Exploring the potential of microfinance as a platform for social change
This article provides evidence from rural South Africa on microfinance’s ability to reduce poverty and bring about broader social change. It describes the Intervention with Microfinance for AIDS and gender Equity (IMAGE) project jointly conducted by the Small Enterprise Foundation (SEF) and the Rural Aids and Development Action Research (RADAR) Program.
Combining poverty-focused, group-based microfinance with training and discussion about social norms, gender-based violence and HIV/AIDS, the project delivered the following results:
- Increase in women’s self-confidence, improvement in their relationship with their partners and engagement with their communities;
- Decrease in violence within families and positive shifts in HIV risk behavior;
- Increase in client loyalty, improvement in problem solving and better use of financial services;
- Economic empowerment of women that helped them achieve greater autonomy and choice;
- Strengthening of social networks that helped reduce women’s vulnerability.
The relationship between microfinance and women’s empowerment is complex, and benefits are not automatic. IMAGE highlighted the synergies created by combining economic empowerment through microfinance with group-based interaction and support processes, as well as external support and training.