which access loans from ASA is 30-39 years. The total number of people (44) in this age group represents 47.3 percent. It can be observed from Table 4.1 that a meagre 3.2 percent of the respondents were 60 years old or older. In terms of the marital status of respondents, 68.8 percent of the women interviewed were married with 15.1 percent being single. The widows among them constituted 8.6 percent, 4.3 percent are separated in their relationships and the remaining 3.2 percent of the women are divorced.
The commerce industry is a major employment sector in the Kumasi Metropolis engaging 38.4 percent of the employed population (Ghana Statistical Service, 2014). Almost half (46.1%) of employed women in the metropolis find themselves in the commerce sector. With every town in the Suame Sub-metropolis having a market centre, the presence of the Artisan Engineering Cluster (Suame Magazine) coupled with the proximity of the area to 34
the Central Business District of Kumasi, it is not surprising that the service industry employs 91.4 percent of the respondents. Manufacturing employs 7.53 percent whiles agriculture employs only 1.1 percent.
Examining how long respondents have been involved in taking loans from ASA Savings and Loans Limited, it was realised that 96.77 percent of respondents have spent more than a year dealing with the company. About 13.8 percent have spent five years or more with the company and 46.24 percent spending between three to four years with them. A fraction of 3.23 percent of respondents have spent less than a year dealing with the company although they are in their second loan cycle. This is very good for assessing the influence of the loans on the living conditions of the women since about 96.77 percent of the respondents have been in the programme for more than a year.
4.4 Loan Facility The clients unanimously conceded that they faced no challenges in accessing loans from ASA Savings and Loans Limited as there is no demand for assets as collateral and the company also does not exert any unnecessary repayment pressures on them. The clients actually agreed that although the interest rate is relatively high compared to the commercial banks, getting loans from ASA is not as difficult as it is with the commercial banks.
Figure 4.1 shows how long the respondents have worked with the company and the initial amount that they received as loans in their first cycle. It can be observed from the chart that about 13.97 percent of respondents have worked with the company for five or more years. About 92 percent of these people representing 12.9 percent of the respondents received up to a maximum of GH¢ 500. Also, about 16 percent of those who have worked with ASA for three to four years (7.52% of respondents) received same amounts. However, about 84 percent of those who have worked with the company for three to four years and all those who have worked with them for fewer years received a minimum of GH¢ 500. This implies that the minimum amount given as loans for the first cycle has increased over the years and that women have the chance to progressively increase their working capital enabling them to expand their businesses. 35
45
Percentage of respondents
40 35 30 25 20 15 10 5 0 < 1 year
1-2 years
3-4 years
5+ years
Longevity in Programme ≤ GH¢ 500
GH¢ (501-1000)
GH¢ (1001-1500)
Source: Field Data, March 2018 Figure 4.1 Cross-tabulation: Longevity in the programme and initial amount received Figure 4.2 also shows a comparison between the longevity of clients in the programme and the last amounts they received as loans. The chart depicts that about 84 percent of clients who have taken loans for at least five years took amounts above GH¢ 2,000 as loans in their last cycle with the remaining 16 percent taking between GH¢ 1,501-2,000. Also, 58 percent of those who have taken loans for three to four years took above GH¢ 2,000 in their last loan schedule. This generally indicates that the longer a client take loans, the higher the amount the client can take after each cycle. Meaning the loan amount increases after each loan cycle completed given that the client is ready to take more. This increase is influenced by the client’s repayment habits. Clients with unencouraging repayment habit receive little or no increase in loan size after the completion of a loan cycle.
36
30
Percentage of respondents
25 20 15 10 5 0 < 1 year
1-2 years
3-4 years
5+ years
Longevity in Programme GH¢ (501-1000)
GH¢ (1001-1500)
GH¢ (1501-2000)
Above GH¢ 2000
Source: Field Data, March 2018 Figure 4.2 Cross-tabulation: Longevity in the programme and last amount received The key reasons that motivate the women to work with ASA Savings and Loans Limited are that: accessing loan from the company is not hectic; they have a good repayment structure, and their staff demonstrate good interpersonal relationships. This is what one group leader had to say about her motivation for working with ASA: “ASA is good. Considering how ASA loans have helped me, I cannot stop doing business with them because the repayment is not stressful, the terms and conditions are favourable and the services of the staff are extraordinary.”
