The development of poor communities is contingent upon the interventions of development partners in the affairs of government and non-governmental organizations worldwide. Since it gained prominence with its declaration in 2005 by the United Nations General Assembly, microfinance has been highly noted as an intervention that could help elevate the socioeconomic status of low-income earners and improve their standard of living by providing financial services to enhance development. Financial inclusion and women empowerment are two key focus areas in sustainable development efforts worldwide. This study aims to examine the role of microfinance in women’s empowerment in Bo City, southern Sierra Leone, using BRAC Sierra Leone’s microfinance scheme for market women in Bo Big Market Center as a case study. Questionnaire instruments and interviews were used to collect primary data from 290 respondents, some of whom were microfinance beneficiaries and female business table owners. The collected data was analyzed using simple descriptive statistics and simple correlation and regression analysis. The study revealed that although there are challenges for women to access resources, MFIs have provided options for women to explore in addition to the few other options available to them. Some improvement in psychological well-being and social empowerment among rural women is on record due to their participation in microfinance through the SHG program. However, a significant constraint was the need for more funds to transform their businesses meaningfully. Access to financial resources for women in most deprived communities, like the study area, is a significant challenge for the upward mobility of most women. Furthermore, although the MFIs give loans to all genders, women are often more preferred. In addition to providing microcredits in cash terms, some MFIs also give agricultural products like seedlings and animals to their clients. To guide the economic activities of their clients, some MFIs offer training programs on basic bookkeeping, savings, and accountability lessons.
The study further revealed that although some women seek these loans
to start or improve their businesses, they often use a considerable amount of
these loans to handle other affairs, like paying school fees for their wards
and buying household items. Thus, the services provided by MFIs have
significantly enhanced women's ability to start other income-generating
activities, increase their chances of contributing to the development of their
children, and improve their decision-making stance in their communities.
However, despite the incredible benefits realized from MFIs, these
market women face many challenges, including loan diversion and a need for more
financial discipline in their businesses. Short repayment schedules and
unjustified deductions from the loans expected from MFIs were also significant
challenges that were revealed.
Based on all of these issues identified, it was recommended that
training programs for both clients and MFI staff must be an integral part of
their services. Also, financial discipline must be instilled into the clients
to avoid loan diversion, creating a better chance to improve their businesses.
Additionally, MFIs are expected to monitor or supervise their clients and
businesses by continuously engaging with them on critical elements of their
businesses. Finally, the central government must ensure that robust regulations
are provided and implemented to govern the operations of MFIs and guide the
implementation of interest rates for the clients. The small size of loans,
market instabilities, high interest rates, deductions, short loan repayment periods,
and too few MFIs in the community are challenges that market women must
overcome to enjoy the full potential of these opportunities.
Author
(s) Details
Abdulai B. Dumbuya
Department of Economics, Njala University, Sierra Leone.
Ibrahim Munu
Department of Sociology and Social Work, Njala University, Sierra Leone.
Please see the book here:- https://doi.org/10.9734/bpi/bmerp/v9/3257
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