published in French in the Paperjam
On International Women’s Day, Kaspar Wansleben from the Luxembourg Microfinance and Development Fund explains his unconventional view on stimulating the global economy.
As caution prevails in markets around the world and fears of a global crisis resurface, discussions often focus on the best catalysts for growth. Surprisingly there is one solution which is not discussed enough, but which could have a dramatic impact. A solution which could add $12 trillion dollars to global growth. A solution which could increase many country’s GDP by more than 10%. A solution which could even diminish the world’s starving population by 100-150 million.
On International Woman’s Day, it may come as no surprise that this solution is narrowing the gender gap. Across the globe and particularly in developing countries, women are not necessarily given the same opportunities to thrive as men.
One problem faced by women is education. Although women are beginning to outpace men academically in much of the developed world, women in developing countries are frequently pushed out of school at an early age. Families prioritise the education of sons, with the result that 1.55 times more boys complete secondary education than girls. And yet, educating women is key to breaking the global poverty cycle. Better educated women marry later, are less likely to die in child birth and have a much greater earning potential. Moreover they are more likely to send their children to school, helping to perpetuate these trends.
Healthcare is a second issue. Although women live longer than men across much of the globe, more women die at relatively younger ages compared with men in developing countries. The UNDESA speaks of 4 million excess female deaths per year. Many of these occur in infancy, but nearly a third occur during a woman’s child bearing years. These excess deaths should be avoidable and decreasing the gender gap in healthcare will save millions of lives.
However, as a Fund Manager, there is one area that I find particularly important: financial inclusion. Around the world, women struggle to have the same access to funds as men. In many developing countries only 50% of women have a bank account. It becomes even tougher when women look for loans and financing to support their business endeavours. The World Bank estimates that 70% of women owned small and medium sized businesses in emerging markets are underserved by the financial sector. Many a deserving female entrepreneur simply cannot access funding which would help them to change their life.
And yet giving women access to financing can make such a difference. Women reinvest more of their income in their families than men helping to bring their children out of the poverty trap. A loan can be very empowering and completely change a woman’s role within society.
I was recently speaking to staff at PAMF, one of the MFIs we work with, who told us about Fatoumata de Zorgho, a client of theirs in Burkina Faso. As a woman in Burkina Faso, she is already relatively marginalized, but to add to the challenges she faces she is blind and a widower. People in her community were very harsh towards her and thought that her handicaps and her mild nature would prevent her from getting anywhere in life. As a result, she had to beg to earn a living. However some women in her community told her about microloans. Instead of begging, she was able to get a loan to set up a business selling fuel. Following this she has managed to turn her life around and her community now considers her a success.
As she told us “From a ramshackle shed, I have now built myself a shop where I can keep my coal, all thanks to loans from PAMF. I have felt really significant changes to my life. I can feed my whole family, buy clothes for myself and my children and even send my daughter to school.” She has now diversified her business and sells soap and matches as well as firewood. She is very proud of the financial autonomy she has achieved. Her community now view her with respect and even say that she is lucky!
Giving a loan to a female entrepreneur like Fatoumata does not only help the individual and their family. In many communities which we visit, we notice that the quality of life for a whole village begins to change as the female entrepreneurs flourish. As happened with Fatoumata, women will encourage their friends to get loans, start businesses and gain independence. These women and their families can all find a way out of the poverty trap. They can reach their full potential and in doing so help their countries to reap the benefits that we discussed earlier.
On international women’s day, let us lead the world forward…Breaking down the gender gap can cause big changes which will have repercussions for us all.