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microfinance fact sheet
| Poverty | Women & Poverty | Microfinance | Women & Microfinance | ||
| Poverty Facts | ||
| • | Each year, more than 8 million people around the world die because they are too poor to stay alive.1 | |
| • | Over 1 billion people—1 in 6 people around the world—live in extreme poverty, defined as living on less than $1 a day.2 | |
| • | More than 2.5 billion people live on $2 a day or less—nearly half the world’s population. | |
| • | More than 800 million go hungry each day.2 | |
| • | Every year, 6 million children die from malnutrition before their fifth birthday.2 | |
| • | Over 11 million children die each year from preventable causes like malaria, diarrhea and pneumonia.3 | |
| • | Every 3.6 seconds another person dies of starvation and the large majority are children under five.2 | |
| • | Over 100 million primary school-age children cannot afford to go to school.2 | |
| • | More information from Unitus on poverty | |
| POVERTY AROUND THE WORLD | ||
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| 1NetAid: http://www.netaid.org/global_poverty/global-poverty/ 2UN Millennium Project: http://mirror.undp.org/unmillenniumproject/facts/index.htm 3NetAid: http://www.netaid.org/global_poverty/global-poverty/global-poverty-fact-sheet.html |
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| Women & Poverty Nearly half the the world’s population lives on $2/day; 70% of the world’s poorest are women and children. Limited schooling and lack of appropriate health education are just some of the chronic issues that are strongly correlated with high poverty rates in women. |
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| FACTS: | ||
| • | Of the 550 million working poor, an estimated 330 million are women.4 | |
| • | Women work 67% of the world’s working hours, and produce 50% of the world's food, yet they earn only 10% of the world's income and own less than 1% of the world's property.5 | |
| • | More than 40% of women in Africa do not have access to basic education.6 | |
| • | Every minute, a woman somewhere dies in pregnancy or childbirth. This adds up to 1,400 women each day—an estimated 529,000 each year—from pregnancy-related causes.7 | |
| • | AIDS spreads twice as quickly among uneducated girls than among girls that have even some schooling.8 | |
| • | 70% of the economically active poor are women.9 | |
| • | Two-thirds of illiterate adults are women.10 | |
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| 4International Labour Office: Global Employment Trends for Women 2004: http://kilm.ilo.org/GET2004/DOWNLOAD/trendsw.pdf 5United Nations Association of the United States of America: http://www.unausa.org/site/pp.asp?c=fvKRI8MPJpF&b=640971 6UN Millennium Project: http://mirror.undp.org/unmillenniumproject/facts/index.htm 7UN Millennium Project: http://mirror.undp.org/unmillenniumproject/facts/index.htm 8UN Millennium Project: http://mirror.undp.org/unmillenniumproject/facts/index.htm 9Opportunity International:http://www.opportunity.org/site/pp.asp?c=7oIDLROyGqF&b=217980 10World Economic Forum—Women’s Empowerment: Measuring the Global Gender Gap: http://www.ncwo-online.org/data/images/WorldEconomicForum.pdf |
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| Microfinance Microfinance is based on the belief that the poor need a hand up, not a hand-out. This new philosophy emerged in the 1970s in places like Bolivia and Bangladesh as social innovators began to offer financial services to the working poor — those who were previously considered “un-bankable” because of their lack of collateral. Once given the opportunity, not only did clients of microfinance institutions (MFIs) expand their businesses and increase their incomes, but their high repayment rates demonstrated that the poor are capable of transforming their own lives when given the chance. This model of lending disproved all conventional thinking. Microfinance was born. Since then, microfinance has become one of the most sustainable and effective tools in the fight against global poverty. |
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| FACTS & INFO: | ||
| • | More than 115 million people are currently benefiting from microfinance worldwide. | |
| • | (MFIs) exist in many forms — credit unions, commercial banks and, most often, non-governmental organizations (NGOs). | |
| • | Because most microfinance clients lack traditional forms of collateral, many MFIs use social collateral in the form of peer groups to ensure loan repayment. Borrowers take out loans in groups of five to eight individuals. If a borrower defaults on her loan, the group is responsible for paying her loan back. This peer pressure encourages borrowers to be very selective about their peer group members and to repay loans in full and on time. | |
| • | Global repayment rates for microcredit loans are higher than 97%. | |
| • | Microfinance refers to an entire suite of financial services. Micro-credit loans used for business development are the most commonly known form of microfinance. However many microfinance organizations also offer savings products, insurance, home loans and school loans. | |
| • | More information from Unitus about microfinance | |
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| Women and Microfinance There are many reasons why women have become the primary target of microfinance services. At a macro level, it is because 70 percent of the world’s poor are women. Women have a higher unemployment rate than men in virtually every country and make up the majority of the informal sector of most economies. They constitute the bulk of those who need microfinance services. Targeting women has also proved to be a successful, efficient economic development tool. A recent World Bank report confirms that societies that discriminate on the basis of gender pay the cost of greater poverty, slower economic growth, weaker governance, and a lower living standard for all people. Women are often the primary or sole family caretakers in many developing countries. As women typically put their children’s needs before their own, giving a woman the ability to strengthen her own financial health is often the most efficient way to affect an entire family. Children are more likely than their parents to complete their education and escape the poverty trap. Giving women access to microfinance therefore generates a multiplier effect that increases the impact of a $100 loan across multiple generations. |
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| FACTS & INFO: | ||
| • | Microfinance programs from multiple regions around the world report that their female clients have increased decision-making roles within their families and communities.11 | |
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| 11United Nations Capital Development Fund: http://www.uncdf.org/english/microfinance/facts.php | ||
