Gloria Uwingabiye works on the evaluation and impact assessment of financial and macro-economic policies at ICF SA, a leading policy research consultancy in Belgium. She has an extensive international experience and has worked in both the private, not-for-profit and academic sectors, in various countries. She is also a Research Fellow at the EIB-GDN program in Applied Development Finance, where she studied the impact of microfinance.
Q. Can you tell us a little about the importance of helping women join the economy in Côte d’Ivoire?
Despite massive efforts, the reality remains that Ivoirian women are still marginalized economically, and they must be urgently included for the economy to grow and generate more of the country's revenues. In Côte d’Ivoire, as across much of the African continent, women are more likely to join the economy through entrepreneurship activities. Access to financial services, including microfinance, will empower them to access economic resources. This is especially true now, when the current Covid-19 crisis has disproportionately impacted female-owned businesses.
Q. Is the microfinance revolution working around the world? Are there many such microfinance institutions trying to lift women out of poverty in Côte d'Ivoire?
Yes, absolutely, the evidence out there may sound ambiguous at times, but the benefits of microfinance clearly outweigh the downsides. While critics attack microfinance as leading to higher rates of debt for already impoverished people, there is a growing understanding of the pivotal role that microfinance institutions (MFIs) can play—and are playing—in addressing poverty and financial exclusion in developing market economies. The transformational potential of microfinance is even more so for vulnerable groups, including women. In fact, because MFIs are able to extend their outreach to particular at-risk groups, including informal businesses, they are driving financial inclusion across the world than any other players in the financial sector. In Côte d’Ivoire, a large number of MFIs currently target women-owned businesses. The business case is substantial, mainly because the targeting of women has a cascading impact through the whole economic ecosystem. It is a win-win partnership. For example, women repay their microloans at higher rates than men. What we also know is that access to finance gives women more financial autonomy over their lives and empowers them within their communities. Even more importantly, microfinance allows women to invest in their families’ prosperity, including the education, health, and nutrition of their children.
Q. What did the results of your study show, precisely?
Guylaine (my co-researcher) and I compared microfinance clients who have received at least two loans with those who are in their first loan cycle, and two main findings emerged. First, profitability and performance increase exponentially after the second loan, suggesting that there may be cumulative positive effects associated with longer program participation. Second, gender exerts an influence on these measures, with men sustaining higher profits than women. Our findings show that women tend to operate within less productive sectors, whereas their male counterparts are more likely to invest in high-yield activities. We thus recommend the establishment of women's networks to help reduce the cost of operation and develop their entrepreneurial skills, including financial literacy.
Q. Are there any success stories that you can recall from your field work?
During our qualitative interviews, we heard moving stories from respondents about being able to buy homes for their families, or even trebling the size of their small trading activities. These micro and small businesses, most with fewer than ten employees, have been able to achieve incredible results despite all the obstacles. One might think that these businesses only make a marginal impact on economic growth, but the benefits to business owners and their communities are substantial, and can mean the difference between living in abject poverty and earning a livelihood. Strengthening and solidifying this practice is, thus, critical and could constitute the transitional practice that African countries need to pull the informal economy into the formal.
Q. How did EIB-GDN program shape your thinking about your work?
I learned a great deal, not least of all because of my mentors and the many talented people I was able to work with in the program. Among their impacts on me as a person and a researcher, they shaped my thinking, leadership skills, and technical abilities, including refining my ability to use measurement to generate commercial benefits for investees while maintaining academic rigor in my research. The program also changed my thinking on the utility of mobile technology to collect high-quality impact data in an efficient, quick, and inexpensive way, thanks to the increasing penetration of mobile phones in developing countries. For example, 99% of our sample of rural respondents had a mobile phone! It allowed me to value mobile data collection tools, which is all the more important now that the Covid-19 pandemic has halted virtually all research involving in-person interactions with human subjects. In addition to the benefits of mobile technology for research purposes, the expansion of digital technology offers investors the opportunity to equip low-tier MFIs with mobile business models that maximize their digital offerings in the changing environment of the pandemic.
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