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Society
Poverty alleviation of women in South Asia (Part I)

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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 current trends.

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.

Problems

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 than men.
•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 reproduction.
•Unlike men who may have more technical skills, women have limited access to non-traditional skills.
•Women in South Asian Sub-continent are subject to constraint on their mobility outside their home, or their entering in areas considered being the "male domain".

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 women.

The main factors, which restrict women access to institutional credit, are: -

•Collateral requirements of the formal financial institutions.
•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 loan.
•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.

Remedial measures

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)