Women as Microfinance Leaders, Not Just Clients

This year my organization decided to give an award for “excellence in leadership,” and among the elements of excellence we expect to see in the winner, we’re putting one criterion front and center: the nominees’ commitment to gender diversity in their leadership ranks. Not everyone agrees that the presence of women at the top should be so imperative. But in our industry, it’s very hard to argue that gender diversity is anything less than key. We’re a network of microfinance organizations; we exist to share practices and develop the leadership skills required by a sector that has grown up fast. And as you might be aware, microfinance is a phenomenon that, while it did not set out to be “for women,” has mainly turned out to be. Looking across the client bases of the 39 institutions we deal with in Africa, Asia, Eastern Europe, Latin America, and the Middle East, 82 percent of their clients are poor women entrepreneurs. How strange, then, that in the industry as a whole there has been little focus on gender within lending institutions. In fact, our data indicate that the percentage of women in senior management and boards has been decreasing over the past eight years. The trend is a disturbing one not only for its societal implications but because microfinance organizations more than ever must be equipped to make good decisions — and decisions are always enhanced by the sharing of diverse perspectives. Especially when a majority of your clients are women, it makes sense for women’s voices to contribute to the next generation of products you will offer. It’s vital to reverse the trend and help microfinance institutions attract, train, and retain talented women. Finding the success stories out there, celebrating them, and spreading the practices behind them can be part of that. For example, at Kenya Women Finance Trust, we were intrigued to hear about the “marriage counseling” its human resources department offers to the newlyweds among its women employees. It’s not about keeping the relationship happy, but about making both members of the couple aware of the career path that might be most promising for the young woman at the bank. For example, a rural branch might offer a faster development path, as every employee tends to wear multiple hats in its operation, but that fact might be lost if a husband’s work is in an urban setting, and the woman’s work is an afterthought in their decision of where to live. The counseling is just one aspect of a broad commitment to embed gender considerations in all of KWFT’s HR policies. Another success has been its training program focused on building women’s images of themselves as leaders, and helping them identify and capitalize on promotion opportunities. Microfund for Women in Jordan, meanwhile, is a standout in the area of bringing women’s thinking to bear on its new product development process. It isn’t hard to find women on staff to offer their ideas, given that 74 percent of its total employee base is female (in contrast to a national average for Jordan of 14.9 percent). The key, however, is that MFW draws staff from all levels of its organization into the decision-making process. One result was the innovative supplemental health insurance product MFW launched in April 2010. The Caregiver (or Ri’aya in Arabic) policy recognizes that a health crisis resulting in a hospitalization can also entail crippling incidental expenses, such as for childcare, days of work lost, or related medical fees. Leadership came straight from the top for an important initiative at Fundación Mundo Mujer Popayán in Colombia. Despite being a woman CEO herself, Dr. Leonor Melo de Velasco hadn’t worried much about the importance of gender diversity in her leadership group until she attended an Advanced Leadership Workshop organized by Women’s World Banking. She returned from that discussion to launch, in March 2010, something called the Interdisciplinary Group for the Promotion and Development of Women Leaders. The group is tasked with designing career development and skill-building training, helping to identify high potential employees to put on the fast track, and making recommendations to increase the hiring of female staff. And in Bangladesh, the Shakti Foundation for Disadvantaged Women has pioneered several practices to hire and retain more women in a particularly challenging environment. By long tradition, women in that country face strong social and cultural constraints on their mobility and professional aspirations. Many hesitate to travel, much less carry cash, making it hard for them to envision themselves in the role of a credit officer — a pivotal role in a microfinance organization. The Shakti Foundation, however, sees in this social conservatism the reasons for bringing more women into its ranks: Its women clients — and note that 99 percent of its 400,000 clients are women — tend to be more comfortable interacting with female staff. Its female staff, likewise, are much more attuned to the situations their clients are dealing with. And perhaps most of all, to quote Shakti’s executive director Humaira Islam, “I want men to see women are powerful, as clients and leaders.” All four of these organizations are contenders for the inaugural Excellence in Leadership Award that we, in partnership with the MasterCard Foundation, will give out at a gala dinner in New York on March 21. The winner will receive $25,000 to be applied toward their continuing pursuit of leadership diversity and gender equality. But I’ll be expressing my admiration and gratitude to them all. All are succeeding as financial service providers of choice for low income women entrepreneurs. The average return on assets for the four institutions is 6.8 percent; the average client growth rate is 44 percent, for institutions with an average portfolio outstanding of $97 million. At the same time, they are increasingly becoming known as employers of choice for women. Harvard historian David S. Landes wrote, in The Wealth and Poverty of Nations, that “the best clue to a nation’s growth and development potential is the status and role of women.” As microfinance institutions develop the management capacity to achieve their dual objectives of financial stability and poverty alleviation, we can look for the same clue in them. Mary Ellen Iskenderian is president and CEO of Women’s World Banking (WWB), the world’s largest network of microfinance institutions and banks.

Women as Microfinance Leaders, Not Just Clients

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