Another woman shared her motivation for working with ASA as that: “They listen to the concern of customers. Due to the nature of my business, on my 3rd cycle, my loan officer decided to give me a business loan with 10 months repayment period which made me very happy.”
4.4.1 Repayment of Loan The group loans are paid on weekly basis. The group leader of each group organises and makes arrangements for weekly meetings. It is at the weekly meetings that loan repayments are made. If any one member of the group fails to pay her weekly portion of the loan, the 37
entire group becomes liable in repaying the amount. If not, the meeting does not come to an end. The sanction for continuously defaulting weekly repayments is the discontinuation of loan disbursements to that individual. The mild sanction that such a person can receive is that their loan amount can be reduced in their next loan cycle. In the worst case, if the loan repayment of a group is unencouraging, the entire group is denied subsequent loans. This inculcates a collective responsibility in the group in terms of loan repayments. Collective
responsibility encourages members of a group to help each other, if not out of kindness, then at least out of fear that their own privilege will be revoked due to default by another member.
The women unanimously agreed with being satisfied with the loan repayment structure. The women are of the view that the grace period of one month and the weekly schedule of the group loans give them ample time to work and repay the loans on time. The weekly instalments also come with a compulsory savings amount which helps the women to make savings for their own benefits. The compulsory savings help women to gather some amount of money by the end of their loan cycle and can even choose to discontinue taking loans.
4.5 Impact on Business This section analyses how the loans acquired by the women have made impacts in their various business ventures. How the women utilise the loans granted is investigated. How the loans have affected their working capital and businesses are analysed. A look is also taken at ASA’s role in honing their entrepreneurial skills.
Figure 4.3 shows how the women use the loans they are granted. The horizontal axis shows the proportion of the loans that the women invested in their business, expended on household purposes, purchased assets with or gifted out. The vertical axis shows the percentage of women who spent their loans on the given options.
38
4.5.1 Usage of Loans 100 90
Percentage of clients
80 70 60 50 40 30 20 10 0 0%
1-25%
26-50%
51-75%
76-99%
100%
Proportion of loans used Business
Household Expenses
Gifts/Donation
Assets
Source: Field Data, March 2018 Figure 4.3 Usage of Loans It can be seen from Figure 4.3 that only 30 percent of the women invested the full loan amounts into their businesses while 8.6 percent did not invest any proportion of the loans into their businesses. A proportion of 26.9 percent of the respondents invested 76-99% of their loans in their business ventures. An equal proportion also invested 51-75% in their business activities as well. This means that about 83.9 percent of women invest more than half of their loans in their businesses. A total of 31.2 percent, 1.1 percent, and 4.3 percent spend 1-25%, 26-5-%, and 100% of their loans respectively in purchasing assets. Household expenses take all the loan amount of 2.2 percent of the respondents.
4.5.3 Increased Income A seeming rollover effect of increased capital in any business is an expansion of that business. This assumption is corroborated by 90.3 percent of respondent admitting to an expansion of their businesses due to increased capital earned from the loans. Table 4.4 gives some responses of the women on how the loans have helped expand their businesses.
39
Table 4.2 How ASA loans have expanded selected clients’ businesses RESPONSES CLIENT 1: ASA loans have helped elevate my shop from a kiosk financed by my husband to a shop and now to a wholesale business. CLIENT 2: Helped me open a second shop CLIENT 3: Help me stabilise other business ventures that I engage in CLIENT 4: I deal in human hair and lotions. I have been able to improve my business with the help of ASA and I have been able to open a new branch. CLIENT 5: I have been able to acquire two additional machines for my hairdressing shop CLIENT 6: I have been able to increase the amount of food I sell overtime CLIENT 7: I make more sales now than before the loan CLIENT 8: It has helped me increase the stock of goods in my shop CLIENT 9: My working capital and income have increased CLIENT 10: New branches Source: Field Survey, March 2018 90
Percentage of respondents
80
78.5
70 60
57
50 40
38.7
30 20
19.4
10 0
2.2
2.2
≤ GH¢ 50
GH¢ (51-100)
GH¢ (101-200)
Income per day Income per day before loan
Income per day after loan
Source: Field Data, March 2018 Figure 4.4 Level of daily incomes before and after loans
40
2.2 0 GH¢ (201-300)
Figure 4.4 shows the level of incomes of the women prior to taking loans from ASA Savings and Loans Limited and after taking the loans. The level of income of the women before they too the loans was very low. About 78.5 percent of the women earned a maximum of GH¢ 50 in a day prior to the loan. Only about 19.4 percent earned between GH¢ 51-100 in a day and as little as 2.2 percent of them took home daily earnings between GH¢ 101 -200 prior to taking a loan. However, the respondents experienced a surge in daily incomes after utilising loans from ASA Savings and Loans Limited. The percentage of women who earned GH¢ 50 or less in day dropped to 2.2 percent. It can be observed that percentage of women with daily incomes of GH¢ 51-100 increased by 37.6 percent and 38.7 percent of them now earned GH¢ 101-200 per day. The loans thus increased the level of income of women.
