Testimony to House Foreign Affairs Committee

On the Occasion of its Hearing,
Beyond Microfinance: Empowering Women in the Developing World
Submitted for the Record by
July 12, 2017

CARE USA thanks Chairman Royce, Ranking Member Engel, and the House Foreign Affairs Committee for bringing attention to the issue of women’s economic empowerment. United States’ leadership on the empowerment of women is critical to achieving sustainable development for the 1.2 billion people living in absolute poverty, most of whom are women and girls. With more than 71 years of experience in providing development assistance and emergency humanitarian aid in over 94 countries around the world, CARE has developed practical, evidence-based methods for approaching development challenges with the goal of eradicating poverty and achieving social justice for the poor. Our decades of work has shown that to succeed, sustainable development must enable and empower women economically, socially and politically, to fulfill their potential as leaders within their communities.

CARE works directly with girls and women in developing countries to improve their socio- economic situation, develop new skills and access resources. When we help a woman or girl, we help her family and her community. When she is able to earn money, she reinvests it into her children’s education, health, and future, catalyzing broader development within her village and through her nation. 1 When she is able to speak up in her community, she speaks on behalf of everyone, offering ideas that are practical and beneficial to not only her, but also the society around her. CARE has seen that when women have control over their resources and equal economic opportunities as men, they have the power to transform whole economies and improve the quality of life for women, men, families, and communities. Indeed, according to the McKinsey Global Institute report, if women participated in the economy identically to men, the annual global GDP in 2025 would increase by 25% – roughly equivalent to the size of the combined U.S. and Chinese economies today. 2 By investing in women and girls, we promote a smart, strategic and effective approach that is not only the right thing to do, but also gives development dollars the most impact.

CARE has centered its programming on women’s economic empowerment and income generation for over 30 years. Working with women, women’s groups and community organizations across the world, we have developed significant experience and tools for reaching and supporting the poorest and most marginalized women and girls in some of the poorest parts of the world. This has included empowering women to address some of the most pervasive barriers to their own economic and social advancement, such as gender-based violence, discriminatory social norms, and restrictions on access to resources and opportunities that would help women contribute to their societies. These include property and livestock, birth certificates, inheritance, mobility, family planning and child care, education, financial services, and other tools that promote skills and productivity.

Women’s economic empowerment is a process by which women improve their lives and the well- being of their families and communities by increasing their access to economic resources and their power to make decisions. Women’s economic empowerment means having access to and control over economic resources, assets and opportunities, and creating long-term changes in social norms and economic structures that benefit women and men both.

This process involves three key interrelated elements:

  1. Women have the capacity , confidence , and choice to identify, pursue, and achieve their own and collective economic aspirations;
  2. Women individually or collectively influence or make economic decisions ; and
  3. Power-holders, structures, and formal and informal institutions enable and respect women’s access to and control over economic resources and opportunities.

At its heart, economic empowerment helps women live self-sufficient lives where they can use their skills to generate income for the benefit of themselves, their families, and their communities.

But it is crucial to underscore that sustainable economic empowerment cannot be achieved without also addressing the social, cultural and policy constraints and barriers that marginalize women and girls, particularly those who are poor. Women’s economic empowerment is both a reflection of and a catalyst for gender equality across income levels and communities. Achieving women’s economic empowerment goals, for instance, cannot happen without addressing violence and discrimination women and girls commonly face, just as women becoming more economically empowered will also lead to their greater autonomy, agency, and capacity to combat discrimination and gender-based violence. This requires an integrated approach to income generation, education, financial inclusion, social norm change, and access to reproductive health services to address barriers to women’s economic empowerment. It also requires an approach that looks beyond the traditional tools of microloans and microcredit toward community-driven and community-owned approaches that treat women as financial decision makers rather than simply loan applicants or investment opportunities.

Key Principles to Approaching Women’s Economic Empowerment

Initiatives that promote women’s economic empowerment and gender equality should be viewed in tandem with several basic principles:

