Microfinance for Urban Poverty Reduction: Sustainable Livelihoods Project Angola
Linda Mayoux; Margaret Jiri; Marinela Cerqueira (2002)
How can micro-finance programmes avoid some of the common pitfalls associated with them? How can they integrate strong strategies for poverty reduction and women’s empowerment?
This One World Action publication describes the Sustainable Livelihoods Project in Luanda, Angola, implemented by the Development Workshop Angola group since 1999. One feature of the project has been microfinance, using methods which brought together different elements of microfinance models. The publication draws out lessons for further work on microfinance in the region. It argues that unless microfinance has a strategic vision for poverty reduction it risks being merely a means of shifting the costs of development onto poor people, particularly women.
In particular it highlights that:
Female targeted micro-finance can risk disempowering women by shifting to them the full burden of family savings and debt. Women may not control their incomes and men may divert more of their own incomes to personal expenditures.
Badly designed microfinance programmes can also push out poorer people who do not have access to credit, and where large amounts of credit are available in saturated markets, product prices may be driven down.
Recommendations for future work include that:
Gender analysis and awareness needs to be integrated throughout the programme including in core training; group discussion; staff attitudes and impact assessment. Credit products which significantly increase women’s income and control over it should be sought and collaboration should be sought from women’s organisations.
Some flexibility will be required in short term financial sustainability goals in order to allow for capacity building at all levels.
New, more inclusive and more empowering models for microfinance are needed, which can cater to the needs of the ‘unbankable’ extremely poor, currently at risk of further marginalisation.
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