4.5.2 Impact on Capital This section shows the impact that the loan has made on the working capital of the women who acquire them. Table 4.3 Initial working capital Amount ≤ GH¢ 500 GH¢ (501-1000)
Frequency 43 40
Percent 46.2 43.0
GH¢ (1001-1500)
7
7.5
GH¢ (1501-2000)
3
3.2
Total
93
100.0
Source: Field Survey, March 2018 Table 4.3 shows the initial working capital of the respondents. 46.2 percent of the respondents started their businesses with an amount of GH¢ 500 or less. 43 percent of the respondents started with amounts between GH¢ 501-1000.
41
Table 4.4 Increased Working Capital Increased Capital? NO
YES
Amount
Frequency
Percent
Above GH¢ 2000
8 20
8.6 21.5
GH¢ (1501-2000)
17
18.3
GH¢ (1001-1500)
28
30.1
GH¢ (501-1000)
20
21.5
93
100.0
Total Source: Field Survey, March 2018
The survey revealed that 91.4 percent of respondents have seen a surge in their working capital after taking loans from ASA Savings and Loans Limited. 21.5 percent of the respondents have seen their working capital increase by over GH¢ 2000 while 18.3 percent have a capital increase between GH¢ 1501-2000. However, majority (30.1%) of them have realised increased capital in the region of GH¢ 1001-1500. Notwithstanding, 8.6 percent of respondents had not realised any increase in capital after taking the loans. This can be attributed to they not investing the loans in their businesses as 4.3 percent of them used the full loans in acquiring assets and 2.2 percent used the full loans to take care of household expenses. The increase in working capital is particularly imperative for women’s empowerment. This is basically so because when women have their own capital or have access to cash credit, they have considerably more power and prestige in the marketplace. However, Cheston and Kuhn in their draft paper in 2002 on “Empowering Women through Microfinance” noted that although increased esteem does not automatically lead to empowerment, it does contribute decisively to women’s ability and willingness to challenge the social injustices and discriminatory systems that they face.
4.6 Impact on the Household and Family Relations Women’s ability to influence or make decisions that affect their lives and their family is considered to be one of the principal components of empowerment. 42
The survey conducted showed that of those interviewed, 71 percent of the 93 women experienced an increase in their decision-making roles in the areas of family size determination, control over income, education of children and other decisions such as the purchase and sale of properties —all areas of decision making traditionally dominated by men. Also, 78 percent of the women who are married were now part of the decision-making process about what should finally prevail in their households mutually with their husbands, which represents a step forward because formerly these women’s husbands would have made such decisions alone.
In Ghana, a woman earning a little money to cover household expenses will not necessarily earn her more respect in the eyes of her husband because women are traditionally responsible for providing food, clothing, children’s allowances (pocket money), and cooking and cleaning supplies. However, if she earns enough to help cover expenditure like school fees, rent, furniture, and transport, her decision-making power often increases greatly in the household. The married women (68.8 percent of clients) interviewed were particularly proud of their financial contribution to their children’s education not only because it helped them earn the respect of their husbands but also because it gave them the opportunity to ensure the best possible education for both their daughters and their sons. They were also proud of their financial contribution to their household food needs. Table 4.5 depicts the sample of women who experienced an increased financial contribution to the upkeep of their household after the loan from ASA Savings and Loans Limited.