  • Leave No Woman Behind: Focus resources and attention on women at the economic base – poor, low-income, and marginalized women – to achieve lasting results. Many interventions have neglected women among the poorest of the poor, relying on “trickle down” interventions that begin with higher-income populations and exclusively for-profit models, with the theory that benefits to this group will eventually reach the bottom of the economic pyramid. However, this misses a critical opportunity to empower a broader base of the population and catalyze sustainable development for millions of women with the greatest need in the poorest segments of society. The massive gains in GDP that would be achieved if women participated equally in the economy supports the need to include poor women at the bottom of the economic pyramid in women’s economic empowerment initiatives.
  • Take a holistic approach and tackle root causes. There are a variety of factors that lead to the disempowerment of women, including discriminatory social norms, gender-based violence and harassment, and discriminatory laws and administrative structures. Issues such as child marriage, gender-based violence, early pregnancy, and lack of reproductive health services or alternative childcare options are genuine challenges to women obtaining the skills, experience, and opportunities they need to advance economically. For instance, globally, participation of women aged 15-39 in the labor force goes down by 10-15 percentage points with each additional child they have. 3 Women’s economic empowerment activities should create an enabling environment for women by integrating approaches that address these underlying barriers to both draw in women marginalized by discrimination and empower them to combat such discrimination against themselves and within their communities. In order to be truly gender transformative, approaches should engage women, the wider community, and especially men and boys, in redefining social roles and expectations, leading to broader women’s empowerment, as well as direct participation in control of family income and assets.
  • Women’s voice and participation at all levels is critical. Initiatives that include women in developing the objectives and design of economic empowerment engagement will have a better likelihood of incorporating the specific needs, aspirations, and capacities of the women served. Inclusion is also a powerful empowerment tool in itself as it engages women to think critically about their goals and available resources. Governments, businesses, and donors all have a role in ensuring that policy reform and programmatic investments in women involve them at the design, implementation, review, and accountability stages.
  • Access to reproductive health and family planning services is inextricable from women’s economic empowerment and self-sufficiency. Helping women decide if, when, and how many children they would like to have affords them the ability to take advantage of educational opportunities or pursue paid employment if they so choose. Enabling adolescent girls in particular to prevent or delay pregnancies, ensures that women and girls are able to attain levels of education needed to participate and thrive in the formal and informal workforce. Around the world, over 200 million women who would like to timeand space their pregnancies lack the tools to do so – investing in family planning and reproductive health services offers a powerful tool in helping empower women and girls to live up to their full potential.

Pathways to Women’s Economic Empowerment

To effectively reach women’s economic empowerment objectives, CARE and others in the international community have designed and tested approaches in both stable and crisis-affected markets. Amongst them, four pathways for successful women’s economic empowerment have emerged:

Financial Inclusion: Bringing women into the realm of financial inclusion, and increasing their control over assets is a recognized key driver to economically empowering women. 4 Globally, only 24 percent of low-income populations have an account at a formal financial institution, and only 11 percent save at a financial institution . 5 This further impacts women, who still lag behind men in access to formal financial services by seven percent worldwide and nine percent in developing countries. 6 CARE’s experience with partners – Barclays, Equity Bank, MasterCard Foundation, UNCDF, Visa, Gates Foundation, Mars, the Government of the United Kingdom, and many others – has proven that forming and training savings groups (more than 75% are women) and then linking them to formal financial services is an effective two- step strategy to enable poor and excluded women to benefit from formal financial inclusion.

CARE’s Village Savings and Loan Associations (VSLA) are designed to ensure women have equal and increased control over financial resources and access to savings and credit. In addition to building financial skills and capabilities these groups simultaneously increase women’s voice and decision-making power within households. The methodology builds on a savings-led approach to financial inclusion; a foundation in saving is one of three interventions proven to accelerate the economic empowerment of women regardless of their context. 7

Saving groups are recognized as a vital entry point to formal financial services 8 and there is high demand from groups to protect and grow their savings with formal financial institutions. Our evidence shows that, once linked to a bank, the average savings per member increases between 40% to 100% and the average profit per member doubles. 9 Key to these outcomes is investing in financial literacy training. CARE’s data shows trained groups who have linked to
a bank have a significantly higher savings balance and lower dormancy rates than untrained groups. 10
Entrepreneurship: Some of the key constraints to female entrepreneurship include lack of skills and knowledge, limited control over economic resources and earnings, lower productivity in sectors that women typically engage in, and lack of access to credit and financial services. Initiatives such as VSLAs help poor women address some of these constraints – for example, by providing access to basic financial services, and to business skills training. However, supporting women’s ability to build sustainable, profitable and growing enterprises at scale with the potential to enter the formal economy, requires a more focused approach that targets the specific vulnerabilities women might face:

  • Enhancing fundamental business skills and independence for female entrepreneurs by providing business training, technical skills, access to financial services and technical assistance; gaps in literacy and numeracy may also need to be addressed.
  • Enhancing the social or relational environment for support to female entrepreneurs through facilitating peer networks, mentoring and women’s collective organization (for example through VSLAs and cooperatives), and engaging men and boys. This will also enhance negotiating power and address some of the structural barriers.
  • Addressing structural barriers to female entrepreneurship through advocacy for policy and social changes. This requires working with men, local leaders, the private sector and other power-holders to address underlying causes of gender inequality.

Dignified Work: As women encounter violence, harassment, discrimination, and unequal or harsh working conditions in both the formal and informal working sectors, a growing emphasis on dignified work is necessary to uphold their rights. However, irregular, unsafe, poorly remunerated or exploitative jobs do not empower women in the short term or long term. Rather, poor quality jobs can increase disempowerment and marginalization, particularly if women lose their support networks, for example through migration or trafficking, or if their work increases the risk of stigma or exploitation. One critical pathway to achieving respect for women’s rights in the world of work is through promoting collectives to ensure women’s voices are heard, that women have influence over working environments, and that they are able to support each other.

