Household Economy, Household Finance, Micro Finance & Gender

Analysis

Thalia Kidder Oxfam GB 2002

• A. MicroCredit, MicroEnterprise & Gender

• B. What do Microenterpreneurs need?

• C. MF’s contribution to poverty reduction – vulnerability & consumption smoothing

• D. Household Economies & Household Finance

• E. Training tools on gendered h’hold finance

A. MicroCredit, MicroEnterprise & Gender Perspective

• Target women with loans• Reduce barriers • a) collateral • b) Training• c) Logistics• d) Control• Institutional systems

• What does a woman microenterpreneur need?

• Are all women microenterpreneurs?• A focus on women is gender analysis?• How do MF services reduce poverty?• What financial services do

households need? Do women need?• How do we have an impact on gender

relations and roles…. And on men?

B. Let’s question the assumptions…

Credit… for production/business… for women?

MicroCredit, MicroEnterprise & Gender Perspective

• Why are women in certain sectors or activities (low returns, vulnerable)? Diversification and control in markets

• Are MICRO enterprises viable? Why do women work alone? Training on economic organisation…

Sustainable Economic Projects:what resources are needed?

BAKERY

Financial Services:

Credit, Insurance,

Reserves, Transfers

Skills

Efficient

Organizational

Structure

Marketing

TIME &

Labor

Assets,

C. Income-Poverty Reduction: What matters? (1)

• Level of Income Income Promotion Strategies

• (in)Stability of Income• (un)Certainty of Income• Income Smoothing and • Consumption Smoothing Strategies

Income-Poverty Reduction: what matters? (2)• Income Smoothing Strategies:

– Diversify income sources– Protect against external shocks– Adapt products/services to markets– Increase flexibility of labor supply / skills

• Consumption Smoothing Strategies:– Manage money to meet daily/weekly expenses

throughout the year & life cycle– Provide mechanisms to cover expected large

expenses and unpredictable events & losses.

(3) Consumption smoothing: the minimum acceptable consumption level

0

100

200

300

400

500

600

700

800

900

1000

feb mar april may june july aug sept oct nov dec jan

Minimumacceptable level

(4)Consumption Smoothing: Large Expenses

0

100200

300400

500600

700800

900

feb

ruar

y

mar

ch

apri

l

may

jun

e

july

aug

ust

sep

tem

ber

oct

ob

er

no

vem

ber

dec

emb

er

jan

uar

y

School expenses

Festivals

Illness/birth

Planting/harvest

Housing repair

Basic consumption

(5)Consumption Smoothing: Income Sources and Levels

0

100

200

300

400

500

600

700

800

900

february may august november

Grains harvest

Plantain harvest

Migrant/temp wk.

Small trading

Remittances

Sale of animals

(6)Consumption smoothing: the minimum acceptable consumption level

0

100

200

300

400

500

600

700

800

900

1000

feb mar april may june july aug sept oct nov dec jan

Minimumacceptable level

Above

At risk

Extreme poverty

(7)Income &Consumption Smoothing

& the unrecognized potential of MF: WHY?• The threat of falling into poverty can be as constraining and disempowering as the impact of occasional deprivation (Sen)

• The poor tend to value financial services that address the risk-coping motive, the better-off can afford those that generate income and accumulate assets (Zeller)

• Women value consumption smoothing mechanisms because of vulnerabilities specific to their life cycles and gender roles - due to marriage, births, childcare, health needs, education needs, old age, abandonment, separation and violence against women.

(8)Income &Consumption Smoothing

& the unrecognized potential of MF: HOW?• Identify common large expenses, • (idiosyncratic) risks, threats & ‘bad times’• Look at the ‘financial landscape’ - analyze how

people currently cope …borrowing, saving...

• Identify what ‘doesn’t work well’ for people• Figure out in what areas MFI products and

services might do better…– Savings for births, school expenses, marriages– life & accident insurance, health care mechanisms– emergency loans, reserves against natural disasters

D. What do Financial Services Do? (I)

1. They function to transfer money

from one place...

...to another.- -

2. They function to convert the value of assets ...

...into cash (pawns and mortgages)

3. They permit building and accessing large sums of money

through savings, credit and insurance.

(a) Savings - give up a portion of current income to

accumulate a lump sum in the future

amounts and periods are flexible

requires discipline and security

Time line…….

(b) Insurance -small payments out of current incomerelatively large sum of money, but...accessible only in case of certain events

???

Time line…….

commitment to give up part of future income to repay loan

(c ) Credit/Loans -immediate access to large sum

interest paid for the right to spend now and pay later

the payments and periods are fixed

Time line…….

+%

(ii) For what do we need large sums of cash?

1. Economic projects

• Inputs• Working Capital• Equipment and tools• Transportation• Marketing

2. Investments for Care of People

• Health care, illness• Births• School expenses• Housing Repairs• Stoves• Plumbing - sanitation• Washing Facilities• Adult Education• Backyard gardens, animals

3. Cultural and community expenses

• Funerals• Festivals• Religious Ceremonies• Weddings• Travel

4.Consumer goods

• Radios• Furniture• Electronics• Clothing

(iii) How are these sums accumulated and accessed?

For Economic Projects....?

Care: Health, education and housing....?

Cultural events....?

Consumer goods....?

Who (in the family) is responsible for these expenses?

Women?

Parents?

Men?

Young people?

Other relatives?

The Household & the Economy

What goods and services do householdsuse - need - depend on for their welfare / well being?

Question 1:

Clothing- washing and ironingHousing- annual roof repair!Sanitation (outhouse, bathing area)Education- helping with schoolworkFood…….

The Household & the Economy

Where do these come from? How are these goods and services provided?

Question 2: IDENTIFYING SOURCES

Purchased in the cash market

Natural Resources - the environment

The State

Household work (unpaid)

Exchange, barter, social/family networks (unpaid)

Hire - pay someone for services

Goods

Services

The Household & the Economy

Where do these come from? How are these goods and services provided?

Question 3: DOING THE EXERCISE

Buy Natural Resources

State H’hold work

social/family networks

Hireothers

List:good 1

2

3

service 1 2

The Household & the Economy

Where do these come from? How are these goods and services provided?

Question 3: VARIATION - highlight most important sources

Buy Natural Resources

State H’hold work

social/family networks

Hireothers

List:good 1

2

3

service 1 2

The Household & the Economy

WHO IS RESPONSIBLE for providing thesegoods and services?

Question 4: GENDER ANALYSIS

Buy Natural Resources

State H’hold work

social/family networks

Hireothers

List:good 1

2

3

service 1 2

The Household & the Economy: The theory behind policy and

programmes: How does a household’s welfare improve?

Household

(cash) Market:

goods & services

the State (health

education, social security)

Natural

resources

social networks

community work

barter

Household -

reproductive or

‘caring’ work

Unpaid household work:

production / subsistence agr.