Where Did All the Women Go?

Women’s leadership has been central to microfinance since the industry's inception. In recent years however, microfinance providers have been strained by unprecedented rates of growth, an increasing need for skill sets from the private sector, and pressure to become more commercially oriented. Evidence suggests that with these changes, the percentage of women in leadership positions in the microfinance industry is beginning to decline.

This trend is apparent even in women-founded MFIs with long-standing commitments to serving low-income women. Within Women's World Banking (WWB) - the only global microfinance network expressly committed to women’s leadership - the percentage of women in board positions declined from 66% to 58%, and in senior management  from 66% to 51%, between 2003 and 2007. WWB is concerned by this “insertion of the glass ceiling” for women in microfinance organizations and is working with its network members and the global microfinance community to reverse this trend.

Building the Business Case for Gender Diversity

Organizations that successfully recruit, retain and promote women will benefit from these efforts, not only in terms of “social returns” but also financially. 

WWB posits this business case for gender diversity based on a 2007 study of 226 MFIs in 57 countries. The study showed a correlation between women's leadership in an MFI and a higher return on assets. Studies have yet to conclusively illustrate the relationship between gender diversity and financial performance in the microfinance sector, but lessons learned from the private sector may hold clues.

Why is gender diversity good for an MFI's bottom line?

• Attract and retain top talent - In microfinance, getting and retaining talent is critical because of the labor intensive nature of the business. Women are becoming a more and more significant segment of the labor pool in many markets and being able to attract them to join an MFI will be critical. 
• Differentiate - Market recognition as a gender diverse organization attracts not only top female talent but can have corresponding benefits in attracting new women clients. This in turn will help to position an MFI as an “employer of choice” - an organization that is truly committed to serving women.
• Mirror the market - Borrowing a concept from corporate marketing strategy, WWB believes that MFIs targeting women customers will be more successful at understanding and responding to customers’ needs if they mirror their market, or have more female voices at the decision-making table.

What Are Women Leaders Saying?

In 2008, WWB conducted a survey of 54 women leaders and managers who graduated from the network's Women’s Leadership Development Program to understand gender trends and challenges women professionals in the microfinance industry face, and to help create WWB's new Organizational Gender Assessment Tool. Respondents represented 23 organizations in 17 countries.

The respondents were asked to reflect on their professional experiences and those of women in junior-level positions in their organizations. The majority of respondents expressed that the pressure of rapid growth, aggressive expansion targets and increasing competition were making the industry a more difficult place for women to succeed. Common observations included:

• Increased commercialization brings increased participation by men: “The sector has become more commercialized,” said one respondent. “There is more money, so men are vying for the same positions. The rules of the game have changed.”
• Changes in the industry have not eliminated gender biases against women: “Nothing much has changed. Young women will have to work twice as hard as their male counterparts to prove their worth.”
• The increasingly demanding nature of microfinance as a career (long hours and extensive travel) discourages women: “The work is so demanding and women must sacrifice a part of their family life to work in this sector. Women have to be prepared for extensive field work and travel.”
• Changes to organizational culture may discourage gender diversity: “Organizations today tend to have a more masculine character, with more emphasis on making profits than on addressing the parallel demands of career women.”

A New Tool - WWB’s Organizational Gender Assessment Methodology

WWB has designed an Organizational Gender Assessment (OGA) methodology to help institutions identify and make improvements at three core levels that impact an institution's gender diversity:  vision, policies and culture. WWB performs the following as part of the OGA.

1. Vision:  In-depth interviews with senior leadership and members of the board to understand their vision for gender equality, including an organization’s social and financial motivations, and how leadership links gender equality with other objectives. 
2. Policies: Desk review of written policies including HR manuals and training and recruiting materials to better understand the organization’s current state.
3. Culture:  In-depth interviews and focus groups with staff at all levels to understand employees’ perceptions and experiences.

The methodology specifically focuses on areas where women may be challenged in the workplace. Areas cover recruitment, retention, promotion and professional development.

WWB has already conducted gender assessments with two network members and found both MFIs face common issues in achieving gender diversity:

• Recruitment: Recruitment channels for reaching women vary in diverse cultures. Newspaper advertisements may be cost effective, but if young women do not read newspapers in certain markets, this strategy may fail.  WWB advises targeting women’s colleges, clubs and societies, and using high-performing women staff as public institutional representatives.
• Promotion: Biases in performance reviews and evaluations for promotion are often unconscious or implicit, such as evaluating a female candidate for promotion based on the likelihood that she will marry and leave the organization. WWB recommends that instead of relying solely on individual managers to identify female staff for promotion, all job promotion announcements be posted publicly to ensure that staff have access to the same information. 
• Professional Development: Often professional development occurs outside of the classroom, through cultivation of professional relationships, mentoring programs and informal coaching.  In male dominated institutions, women are far less likely to have access to these informal channels, particularly in some contexts where men and women tend to segregate even in the workplace. WWB recommends establishing a talent inventory to track performance and impact of high potential employees who can then be offered professional development opportunities.