Household Economy, Household Finance, Micro Finance & Gender Analysis Thalia Kidder Oxfam GB 2002

A. MicroCredit, MicroEnterprise & Gender B. What do Microenterpreneurs need? C. MFs contribution to poverty reduction – vulnerability & consumption smoothing D. Household Economies & Household Finance E. Training tools on gendered hhold finance

A. MicroCredit, MicroEnterprise & Gender Perspective Target women with loans Reduce barriers a) collateral b) Training c) Logistics d) Control Institutional systems

What does a woman microenterpreneur need? Are all women microenterpreneurs? A focus on women is gender analysis? How do MF services reduce poverty? What financial services do households need? Do women need? How do we have an impact on gender relations and roles…. And on men? B. Lets question the assumptions… Credit… for production/business … for women?

MicroCredit, MicroEnterprise & Gender Perspective Why are women in certain sectors or activities (low returns, vulnerable)? Diversification and control in markets Are MICRO enterprises viable? Why do women work alone? Training on economic organisation…

Sustainable Economic Projects: what resources are needed? BAKERY Financial Services: Credit, Insurance, Reserves, Transfers Skills Efficient Organizational Structure Marketing TIME & Labor Assets,

C. Income-Poverty Reduction: What matters? (1) Level of Income Income Promotion Strategies (in)Stability of Income (un)Certainty of Income Income Smoothing andIncome Smoothing and Consumption Smoothing StrategiesConsumption Smoothing Strategies

Income-Poverty Reduction: what matters? (2) Income Smoothing StrategiesIncome Smoothing Strategies: –Diversify income sources –Protect against external shocks –Adapt products/services to markets –Increase flexibility of labor supply / skills Consumption Smoothing StrategiesConsumption Smoothing Strategies: –Manage money to meet daily/weekly expenses throughout the year & life cycle –Provide mechanisms to cover expected large expenses and unpredictable events & losses.

(3) Consumption smoothing: the minimum acceptable consumption level

(4)Consumption Smoothing: Large Expenses

(5)Consumption Smoothing: Income Sources and Levels

(6)Consumption smoothing: the minimum acceptable consumption level

(7)Income &Consumption Smoothing & the unrecognized potential of MF: WHY? threatThe threat of falling into poverty can be as constraining and disempowering as the impact of occasional deprivation (Sen) risk-copingThe poor tend to value financial services that address the risk-coping motive, the better-off can afford those that generate income and accumulate assets (Zeller) Women value consumption smoothing mechanisms because of vulnerabilities specific to their life cycles and gender roles - due to marriage, births, childcare, health needs, education needs, old age, abandonment, separation and violence against women.

(8)Income &Consumption Smoothing & the unrecognized potential of MF: HOW? Identify common large expenses, (idiosyncratic) risks, threats & bad times Look at the financial landscape - analyze how people currently cope … borrowing, saving... Identify what doesnt work well for people Figure out in what areas MFI products and services might do better… –Savings for births, school expenses, marriages –life & accident insurance, health care mechanisms –emergency loans, reserves against natural disasters

D. What do Financial Services Do? (I) 1 1. They function to transfer money from one place......to another.

2. 2. They function to convert the value of assets......into cash (pawns and mortgages) They permit building and accessing large sums of money through savings, credit and insurance.

(a) Savings - 4give up a portion of current income to accumulate a lump sum in the future 4amounts and periods are flexible 4requires discipline and security Time line…….

(b) Insurance - 4small payments out of current income 4relatively large sum of money, but... èaccessible only in case of certain events ??? Time line…….

ècommitment to give up part of future income to repay loan (c ) Credit/Loans - 4immediate access to large sum èinterest paid for the right to spend now and pay later èthe payments and periods are fixed Time line……. +%

(ii) For what do we need large sums of cash? 1. Economic projects Inputs Working Capital Equipment and tools Transportation Marketing

2. Investments for Care of People Health care, illness Births School expenses Housing Repairs Stoves Plumbing - sanitation Washing Facilities Adult Education Backyard gardens, animals

3. Cultural and community expenses Funerals Festivals Religious Ceremonies Weddings Travel

4.Consumer goods Radios Furniture Electronics Clothing

(iii) (iii) How are these sums accumulated and accessed? For Economic Projects....? Care: Health, education and housing....? Cultural events....? Consumer goods....?

Who (in the family) is responsible for these expenses? Women? Parents? Men? Young people? Other relatives?

The Household & the Economy What goods and services do households use - need - depend on for their welfare / well being? Question 1: Clothing - washing and ironing Housing - annual roof repair! Sanitation (outhouse, bathing area) Education - helping with schoolwork Food…….

The Household & the Economy Where do these come from? How are these goods and services provided? Question 2: IDENTIFYING SOURCES Purchased in the cash market Natural Resources - the environment The State Household work (unpaid) Exchange, barter, social/family networks (unpaid) Hire - pay someone for services Goods Services

The Household & the Economy Where do these come from? How are these goods and services provided? Question 3: DOING THE EXERCISE Buy Natural Resources State Hhold work social/family networks Hire others List: good service 1 2

The Household & the Economy Where do these come from? How are these goods and services provided? Question 3: VARIATION - highlight most important sources Buy Natural Resources State Hhold work social/family networks Hire others List: good service 1 2

The Household & the Economy WHO IS RESPONSIBLE for providing these goods and services? Question 4: GENDER ANALYSIS Buy Natural Resources State Hhold work social/family networks Hire others List: good service 1 2

The Household & the Economy: The theory behind policy and programmes: How does a households welfare improve? Household (cash) Market: goods & services the State (health education, social security) Natural resources social networks community work barter Household - reproductive or caring work Unpaid household work: production / subsistence agr.