Table 4.5 Evidence of Increased Financial Contribution of Married Clients to the Upkeep of Household per Week Client
Client 1
Client 2
Area of contribution
Prior to loan
After loan
Change
(GH₵)
(GH₵)
(%)
Children’s education
30
50
66.7
Food
15
35
133
-
15
-
15
25
66.7
12.5
25
100
Children’s education Food
Client 3
Children’s education 43
Client 4
Client 5
6-93rd client
Total
Food
35
35
-
Children’s education
25
25
-
Food
50
75
50
Children’s education
50
80
60
Food
52.5
60
33.3
Children’s education
5,405
8,980
66.1
Food
7,755
11,090
43
Children’s education
5,522.5
9175
66.4
Food
7922.5
11330
43
Source: Field Survey, March 2018 The women believed that their financial contribution had helped them earn greater respect from both their husbands and their children. This attests to the studies by Grasmuck and Espinal (2002) in the Dominican Republic which showed that children are better educated and cared for when women contribute income to the family. Also, according to the Women’s Entrepreneurship Development Trust Fund reports stated by Cheston and Kuhn (2002) women’s increased income benefits their children, particularly in education, diet, healthcare, and clothing. The analysis of the impact of microfinance by the World Bank Global Learning Conference in Shanghai in 2004, established that a woman’s contributing to her household’s income is a significant factor towards her empowerment (World Bank, 2004). In the survey, the complete appropriation of women’s loans by men was rare, and women typically control their own income from their business. 99 percent of those interviewed controlled their loans and incomes from their business. Even though 42.8 of the women who were married reported their husbands assist them with their accounts, planning, and other aspects of business, only one woman reported that her husband had decided how her first loan should be used but that she was involved in subsequent decisions. Women’s increased economic independence can, however, lead to other unanticipated challenges as discovered in the survey. Discussions with the married clients revealed that
44
in a number of cases their husband’s contribution to the household decreased once they began to earn more income and became able to cover more of the household’s expenses. Occasionally the husband withdrew his support to the extent that the woman was forced to spend her loan primarily to meet consumption needs instead of investing it in her business, leading to repayment difficulties later.
4.7 Impact on the Community and Women’s Role It can be said that leadership skills, self-confidence, and solidarity play an important role in changing women’s role and status in the community. However, women’s economic success plays a role in shaping the community’s perception of them as well.
About 24.3 percent of the women have been invited to participate in community and societal meetings because they are now in a position to contribute and are also now able to make much contribution at social gatherings such as funerals and church.
84 percent of clients interviewed are beginning to advise neighbours in business, family, health, and community matters. One woman interviewed had even become a member of the Unit Committee in her area and contributes to the identification and communication of the development needs of her area to higher authorities in the sub-metropolis. Women giving advice is a positive sign of empowerment since women are learning and putting into practice what they learn. They are sharing their knowledge and helping others, which mean that the knowledge benefits of the programme are having an impact beyond its members. Virtually all the women interviewed now contribute either financial resources or labour to community development projects. From the survey, 82 percent of the women contribute financially to the development of their community and 12 percent contribute in the form of labour to community development projects.
Empowerment and well-being benefit substantially increased when women controlled their loans and used them for their own income-generating activities. The survey showed that all the women controlled the loans received from ASA Savings and Loans Limited for their business activities. 45
CHAPTER FIVE SUMMARY OF KEY FINDINGS, RECOMMENDATIONS AND CONCLUSION 5.1 Introduction The focus of the last chapter of the study includes key findings emanating from the analysis and discussion made in the previous chapter. Suitable recommendations are then made for policy interventions and conclusions drawn. 5.2 Summary of Key Findings The study investigated the effect of microfinance on the socio-economic empowerment of women with a focus on ASA Savings and Loans Limited’s microfinance programme. This study realised several observations and the key findings made from them are summarised as follows: ➢ ASA Savings and Loans Limited’s primary lending methodology is the group lending system where loans are given to groups of women who may not necessarily be in the same line of business. ➢ Loans given by ASA Savings and Loans Limited to the women are with the motive of an expansion capital hitherto being seed capital as loans are only granted to women who are already operating businesses but not those trying to start new businesses altogether. The size of the loans increases after a client successfully completes a loan cycle and decides to take on another. ➢ A default in a weekly loan repayment by a member of a group becomes the liability of all other members of the group to repay the amount. Also, an unencouraging repayment attitude displayed by several members of a group may lead to the dissolution and discontinuation of disbursement of loans to that group. ➢ Women are economically empowered when they have access to credit. They are able to independently make economic decisions in terms of controlling their incomes, deciding on the business venture to undertake, expansion of their businesses among others. ➢ Women’s ability to influence or make decisions that affect their lives and their family is considered to be one of the principal components of empowerment. This study revealed that 71 percent of the 93 women experienced an increase in their decision-making roles in the areas of family size determination, control over 46
income, education of children and other decisions such as the purchase and sale of properties —all areas of decision making traditionally dominated by men. ➢ Discussions with the married clients revealed that in a number of cases their husband’s contribution to the household decreased once they began to earn more income and became able to cover more of the household’s expenses. ➢ The organisation of weekly meetings serves as an avenue for women to share ideas and discuss issues pertaining their communities and businesses. This activity has contributed to the social empowerment of these women. As a matter of fact, about 24.3 percent of the women have been invited to participate in community and societal meetings because they are now in a position to contribute and are also now able to make much contribution at social gatherings such as funerals and church.
