Education and Microfinance

16 September 2010 at 06:42 8 comments

By Becky Myers, KF12, Sierra Leone

A recent article from Nicholas Kristof ( argues that among the poorest families in the world, 2% of income is spent on educating children whereas larger percentages (6% in Indonesia and 8% in Mexico) is spent on alcohol and tobacco, excluding additional funds spent on soft drinks and prostitution.  And according to Kristof’s most recent book, Half the Sky, one reason for this is due to the high percentage of men who control family finances.  When women, on the other hand, end up controlling family finances, funds are much more likely to be spent on education, nutrition and medicine for their children.   This not only promotes these children to gain an education, but it also provides them with important physical and mental nourishment during their crucial childhood years.  The potential effect that empowering one woman can have on successive generations is exciting.  And empowering many women could have a staggering future effect on an entire village or country.

This is where Kiva comes in.  Overall, the microfinance organizations that Kiva partners with give 82% of loans to women.  Here in Sierra Leone, at a microfinance organization called ARD, 72% of all loans are to women.  The names of group borrowing teams, such as “Destiny Sisters” and “Great Women”, imply both the pride and ambition these women have in receiving a loan for running their businesses.  Meeting with some of these women only solidified the priorities they place on their children.  Particularly during this time of year, when schools all over the country are opening their doors, many women cite the need to tighten their purse strings- by skipping lunch or foregoing household goods- in order to pay for their children’s education.  And Kiva’s website is chock full of women who cite that the additional profits they have received as a result of a Kiva loan are used to pay for school fees or for necessary school supplies and textbooks.

Sierra Leone, in particular, can benefit from a focus on empowering women.  In 2007, Sierra Leone was named the worst country to be a woman by the Human Development Report, with the highest infant mortality rate in the world.  While government schools, which are primary schools only, are now free for all children in the country, many families cannot even afford the necessary school supplies and textbooks for their children.  And borrowers frequently cite that private schools in Sierra Leone provide a far better quality of education.  The majority of trained and qualified teachers migrate to these schools, leaving the poverty-stricken public schools that do not pay them well.  Literacy rates for adults (aged 15 and above) are additionally quite low, and diverge significantly by gender, with 52% of literate males and only 29% of literate females.  However, this improves moderately for youth (aged 15-24), where 66% of males are literate and 46% of females are literate.  And with 300,000 children still out of school according to UNICEF, Sierra Leone has a lot of room for improvement.

While it is extremely difficult to measure the impact these microfinance loans have on borrowers and their families, enabling women to receive loans and recognizing how additional business profits are spent offer significant insight.  By directing loans to women entrepreneurs, lenders not only empower women in business who lack alternate funding options but also likely heighten children’s future prospects, offering a double punch for alleviating poverty.

Entry filed under: ARD Sierra Leone, KF12 (Kiva Fellows 12th Class), Sierra Leone. Tags: , , , , , .

Inauguration Day in Rwanda The Ants Go Marching One By One


  • 1. Estrella Chan  |  23 September 2010 at 21:58

    I am so glad your program exist. The lives of many people are improving because of your work. Thank you for starting KIVA and for continuing to contribute to the well-being of many around the world.

  • 2. Tom Ellum  |  20 September 2010 at 01:53

    Mainly referring to Nicholas Kristof’s article, but also relevant here: –

    The analysis of the statistic that families are spending only 2% of their income on education for their children compared to 4-8% on cigarettes and alcohol ignores a social understanding of the data which would help to develop a better understanding of the realities of life for many people. I provocatively argue the statistics are a result of a combination of two things. First, and most importantly, in poor communities social capital can be more valuable than financial capital. Secondly, the demands placed upon men in patriarchal societies to help relatives and friends in many poor countries are counter-intuitive to a Western understanding of saving. Furthermore, the argument assumes that sending children to school in these communities is actually beneficial, and visibly so, for the families, i.e. if there are not jobs out there for educated children why would they prioritise education above all else anyway? I do this not because I disagree with the normative position that education should take precedence over alcohol and cigarettes, but to stimulate discussion about what I view are important factors influencing spending decisions. I am not against the argument that poor households require better financial management – indeed, they do – but I believe that the conclusion deserves to be nuanced.

    In poor communities the way people survive is heavily dependent on social interaction and relationships formed through this. The participation of men in patriarchal society – yes, drinking and smoking! – is essential to develop social capital and gain access to assets that help them provide for their family. In a livelihoods understanding, social capital is often referred to as the asset of last resort and its importance has been highlighted in many studies. As such, the return on investment of one dollar spent on drinking may be substantial in such forms as information learnt and social capital developed. Social reproduction has determined that certain communities interact by drinking alcohol and smoking; therefore to participate and benefit men must spend money on this.

    In addition to the demand on men to participate in community activity to develop valuable social capital and keep apprised of useful information, they are also subject to demands of other upon them. Relatives must be looked after and reciprocal claims based upon social capital must be honoured. Yes, this may entail getting in a round of drinks or two. Shirking on this responsibility would see them forfeiting the rights they have earned access to and erode their social capital. The demands of relatives, that may be quite intense and ongoing, mean that savings are also a dangerous thing to keep, especially for a man. Savings are not just seen as for the household, but as a resource to which many people have a claim.

    The statistic that only 2% of household income is spent on educating children whilst more than double is commonly spent on alcohol and cigarettes is an easy one to criticise and efforts need to be made to address this. However, efforts that are not rooted in the nuances of local culture and do not consider the social benefits of drinking or the liability of saving will be disruptive to communities. Only by understanding why such spending decisions are taken and moving beyond the paradigm of men as selfish drunks can we address the problem of male-led financial management.

  • 3. Fehmeen | Microfinance Hub  |  19 September 2010 at 04:00

    That the poor do not engage much in financial planning is a troubling thought. They lack financial stability, and that hinders economic progress to some extent – in which context, microsavings have a lot to offer.

    Household finances ought to be a “shared” responsibility and therefore, part of the solution would be to give women more power in dispensing personal income. Even if MFIs purely deal with women, care must be taken to ensure the men don’t feel left out and hence, resentful.

  • 4. sushil regmi  |  17 September 2010 at 01:49

    dear sir ,

    I need hole coverage people of mfi in sauth asia

  • 5. KivaWalk » Blog Archive » Day 182!  |  16 September 2010 at 17:37

    […] CLICK HERE – for a great article on visiting borrowers from a Kiva Fellow in Cambodia & HERE for one on Microfinance & Education from a Kiva Fellow in Sierra […]

  • 6. Nathalie Kallon  |  16 September 2010 at 10:01

    Really interesting Becky! Keep up the good work!

  • 7. Abigail  |  16 September 2010 at 08:30

    I read that article, too. Sad.

  • 8. Margarita Salasyuk  |  16 September 2010 at 07:19

    Great post Becky! Would be interesting to know how much private school costs in Freetown, do you know?

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