1. WHY THIS STUDY?
1.1 The GAD Council Resolution
Following the December 1995 Council Resolution regarding the integration of gender into all development instruments, the Gender and Development (GAD) desk of the European Commission Directorate-General for Development (DG VIII) has commissioned a number of studies on the integration of gender issues in development cooperation (managed by The Royal Tropical Institute, KIT in Amsterdam).
This report is one of these studies and is concerned with integrating a gender perspective into microfinance.
1.2 Likely growth in EC support to microfinance
The European Commission (EC) supports microfinance in a number of ways: through the National Indicative Programmes (NIPs), the Non-Governmental Organisations (NGOs) budgetary line, special lines such as the modest credit facility for women and to a limited extent from European Development Fund (EDF) funds managed by the European Investment Bank (EIB). There is also a budgetary line to promote the integration of gender in development cooperation (B7-611).
Until the early 90's, credit schemes funded by the EC under the NIPs were generally one component of an integrated project, often related to agriculture. Beneficiaries obtained funds on subsidised terms, the repayment level was not deemed important as an indicator of success and savings were not considered (Gentil, IRAM, 1997).
Following the retrenchment of the public sector's involvement with economic activity in many ACP (African, Caribbean and Pacific) and the increased awareness of the size and importance of the informal sector, the focus of aid started to shift towards the private sector.
From the early 90's the approach starts shifting to stand-alone credit intermediaries sometimes with a view to viability and sustainability even where customers are poor although these projects are still the exception under 8th EDF NIPs.
The success of certain financial intermediaries lending to poor people particularly in Asia and Latin America and to a lesser extent in Africa and highly mediatised at the recent Micro Credit Summit has put microfinance high on the agenda of development agencies. As a result projects in this area are likely to multiply and the EC as a substantial actor in development will probably have an important role to play.
In this context a number of measures have been taken. A working paper on Credit Strategy has been produced (Dhonte, 1997). The first expert meeting of Members States and EU institutions on Microfinance and Poverty Reduction took place in October 1997 at which two papers were presented - Microfinance and Poverty Reduction (Conlin, 1997) and Microfinance for those Excluded from Financial Services (Gentil & Nieuwkerk, 1997). Mr Conlin's paper together with a summary of discussions at the expert meeting taking into account gender aspects was presented the same month to the Council, which has decided to pass a Council Resolution in support of microfinance.
Also, guidelines for credit and savings projects (mainly about microfinance), following a major evaluation of rural credit and savings projects funded by the EC and taking into account the present report as regards to gender issues, is to be made available towards the beginning of 1998 (IRAM, forthcoming).
1.3 Summary regarding the attitude of EC officials vis-à-vis gender and microfinance
The majority of EC officials interviewed did not feel knowledgeable about microfinance and gender issues.
Futhermore, some regret the lack of internal expert support in microfinance.
With one exception those interviewed favoured a practical checklist to help them integrate gender that was brief but had some examples. Several people indicated that this list should also be available on diskette or on the computer system.
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