Giving women credit: The strengths and limitations of credit as a tool for alleviating poverty

Poor women in developing countries often turn to self-employment as a way to support themselves and their families, but these small-scale activities rarely yield enough income to lift them out of poverty. Recently NGOs and donor agencies have sought to assist these women by providing credit, which is otherwise largely unavailable to them. The broad aims of these programs vary, as do the strategies, which range from simply offering credit (a “minimalist” approach) to providing training and technical assistance as part of the credit package (a “credit plus” approach). The channels used (bank schemes, intermediary programs, parallel programs, or poverty-focused development banks) also vary. So far, the last three channels have been more effective than the first in improving women's access to credit. However, not enough is known about which strategies have the greatest economic impact for particular groups of women, and further evaluation is needed.