Microfinance: for women, delivered by women.


Byline: Amna S. Sandhu

Gender is crucial in banking since a typical microfinance client is a woman from a rural household. Detailed research on microfinance has discussed the claim that microfinance shows inclination towards female entrepreneurship and empowerment. However, there has been very limited research on the gendered dynamics of employment in microfinance.

Globally, microfinance is being seen as a potential tool to alleviate individuals out of poverty, however, microfinance institutions need strong human capital to play their part. As microfinance is a high-touch business that necessitates personal relationships. Therefore, making the frontline staff indispensable when it comes to identifying clients, verifying their information, filling and screening the loan applications, monitoring and recovering repayments especially in the case of low-income clients. Loan officers are still a crucial intermediary between microfinance institutions and clients. Recently, Pakistan is rated as one of the most progressive microfinance sectors in the World with outstanding on ground microfinance network.

From a personal field experience with microfinance organizations, I witnessed the struggle of female loan officers. There is an active demand side for female loan officers in lieu of cultural concerns where targeted women beneficiaries feel more comfortable welcoming females loan officers in their houses and sharing personal information. However, there is an existing lag on supply side. Why are there not enough female loan officers?

Challenges usually emerge from aspects such as building relationships, rough work environment in terms of travelling to remote areas that present security risks, potential threatening conduct of client and difficult loan recoveries.

Firstly, most of the loan officers are hired locally given they are well aware of the communities and geography in that respective area. Thus, belonging to local communities they mostly know their clients beforehand. If not, the job still requires regular and close interaction with the clients, thus, building a close relationship. This further complicates the female loan officers' job as they have to be authoritative in order to ensure repayment but also be compassionate and understand the struggles of the borrower in case they are unable to repay. Thus, balancing personal and professional relationships is a constant challenge.

Secondly, their work is primarily based in the field and since...

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