With money of her own a woman can make independent choices. But how can female consumers get the credit that is due to them?

'The women in Budhanilkantha say that the bank has changed their lives,' says Bhisma Ojha, a Women's Group organiser with Nepal's Small Farmer Development Programme. 'They did not believe that they could set up these small businesses. They had no idea about money.' Today some 3,000 of Nepal's poorest rural women are becoming economically independent for the first time in their lives.¹ And economic freedom can lead to many other freedoms.

Nearly everybody needs to borrow money some time. Having credit facilities is important to women and men alike, especially those who may not have enough money for emergencies such as a sudden illness, or the need to buy something outright, or simply because all money has run out. Unfortunately these people — often the least literate, the least numerate and the most desperate — go to the most expensive sources of credit, such as the money-lenders and the pawnbrokers.

Over money matters women may find themselves in a double bind. Usually they are the ones charged with providing for the family: food, clothes and other basic goods. But frequently they do not control the family income, nor consulted about its spending. They find it harder than men to get credit, and when they do borrow money, they seem to run into more difficulties than men in using credit effectively.²

There are three reasons why. First, they are less aware of the costs involved in borrowing money and of their rights as consumers. Next comes 'credit-worthiness' or the ability to repay. Loans are usually advanced on the basis of how much you earn and whether you own your home or have other substantial assets such as land. People on low incomes, living in rented accommodation are thought of as more unreliable payers. And of course women find themselves lumped in with this group — since many of them either do not work outside the home, or are engaged in low-paid work. Sometimes, too, there is discrimination against women seeking credit. In most developed countries there is at least legal recognition of a women's right to apply for loans.³

It is a different picture in parts of the Third World, where women face additional obstacles when looking for loans. Firstly, the laws may discriminate against them. For although most countries have now begun to set up constitutional and legal provisions to ensure equality of the sexes and equal rights to women, these principles still have to be put into practice and redress centuries of discrimination. In some places women, are seen like children, as minors in the eyes of the law, unable to give evidence in court or to represent themselves — and certainly unable to raise a loan from the conventional sources, like banks.

Lack of education may well make a woman appear helpless when she sets out on the twisty road to finance. Fewer girls than boys go to school and so many more women than men are illiterate. In 1985 only 37.1 per cent of girls (compared to 48.1 per cent for boys) of secondary school age were in school.⁴ Being able to read and write, add, understand and work out percentages are some of the tools needed to make sense of the world, especially the world of money.

Even having a legal right to borrow money and being literate, a woman may yet find the loan elusive. What she needs next is collateral; some form of asset to guarantee the request for money. Assets can be in kind — cattle or jewellery for instance, or property in the form of land and houses, or cash. In Tunisia, for example jewels are often passed down from mother to daughter, providing an important source of cash in time of need.⁵

Land is a major asset, but it is one that is slipping away from women in many parts of the world. Their rights to land are gradually swept aside under some of the oldest laws in history: the laws of marriage and inheritance. Under Islamic law, for example (which operate in much of North Africa, the Middle East and parts of Asia), daughters only inherit half of what a son inherits, and a widow gets just one-eighth of her husband's estate if she has children, one quarter if she is childless.

Laws passed in the last ten years give women the right to own land in most countries but, in the vast majority of cases, the laws of marriage and inheritance are superimposed on new laws and steal those rights back again. So complete is this disinheritance that it has been estimated that they own less than one hundredth of the world's property.⁶

The other major form of collateral is a regular cash income — the visible means of paying off a loan. Many women however are not in a position to earn money regularly and in anything like the amounts required to satisfy banks and other lending agencies. Also usually, the credit poor women need is small, too small to be considered worth administering.

So how do they get the money they need?

Most banks and other formal lending institutions may stand aloof, but the world outside their doors teems with other sources of credit, such as the money-lenders and pawnbrokers. These have certain advantages: one doesn't need to be literate, or already have an account with them, usually no questions are asked, no guarantors needed, and the loan is quickly made. But it is also a world full of pitfalls for the unwary. Excessive interest rates is one.

Sugunna who sells tomatoes, coconuts and other vegetables by the roadside in Madras, borrows from the money-lender to buy her stock, complains, 'I have to pay him almost two rupees a day.' But Sugunna has nobody else to turn to for credit, even though that interest works out to about 15 per cent per month.⁷

Of course most countries have laws governing money-lending practices: licensed money-lenders, stipulated interest rates, rights of the various parties in the event of default, etc. However, as can be expected, the unregulated or illegal money market is thriving. And defaulters are dealt with ruthlessly. Many borrowers often soon find themselves in an endless cycle, borrowing to pay off a previous debt, now grown larger with the accumulated interest.

Some women take their jewellery or gold to the pawnbroker as collateral for a cash loan. For about five million Malaysian men and women — that's roughly one third of the population — the heavily barred windows of the pawnbroker's shop are an all too familiar sight. In 1980 they borrowed a total of M$500 million ($192 million).⁸

Pawnbrokers, like the other 'informal' credit facilities, provide quick cash loans against the value of the pawned valuables, for an interest. Abuses for example, highlighted by the Selangor Consumers' Association, Malaysia, range from excessive interests, undervaluing of the pawned articles to blatant theft, such as gold chains shortened and jewels substituted with fakes.⁹

On other hand, in the scramble for the consumer dollar — at least from those who have some — traders and credit card companies alike make credit to consumer too easy to refuse. It maybe a useful service to housebound women, like the tallyman who is a regular part of the lives of many women in Britain. This is an itinerant trader often selling drapery and cloth. He'll give doorstep credit for clothes or textiles up to $50, with the interest rate fixed at the start. The customer pays back an agreed amount of money each week. Or it maybe in the form of hire purchase facilities for major buys like washing machines. Here, after an initial payment, they take the product and sign a contract to pay off the sum owing, including interest which is usually at a higher rate than credit from the bank, over a specified period of time.¹⁰ The easy credit has led to a rising trend in consumer indebtedness in many countries in the West.¹¹ The problem is beginning to be noticed in the richer developing countries.

