Women are a good investment. Here's why they are a worthy investment, how they can be invested in and thereby empowered, and how this impacts global development:
Women are one of the most vulnerable populations and are therefore in great need of economic empowerment. Also, studies show women are often more likely to repay loans than men, making them reliable borrowers.
Microfinance functions as an investment in and empowerment of women.
Female economic empowerment spurs global development to the extent that everyone benefits.
Women Are Worthy of Investment: In Need & Reliable
70% of the world's poor are women.
The Global Findex, a comprehensive database measuring how people save, borrow, and manage risk in 148 countries, reported that women are less likely than their male counterparts to have formal bank accounts. Specifically, women are 20% less likely than men to have an account at a formal financial institution and 17% less likely to have borrowed formally in the past year in developing economies.
Many countries still require a man to co-sign for a woman in order for her to open a bank account as these institutionalized societal norms often negatively impact female economic empowerment. Even when women are able to open a bank account, they may still be financially excluded from deciding how to use the funds in the account. For example, a study in Pakistan showed that, although accounts may be opened in a woman's name, the decision-making authority regarding the use of those funds often lies with a male relative. This is not too surprising given the fact that it was difficult, if not impossible, for American women to obtain credit until the Equal Credit Opportunity Act in 1974.
Studies show that women in poor, rural regions are more reliable borrowers of credit than men.
Microfinance is an Investment in and Empowerment of Women
Microfinance makes women economically independent by placing financial resources and capital directly in their hands. For example, a microfinance institution ("MFI") in the Philippines (Tulay sa Pag-unlad, Inc. [TSPI]) reported a significant increase, from 33 to 51%, in women’s role as funds managers in their households[.] (Ledesma, J., Empowerment impact report on TSPI’s Kabuhayan program). Likewise, in Nepal, women participating in the MFI program were able to make small purchases of necessary items such as groceries independently. (Shrestha, M., Report on Self-Help Banking Program and Women’s Empowerment. Kathmandu: Centre for Self-Help Development (CSD)). Numerous studies support these same findings regarding greater female financial agency as a result of microfinance programs. Additionally, women who participate in microfinance programs, and thereby achieve greater economic empowerment, are also better able to escape abusive relationships and participate more in communal decision-making and politics, helping to shape policy for future generations.
Female Economic Empowerment Positively Impacts the World
Greater gender equality can increase economic productivity and enhance development outcomes for children and future generations. (World Bank’s 2012 World Development Report: Gender Equality and Development). Women represent 40% of the world's labor force and the majority of the world's university students, such that investing in developing and increasing women's skills and job prospects would have a positive impact on global productivity. If barriers to women working in certain professions or sectors were removed, this could increase output by raising women’s participation in the labor force and labor productivity by as much as 25% in some nations through greater allocation of their expertise and abilities (Cuberes and Teignier-Baqué, 2011). A 2011 FAO report concluded that if female farmers have the same access as their male counterparts to productive resources such as fertilizers and land, agricultural output in developing nations could increase by as much as 2.5 to 4%.
Additionally, investing in female economic empowerment has a proven ripple effect of enhancing development outcomes for children and future generations. This is due in large part to the fact that women tend to invest in sectors that improve their families’ welfare, such as healthcare and education.The positive social, health and economic impact of investing in female economic empowerment is therefore almost always multiplied. Further, a 2011 World Bank report concluded - referencing evidence from Brazil, China, India, South Africa and the United Kingdom - that when women have greater control over household resources (through their own earnings or cash transfers), children are positively impacted due to increased spending on education and food.
Conclusion
The global economic development benefits that result from greater female empowerment are abundantly clear. Women are one of the most disadvantaged populations and have the largest need for economic empowerment, which matters to global productivity because women represent a significant portion of the labor force, potential labor force, and university students. Also, studies show that women often tend to be more reliable borrowers of credit. Therefore, microfinance - a proven method to help economically empower women across the globe - should be heavily invested in. Lastly, greater female economic empowerment not only leads to greater global productivity, it also enhances development outcomes for children and generations to come since women by and large tend to invest in education and healthcare as compared to their male counterparts.