Around the world, over 2.4 billion people live on less than $2 a day. An estimated 75% of these are women and girls.
Women who have a little money generally use it to improve the welfare of their children, rather than spending it on themselves. This makes supporting women’s business enterprises a particularly sound investment – improving the future as well as the present.
Women are, on the whole, well-served by a group lending setting, in which each borrower guarantees the loans of her co-borrowers. These guarantees substitute for collateral and are responsible for micro credit’s extremely low default rates (historically, less than 3%).
Group lenders generally offer related services to their women borrowers, such as education, business advice, health services or insurance.
Group lending infuses a whole community with capital and gives all the borrowers a better chance to prosper and repay their loans, as the women will do business with each other and support each other if problems arise.
Women who are employed and earning some money have a higher status within their family and community groups. This can lead to a reduction in domestic violence and increase women’s participation in community life and governance. This in turn may reduce conflict and corruption, improving the life of the whole community.