Poverty alleviation of women in South Asia (Part I)
Globally there are 6 million poor women out of the
estimated 1 billion people who live below the poverty line
By Amina Mahfooz
Aug 06 - 12, 2001
Poverty continues to be a major challenge for the
international community, national governments and the people themselves. If the
projections for population growth from 5.5 to 10 billion by 2050 are accurate,
the number of people living in poverty, currently estimated to be 1 billion,
could rise to an alarming 2 or 3 billion, unless there is a change in the
Poverty is a complex and multi-dimensional phenomenon.
Consequently, it can be visualized as unequal distribution of income or unjust
sharing of the fruits of development by a segment of the society in the country.
The causes of poverty are complex and vary from one culture to another. These
have also highlighted the fact that poverty has a decisive gender bias against
women. Poverty has an overall destabilizing effects; it brings changes in the
reproductive and productive role of women and men.
It is generally agreed that important contributions to
reducing poverty can be made through the interacting operations of state
agencies, markets and community networks and organizations. But the potential
for gender bias exists even in these operations. If women's poverty is to be
effectively alleviated, it has to be systematically addressed.
The ultimate objective of economic development is to increase
economic and social well being of the people and to build human capabilities and
enlarge human choices: to create a safe and secure environment where citizens
can live with dignity and equality. The main reasons for South Asia's colossal
human deprivation are not just economic. These problems go hand in hand with
social and political factors rooted in poor governance. This goal cannot be
materialized if a large segment of the society is deprived of the benefits of
socio-economic development. There should also be recognition and measurement of
women's economic contribution within and outside the household through the
development of sex dis-aggregated data will reflect the extent of participation
of both genders. What is also needed is strengthening of government machinery
and of women organizations in civil society for identifying and for inclusion of
those activities, which will improve the status of women.
A key approach to the alleviation of poverty, and at the same
time improving the status of women, is through empowering women with resources,
which will provide them access to remunerate activities.
South Asia remains a region divided — divided between the
hopes of the rich and the despair of the poor. Nearly 40% of the world's poor
live in South Asia, a region which accounts for roughly 30% of the world's
population. Within regions and countries, the poor are concentrated mainly in
rural and urban slums areas, with high population densities, and in resource
poor areas. Often the problems of rising poverty, rapidly expanding population
and the environment degradation are intertwined. A region where the richest1/5th
earns almost 40% of the income and the poorest 1/5th makes do with less than
10%. A region where a day begins with the struggle of survival for 515 million
poverty ridden destitute, and tomorrow threatens the future of 395 million
illiterate adults. Where women are often denied basic human rights and
minorities continue their struggle against prejudice and discriminations.
It is poignant that women in large numbers are among the
poorest. Globally there are 6 million poor women out of the estimated 1 billion
people who live below the poverty line. Women face greatest disadvantages.
•They are less educated. Women have lower level of literacy
•Have less access to health facilities.
•The degree to which women control their income in the household varies
widely, but is largely negative as is the extent to which they can control
income earned by them.
•Women have the added burden of unequal gender division of labour.
•Women are responsible for most of the unpaid tasks in production as well as
•Unlike men who may have more technical skills, women have limited access to
•Women in South Asian Sub-continent are subject to constraint on their
mobility outside their home, or their entering in areas considered being the
Constraints On Women's Access To Credit
•Constraints include the limitations inherent to the
small-scale sector. There is the question of efficiency of small-scale
enterprises and their actual contribution to the development.
The issue of low skill, low profit production for local
markets which are not very profitable, and more often than not, depend on
middlemen, who swindles away with the profits.
•Self employed women are often in very exploitative market
relations with large-scale traders or large-scale enterprises.
•Limitations posed by poverty and gender inequality operate on many levels,
and mostly reinforce each other to seriously restrict the options open for poor
The main factors, which restrict women access to
institutional credit, are: -
•Collateral requirements of the formal financial
•Lending only for traditional activities.
•Lengthy credit procedures.
•Banks are too busy with trade advances and they have yet to develop attitudes
and gender sensitizations for surveying the needs of women.
•Institutional structures prevented from direct dialogue with beneficiaries,
especially women who do not come to the banks.
•Extension approach of the banks is lacking in pre-project planning, i.e.
identification of feasible economic activities, modification and skill training
etc. for women.
•Some banks require husband's signatures on documents executed by a women
borrower and also if a family member is a defaulter, woman could not obtain a
•There is urban bias of Branch Managers of banks and officials, which led to
ad hoc approach to assessment of credit needs for poor women.
•Banks are hesitant in financing group activity of women or unregistered
groups of women.