But the poorer someone is, ironically, the more they will probably pay for their credit. 'There is clear relationship,' notes the UK National Consumer Council 'between not having a bank account and using relatively costly forms of credit. '¹²

Keeping up with the payments is a major headache for many people, especially the less well-off. Figures show that repayments on credit agreements typically absorb twice as high a proportion of income for someone in the lowest income group as it does for those who earn more money.¹³

People often feel they have been taken advantage of by their creditors. 'Someone should explain to us, but they are only there to sell,' comments a disgruntled female consumer: 'they should tell you the whole story, how much you will end up paying and what they will do if you get into difficulties. '¹⁴

Women are beginning to realise the importance of having money to venture out and are coming together to help each other. Take the Self-Employed Women's Association (SEWA) in Ahmedabad, a trade union of poor women workers. Over ten years ago they set up their own bank to help their members and guarantee loans from regular banks even to landless women so they can buy cattle. 'The banks always ask "where will such a poor woman be able to house her buffalo?",' says SEWA's Annila Dholakia. 'We say, "come and see for yourselves". And when they do they find these poor one-room clay and mud houses. They open the door and the first thing they see is the buffalo ... the woman has moved outside.'¹⁵

Female small farmers in Nepal, according to UNICEF, have shown themselves to be a much better financial risk than their male partners. For the first time, women there are beginning to be seen as legitimate and responsible borrowers.¹⁶

Savings clubs or credit unions where cash is loaned for a specific purpose are favoured by some. Repayments are usually made weekly or monthly at a fixed rate of interest. Kenya has a tradition of such societies and public fund-raising activities called harambees after the national motto meaning 'join together'. The appeal of these clubs is that members contribute what they can afford on a regular basis. Money — or goods in kind such as hens and fruits — is collected at the monthly meeting. Women who do not attend are fined. With the money raised, the group can buy substantial items, from goats to retail shops.¹⁷

'The popular belief that poor people are not bankable, and that women in particular will not be able to borrow is a myth,' says Professor Yunus of the Grameen (rural) Bank, which operates in Bangladesh, Dominica and the Gambia among other countries.¹⁸

Women have a keen sense of responsibility which means not only do they pay back their loans promptly, but also that they are likely to spend the benefits of credit on their children, buying additional food and so on. Helping them therefore is not charity. It makes good business sense, and offers a bonus through improved family well-being.

Women and poor consumers the world over need advice and protection when borrowing money. More controls on creditors are in order too, to stop the worst excesses of greed and manipulation. Repayment periods can be made more flexible, to deal with the realities of people's lives. Installments could be closely tied to periods when income is being generated. For example, it is easier to pay back what you have borrowed on a buffalo when the animal is producing milk which you can sell. When she is dry, installments are expected to stop. Harvest time is the moment to repay loans on seeds and fertilisers, while money to finance orchards need only be called in five years later, when the trees have begun to bear fruit.¹⁹

Making money requires money — in the form of credit. With access to loans as well as financial and management training women can enhance their income, benefit their families, increase their self-esteem and lessen their dependence on men.

'I cannot sign my name. I own only this torn sari, but I go to the bank and talk to the manager,' says Rehmat Begum, a mat weaver and member of Working Women's Forum in Tamil Nadu. She explains, 'We women are organising. Everybody, even the wholesaler, respects a Forum member. They know we have our own money. We are not at their mercy.'²⁰

Notes

1. Cameron, S. and Giri, M. 'Give Us More Credit', in UNICEF News, Issue 122/1985/1, p.21.
2. Consumers and Credit. National Consumer Council, UK, 1980, p.35.
3. ibid.
4. Taylor, D. et. al. Women: A World Report. Methuen/New Internationalist, London, 1985, p.71.
5. Mair, L. Marriage. Penguin, Harmondsworth, 1971, p.63.
6. Report of the UN Mid-Decade of Women, Copenhagen, 1980.
7. Darshini, P. 'Cooperative Credit', in Woman's World, no. 12, p.24.
8. Hamdan Adnan. 'Pawnshops', unpublished article, 1986.
9. Hamdan Adnan. 'Flaws in Pawnbroker's Act, 1972', in Malaysian Current Law Journal, September 1982, pp.394-396.
10. Consumers and Credit, op. cit., pp.21-22.
11. Consumers and Debt. National Consumer Council, Welsh Consumer Council, London, 1983.
12. ibid. p.28.
13. ibid.
14. ibid, p.304.
15. 'The First Person You See is a Buffalo', interview with Annila Dholakia in Ceres: Food, Agriculture, Women. Special supplement, FAO, Rome, 198?.
16. Cameron, S. and Giri, M. op. cit., p.23.
17. Kneerim, J. 'Village Women Organize: The Mraru Bus Service', in SEEDS, 1980, p.4.
18. 'Bangladesh: Credit for Women', in The State of the World's Children 1987. Oxford: Oxford University Press/UNICEF, 1987, p.60.
19. Cameron, S. and Giri, M. op. cit., p.23.
20. Darshini, S. op. cit., p.24.