Women in Value Chains: Gaining self-employment or receiving a wage are regularly cited as key pathways out of poverty for women in developing countries. Although much of the rural economy in developing countries relies on women in their role as producers, their contribution is often unrecognized or “invisible.” Even in countries where the bulk of agricultural production is done by women, many crops are erroneously identified as “male crops,” such as cocoa in West Africa. 11 In addition, globally, women carry out between three and six hours of unpaid care work 12 each day, which underpins the formal economy, but continues to be considered less important. Gender-based division of labor and other structural barriers like access to land 13 make it more difficult for women to access business development services and training opportunities, and reduce their productivity and their capacity to benefit from their work. Approaches to empower women in value chains should have the overall aim of enabling women to increase their share of gains through promoting ownership of resources and assets, control over profits, and access to markets. 14

Cross-cutting these pathways is the underlying necessity to develop and expand women’s resilience. Women are instrumental in reducing disaster risks, saving to create financial buffers, and are key actors in responding to emergencies as heads of households, workers, and business women. Greater effort has to be made, however, to appropriately support women’s economic empowerment before and during crises. This requires an integrated approach by development and humanitarian actors, and policies by governments and donors that support investment strategies for women across the disaster cycle.

Promising Practices

Programmatic practices that are showing signs of broadly impacting women’s economic empowerment include approaches such as:

  • Scaling up of savings-led approaches with linkages to financial inclusion and financial literacy for participants. Across 11 countries in Africa, Asia, and South America, CARE established 35,000 savings groups of 15-30 members each, equipped them with skills to save and manage their money, and then linked them to formal financial institutions. This was the first partnership of its kind between a global bank (Barclays) and international NGOs to link savings groups to the formal banking sector. The results showed an increase of spending on health, education, housing, food and businesses, and a rise in formal financial inclusion. Notably, this approach also led to a rise in perceptions of empowerment with 180,000 women and young people reporting an increase in feeling respected and able to influence community and household decisions.
  • Bringing financial services to rural areas to increase access to financial products promoting savings and credit. Smallholder farmers and micro-entrepreneurs in Honduras experienced a 488% increase in yellow maize productivity and almost 100% of participants adopted new technologies through a financial inclusion project. Smallholder farmers and micro-entrepreneurs were linked to Cargill’s supply chain and encouraged to join Rural Savings and Credit Unions (CRAC) – a regulated entity providing financial services in rural areas. From 2014-2016 the capacity of CRACs was strengthened and facilitated members’ access to technical training, financial literacy and business skills. This resulted in increased productivity and output, a rise in new businesses, and a notable increase of women holding savings.
  • Developing Women’s Skills in Male-Dominated Industries. The work of CARE and the Gates Foundation to strengthen dairy value chains in Bangladesh increased milk production of producers by approximately 600%, helping meet demand from growing urban markets and significantly growing women’s incomes. Mobilizing women across seven districts in Northern Bangladesh to form producer groups and providing access to an informal savings and loans platform and training on modern dairy farming practices resulted in an increase in milk production and incomes, first-time access to financial services, and shifting social norms where new skills coupled with community gender awareness training enabled women to take up traditional male roles in dairy production.

Recommendations for Action

Given the need for targeted investment in women’s empowerment, both economically and socially, CARE recommends Congress follow the following approaches and principles as it develops or responds to a U.S. role in this movement:

