The Way She Spends Her Money: Why Women Make Good Microfinance Borrowers in Latin America

Jane Haines


Development practitioners often see women as the key to sustainable international development success, especially in the microfinance industry. A wide range of research conducted in support of this belief identifies various distinct and individual factors (such as spending habits, familial responsibilities, status, and social networks) as reasons for women’s high repayment rates, or as arguments for the utility of microfinance loans made to women). The result is a near-consensus on the status of gender as an important criterion around which to design economic development, but a lack of consistency in explanations of why this should be so, how these variables interact, or whether a more efficient way to target intervention can be found. This study addresses these methodological questions in order to further investigate how it is possible that women are universally considered good microfinance borrowers, even though they borrow under varying, complex socioeconomic circumstances. This study first uses a large-n statistical approach to compare World Bank data on gender equality and lending data from the Microfinance Information Exchange (MIX) in order to uncover trends that exist among microfinance industries in fourteen Latin American states. Using descriptive statistics and a range of gender equality indicators, the study then tests ten notional hypotheses drawn from the literature on women, gender and development. The results suggest that socioeconomic circumstances (such as barriers to market access for women) are indeed important elements in explaining why some women have more success than others as microfinance borrowers. The results also emphasize that more work should be done to critically evaluate the near-consensus on the status of gender in development if firmer conclusions are to be drawn in future.


Development; Microfinance; Women

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