Gender and the Economy

Tag: Microfinance

Research briefs, news, and event recaps related to microfinance.

  • Adasina: Reimagining Finance for Social Justice

    Adasina: Reimagining Finance for Social Justice

     

    Introduction

    Established in 2018 as an initiative by Rachel Robasciotti and Maya Philipson, Adasina Social Capital is a wealth management and investment advisory firm owned by Black individuals and primarily managed by women, people of colour, and LGBTQ+ members. Since its founding, Adasina has focused on integrating individuals, financial assets, and educational programs to align investments with social justice principles. In 2020, the firm became an independent entity dedicated to connecting social justice movements with financial markets. “If you aren’t engaging the financial markets, you are simply missing a huge point of influence to create systemic change,” says Renee Morgan, the firm’s social justice strategist. “Certainly, public policy can also create systemic change, but so can capital markets. Also, the government and policy are vastly influenced by capital, so to not engage is missing a huge lever for change.” To access this lever, the firm aims to mobilize investors to withhold their capital from companies that perpetuate racial, gender, economic, and climate inequities, thereby promoting a more equitable and just financial ecosystem. As Morgan puts it, describing Adasina’s motivation, “We need change as quickly as possible and pushing all the levers is the most powerful way to get movement.”

    TO VIEW AND DOWNLOAD THE FULL CASE STUDY, FOLLOW THESE INSTRUCTIONS.

     This case was written by Tanmay Padhye. The author prepared this case under the supervision of Professors Sarah Kaplan and Hyeun Lee. 

    The development of this case study was supported by the Latner GATE MBA Internships program. 

     

  • Coralus: A Collective Economy for Perpetual Investment in Women and Non-binary Ventures

    Coralus: A Collective Economy for Perpetual Investment in Women and Non-binary Ventures

     

    Introduction 

    Imagine a venture capital ecosystem where traditional patriarchal barriers are dismantled. Where the primary currency is not profit, but radical generosity. And where hierarchy gives way to collective decision-making. Since its 2015 inception, Coralus (formerly SheEO) has redefined traditional venture capital (VC) goals with its distinct vision of developing a sustainable venture ecosystem. This ecosystem operates by providing investment pathways for women and non-binary led businesses working towards the United Nations Sustainable Development Goals (UNSDGs). Unlike traditional VC funds looking to generate returns for limited partners and maximize on investments, Coralus only seeks repayments of its loans at 0% interest. Both subscription fees and repaid loans are then reinvested into a perpetual fund to to guarantee ongoing support for women and non-binary entrepreneurs.1 As of 2024, Coralus has supported 190 ventures, with more than 19 million (CAD) in funding raised by 7,000+ Activators around the world in just over 9 years.2 With perpetual funds established in only a few of its venture regions (Canada, the United States, the United Kingdom, Australia, and New Zealand), in 2024 Coralus looks to create one overall perpetual fund to break down traditional borders, ensuring a future of global access for women and non-binary entrepreneurs.

    TO VIEW AND DOWNLOAD THE FULL CASE STUDY, FOLLOW THESE INSTRUCTIONS.

     This case was written by Zachary Meager. The author prepared this case under the supervision of Professors Sarah Kaplan and Hyeun Lee. 

    The development of this case study was supported by the Latner GATE MBA Internships program. 

  • MiCrédito: Designing microfinance products for first-time women entrepreneurs in Nicaragua

    MiCrédito: Designing microfinance products for first-time women entrepreneurs in Nicaragua

     

    Overview 

    This case study examines how Mujer Emprende, a microcredit product developed by MiCredito uses innovative features to de-risk ‘risky’ clients and maintain profitability, all while supporting women led businesses.

