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Eric Engel / Linda Engel

A Deeper Look: Women's Economic Empowerment Through Microfinance

Dive into Kinshasa's business world and you will meet extraordinary women like 42-year-old Rosalie. She produces ginger syrup, along with a variety of other ginger-based products. The idea to produce syrup was not a culinary decision; it was based on creative pragmatism. A lack of electricity means juice cannot be cooled, while syrup will last outside the fridge if bottled properly. This is why Rosalie moved away from her initial idea of producing ginger juice.

In addition to her own entrepreneurial will and education, Rosalie drew on a microcredit to promote her business. Having been a client at a cooperative for eight years, she is currently working with a 1,500 dollar credit and able to buy up to 500 kg of ginger at once. When she started out the maximum amount was closer to 2 kg. While the production of ginger syrup may seem like an unusual enterprise, there are many other examples of successful female entrepreneurs in Kinshasa who have benefitted in one way or another from a microcredit. Most of them would astonish you with the energy and willpower they employ to make their businesses successful. They work alone or – like Rosalie – employ others as the business grows. Nevertheless businesswomen trying to benefit from a microcredit are disadvantaged by various challenges in western Congo (DRC). At least that is what a 2012 study conducted by an advisory team from the Centre for Rural Development (SLE) in Berlin suggests.

The results are even more surprising since Muhammad Yuns, the so-called father of microfinance, is convinced that women are better microcredit customers than men. Indeed women's repayment rates are often better then men's and they tend to invest more money in their households. [1] This article aims to sketch out the situation for business women in Kinshasa and other urban centres in western Congo and explain the diverging results between the sexes.

Characteristics of the Congolese microfinance sector

The focus of the microfinance approach in the DRC is to provide micro, small and medium enterprises (MSMEs) with services, regardless of whether the entrepreneurs are male or female. Due to a very weak financial sector, Congolese MSMEs often lack access to money and are therefore unable to develop their enterprises. Microcredits are a helpful instrument as they require less collateral than normal credits. In the DRC, microcredits are understood to include sums of up to 100,000 dollars and thus go well beyond the popular image of a microcredit used to buy a sewing machine. The guiding principle for all microfinance institutions is to adhere to the "double bottom line" by integrating social and economic goals. More specifically, the social goal focuses on poverty reduction and the economic goal is to work in a sustainable way and avoid depending on subsidies from donors in the long run – the microcredit institution has to produce profit.

Apart from the size of the credit, another characteristic of western Congo is that financial institutions mostly offer credits to individuals. Kinshasa is a melting pot of different ethnicities and migrants from other parts of the country, social cohesion is low, and as a result financial institutions haven't had good experience with group credits.

Challenges for female borrowers

The objective of the above-mentioned study commissioned by the German KfW Development Bank was to analyse the economic empowerment of microfinance borrowers (see textbox) in three urban centres. The focus was on men and women equally, as it initially seemed that gender differences were not a big issue in the field of microcredits. In the Gender Inequality Index (GII) of 2012 results for the ‘labour force participation' indicator are quite good, although the DRCs overall rank on the GII, 144 out of 148 countries, is very poor. [2] Regarding ‘labour force participation' there is no significant difference between men and women (70.2 percent of women and 72.5 percent of men participate in the labour market) and numbers are better than for Germany, for example (Human Development Report 2013).

Why do we think women are disadvantaged in the microfinance sector and still need to be further empowered to develop their businesses?

Why do we think women are disadvantaged in the microfinance sector and still need to be further empowered to develop their businesses? Generally speaking, female borrowers are making slight economic progress thanks to microfinance, even if these financial benefits do not noticeably alter their decision-making power regarding household resources. Their results regarding increasing profit and creating new jobs (per credited dollar) are similar to those of men.

However, our research shows that women have less easy access to good-sized credits - the average sum accorded by financial institutions is five times smaller than that for male entrepreneurs. Due to their double burden as homemakers and businesswomen, they have less access to information and capacity-building courses. Knowingly or not, credit agents favour male business partners, in accordance with the ancient and (now formally invalid) family law which legally put women under the stewardship of their husbands. Instead of reducing gender inequalities, the current policy of financial institutions contributes to structural discrimination against women.

