How microcredit could empower women in Afghanistan

Microcredit primarily makes loans to women. It has helped to empower women to earn more money and gain respect from men. So in a country notorious for poor treatment to women such as Afghanistan, microcredit faces some unique challenges.

From this Reuters article that we found at WTAQ, writer Michelle Nichols takes a look at how microcredit can help women in Afghanistan.

"If you talk to the real villagers, they need money," said Fazlul Hoque, head of non-profit development group BRAC in Afghanistan, which is responsible for half the country's 430,000 microfinance clients. "We need to establish a credit culture."

Unlike traditional bank loans which require paperwork such as proof of identification and income, many microfinance lenders simply require borrowers to become part of a support group and verify their ability to repay.

The average annual income in Afghanistan is $370, according to the World Bank. But Hoque said the default rate on BRAC loans was low, around 3 or 4 percent.

Microfinance -- developed more than 30 years ago by Bangladeshi economist Muhammad Yunus, who won the Nobel Peace Prize in 2006 for his efforts -- traditionally targets women. MISFA said 60 percent of current Afghan clients are women.

"Women are ignored, so one of our social missions is to bring them out, so that there will be a kind of dignity of women, they can have a better position in the family," said Hoque, adding that more than 80 percent of BRAC's clients were women.

But the independent Afghanistan Research and Evaluation Unit (AREU) said it would take more than access to microfinance to empower women and build their social status.

"Credit can be a means to assist women to achieve more decision-making power and autonomy, but there needs to be a purposeful, culturally attuned strategy in place to support this process," said Paula Kantor, an AREU visiting researcher and former director of the unit.

There are enduring limits on women's rights across Afghanistan more than nine years after the strict Islamist Taliban were ousted after more than five years in power, during which women were made to wear all-covering burqas and were rarely allowed out in public for education or work.

A U.N. report earlier this month found that millions of Afghan women and girls suffer from traditional practices such as child marriage and "honor" killings, and that authorities are failing to enforce laws protecting them.

AREU senior research officer Sogol Zand has been studying microfinance and gender in Afghanistan and said that when a loan helped improve a family's economic situation it reduced domestic violence, but when a family found it difficult to repay their loan, the violence increased.