FINCA seeks to empower female entrepreneurs in the developing world | The World Weekly

Efforts to promote the equality of women go hand-in-hand with global attempts to end poverty in the developing world. Among its 17 Sustainable Development Goals, launched last year to replace the Millennium Development Goals, the UN wants to “achieve gender equality and empower all women and girls” by 2030.

It is clear that it has a long way to go. According to the OECD, although women make up 75% of the workforce and produce 80% of the household food in Sub-Saharan Africa, they only own 1% of the land. Women’s employment is often more unstable. In South Asia, over 80% of women in non-agricultural jobs are in informal employment, in sub-Saharan Africa the figure is 74%, and in Latin America and the Caribbean it’s 54%. And despite evidence suggesting that increasing girls’ education benefits developing economies as a whole, creating a larger worker and consumer base, UNICEF estimates there are 31 million girls of primary school age and 32 million girls of lower secondary school age out of school. Female genital mutilation remains a big problem in many developing countries, especially in East Africa and the Middle East, with 133 million people affected worldwide. Child marriage is also highly prevalent in the developing world, with a third of girls married before the age of 18. According to the International Centre for Research on Women, girls living in poor households are almost twice as likely to marry before 18, contributing to an ongoing cycle of poverty.

FINCA International is seeking to help break that cycle through the use of its microfinance loans to empower female entrepreneurs. Through its British partner FINCA UK, it is both seeking to raise awareness about the challenges women face in the developing world and, crucially, money to assist them - £1 million ($1.4 million) to be precise.

But FINCA is not a typical charity. Its philosophy is that handouts create dependence and destroy dignity. Rather than give the money away, it uses it to provide small loans - of the kind pioneered by Bangladeshi Nobel Peace laureate Muhammad Yunus - to individuals to set up and expand businesses. The loans, the average size of which in 2015 was $831, are frequently repaid with a comparatively low interest rate, which allows FINCA to turn a profit, but also to accumulate more capital to provide further loans in developing countries.

Rupert Scofield, president and co-founder of FINCA International, points out that by lending money at interest, it creates more of a business relationship, empowering impoverished people who no one else would lend to because they were considered a bad credit risk. He now says there’s an urgency to ramp-up FINCA’s services around the world in response to the number of countries falling into chaos and instability.

“It means people are finding it harder and harder to make a living,” Mr. Scofield told The World Weekly. “There’s companies deserting, higher rates of unemployment. So people have to move to self-employment to basically even survive. And women, in particular, in these troubled times find themselves either being abandoned by their husbands altogether or their husbands migrate to some other more stable country where they think they can make a living and remit money back, so it’s more important that organisations like FINCA step up and make financial services to people who are trying to establish a self-employed business or expand one they already have.”

Working with women has a number of advantages, Mr. Scofield points out, especially for those concerned about safeguarding the next generation in developing countries, many of which have very young populations. In Uganda, for example, almost half the population is below the age of 15. It is in these countries where the adage that ‘children are the future’ is more vital than ever, and Mr. Scofield is worried about the state of nations where children have no future.

“Look at Afghanistan and Pakistan, where if you live in the tribal areas or areas controlled by the Taliban, there’s no jobs there,” he said. “These examples have to be treated with caution, but there are cases where if you’re young, then the Taliban will say we’ll put an AK in your hands and we’ll pay you $200 a month to go kill a policeman or some soldiers if you’re lucky enough to find some Americans to shoot at. Then there’s the even sadder case of the parents who can’t feed their children, so they turn them over to a madrassa that’s financed by some radical elements and they turn them into human bombs by the time they’re 18. And when they blow themselves up, the madrassa pays the family like $600 a month for the rest of their lives. We need to create an alternative to this and the best way to do it is finance the mothers and say you don’t need to give up your children, you can raise them, educate them, feed them and guarantee that they have an opportunity to live better than their parents.”

Promoting gender equality is another core concern for FINCA. Mr. Scofield points out in many countries women are often seen on the same level as animals, as property rather than an earner in the household. This has a great deal to do with culture in many instances, but economics can make a difference. Mr. Scofield says when you inject capital into that environment, enabling women to start a business and generate income, the perception of them in the household changes almost immediately.

But given the patriarchal constraints those working on international development projects have to deal with, how can FINCA ensure the money gets to the women?

“Eighty percent of our 30,000 customers in Afghanistan are women,” Mr. Scofield said. “And they’re not allowed to roam freely and work in the markets. They have to do a business that can be done from the home. And they’ll usually market their products, let’s say sewing dresses, and the husband will go out and sell it in the market. We use female credit officers to reach them because they’re not allowed to interact with men. So we disburse the loans right in the home.”

Beyond Afghanistan, other significant countries for FINCA include Pakistan, the Democratic Republic of Congo and Nigeria. Mr. Scofield says that these are big underserved markets, and while there are high levels of poverty, there is also enormous potential and industrious, entrepreneurial populations. “My hope is in those three markets, we will have over a million customers three years from now and they’ll be generating a good margin that we can use to add to capital of the network.”

One example of success FINCA holds up is that of a woman from Uganda named Cissy Ssekyewa. A decade ago, her husband lost his job and she found herself having to support the family. She would go to the market and rake up the rubbish she found there, burning it and selling the charcoal. It was not enough to feed a family on. But while at the market, she noticed a nearby foam mattress factory throwing its rejects onto the rubbish heap and she got an idea. She would tear the mattresses into shreds and cover them in cloth and turn them into cushions to sell. With a loan from FINCA, of less than £25, she was able to set up a cushion business. Today, Mr. Scofield reports, she is a millionaire who not only imports a container of cloth from Dubai once a month, but owns an apartment block that she rents out. Of her journey from abject poverty to flying to Dubai for business, she says: “I went from the Earth to the sky”.

Andrée Simon, co-CEO of FINCA Microfinance Holdings, argues that it is not just the successful businesswomen who benefit: “In the field we have seen the dramatic ripple effect that our services have on the local communities. Successful women entrepreneurs go on to employ and train other women, who can go on to help their own families. It's not just one woman that benefits – or even just one family – but entire communities.”

Although he is transitioning out of his day-to-day executive role at FINCA to become a very active president of the FINCA family of organisations, Mr. Scofield is excited about the future of the projects he has initiated.

“We are launching this campaign in the UK and we’re really excited about enrolling people and we’re discussing how we might use technology as a fundraising tool, maybe create a FINCA app for people of modest means like students who want to get involved and learn about what’s going on in developing countries and about the solutions to the problems they face,” he said. “If you just read the papers, you might think I’ll never go to Afghanistan or the Congo. But when you go, you get inspired by how they’re overcoming their problems.”

“We want to raise £1 million, but we also want people to get involved in the UK because there’s enormous human resources,” he added. “I’ve recruited a very young board and I’m really excited about the value of the ideas they’re bringing. I’ve told them it’s your world now. I grew up in the 60s, I was gonna change everything, I’ve done my best. And I think we’ve had an impact, my generation, but a lot of it’s been undone by some other members of my generation too. It’s gonna be up to you.”

People are able to make a donation directly to FINCA UK by visiting http://www.fincauk.org/. If you are interested in working with FINCA in the UK, please contact costanza.beltrame@finca.org