Credit plus microcredit schemes: a key to women´s adaptive capacity

Credit plus microcredit schemes: a key to women´s adaptive capacity

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  1 “Credit plus” microcredit schemes: a k  ey to women´s adaptive capacity Martina Angela Caretta -   Human Geography Department  –   Svante Arhenius Väg 8, 10691, Stockholm University, Stockholm, Sweden Pre-print version; Published in Climate & Development  , 2014  Abstract This paper presents the  provision of “credit plus”  training activities conditionally and jointly with microloans by Equity Bank and by Swedish NGO Vi-Skogen in the area of Kisumu, Kenya to women groups as a key to the improvement of women´s adaptive capacity to climate change. Groups received training in small business administration and agroforestry which produced positive outcomes or a virtuous spiral in their families’ econ omy, wellbeing and in their intra-household  bargaining power. In agroforestry and new farming practices group training enhanced the women´s set of planned adaptation strategies. In a context where formal financial institutions are still reluctant in providing credit to subsistence farmers, this case study shows the beneficial effects that credit would generate for women´s adaptive capacity.  2 Keywords “Credit plus”, Equity Bank, Vi-Skogen, Kenya, adaptive capacity Introduction Women still suffer from gender specific drawbacks (Ransom and Bain 2011) and their “experience with climate change adaptation [..] has been largely disregarded in the larger climate change literature” (Bee et al. , 2013:97). Adaptive capacity is defined as the ability of a community to respond to climate change, variability and extremes for the long term rather than merely coping with temporary exposure to risk (Smit and Pilifosova, 2003). Such capacity is dictated by gender specific norms shaping gender division of labor which endows men and women with different means of responding to climate change (Lambrou and Nelson, 2012; Petrie, 2010; Nelson and Stathers, 2009; Rossi and Lambrou, 2008; Pelling and High, 2005; Masika, 2002). These norms determine women´s access to material and productive resources as land and credit (Hurni and Osman-Elasha, 2009; Rossi and Lambrou, 2008; Masika, 2002) and their participation in decision making (Nelson and Stathers, 2009). These dynamics negatively affect small holder subsistence farming as a whole in Sub-Saharan Africa given that women are the majority of subsistence farmers (Agarwal, 2011). Gender division of labor in fact confers to women the responsibility of food security and household management (Petrie, 2010). Consequently, women are the main food  producers for household consumption and sale (Tandon, 2007) as well as the repositories of natural and agricultural knowledge. These livelihood dynamics are at the forefront of climate change adaptation (Aguilar, 2013; Petrie, 2010; Lambrou and Piana, 2006). Within this context this case study focuses on the enhancement of women´s adaptive capacity through the provision to women groups of “credit plus”: training activities carried out by micro -financial institutions conditionally and jointly with microloans. In fact, while the lack of access to credit has been singled out as a deterrent to women´s adaptive capacity (Hurni and Osman-Elasha,  3 2009), the potential linkages between microfinance, gender and adaptive capacity are still poorly understood (Agrawala and Carraro, 2010). The findings were gathered through interviews, focus groups and observation in 2010 in the region of, Kisumu, Kenya. The sample of thirty women was selected according to Mayoux´s virtuous spiral conceptual framework (1998) which identifies microloans to women groups as a trigger for the improvement of their families living conditions and subsequently of women´s economic, social and political empowerment. The study participants were between 20 and 40 years old, married, with children dependent on them and had been participating in the micro-credit program since 2007. A women-only approach was chosen because the literature has shown that micro-lending to women groups ensures a much higher repayment rate than men groups (D´Espallier et al., 2011; Mayoux, 2009). Moreover, a gender focus does not exclude women-only initiatives as gender mainstreaming which drifted attention towards gender awareness. This paper aims to use a gender focus to investigate women´s specific challenges in relation to climate change and whether the coupling of micro-lending with “credit plus” to women groups enhances their adaptive capacity. “Credit plus” schemes: Fanikisha Shaba and VSLs The first micro-finance scheme examined is called  Fanikisha Shaba 1  and was initiated in 2007 in Kisumu by Equity Bank: the first commercial bank promoting the Graamen’s bank joint liability approach targeting women’s groups in Africa (Coetzee e t al., 2002). Directed towards groups of up to 30 women having a small business in cities, this scheme reached 16,000 people in 2010, including a minority of men enrolled in so called “ youth groups ”  (Kuyoh, 2010). At first, the bank officer introduces women to the administrative roles within the group and provides training on the  basic principles of small business management i.e. customer relationships, products stock and assortments, types of services to be offered to customers and competition. After a trial period, the  bank officer provides insights and advices on occasion to the group i.e. market seasonal  4 fluctuations. The officer advises them for on the right time to stock up to respond to high demand at the beginning of the school year or during weddings period and Christmas, on effective advertising strategies and on how to competitively set up their prices. The second scheme investigated here has been championed by the Swedish NGO VI-Skogen has  been promoting agroforestry in Kenya since 1983. To facilitate women´s participation in training and the affordability of seedlings, VI initiated in 2007 in the rural area surrounding Kisumu a  program of “village savings and loans” (VSLs) which counted 7000 members, mostly women, in 2010 (Personal communication). VSLs are a one year time bound accumulating and saving association. After one year of training by the VI-Skogen officer, the group engages autonomously with the saving routine and with eventual temporary defaulting by some members. Due to the remoteness of these groups, local women with a long experience in VSLs, are trained to become sub-officers to visit groups and assist with problem solving. Through these officers VI-Skogen  promotes agroforestry and introduces farmers to improved seeds, new farming practices (e.g. mulching and intercropping) and cooking (e.g. solar cooker) techniques. Virtuous communities of practice The results from focus groups and interview indicate that all women increased both their income and loans increased over time. They intend to continue to expand and diversify their small business or their agricultural production. At the beginning of their involvement most of the women did not disclose their involvement to their husbands. This behavior can be interpreted as a successful attempt to nudge hindering gender norms. All the women interviewed shared common goals such as: becoming food secure, affording the payment of their children´s school fees and gaining more independence from their husband by contributing to the wellbeing of the whole family. It was found that saving and agricultural training does not only enhance their knowledge, but constitutes a shared repertoire of practices which contributes to a community of practice (Wenger, 1998).  5 This group dynamic and recursive process of working together reinforces trust, social cohesion and creates joint liability and ownership through peer pressure which is evident in the lack of defaulters. Group loans are reinvested in women´s small businesses allowing them to free themselves from  pawnbrokers, to feed and school their children and to meet household provisioning responsibilities (cf. Quisumbing, 2003). These apparent improvements reflected in the household bargaining power as  partners could count on “separate purses” (cf. Aspaas , 1998; Whitehead and Kabeer, 2001). Husband and wife had indeed separate economic responsibilities which meant, women unanimously stress, that husbands would not decide upon or profit from their group loan and women. (cf. Goetz and Gupta, 1996). Nevertheless, when emergencies arise  –   i.e. funeral or hospital fee  –   they are shared among partners otherwise “how are we [women] supposed to repay the loan if we cannot reinvest it in agriculture and trading? If we default, the whole family defaults and the whole group defaults and our husbands must help us to avoid this” 2 . This statement shows that even though women had not discussed microcredit with their husbands at first, they now have expectations on them to responsibly facilitate their enterprise (cf. Worthen, 2011). Moreover, it brings light to the role of peer pressure in both motivating women and keeping them individually and as a group on track with the repayment of the loans.
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