microfinanceandgenderinequalityinchina.docVIP

Microfinance and Gender Inequality in China Authors: Cindy Dyar Patrice Harduar Cynthia Koenig Gabriela Reyes April 24, 2006 Prepared for the International Economic Development Program, Ford School of Public Policy, University of Michigan. Table of Contents Executive Summary 3 Section 1: Introduction 4 State of Gender Inequality in China 4 What is Microfinance? 6 Section 2: Microfinance and Women 7 Why Target Women? 8 Benefits to Women 9 Negative Effects 11 Section 3: Overview of Microfinance in China 13 Background 13 International Donors 15 The Government’s Role 18 Regional Credit Cooperatives (RCCs) 21 Section 4: Recommendations and Conclusion 22 Bibliography 24 Executive Summary Gender inequality is pervasive in China, especially in the poorest rural areas of the country. Impoverished women in these areas are targeted by microfinance programs because of such programs’ proven success in increasing women’s financial stability and decision-making power, which results in more resources for their families and development within their communities. However, even established microfinance programs which have existed for decades in Bangladesh and Latin America cannot measure the success of their programs on reducing gender inequality. Further, some studies conclude that the extension of microcredit to rural women results in negative consequences, such as exhaustion due to increased workloads and increased income of a recipient’s male relatives in place of the female recipient. Although microfinance programs began in China in the 1990s, there has been slow growth due to inadequate legal and regulatory measures. As of March 2006, international organizations and the government had invested more than RMB 200 billion through six major models of microcredit programs. However, lack of detailed information – such as length of loans and return on loans – prevents a comprehensive examination of microfinance’s effect on gender equality