In this interview with CGAP/Microfinance Gateway, Cindy Drakeman of DoubleXEconomy shares thoughts on women’s economic empowerment and microfinance. This blog was originally posted in May 2017 and has been modified for publication here.
Dr. Cynthia L. Drakeman is the founding CEO of DoubleXEconomy, LLC, one of the world’s leading research and consulting firms focused on enhancing women’s economic empowerment. Cindy was the lead author of the second report for the UN Secretary General’s High-Level Panel on Women’s Economic Empowerment. Cindy will be a featured speaker at the Women’s Economic Empowerment (WEE) Forum.
Gateway: Let’s start with the concept of economic empowerment for women – how do you define this? And what role do you think financial inclusion can play in women’s economic empowerment, and overall empowerment?
Cindy: Economic empowerment is fairly straightforward to define; however, overall empowerment is quite a bit more complex. Economic empowerment is the degree to which a woman is able to participate as an economic actor in her community. By this I mean her capacity to buy and sell goods and services, influence producers and market trends, and control essential resources, such as financial or real assets, that facilitate those activities. Financial inclusion is at the heart of economic empowerment. Access to assets and financial services can represent freedom, leverage, influence, and opportunity for women. Whether she is a small producer from a rural community in Africa or a tech entrepreneur in Asia, the ability to earn, save, spend, and invest money is essential for her successful economic empowerment.
“Overall empowerment” is commonly defined as a sense of satisfaction and subjective well-being; however, our experience in the field shows that women who are taking greater control of their economic resources often face backlash from the community for challenging social norms, and may feel depressed or anxious as a consequence. DoubleXEconomy, is currently developing a series of psychometrics to quantify the psychological aspect of “empowerment,” so that we can better understand what the women are actually experiencing as they achieve greater economic engagement. These metrics will help establish worldwide benchmarks for empowerment, and also allow WEE actors to develop programs that provide access to finance in concert with counseling and support to ensure the highest possible success for both economic and “overall” empowerment outcomes.
Gateway: The recent report from the UN Secretary General’s High Level Panel on Women’s Economic Empowerment, Taking Action for Transformational Change on Women’s Economic Empowerment, on which you were the lead author, talks about the possibility of economically empowering 1 billion women by 2030. How will we know if we reach this goal or not? Are there efforts in place to track and measure this goal? How do we measure economic empowerment?
Cindy: The long-term sustainability and measurement plan is currently being developed, so I can share the recommendations I put forward, with the understanding that the final indicators may look quite different. Since we’re talking about economic empowerment, my advice was to focus on concrete metrics such as:
How much more money is in the hands of women (e.g., through new procurement targets for sourcing from women-owned enterprises);
The number of assets women have control over (e.g., real estate through updated laws that eliminate barriers to ownership and inheritance);
and whether more women have free access to essential infrastructure that enables them to be economically engaged (e.g., farmable land, public water and electric grids, etc.).
We can also look at female labor force participation – which has dropped precipitously since 2005 to under 50% worldwide – to see if that trend has reversed, what that means in terms of overall numbers of women employed worldwide, and how that employment translates to earned income and spending power.
Finally, the World Bank’s Global Findex estimates 1.1 billion women worldwide have no access to formal financial services. This is where some of the efforts around digital access and fintech could really make a significant impact, and that is quite measurable. Nearly a quarter of these unserved women are in India, and I know the High Level Panel members from SEWA and WIEGO are advocating strongly with the government and stakeholders there to close this gap and ensure their members’ economic contributions to the country are formally recognized.
Gateway: In your blog post, you mentioned that the Panel was guided by the principles of “no one left behind,” and “nothing for women without women.” What do you mean by this?
Cindy: For the first report, the Panel members agreed on “7 Principles for a transformative agenda for women’s economic empowerment.” One of the members told me that these principles were actually more meaningful to her than the 7 Drivers because their establishment was such an important step in identifying common ground and a shared agenda for the panel’s work. “No one left behind” is the first principle and it means that the panel was taking a bottom-up approach – working from the base of the pyramid and ensuring those who are most marginalized are at the heart of the recommendations. Throughout our discussions, this was frequently used as a test for the second report’s recommendations – do they meet this bottom-up standard?
Microfinance’s transformative ability is limited unless it is designed as part of a larger continuum of financial services that allows women to grow “Nothing for women without women” is the second principle, and emphasizes the need for women to be actively involved in all efforts intended to benefit them. This is something I feel particularly strongly about as I too often see well-meaning interventions designed without anyone asking the women what they need or want. This principle was also applied throughout the report, although it is most visible in the section on Driver 7: Strengthening Visibility, Collective Voice and Representation.
Gateway: What do you think it is important for microfinance institutions to keep in mind when working towards a goal of empowering women?
Cindy: Microfinance is important for women’s economic empowerment, but its transformative ability is limited unless it is designed as part of a larger continuum of financial services that allows women to grow their assets and move up to more sophisticated types of saving, borrowing, and spending. Microfinance can provide urgently needed capital, but it does not provide enough capital in most cases to allow a woman to transition from subsistence to profitable production. However, it can help her develop a positive track record and credit history – the lack of which is frequently cited as a barrier to women’s financial inclusion – that could make her eligible for larger loans, which would allow for that leap to profitability.
Microfinance institutions should be thoughtful both about how they are designing their products to serve the specific needs of women (soliciting input from their prospective customers is essential), and where the opportunities are for their clients to grow out of the microfinance community and into more mainstream financial offerings. This is a great benefit to the women as well as the financial institutions, but is a link that is often missing, so women get into the system through microloans, but have limited mobility to grow beyond them. Additional products and services that could be added to loans include insurance (life, health, and business), ID cards, and business trainings, all of which are essential for advancing women’s financial inclusion.