Why MENA Microfinance for women?

[Geetha Balvannanathan]

It all started out with the thought that I needed to do more than what I was doing within my bank in helping family businesses. In most of my meetings I would be faced with the screamingly silent issue of women's role in MENA family businesses.

I realised that the issue of women in business was still something that did not receive much support locally although there were some amazing and highly educated women out there. Many arab and non-arab women living in the MENA region had achieved a lot but they represented the exception rather than the normal take on things. I had tried speaking on the topic during seminars I had given or attended to but realised this was also linked to social stigmas around the ME region, despite the fact that the wife of the prophet (PBUH) herself had been a trader and that women's presence in business and social life was not something that Islam frowned upon.

I decided to set-up independently from any bank whatsoever so as to have total freedom in giving the best possible support to my clients without any consideration of costs and return on my investment.

My point was to make my intervention with clients meaningful and my return on investment would be the long term relationship I would forge with my clients and the way I would change their business models for the better, help them in their daily lifestyle issues, etc. I would earn my wages through my commitment to my clients rather than through making rabbits appear out of nowhere.

It happened to prove quite challenging to gather funds for the project and I realised that if I, as a professional in a banking world, with solid experience and a good academic background was facing such difficulties, how could it be for those who did not have access to education or experience given the social stigma?

I researched on Microfinance and met with inspired and inspiring women and discussed many issues faced by women in the region trying to set-up their own businesses - mostly very small businesses given the social texture throughout MENA.

My personal conclusions drawn were that there was an immense need for Microfinance in the region and more in the field of women's microfinance initiatives. While there was such a big need, that you would think anybody could have seen as an opportunity to work on extensively, only few initiatives were being actually carried out and mostly by very wealthy individuals as opposed to strong government initiatives or at least strong initiatives that were also publicised equally strongly.

Since that realisation, my whole focus has been on developing my business model very much in the butterfly way: one wing for the business that sustains my team's and my needs and the other wing for the social giving be it organised philanthropy of clients and other friends and partners, the microfinance initiative that would help foster women in business as well as any initiative that would help promote education that would in turn help the whole society move forwards rather than remain stagnant.

I hope to have more and more people on board, people committed to bringing new active members or identifying and sharing with all of us experiences or bringing to my knowledge (and to the team created and growing) the case of women in need of microfinance.

The model I aspire to developing would work in three ways:

1) "Qard al hasan" or forgivable loan model for the very small funding needs where the project is to sustain a woman in an extremely small business that is not likely to get enough profits other than to sustain the woman and her family. The tenure would be of 5 to 10 years and if no repayment is possible, the loan would be forgiven.

2) Classical microfinancing model for businesses that are deemed sustainable and for which the interest-free loan would be granted on terms compatible with the business plan envisaged or created on the basis of assistance to the founder of the business.The founder should commit to being an active member in helping other women set-up their businesses

3) Microfinancing model based on a reduced interest loan, granted on terms compatible with the business plan envisaged. The interest from the loan would go back into the common funds used for funding other projects.

At any point in time that the business is facing difficulties, any of the two second models could have another loan in terms described under 1 or could simply have their existing loan converted into model 1.

The entity would work totally on the basis of volunteers and would therefore have an almost zero cost at administration level. I have and intend to continue having like-minded people in my team on the business side who will also contribute to the social side, including for MENA Microfinance work.

Any other ideas welcome.

Best.

Geetha