Microlending

Developed as part of a mix of widely implemented attempts to end global poverty, microlending is the provision of small loans with the intent of fostering self-employment, the growth of small businesses, and ultimately permanent economic self-sufficiency. It is an element of a larger spectrum of financial services called microfinance, made available to people who typically lack access to services such as savings, home loans, insurance, and money transfers. Now practiced in urban and rural communities worldwide, microlending began in developing countries as a way of freeing the poor from the usurious rates and practices of moneylenders, allowing them to borrow at lower rates without collateral or traditional credit qualifications.

As women are disproportionately affected by poverty and have proven to be better credit risks, they are now the majority of borrowers. Among the reputed benefits of microlending to women, in addition to reducing poverty and creating more stable and sustainable communities, are greater status and access to resources and therefore increased decision-making influence, authority, and autonomy in the home and community; less economic dependency on husbands and more security for divorced, abandoned, and widowed women; the development of entrepreneurial, leadership, and financial skills; less physical abuse as women's economic significance and perceived productivity increase; self-confidence; strength and solidarity among groups of women borrowers, who join forces to combat threats to their members; political participation and the power to change laws, regulations, and customs; literacy and education for themselves and their children; and improved health and reproductive control.

More than 100 million people have been reached by microlending, and women make up as much as 80 percent to 100 percent of some lenders' clients. This entry reviews the history and structure of microlending and some of its major institutions, aspects specific to women's participation, success factors, and the open issues and criticisms raised by feminist and Marxist scholars.