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Making Loans Work For Women

Author: Gayle Tzemach Lemmon, Senior Fellow for Women and Foreign Policy
November 27, 2010
Newsweek

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Gayle Tzemach Lemmon, deputy director of the Women and Foreign Policy Program at the Council on Foreign Relations, has spent more than five years writing and reporting on female entrepreneurs in Afghanistan. Her work is now the subject of a forthcoming book, The Dressmaker of Khair Khana. She spoke to NEWSWEEK's Tania Barnes about how the international community can support female entrepreneurs.

Do you believe in the power of microfinance to lift women out of poverty?

Microfinance is a part of the solution, but it should not be confused with the solution. Because microfinance is so manageable in terms of the size of the loan, people have made it the cornerstone to lifting women out of poverty. They have forgotten the other economic contributions women make, and the challenges women face when trying to create small and medium enterprises.

Some critics say men are more often the beneficiaries of microfinance and other credit programs because the loans tend to go to those with existing businesses.

This is the challenge. There are two issues: one is, are you reaching all the women you could with microfinance? And the second, how do we help them take the next step, which is to small and medium enterprises? Microfinance does not require previous experience or loans to the same extent as a small-business loan, so it's easier for women to enter the micro sector. But are we keeping women there, because there's no place else for them to go? Once you grow to a certain point, it's very difficult to get financing.

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