5.3 Recommendations The study has proven that expansion of loan granting services to women immensely contributes to their socio-economic empowerment. Therefore, for policy action, it is recommended that ASA Savings and Loans Limited should endeavour to expand their loan granting services by extending credit facilities to women who are freshly starting to do business as seed capital. Such loans should be given after carefully scrutinising and determining the profitability of the business activity intended to be undertaken. The loans should also come with business training such as managing finances, customer relations, pricing, selling on credit among others.
Conducting and supporting research on appropriate measures of empowerment that can be used to monitor and improve the impact on empowering and upgrading the status of women should be considered.
This study focused on only one branch of ASA Savings and Loans Limited, that is the Suame (Kumasi) branch, to investigate the role the institution plays in empowering women. However, the company has several branches in the region. It is therefore suggested that further studies should be done in other branches in order to assess a broader impact of ASA
47
Savings and Loans Limited’s microfinance programme on the socio-economic empowerment of women.
5.4 Conclusion Bennet and Goldberg (1993) asserted that in developing economies, low-income women are often victims of societal suppression and abuse; while their counterparts in developed economies are victims of lending discrimination. It is therefore argued that lending to women may help empower them economically and socially. The heightened interest in the gender dimension of microfinance in recent times stems from the fact that women are often seen as instruments for societal change and development and as such, empowering them may be of great benefit to society. The study showed that participating in microfinance services could be a way for women to gain the ability to make strategic choices concerning their lives (Kabeer, 2001). Evidence from this study corroborates this assertion as it clearly seen that the women who received loans from ASA Savings and Loans Limited have increased participation in household and community decision-making, increased contribution to household expenses such as education of children and provision of food for the family.
Therefore, the following conclusions were made from the study. First, the study revealed that access to microfinance has contributed immensely to the economic empowerment of women through improvement in their businesses. Secondly, the study shows that access to microfinance has improved the status of women both at the family level and in society as a whole. At the family level, the study reported an improvement in household income and standard of living of the family. The social level, there was a rise in the confidence level of clients, increased degree of socialisation and positive outlook.
48
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Development (p. 193). Cairo: United Nations Publication. https://doi.org/ISBN 92-1151289-1 United Nations. (1995). Beijing Declaration and Platform for Action: The Fourth World Conference on Women (pp. 1–132). Beijing. United Nations. (2000). Microfinance and Poverty Eradication: Strengthening Africa’s Microfinance Institutions. New York. United Nations. (2001). Empowerment of women as a transformative strategy for poverty eradication. In Division for the Advancement of Women (DAW) Expert Group Meeting on “Empowerment of women throughout the life cycle as a transformative strategy for poverty eradication” (pp. 1–11). New Delhi. United Nations. (2005). Concept Paper: Building Inclusive Financial Sectors to Achieve the Millennium Development Goals. United Nations Development Programme. (2016). Human Development Report 2016. New York: Lowe-Martin Group. World Commission on Environment and Development. (1987). Our Common Future: Report of the World Commission on Environment and Development. Oxford University Press. Retrieved from http://www.un-documents.net/wced-ocf.htm Map of Suame Sub-metro in context of Kumasi Metropolis>>> https://www.researchgate.net/profile/KWABENA_OFORIKWAKYE/publication/279849216/figure/fig1/AS:284497015787521@1444840782400/ Sub-metro-areas-of-Kumasi-Source-Google-images.png
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APPENDICES Appendix 1: Key International Instruments and Frameworks Ratified by Ghana in support of Gender Equality and Women Empowerment
Ghana has ratified all the important International Instruments on Gender Equality and Women Empowerment. Critical among them are: ▪
The Universal Declaration of Human Rights, 1948
▪
The Convention on the Elimination of all forms of Discrimination Against Women (CEDAW) 1979 (Signed 17 July 1980 and Ratified on 2nd January 1986);