  • Invest in savings-led approaches that link savings groups to financial institutions. This approach ensures access to financial products and opportunities for poor and marginalized women to save, have access to and control over their resources, and grow their money – all at less risk than traditional credit-based micro-loan programs.
  • Couple savings-led approaches with financial literacy and business training. This enables women to better understand methods of saving, managing, and investing their own funds, empowering them to effectively exercise agency over resources they earn.
  • Engage women in the design, implementation, and review of women’s economic empowerment policies and programs. This ensures that initiatives account for the particular context, needs, and capacities of the women they are intended to serve.
  • Ensure that women’s economic empowerment approaches integrate objectives to address barriers to such empowerment. This means critically examining the context – social norms, legal structures, discriminatory regulations – that have worked thus far to restrict women’s access to the tools they need to engage in economic activities. Supporting local women’s organizations engaged in advocacy around legal and structural reform is critical to this effort.
  • Continue already-established strategies to combat gender-based violence and empower adolescent girls, particularly the U.S. Strategy to Prevent and Respond to Gender-Based Violence Globally and the U.S. Global Strategy to Empower Adolescent Girls. Each of these comprehensive policy documents address many of the critical barriers women and girls face in their communities that, amongst other consequences, impede effective economic empowerment. CARE calls on Congress to further support U.S. Government practice by launching the USAID Women’s Economic Empowerment and Equality Framework that provides guidance on empowerment of women within economic growth activities.
  • Invest in the power of partnerships. Through coordinated global action it is possible to scale transformative VSLAs to reach the poorest unbanked women and link them to formal financial services. CARE recommends the creation of a global partnership of private sector, government and development sector actors for coordinated action to scale up VSLAs and link them to formal financial services to realize impacts. Formal financial services providers (FSPs) are increasingly realizing the business opportunity for banking savings groups. In order to reach the necessary scale, FSPs should offer low or no cost savings and credit products, offer a digital and field agent platform to overcome supply and demand side costs to serve, and work with development partners to design products tailored to group needs. Donors can fund the scale up of cost-effective systems that deliver high- quality groups and support the coordination and cross-learning of a global partnership. Development partners can ensure women fully enjoy the benefits of access to financial services via financial literacy training and linkage, and work with the community to tackle restrictive gender attitudes. Governments and central banks can implement policies that support group registration with simpler Know Your Customer requirements, support and fund the scale up of group formation and linkage via their national financial inclusion strategies and ensure supportive bank balance sheet and liquidity measures. 15


CARE USA sincerely thanks Chairman Royce, Ranking Member Engel, and the entire committee for your commitment to examining the variety of needs, approaches, and promising practices that have emerged from decades of working with women to achieve economic empowerment, sustainable development, and social justice. We thank you for the opportunity to share some of CARE’s broad experience on women’s economic empowerment and stand ready to work with Congress as it continues to advance the rights of women worldwide.


1 CARE International Briefing Paper to the United Nations High Level Panel on Women’s Economic Empowerment Working Group on Financial, Digital Inclusion and Property (2017), available at: http://insights.careinternational.org.uk/media/k2/attachments/CARE_Brief... Group_Jan-2017.pdf.
2 McKinsey Global Institute report, The Power of Parity (2015), available at: http://www.mckinsey.com/global- themes/employment-and-growth/how-advancing-womens-equality-can-add-12-trillion-to-global-growth.
3 Grepin KA and Klugman J (2013), Investing in Women’s Reproductive Health: Closing the Deadly Gapp Between What we Know and What We Do, Washington: World Bank (2015).
4 Access to digital, financial, property assets is one of seven drivers to Women’s Economic Empowerment according to the report of the United Nations High Level Panel on Women’s Economic Empowerment (2017), available at: http://hlp-wee.unwomen.org/-/media/hlp%20wee/attachments/reports-toolkit... action-en.pdf.
5 U.S. Chamber of Commerce Foundation, “Financial Inclusion,” available at: https://www.uschamberfoundation.org/initiative/financial-inclusion.
6 Demirguc-Kunt, Asli et al., The Global Findex Database 2014: Measuring Financial Inclusion around the World, World Bank Policy Research Working Paper 7255 (2014).
7 United Nations Foundation: A roadmap for promoting women’s economic empowerment, available at: http://www.womeneconroadmap.org/sites/default/files/WEE_Roadmap_Report_F...
8 As referenced in the UN High Level Panel on Women’s Economic Empowerment first, second report and toolkits.
9 Barclay’s, CARE, Plan, State of Linkage Report (2016), available at: http://www.seepnetwork.org/filebin/savings_led_working_group/The-State-o...
10 CARE VSLA data 2016
11 While approximately 20% of formally recognised cocoa farmers in West Africa are female, it is estimated that women and girls contribute up to 45% of labour input, mainly through unpaid family labour
12 OECD Development Center, “Unpaid Care Work: The Missing Link in the Analysis of Gender Gaps in Labour Outcomes” (2014), available at: http://www.oecd.org/dev/development-gender/Unpaid_care_work.pdf
13 In developing countries for which data are available, only between 10-20% of all land holders are women.
14 Furthermore, partnerships with the private sector are critical to efforts to strengthen women’s economic empowerment. For example, since 2016, CARE has partnered with Mars Inc. to empower women smallholder cocoa farmers in Cote d’Ivoire. Cote d’Ivoire supplies the majority of the world’s cocoa, and both CARE and Mars are committed to improving the lives of the families who make up the cocoa value chain. By the end of 2019, 5,000 women will have joined Village Savings and Loan Associations in 28 cocoa-farming communities in Cote d’Ivoire, enabling them to invest in improving their cocoa yields, send their children to school, and grow and diversify their incomes.
15 CARE International Briefing Paper to the United Nations High Level Panel on Women’s Economic Empowerment Working Group on Financial, Digital Inclusion and Property (2017), available at: http://insights.careinternational.org.uk/media/k2/attachments/CARE_Brief... Group_Jan-2017.pdf.