Participation of women in the South Asian microfinance industry: An observation

• Published date: 01 May 2021
• Author: Md Aslam Mia
• Date: 01 May 2021
• DOI: http://doi.org/10.1002/pa.2481

PRACTITIONER PAPER

Participation of women in the South Asian microfinance

industry: An observation

Md Aslam Mia

School of Management, Universiti Sains

Malaysia (USM), Penang, Malaysia

Correspondence

Md Aslam Mia, School of Management,

Universiti Sains Malaysia (USM), 11800,

Penang, Malaysia.

Email: aslammia@usm.my, deaslammia@

gmail.com

Funding information

Universiti Sains Malaysia, Grant/Award

Number: 304.PMGT.6316559

Considering the definitive role of women in microfinance industries, the study has

examined the participation of women in various management roles and clients base

of the South Asian microfinance market. By so doing, secondary data were obtained

from the World Bank database, which incorporated the microfinance information

exchange (MIX) dataset for free and easy access to global data on microfinance insti-

tutions (MFIs). The data used in this study span the period 2011–2018 (excluding

female borrowers), and include six South Asian countries –Afghanistan, Bangladesh,

India, Nepal, Pakistan and Sri Lanka. Methodologically, the study relied on descriptive

types of analysis in line with the context of the research. The findings revealed a dis-

advantageous and disproportionate representation of women in various management

roles relative to the client base of MFIs. Moreover, average female participation rates

(excluding female borrowers) in the South Asian microfinance market in tandem with

the female labor force participation rate were observed to be lower than the global

average; thereby, raising concerns about the poor gender diversity in this part of the

world.

1|INTRODUCTION

“…a growing female talent pool coming out of schools

and universities, and with more consumer power in the

hands of women, companies who fail to recruit and

retain women—and ensure they have a pathway to

leadership positions—undermine their long-term com-

petitiveness”(Schwab, 2014, p. v).

The above quote by Schwab reiterates the importance of

women's role in firms/company's success as they possess skills/

knowledge identical to men, and share a significant percentage of

consumer power. Thus, ignoring their potential to contribute to the

success of firms and overall socio-economic development of a country

could be disastrous. Still, most women have been rendered vulnerable

owing to their involvement in unsustainable economic activities

coupled with the lack of support from mainstream financial institu-

tions, particularly in a patriarchal society such as the South Asian

countries (Barth, Lin, & Wihlborg, 2012; Karmakar, Banerjee, &

Mohapatra, 2011).

1

For decades, women are mostly subdued in South

Asian countries particularly in terms of economic resources control,

participation in the labor force and decision-making processes. How-

ever, in recent years, the situation of women have improved owing to

favorable policies/initiatives undertaken by the governments and

non-governmental organizations (NGO's), along with the rapid eco-

nomic growth and structural changes including the access to finance

(Nawaz, 2019; Nazneen, Hossain, & Chopra, 2019; Hunt &

Kasynathan, 2001;Panday, 2016).

In the early 70's, women's access to finance from formal financial

institutions was very difficult in many South Asian countries. How-

ever, a breakthrough in financing for women was achieved when Pro-

fessor Yunus started a pilot project in the 1970s to render financial

assistance to poor women in Jobra, Bangladesh via collateral-free mic-

roloans (Mia, Lee, Chandran, Rasiah, & Rahman, 2019). The main rea-

son for Professor Yunus' focus on women was due to the prevailing

societal norms and customs which downcasted women. Bangladesh

being a Muslim-dominated country, women were often discouraged

to participate in the labor force or undertake entrepreneurial activi-

ties, despite their possession of sufficient entrepreneurial skills similar

to men. This was further aggravated by the limited or lack of access to

Received: 28 July 2020 Revised: 2 September 2020 Accepted: 9 September 2020

DOI: 10.1002/pa.2481

J Public Affairs. 2021;21:e2481. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons Ltd 1of10

https://doi.org/10.1002/pa.2481