▪
The Optional Protocol to the Convention on the Elimination of all forms of Discrimination Against Women (CEDAW OP) 1999 (Signed on 24 February 2000);
▪
International Covenant on Economic, Social and Cultural Rights (ICESCR) 1966 (Ratified 7 December 2000);
▪
The Covenant on Economic Social and Cultural Rights (ECOSOC),
▪
The Nairobi Forward Looking Strategies for the Advancement of Women, 1985
▪
The Vienna Declaration on Human Rights, 1993
▪
The Beijing Declaration and Platform for Action,1995
▪
The International Conference on Population and Development (ICPD) declaration,1994
▪
The African Charter on Human and Peoples’ Rights (ACHPR) (Ratified on 24 January 1989 and Signed on 3 July 2004)
▪
Protocol to the African Charter on Human and People’s Rights on the Rights of Women in Africa, 2003 (signed on 31st October 2003; ratified on 13th June 2007)
▪
UN Security Council Resolutions 1325 and 1820 on Women Peace and Security and violence against women.
▪
The Millennium Development Goals (MDGs), 2000.
▪
The International Covenant on Civil and Political Rights (ICCPR) 1966 (Ratified on 7th December 2000)
▪
The Declaration on the Rights of Indigenous People (Voted in favour as a member on 13th September 2007); 53
▪
The International Convention on the Elimination of All Forms of Racial Discrimination (CERD) (4th January 1969)
▪
The International Convention on the Rights of the Child (CRC) 1991 (2nd September 1990)
▪
The International Convention on the Protection of the Rights of all Migrant Workers and Members of their Families (MWC) 1990 (1st July 2003)
▪
Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment – New York (10th December 1984; ratified on 7th September 2000)
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Appendix 2: Research Instruments (Questionnaires) QUESTIONNAIRES FOR: Women Beneficiaries Date of Interview: ____/_____/_____
BACKGROUND INFORMATION 1. Name of respondent …………………………..……………………………………… 2. Age of respondent…… 3. Marital status of respondent (i) Married (ii) Single (iii) Divorced (iv) Widow (v) Separated If married is your husband economically active/employed? [ ] Yes [ ] No 4. Have you had any form of formal education? [ ] Yes [ ] No If yes, what level did you attain? (i) Primary (ii) Middle School/Junior High (iii) Senior High (iv)Vocational/Technical (v) Tertiary 5. Business Activities undertaken: (i) Commerce (ii) Food Vending (iii) Manufacturing (iv) Service (v) Agric (vi) Othersspecify 6. Do you have any children or wards? [ ] Yes [ ] No If yes, how many? ……….
LOAN FACILITY 7. How long have you enjoyed loans from ASA Savings and Loans Ltd? (i) Less than 1 year (ii) 1-2 years (iii) 3-4 years (iv) 5 or more years 8. What is the initial loan amount you received? (i) Below GH¢ 500 (ii) GH¢ (501-1000) (iii) GH¢ (1001-1500) (iv) GH¢ (1501-2000) (v) Above GH¢ 2000 9. What was the last amount you received from ASA Savings and Loans Ltd? (i) Below GH¢ 500 (ii) GH¢ (501-1000) (iii) GH¢ (1001-1500) (iv) GH¢ (1501-2000) (v) Above GH¢ 2000 10. Do you have problems accessing loans from ASA Savings and Loans Ltd? [ ] Yes [ ] No 11. If yes to Que.10 what are they? 55
(i) Demand for Collateral (ii) High interest rate (iii) Repayment pressures (iv) Others (Specify)…………………………………. 12. Do you have access to other credit facilities apart from ASA? [ ] Yes [ ] No 13. If Yes, which one of the following: [ ] Government sources (LEAP, YEP) [ ] Commercial Bank / Rural Bank [ ] Savings and Loans / Micro Finance Institution, NGO [ ] Rotatory savings club [ ] Moneylenders. [ ] Friends and family 14. What motivates you to work with ASA Savings and Loans Ltd? ………………………………………………………………………………………...…… ………………………………………………………………………………………………
IMPACT ON THE HOUSEHOLD AND FAMILY RELATIONS 15. Has the loan now increased your participation in household decision making? [ ] Yes [ ] No 16. If yes in how do you participate in household decision making? [ ] Family size [ ] use of contraception [ ] control over income [ ] choice of meal [ ] others (specify)……………………………………………………………… 17. Who decides finally what should prevail in your household? (i) Myself (ii) Spouse / Husband (iii) Consensual decision-making 18. Why is it so in Ques. 17? Explain ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… 19. In what way do you contribute to the upkeep of your household? (i) Financial (ii) Domestic Chores (ii) Both (iv) Others (specify) ……………………... ……………………………………………………………………………………………… Fill the table below Area of contribution
Prior to loan
After loan
Difference
(GH₵)
(GH₵)
(GH₵)
Children’s education Food
56
Clothing Assets
IMPACT ON BUSINESS 20. What proportion of the loan goes into the following: Business:…………
Household expenses (Children’s education, food, bills, etc):……….