Legal bases not well known to financial institutions

One factor having a negative impact on female business activities is a widespread ignorance of the new constitution of 2006. This constitution acknowledges the equality of men and women and overrules the "Code de la famille" of 1987 in which husbands were declared heads of family. Article 448 of the Code stated that women needed the approval of their husbands for all legislative actions. This included the husband's written approval to open a bank account - often a prerequisite for obtaining a microcredit. It is not uncommon for employees of microfinance institutions to still insist on this practice. Discussions with employees from microfinance institutions during a workshop revealed the confusion on what is legally required to obtain a microcredit. Business women have no other choice than to comply with whatever the institution demands. Starting a legal fight is not an instrument a lot of people make use of – no doubt due to the degree of corruption in the DRC.

Traditional understanding of the woman's role

The common practice of depending on the husband's earnings when applying for a microcredit shows that even in the megacity Kinshasa a traditional image of women persists. Before opening a business, women therefore face a lot of resistance from their environment. One husband concedes:

"My wife has opened a small restaurant near my workplace. First I was against it; she has the housework and the children. But she insisted – and found good customers with the schools and the church nearby."

In addition to their ‘natural' duties (taking care of the household and children) women are often forced to generate some extra money as husband's incomes are often not sufficient to cover the high cost of living. As a consequence women suffer under the double burden of household and business – like women all over the world. [3]

One third of the women in the sample (40% of whom were married) declared that they earned the majority of the family income. Although women participate in the labour market, this doesn't mean that they have the same influence as men in the private and public spheres. We couldn't see a correlation between higher income and more influence on household expenditures. To use our example: Rosalie's scope of action doesn't improve just because she sells and additional five bottles of ginger syrup.

More than two thirds of men have a secondary source of income but only 42 percent of women.

About half of the women said they have a say in household expenditures (more than half were married). One out of five said she makes decisions together with her husband. Studying these numbers one must take into account that "household spending" includes only daily expenses like food or school fees. Decisions about long-term spending seem to remain solely the purview of male family members.

Women either understand their enterprises as extra income "to make ends meet" instead of as a main activity, or they are excluded from having a business career by their double burden and social norms, so medium-sized businesses are rarely led by women. Although the sample strived to include equal numbers of male- and female-owned enterprises, only 3 of 20 medium-sized enterprises are run by women.

The double burden of household and business leaves little time to attend trainings. Training centres report lower attendance numbers for female customers. Centres are often funded by the international donor community and try to provide entrepreneurial knowledge for people eager to start a business. Yet women cannot attend the courses and in general their level of education is already lower than that of men: Only one fifth of the women in our sample had a university education, while the proportion for men was twice as high.

Women's lack of time and the understanding of their business as something "on top" of the family income also leads to the fact that more men than women start a second activity to diversify their main source of income. More than two thirds of men have a secondary source of income (petty trade, transport, renting out goods) but only 42 percent of women. This makes women's business activities more vulnerable as they have nothing to fall back on.

Female borrowers have smaller credits

Bearing in mind the difficulties women face in obtaining a loan and leading a business, it is not surprising that credits obtained by business women in western Congo are significantly smaller than those of male borrowers. This is a general tendency commonly referred to in microfinance literature. Being more risk-averse than men, women tend to apply for smaller credits. They seem to care more about the well-being of their family and are therefore more cautious about going into debt. [4] Nevertheless employees of different microfinance institutions and training centres were very much surprised when we presented the huge differences between credits granted men and women at our final workshop. The loans given female borrowers are on average more than five times smaller than those of their male counterparts (2,500 to 13,000 dollars). This difference cannot be explained by men's higher monthly revenues (these are indeed higher, but not five times higher). Nor is it likely that risk aversion alone justifies such a huge difference. Many women entrepreneurs we interviewed stated that they had tried to obtain higher loans but were rejected by their credit agents.

