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EFFECT OF MICROFINANCE SERVICES ON WOMEN ECONOMIC EMPOWERMENT IN JOS SOUTH LOCAL GOVERNMENT
1.1 Background of the Study
Women empowerment is one of the important issues that are at the forefront of development agenda in most of the developing countries. According to Akingunola, Adekunle, Adegbesan and Aninkan, (2013), over 500 million of the world‟s population live under poor conditions but they are economically active. Somavia, (2007), opined that seventy percent of the world‟s poor are women, yet traditionally women have been disadvantaged inaccess to credit and other financial services. Deposit money banks often focus on men and formal businesses who they believe are creditworthy neglecting women who make up a large and growing segment of the informal economybecause of high cost of credit granting (Akingunola, et al. 2013).Nabayinda (2014) opined that women have not only been disadvantaged in access to material resources like credit, property and money, but they have also been excluded from social resources like education and knowledge concerning some businesses.
Vakil and Mohammad (2014), acknowledged that generally, women economic empowerment in the context of knowledge societies is seen as building the ability and skills of women to gain insight of actions and issues in the external environment which influence them, and to build their capacity to get involved and voice their concerns in these external processes, to make informed decisions. Also, it implies building up capacities of women to overcome social and institutional barriers and strengthening their participation in the economic and political processes for an overall improvement in the quality of their lives.Globally, women are more vulnerable and aﬀected by poverty than their male counterparts (World Bank, 2000; United Nations Development Programme UNDP, 2011; Wanninayake, 2016). Females encounter many dimensions of poverty because of gender inequalities in the distribution of income, access to credit facilities, control over properties or earned income, religious beliefs and cultural norms (Mahmood, Hussain&Matlay, 2014). These factors are more prevalent in developing economies and to a lesser extent in developed economies (Nisser&Ayedh, 2017).
International organizations like United states agency for international development (USAID),Department for international developmentDFID (2010), international monetary fund(IMF), World Bank, government and other spirited individuals and private organizations have made concerted efforts in helping women economically, but yet level of poverty has persisted (World Bank, 2000). Women potential labour force is still very high in Nigeria and most of the poor are women. Women consist more than 60% of the Africanpopulation which has given concern to the economy of the world (Okechukwu, Nebo & Jude, 2016).Women entrepreneurs, especially in developing countries, do not have easy access to microfinance factors for their entrepreneurial activity and as such have low business performance than their men counterparts, whereas the rate of their participation in the informal sector of the economy is higher than males (Ramajeyam, Sooriyakumaran, &Vannarajah, 2016).Microfinance evolved as a key instrument to afford financial and non-financial facilities for self empowermentto the poor people especially women in the rural areas and urban low income earners. Furthermore, it has been and increasingly becoming a popular intervention against economic empowerment in developing countries (Adeyemi, 2008). It has been considered as an effective vehicle for women empowerment (Leach &Sitaram, 2002).The argument behind Microfinance Institutions (MFIs) targeting women is that, women are good credit risk, are less likely to misuse the loan, and are more likely to share the benefits with others in their householdespecially their children (Garikipati, 2008; Swain &Wallentin, 2009). It is argued that women increasing role in the household economy leads to their empowerment (Hunt &Kasynathan, 2002). Many poverty reduction programs specifically those targeting women have a credit component, which has been extensively promoted as a way of alleviating poverty and empowering women (Wrigley-Asante, 2011). There are different providers of microfinance services which include; non-governmental organizations (NGOs), savings and loans cooperatives, credit unions, government banks or non-bank financial institutions. The poor are not just deprived of basic resources, they lack acces to information that is vital to their lives and livelihoods. They lack access to knowledge, education and skill development that could improve their livelihoods (Mutua, 2016). According to Onugu (2005) factors such as poor management, low entrepreneurial skill, unavailability of skilled manpower, poor record keeping,economic conditions in the country,government policiescan stall any micro enterprise from generating revenue expected and may even drive the borrower into debt and further poverty where the business fails.
Access to finance has several potential benefits such as long lasting increase in income through higher investments in income generating activities; asset accumulation and consumption smoothing; empowerment of women through expansion of economic opportunities and enhancement of social status that reduce poverty (Wanjira, 2014). Providing credit to women has been accepted as a means of economic development (Ackerly, 1995) and an effective means for empowering women (Bartlett, 2004; Kay, 2002). Poor people who comprise of women, have insufficient income, lack access to basic services, have limited access to credit, they survive on menial jobs and can barely afford to send their children to schools (Idowu&Oyeleye, 2012). Micro savings as a financial service plays a vital role in building confidence of the rural people which includes the women. It can be used as the substitute of insurance where social safety nets are hardly ever existent for the poor of the developing countries (Hossian, 2012). These saving can be used in terms of emergency which can help in the betterment of the lives and conditions of the poor.
Financial Training is the process of acquiring job related knowledge, skills and attitude in order to perform with effectiveness and efficiency specific tasks in an organization. It plays a key role in educating women on information that is vital to the growth of their businesses which could improve their livelihoods thereby making them empowered. Providing training to women will assist and contribute to the soundness of their businesses and sustainability (Porter &Nagarajan, 2005).Advisory services include enterprise development service that provides knowledge and information services with focus on potential entrepreneurs to assist them raise human capacity and organization capabilities (Awuah&Addaney, 2016). Advisory service address constraints to business creation and growth which can increase women power over economic decisions that can influence their lives and priorities in the society.
Jos South Local Government Area is known for its large land mass and rich natural resources. It is one of the LGAs in Jos identified with an increasing number of poverty which is common among its women. These women could be employed for development by facilitating them to become entrepreneurs, as entrepreneurship is essential for proper use of renewable and nonrenewable resources, which provides employment to the unemployed. The introduction of MFIs is seen as one of the best alternative source of financial services for low income earners as a means of raising their income level hence reducing their poverty rate. Economic empowerment of women is seen as a prerequisite for sustainable development, pro-poor growth and the achievement of the Sustainable Development Goals (Organization for Economic Co-operation and Development; Development Assistance Committee: OECD DAC Network, 2011). Hence, evaluating the impact of microfinance services in achieving economic empowerment of women is vital especially in this context.
1.2 Statement of the Problem
Access on income generating activities makes women independent, raise their strategic awareness, transfer power relations throughout the society, increase overall wellbeing, and community developmentMayoux (2001).Microfinance has ability to empower women, it is evident that process of empowerment through microfinance is not straightforward or easy to make (Kulkarni, 2011).Studies such as: Danjuma, Muhammad and Alkali, 2013; Shanthi and Ganapathi, (2012) showed that women are affected by poverty, susceptible to diseases, prone to discrimination, marginalization and environmental degradation which are all detrimental to women economic empowerment and poverty reduction. But when they are empowered these will basically be reduced or completely eliminated.Vandana and Robert (2014) reported that as a result of women wide ranging responsibilities; productive, domestic and community duties, they are generally involved in a broader range of tasks than men and therefore require a wider range of technical knowhow on which to draw for their livelihood pursuits.