Assets:………….. 21. Do you receive advice/training in business skills with the loan facility? [ ] Yes [ ] No 22. If yes what type of training? [ ] Customer care [ ] Pricing [ ] Marketing [ ] Selling on credit [ ] Others (specify) ………………………………………………………………………... Tick either Yes or No in answering the questions below 23. How much was your initial working capital? (i) Below GH¢ 500 (ii) GH¢ (501-1000) (iii) GH¢ (1001-1500) (iv) GH¢ (1501-2000) (v) Above GH¢ 2000 24. Has the loan increased your working capital? [ ] Yes [ ] No If yes by how much has it increased your working capital? Write ………………………………………………………………………………………. Fill the table below
Working Capital prior to loan (GH₵)
Working Capital after Difference loan(GH₵) (GH₵)
25. Has the loan helped expand your business? [ ] Yes [ ] No Explain …………………………………………………………………………………….. ……………………………………………………………………………………………… 26. What is your income per day/week/month? (GH¢) Before Loan…………… After Loan…………. 27. Have you been able to diversify into more profitable product lines since you started taking loans from ASA? [ ] Yes [ ] No Explain ……………………………………………………………………………………..
57
……………………………………………………………………………………………… ………………………………………………………………………………………………
IMPACT ON THE COMMUNITY AND WOMEN’S ROLE 28. Do you involve yourself in your community decision making? [ ] Yes [ ] No (i) If yes what role do you play in the decision making process? …………………………. ………………………………………………………………………….............................. ……………………………………………………………………………………………… (ii) If no why ?………………………………………………………………………….... …………………………………………………………………………………………….. 29. Have you been consulted by any community member for any form of advice after the loan? [ ] Yes [ ] No 30. If yes which advice? [ ] Business [ ] Health [ ] Family [ ] Community matters [ ] Others (specify) …………………………………………………………...................... 31. Do you contribute to the development of your community? [ ] Yes [ ] No 32. If yes what contribution? (i) Financial (ii) labour (iii) others (specify) ……………………………………………………………………………………………… 33. Do you hold any leadership position after the loan facility? [ ] Yes [ ] No 34. If yes what position? (Write) ………………………………………………………….. ……………………………………………………………………………………………....
SELF CONFIDENCE AND PERSONAL CONTROL 35. Who controls the loan that you take from ASA? (i) Myself (ii) My husband (iii) Others (specify)…………………………. 36. Why is it so in Ques. 35? Explain ……………………………………………………………………………………………… ……........................................................................................................................................ 37. Are you aware of any of the following human rights? [ ] Right to vote 58
[ ] Right to participate in decisions that affect your life [ ] Freedom from violence [ ] Freedom of movement [ ] Others (specify) …………………………………………………………………… 38. On the average, how much do/did you save per day/week/month? Fill the table below Average Savings per month (GH¢) Before Loan
After loan
REPAYMENT OF LOAN 39. Are you able to pay back loans on time? Yes [ ] No [ ] Why?…………………………………………………………………..…………………… ……………………………………………………………………………………………… ……………… 40. How do you repay the loans received from ASA Savings and Loans Ltd.? (i) On daily basis (ii) On weekly basis (iii) On monthly basis (iv) Others (specify) ………………………………………………………………………. 41. Do you face any sanctions if you delay repayments? [ ] Yes [ ] No 42. If yes what sanctions (specify)……………………………………………………......... ……………………………………………………………………………………………... 43. Are you satisfied with the repayment system? [ ] Yes [ ] No 44. If yes reasons……………………………………………………………………… 45. If not what do you think could be done to improve the repayment system? ……………………………………………………………………………………...………. ……………………………………………………………………………………………… ……………………………………………………………………………………………....