Despite smaller credits, women and men used their credits with similar success: profits for male entrepreneurs rose by 58 percent; for women entrepreneurs by a respectable 48 percent. Both sexes thus experienced increased revenues, even if those of men (with the disproportionally higher credits) were slightly higher. When it comes to the creation of jobs per invested credit dollar, women create proportionally the same number of jobs as men.

Focus on credits to female entrepreneurs to reduce structural gender inequalities

The situation we encountered suggests that financial institutions tend to maintain or reinforce structural inequalities between men and women rather than reduce them. However, the results of our quantitative research show equal entrepreneurial success of business women in terms of profit and job creation. They also capture slight changes for female entrepreneurs in terms of decision-making power, a change that could be further promoted by more focused support for female entrepreneurs and measures adapted to their social position. Given the many qualitative comments from women unsatisfied with their credit amounts, we think a different way must be found to promote female entrepreneurs.


  • Financial institutions, the government, and donors have to be more sensitive to the additional challenges faced by women. As there is already a legal basis that ensures equality between the sexes, financial institutions should guarantee that their employees know these laws and apply them.
  • Special incentives from donors and the government should encourage good practice regarding female entrepreneurs. Offering business skills training that takes the crowded schedules of women into consideration should be one area of intervention.
  • Financial products should be custom-tailored for women. Bearing in mind that they often suffer under a double burden, their grace period should start later (not as soon as one month after having obtained the credit).
  • The study that served as the basis for this article did not focus on gender issues. More research is necessary regarding gender inequalities as well as on the correlation between education and economic progress.

Changing gender relations is a very long process that doesn't happen overnight. But a proper economic empowerment of women has to consider their double burden as well as the insufficient implementation of the Congolese constitution. Meanwhile the engagement of women like Rosalie shows the potential of female microcredit borrowers.

Applied method and understanding of economic empowerment

For our research we used a quantitative questionnaire and interviewed around 130 microfinance borrowers (half of them women) in Kinshasa.

Additionally, we conducted focus group discussions, and qualitative and expert interviews in the three urban centres in the western DRC: Kinshasa, Kikwit and Matadi. We based our definition of economic empowerment on that of the International Center for Research on Women (ICRW 2011:4) and applied it to both sexes. The ICRW views economic empowerment as a process that includes two interdependent dimensions: economic progress as the material dimension and a broadening scope of action as the cognitive dimension. Economic progress of target groups can be measured through increased revenues and improved market access. We measured a broadening scope of action through larger economic knowledge, better living conditions and financial independence.


In general the results show empowerment foremost in the material dimension. With the help of microfinance most of the entrepreneurs were able to buy bigger stocks at better prices. Around one third of the entrepreneurs interviewed had higher profits and revenues. However, the other two thirds didn't notice a change at all (a small percentage was earning less than before).

The cognitive processes of economic empowerment should lead to an improved scope of action for microfinance borrowers based on better living conditions. However, the Congolese microcredit borrowers do not belong to the poorest of the poor: in the DRC a business is a prerequisite for getting a microcredit. Access to health and education and better food security were not primary concerns for the customers of credit institutions even before obtaining credit. Therefore we did not note big changes in living conditions.

Documentation of the study (in French):

Erik Engel et al.: Pour mieux se débrouiller? Autonomisation Économique par l'accès aux produits de microfinance en République démocratique du Congo. Berlin: SLE 2012. » www.sle-berlin.de


[1] Armendáriz B., Morduch, J.: The Economics of Microfinance, Cambridge 2005, p.180.

[2] Human Development Report 2013: Explanatory note on 2013 HDR composite indices. Congo (Democratic Republic of the), in: http://hdrstats.undp.org/images/explanations/COD.pdf /profiles/COD.html (28.08.2013), p. 4.

[3] Our results are reflected in a study from the SADC Regional Organisation which also acknowledges the heavy burden of women: De la SADC sur le genre et le developpement 2010: Barometre RD Congo, in: http://www.peacewomen.org/assets/file/sadc_barometer1_drc_2010.pdf, p. 14.

[4] Armendáriz B., Morduch, J.: The Economics of Microfinance, Cambridge 2005, p. 183-189.

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