According to Dr. Mahboob ul Haq, "The human dimension of
development is not just another addition to the development dialogue. It is an
entirely new perspective, a revolutionary way to recast our conventional
approach to development. With this transition in thinking, human civilization
and democracy may reach yet another milestone."
In some countries like Pakistan, while economic growth helped
to raise the incomes of the poor, provision of social services received little
attention until recently. In some countries the stress has been more on the
provision of social services and economic growth has been slow. Recent political
conditions have necessitated diversion of resources to security and
defense-related matters. Advancements have been greater in those countries that
have implemented a mixed strategy. By promoting the poor section into productive
activities, and by investing in health and education, such countries have
enabled the poor to participate in development, resulting in a marked
improvement in their living standards and access to better opportunities.
Experience indicates that reaching the poor with
interventions, which are not only well targeted but also carefully designed to
meet their specific needs, such as devising credit to serve women, together with
programmes for successful delivery of social services, provide an enabling
environment for sustainable growth. There is conviction that women's income at
the micro level will also have a positive effect on other aspects of gender
inequality, resulting in decreased vulnerability and enabling them to exert more
pressure for beneficial changes.
Efforts by government, NGOs and donors are directed mainly
towards improving the status of women and making greater choices available to
them. This is done to ensure that women have the possibility of earning
additional incomes, are provided training in micro-enterprises and given access
to credit. This access results in an improved standard of living. The increasing
level of self-employment among women may be the only option to those with few
alternatives, rather than a matter of conscious choice.
The Nairobi Forward Looking Strategies concluded "an
economic environment of growth with equitable distribution, both at the national
level and in the international economic system, is essential, as is the
recognition of women's full participation. The feminization of poverty reflects
the underlying structural problems faced by women in the midst of economic
change." It recommended, "To help revitalize economic growth,
international, economic and social co-operation, together with sound economic
policies, should be pursued. Structural adjustment and other economic reform
measures should be designed and implemented so as to promote the full
participation of women in the development process, while avoiding the negative
economic and social effects. They should be accompanied by policies giving women
equal access to credit, productive inputs, markets and decision-making and this
should be incorporated fully into national economic policy and planning."
An effort was made to move from such women-specific income
generating projects to more poverty-targeted programmes, which included women,
with emphasis on macro-level growth policies and a larger development agenda.
Some international development agencies attempted to increase their assistance
to income generating projects and made additional efforts to address some of the
reasons for their ineffectiveness by including a focus on marketing and
commercial viability. These resulted in a growing number of programmes, started
in 1970, focusing on credit and attracting large amounts of funding from
international development agencies. A few of the most publicized and often cited
cases were Grameen Bank and Bangladesh Rural Advancement Committee (BRAC);
Working Women's Forum and Annapurna Mahila Mandal (AMM) in India; Orangi Pilot
Project (OPP) and Aga Khan Rural Support Programme (AKRSP) in Pakistan.
In most South Asian countries, governments have faced
difficulty in trying to channel formal credit to the poor. In fact, only 15 per
cent of farms in Asia have had access to it. In Bangladesh, after more than 10
years of subsidies, only 15 per cent of small holders and 7 per cent of the
land-less households had received institutional credit. On several occasions
cheap credit became a transfer programme for the non-poor.
Subsidized formal finance has not really succeeded in
alleviating poverty. But it appears that informal credit, which is the most
common source of credit for the poor, has grown. The informal lender, opening on
low fixed costs, offers small loans to low-income clients on the basis of
personal, business or family acquaintance. Since these informal lenders know
their clients personally, they can often be flexible on questions of collateral
and repayment schedules.
The shortcomings of both formal and informal finance have led
government, donors, NGOs and the civil society at large to utilize a number of
innovative credit programmes targeted to the poor, for example, the use made of
group lending in Bangladesh, through the Grameen Bank, to reach the poor. The
bank serves extremely poor people of whom 83% are women and it has a recovery
rate of 98%. Other examples include the Working Women's Forum in Madras, India;
Production Credit for Rural Women Programme in Nepal; and AKRSP and OPP in
Pakistan. They have all achieved a recovery rate of 90 to 95%.
Government have an important role to play in setting up
credit programmes in the bank to meet the needs of the poor, especially women.
Under the guidance and supervision of central banks, the commercial and
agricultural banks could undertake programmes to assist poor women through the
provision of credit. The National Bank for Agriculture and Rural Development in
India, Habib Bank in Pakistan, Agriculture Development Bank (ADB) and Rural
Banks in Nepal are some examples.
Although the circumstances vary enormously from country to
country, the availability of credit for women has resulted in bringing about
significant social changes. The link between provision of credit and poverty
reduction does exist. By and large, accessibility to credit decreases poverty
and improves the provision of social services to the very poor.
(To be continued)