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Microfinance: for women, delivered by women

Gender is crucial in banking since a typical microfinance client is a woman from a rural household. Detailed research on microfinance has discussed the claim that microfinance shows inclination towards female entrepreneurship and empowerment. However, there has been very limited research on the gendered dynamics of employment in microfinance.

Globally, microfinance is being seen as a potential tool to alleviate individuals out of poverty, however, microfinance institutions need strong human capital to play their part. As microfinance is a high-touch business that necessitates personal relationships. Therefore, making the frontline staff indispensable when it comes to identifying clients, verifying their information, filling and screening the loan applications, monitoring and recovering repayments especially in the case of low-income clients. Loan officers are still a crucial intermediary between microfinance institutions and clients. Recently, Pakistan is rated as one of the most progressive microfinance sectors in the World with outstanding on ground microfinance network.

From a personal field experience with microfinance organizations, I witnessed the struggle of female loan officers. There is an active demand side for female loan officers in lieu of cultural concerns where targeted women beneficiaries feel more comfortable welcoming females loan officers in their houses and sharing personal information. However, there is an existing lag on supply side. Why are there not enough female loan officers?

Challenges usually emerge from aspects such as building relationships, rough work environment in terms of travelling to remote areas that present security risks, potential threatening conduct of client and difficult loan recoveries.

Firstly, most of the loan officers are hired locally given they are well aware of the communities and geography in that respective area. Thus, belonging to local communities they mostly know their clients beforehand. If not, the job still requires regular and close interaction with the clients, thus, building a close relationship. This further complicates the female loan officers’ job as they have to be authoritative in order to ensure repayment but also be compassionate and understand the struggles of the borrower in case they are unable to repay. Thus, balancing personal and professional relationships is a constant challenge.

Secondly, their work is primarily based in the field and since majority of clients are based in rural areas, loan officers have to travel to far flung areas adding more pressure than a regular office job. One problem highlighted in this field was that male loan officers were given an official motorcycle whereas female loan officers had to use public transport and were reimbursed later. This made travelling a lot more hectic and at times dangerous for female loan officers travelling to rural areas.

Lastly, loan officers are also responsible for regular visits to ensure timely repayments. Social expectations act as a major pressure point for female loan officers. As, culturally it’s considered that male loan officers are better able to make borrowers repay as compared to their female counterparts. This is majorly because traditionally in rural areas, men are seen to exert more authority and face fewer problem when in the field. Typically, a female borrower is illiterate and not the household decision-maker. Hence, female loan officers have to deal with male clients or male members of their female clients given the male dominated society in Pakistan. Due to social norms, an authoritative and forceful demeanour of male staff is far more acceptable than female officers. Female officers are at higher risk of being called insensitive and coarse when acting dominant in the field leading to occasional misbehaviour and unfortunate events.


Loan officers are the microfinance agents on ground, they work in two distinct social spaces the office and the field with socially complex and multidimensional nature of developmental work being done at the grassroot level. Here are a few suggestions for microfinance institutions to improve working conditions especially for female loan officers:

  • First of all, higher management can set up effective internal communication channels for field officers to voice their concerns. This can be done through regular meetings with the female staff to understand their problems. Not only listening but to also actively responding to these concerns with concrete actions. Such as female loan officers requesting male counterparts to accompany them to loan recoveries or requesting swapping difficult clients with other male officers.
  • Secondly, organizations need to constantly monitor their structure of incentive schemes and evolve as per the need to avoid loan officer turnover as well as to minimize the risk of fraud. They need to ensure that promotions and raises compensate female loan officers fairly. Take an example of Talhar, a small city near Badin located in Sindh, there was only one female officer in each branch and all the loan officers including women were transferred annually. They rotated between the village level branches under one district. This structure, usually to minimize fraud, acts as a barrier for female loan officers. Most of them have limited mobility within villages and cannot transfer because of higher logistic costs or family commitments etc. Microfinance institutions need to come up with better female friendly measures to limit fraudulent activities than annual transfers.
  • Lastly, organisations can ensure capacity of their female staff. A continuous learning process would guarantee preparatory orientations and trainings specific for female loan officers. They could include periodic on-the-job capacity building programs that discuss business side trainings such as risk management in multiple portfolios, communication, emerging digital ecosystem, recovery techniques to personal safety trainings and other soft skills needed for dealing with a diverse group of people. There are public institutes such as National Institute of Banking and Finance (NIBAF) that offer trainings under initiatives providing trainings at the grassroot level.

Conclusively, microfinance institutions are commonly seen as empowering women and making them key stakeholders for social change and economic development. Then why not promote a gender-sensitive work environment in the part of financial sector that aims to cater to women specifically. To address this issue of women underrepresentation and high turnover rate, the sector needs policy reforms and private sector interventions in hiring and retaining female loan officers by facilitating them in the field. The resulting improved gender parity among loan officers has the potential to have a further positive impact on the overall socio-economic development.

Overall the experience of female loan officers may differ by individual cases, this article is based on experiences from three fields and past research.

The writer is a Research Associate, Sustainable Development Policy Institute (SDPI), amna@sdpi.org

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