SEATTLE — On July 12, 2017, the House Foreign Affairs Committee held a hearing entitled “Beyond Microfinance: Empowering Women in the Developing World.” This hearing is the fourth meeting out of a series of hearings the committee is convening to examine the obstacles facing women living in poverty. The goal of these discussions is to identify possible solutions in advancing female empowerment in developing countries.
Appearing before the committee were three expert witnesses. The first of the witnesses to give an opening statement was Mary Ellen Iskenderian, the president and CEO of Women’s World Banking. In her opening remarks, Iskenderian stated that 1.1 billion women worldwide do not have a bank account. Women also own one-third of 200 million businesses in developing economies that have inadequate access to credit.
“Providing these women with basic financial services – that fundamental first step toward economic empowerment – can unlock unprecedented economic growth and job creation,” Iskenderian says, going on to say that this would also have a positive impact on “health, education, food security, and water and sanitation.”
Another witness, Melanne Verveer, the executive director of the Georgetown Institute for Women, Peace, and Security at Georgetown University, added on to Iskenderian’s point about the results of female empowerment in developing countries. According to Verveer, women will typically invest approximately 90 percent of their earnings in the education and nutrition of their families, making female economic participation a key aspect of improving global access to education and adequate nutrition.
“Economically empowering women is necessary to ensure their rights, their ability to realize their agency, as well as to advance human development,” Verveer states.
The third witness present at the hearing was Tavneet Suri, an associate professor of applied economics at MIT’s Sloan School of Management. According to Suri, microfinance loans cannot be a long-term solution to poverty. Citing one of her studies into the effects of mobile money in countries such as Kenya, Suri asserts that mobile money applications like M-PESA in Kenya have improved financial resilience and allowed approximately 186,000 women across Kenya to change their occupation from farming to business or sales as of 2014.
“Women can receive money that is sent directly to them from their friends and family and therefore may have more control over that money,” Suri explains, adding that M-PESA “allows women to save more easily and […] to invest these savings into a business.”
When asked by members of the committee to elaborate on how the United States can improve its efforts to advance female empowerment in developing countries, all witnesses concurred that there must be a greater commitment to researching methods of female economic empowerment. By providing more funding for this research, it will be possible to discover which methods of empowerment yield better results or are more efficient than others.
Four studies on the effects of microcredit on female empowerment in developing countries were conducted by the Poverty Action Lab and Innovations for Poverty Action between 2003 and 2014. Three of the four studies found “no effect on female decision-making power or independence.” One study in Mexico showed a “small but significant increase in decision making power.”
“[Microfinance] loans benefit only a few specific types of individuals and do not lead to any systematic improvements in women’s empowerment,” Suri also mentions in her testimony.
By researching and investing in methods that contribute to women’s economic empowerment, such as mobile money applications that allow women to take control of their finances, the three witnesses all agreed the United States would be better equipped to further aid female advancement in developing countries.
– Amanda Quinn