The Multiplier Effect: Why Investing in Women is the Most Effective Means of Sustainable Development
Between living within a machista Honduran society and working for a women-oriented microfinance institution, I have found myself leaning more and more towards gender-focused theories of development. It is hard not to believe in the transformative nature of women’s empowerment after seeing firsthand the often grim circumstances our female clients have endured, and the incredible strength and perseverance they possess which helps them to overcome them. Furthermore, as I briefly discussed in my first blog post, it has become even more clear to me that when Adelante provides micro-credit and educational lessons to their clients, the impact of these services benefit not just the client, but her children, friends, and even entire communities. In this way, it seems to me that Adelante is not just a socially-minded microfinance institution, but rather an organization that is directly and indirectly contributing to long-term sustainable development.
Many policy-makers, institutions and development experts have acknowledged the empowerment of women through education, healthcare, and access to micro-credit as a core development strategy to uplift the world’s poor. This gender-focused approach is largely due to the constantly emerging research on “the multiplier effect.” This is a term used in the field of development to refer to the notion that investing in women and girls not only affects them individually, but also their family members, communities, and societies as a whole. Because women usually play a managing role in their households, their empowerment directly benefits those who depend upon them. McKinsey & Company recently published an extensive report entitled, “The Business of Empowering Women” in which they persuasively summarize this effect.
Women like Venancia see micro-loans as an opportunity not just for themselves but for their children to live more prosperous lives.
“Women who earn income are especially powerful catalysts for development because they tend to invest more of their income than men into the health, education, and well-being of their families. Economically empowered women also tend to have greater control over their income, reproductive health, and improvements in their children’s lives. Every paycheck to a woman is thus, in essence, also an investment in the human capital of the next generation. ”
Furthermore, this chain of development is not limited to a woman’s children, but it extends to her friends and fellow community members as well, as an empowered woman serves as an inspiring and encouraging example of strength and hope. Many of Adelante’s clients decide to take out their first loans after watching their friends’ businesses, and lives, improve drastically due our services.
Access to micro-credit and job training is central to a woman’s ability to lift herself and her family out of poverty, as recognized by development agendas such as that of the United Nations. Because exclusion from financial services is a major factor that perpetuates the cycle of poverty, especially in rural areas, the fact that Adelante does not require collateral is the fundamental reason in why its services are so essential to development efforts for the most disadvantaged members of Honduran society. To that end, women like Angela receive education and business advice alongside access to credit so that this multiplier effect can have the greatest impact possible.