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QUESTIONNAIRE FOR ASA SAVINGS AND LOANS LIMITED Name of respondent:……………………………………………………………… Position of respondent:…………………………………………………………… Date of Interview:…………………………………………………………………
1. Brief history of ASA Savings and Loans Limited Ltd. ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… 2. How many women benefit from your loan scheme? ........................................................ 3. What are the loan products available to women in ASA Savings and Loans Limited? ……………………………………………………………………………………………… ……………………………………………………………………………………………… 4. What are the requirements for women to access loan from your organization? ……………………………………………………………………………………………… ……………………………………………………………………………………………… 5. Do you think the loan has had much influence on the lives of women? Yes [ ] No [ ] (i)If yes to Que.5, how? ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… (ii) If no to Que.5, why? ……………………………………………………………………………………………… ..…..………………………………………………………………………………………… 6. How do you know the loan has influenced the lives of the clients? ……………………………………………………………………………………………… ……………………………………………………………………………………………… 7. Apart from the loans that you give do you offer management and skill training for clients? Yes [ ] No [ ] If yes to Que.7, what are they? 60
……………………………………………………………………………………………… …....………………………………………………………………………………………… If No to Que.7, why? ……………………………………………………………………………………………… …....………………………………………………………………………………………… 8. What range of loan (in GH ¢) is available to clients………………………………… 9. What time period is allowed to client to repay loans? ........................................................ 10. What is the current interest rate for the loan facility? …………………………… 11. How are clients supposed to repay loans? (i) Daily basis [ ] (ii) Weekly basis [ ] (iii) Monthly basis [ ] (iv) Others (specify) .……………………………………………………………………… 12. Do you offer loans to men? [ ] Yes [ ] No 13. How would you compare repayment rate of women to men? ……………………………………………………………………………………………… 13.
What
happens
to
clients
for
delaying/defaulting
payments?
................................................................................................................................................ ................................................................................................................................................ 14. What measures are in place to reduce or cater for the risk of defaulting on payment? ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… 14. What makes ASA Savings and Loans Limited different from other MFIs? ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… 15. What are the main challenges of the institution? ................................................................................................................................................ ................................................................................................................................................ ................................................................................................................................................ 16. What are your recommendations to make the loans facilities empower women? ................................................................................................................................................ 61
QUESTIONNAIRE FOR LOAN/CREDIT OFFICERS Name of respondent……………………………………………………………………… Position of respondent…………………………………………………………………… Date of Interview:…………………………………………………………………………
1. How long have you been working in this position? (i) Less than 1 year
(ii) 1-2 years (iii) 3-5 years
(iv) 5+ years
2. Do you think the loan has had much influence on the lives of women? Yes [ ] No [ ] (i)If yes to Que.2, how? ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… (ii) If no to Que.2, why? ……………………………………………………………………………………………… ..…..………………………………………………………………………………………… ……………………………………………………………………………………………… 3. How do you know the loan has influenced the lives of the clients? ……………………………………………………………………………………….…… ……………………………………………………………………………………………… 4. Apart from the loans that you give do you offer management and skill training for clients? Yes [ ] No [ ] If yes to Que.4, what are they? ……………………………………………………………………………………………… …....………………………………………………………………………………………… If No to Que.4, why? ……………………………………………………………………………………………… …....………………………………………………………………………………………… 5.
What
happens
to
clients
for
delaying/defaulting
payments?
................................................................................................................................................
62
................................................................................................................................................ ................................................................................................................................................ 6. What are the main reasons women delay/default payments? ................................................................................................................................................ ................................................................................................................................................ ................................................................................................................................................ 7. What are your recommendations to make the loans facilities empower women? ................................................................................................................................................ ................................................................................................................................................ ................................................................................................................................................
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