    Introduction 

    Nicaragua’s political and economic challenges and vulnerability to natural disasters have constrained economic growth and financial inclusion in the country. In 2021, only 26% of adults over 15 years of age had an account at a financial institution or through a mobile money provider.1 Moreover, with 22% female account ownership compared to 31% male account ownership, there is a clear gender gap in access to financial products and services in Nicaragua.2  

    On the other hand, the Nicaraguan economy has shown resilience, and the country’s GDP grew by 3.8% in 2022, driven by robust private consumption fueled by remittances and net exports.3 This presents a massive opportunity and responsibility for microfinance institutions (MFI) to create financial products and services for 74% of the Nicaraguan adult population that remains unbanked. 

    MiCrédito is a Nicaragua-based MFI founded in 2004 by Veronica Herrara and Octavio Cortez with support from Canada-based Mennonite Economic Development Associates (MEDA). MiCrédito’s mission is “to create business solutions that include both social and financial support to Micro and Small Entrepreneurs, providing for a more prosperous future.”4 The MFI provides small business loans, student loans, home improvement loans, life insurance, and other products to both urban and rural clients in Nicaragua and has expanded to Costa Rica. To expand both its financial portfolio and social impact, the organization looks to develop new financial products to improve reach among the unbanked, rural, and female populations.

    To view and download the full case study, follow these instructions.

    This case is accompanied by a video supplement which can be viewed below:

    This case was written by Corrina Vali for the BMO GATE MBA Fellowship Program. The author prepared this case under the supervision of Professor András Tilcsik with guidance from Professor Maja Djikic, Teddy Lusted, Vanessa Iarocci, Chimere Ibecheozor, Professor Sarah Kaplan, Professor Yongah Kim, and Matthew Stevens. The author wishes to thank Veronica Herrara, Lyann Urbina, Serge LeVert-Chiasson, Cesia Calderon, Jessica Villanueva, Martha Gallegos and Carmen Aviles for their participation in this project.

  • How occupations become gendered: A look at microfinance

    How occupations become gendered: A look at microfinance

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    Summary

    How do occupations become gender stereotyped? This study provides empirical evidence that the gender of the initial person filling an otherwise gender-neutral role, has lasting consequences for how that role is subsequently perceived. By examining the role of loan manager in a microfinance bank, the study finds that when a woman initially fills the role of loan manager for a given borrower, that borrower subsequently regards that role as a “lower-status” position, regardless of whether they deal with male or female loan managers in the future. This study thus demonstrates how quickly beliefs about gender can be inscribed into occupational roles, and furthermore, the negative consequences this phenomenon has for women’s authority in the workplace.

    Research

    There is a general consensus in managerial and sociological research that certain occupations are gendered. For example, public relations, nursing, and teaching are considered “female-gendered” occupations, whereas stock trading, engineering, and construction are considered “male-gendered” occupations.  In addition, research suggests that women are perceived as less authoritative than men in work contexts.

    The present study brings these two lines of inquiry (gendered occupations and authority) together in order to ask how the gendering of occupational roles affects women’s authority on the job.

    Using a unique dataset of loan histories from a Central American microfinance bank, the authors focus on the ‘gender-neutral” occupational role of loan manager. This role is initially gender-neutral because on average, men and women fill it equally, and although financial institutions tend to be gender-typed as male, microfinance institutions have a legacy of providing social services to the poor, a stereotypically feminine task.

    In the study, the authors track the gender of the initial loan manager that a given borrower is assigned to. However, because it is common for borrowers to be transferred to other loan managers (for example, to balance out caseloads, or because the initial manager resigns), the authors also track the gender of subsequent managers that a borrower is assigned to. This is done in order to assess whether the likelihood of defaulting on a loan varies by the gender of the loan manager. In addition to tracking gender, a host of other relevant factors are accounted for, such as the borrowers’ household income, debt, and previous borrowing experience.

    Tracing these conditions allow the authors to examine how the job of loan manager becomes gendered, and how this affects the perceived authority of men and women occupying this role.

    Findings: The nexus between gender and authority

    First, borrowers are less compliant overall with female loan managers than with male managers. Specifically, borrowers have a 13.6 percent probability of missing a payment when initially paired with a male loan manager, and an 18.5 percent probability when paired with a woman.

