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In
Bangladesh, an extension worker explains
how to receive and manage credit
FAO/17552
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Credit and capital are basic
requisites to increase agricultural production.
Women and men farmers need short-term
credit to buy improved seeds, fertilizers,
insecticides and herbicides and to hire farm
labourers to work the fields and help with
post-harvest operations. And they need long-term
credit to invest in more efficient technologies -
irrigation, labour-saving tools and implements and
transport - and to set up new enterprises if
conditions are favourable. Yet, throughout the
developing world, and even in cases where they are
acting as heads of their household,
women are denied full legal
status that would grant them loans. This
limited - and often complete lack of - access to
rural financial services hampers women's efforts to
improve or expand their farm activities so as to
earn a cash
income.
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Women
do business in a Haitian street market
FAO/18757/
G. Bizzarri
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Although both women and men
small farmers have problems acquiring credit
in developing countries, the situation
facing women is more serious because they lack
collateral. As men are the legally recognized
landowners, it is they who provide the collateral.
When they migrate to towns and cities, leaving
women to manage the household farm, the problem is
clearly compounded. An analysis of credit schemes
in Kenya, Malawi, Sierra Leone, Zambia and Zimbabwe
found that women received less than 10 percent
of the credit awarded to smallholders and only
1 percent of the total amount of credit
directed to agriculture. In Jamaica, women account
for only 5 percent of loans granted by the
Agricultural Credit Bank. Ironically, studies and
experience both show that, when women succeed in
obtaining credit, they are more reliable than men
in their debt repayments.
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A
revolving fund transaction in Zambia
FAO/17873/
A. Conti
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A number of factors determine the reluctance of
banks and credit associations to lend to women:
- they tend to be inexperienced borrowers -
both a cause and a consequence of the
problem;
- they usually request small loans;
- they are not normally involved in the
development and extension programmes or
structures that act as an interface with lending
institutions;
- widespread female illiteracy means that many
are often incapable of following application
procedures.
Women's limited participation in male-dominated
farmers' associations and cooperatives also reduces
the likelihood of their receiving credit when it is
allocated.
But investing in women brings
considerable rewards as a recent
FAO project in Mali
demonstrates. Setting up revolving funds and credit
schemes harnesses the potential of rural women to
become full partners in sustainable
development.
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