    Second, this behaviour persists over time, resulting in a gendered perception of the loan manager role. Borrowers are more likely to default on payments with subsequent managers, regardless of their gender, when their initial manager was female. For example, those who were initially paired with a female loan manager have a 24.7 percent probability of defaulting on monthly payments. By contrast, borrowers initially paired with a male loan manager have an 18.8 percent probability of default. This means that men who step into roles that were initially filled by women also experience a decrease in their workplace authority.

    That said, it is when subsequent loan managers are female that the greatest rates of noncompliance are found: borrowers originally paired with male managers have a greater probability (22.1 percent) of defaulting when they are subsequently assigned to female loan managers than with male managers (15.5 percent).This has implications for the authority conferred on loan managers stepping into roles previously held by men versus women.

    Men stepping into male-typed roles experience the highest rates of compliance, however, men stepping into female-typed roles, and women stepping into male or female-typed roles, all experience lower rates of compliance.

    In sum, those borrowers initially assigned to men go on to treat subsequent male loan managers with more authority. On the other hand, those who were initially assigned a female loan manager are less compliant and more likely to default on loan payments.

    Implications

    • Performance – The authority conferred upon men and women in the workplace (and lack thereof) is often caused by reasons beyond their control. This has negative repercussions for their performance (for example, in the present study it is harder for loan managers stepping into female-typed roles to get borrowers to comply with the terms of their loan). Management should factor in gender biases when reviewing employees’ performance.
    • Occupational bias – In addition to attending to the role of gender bias, management should be aware of biases associated with occupational roles that are gender-typed female, as even men in such roles may face negative repercussions in their performance.

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    Title

    The Effects of Gendered Occupational Roles on Men’s and Women’s Workplace Authority: Evidence from Microfinance

    Authors

    Laura Doering and Sarah Thébaud

    Institutions

    University of Toronto; University of California, Santa Barbara

    Source

    American Sociological Review

    Published

    June 2017

    Link

    http://journals.sagepub.com/doi/full/10.1177/0003122417703087

    Research brief prepared by

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  • Beyond Policy: How Gendered Interactions on the Ground Shape Development

    Beyond Policy: How Gendered Interactions on the Ground Shape Development

  • Holding up half the sky

    Holding up half the sky

    Sarah Kaplan and GATE post doc Rachael Goodman write in Stanford Social Innovation Review about improving the effectiveness of women’s empowerment programs.

     

    Grounded in the belief that women’s economic inclusion is one of the most unexploited opportunities for improving lives, women have become a major focus of development policy over the past two decades. Microfinance rose to prominence in the 1990s and 2000s based on its success working with women borrowers and microentrepreneurs. Plan International, a large NGO, shifted its focus to girl’s education and empowerment in 2012. Malala Yousafzai won the Nobel Peace Prize in 2014 for her work promoting girl’s education. Many corporate-sponsored development programs—such as the Nike Foundation’s Girl Effect, Goldman Sachs’ 10,000 Women Initiative, and Walmart’s Global Women’s Economic Empowerment Initiative—are aimed directly at women and girls. Under Justin Trudeau’s leadership, Canada recently launched a feminist international assistance policy.

  • Why It’s Time to Invest in Entrepreneurs in Emerging Economies

    Why It’s Time to Invest in Entrepreneurs in Emerging Economies

  • The Rise of Gender Capitalism

    The Rise of Gender Capitalism

    Investing with a gender lens can create financial and social impact by increasing women’s access to capital, promoting workplace equity, and creating products and services that improve the lives of women and girls.

  • The Risky Rhetoric of Female Risk Aversion

    The Risky Rhetoric of Female Risk Aversion

    Foundations, corporations, multilateral organizations, and others promoting economic development are increasingly targeting women, in part because women are seen as less likely to engage in risky behavior and more likely to use money prudently. But this stereotype, although seemingly beneficial, can lead to discrimination against women and produce unequal outcomes.