This document discusses how microcredit can create jobs through three main points: 1) Microcredit provides access to financial resources for the poor, especially women, which allows them to start businesses and become self-employed. This creates employment. 2) Microcredit institutions themselves employ many staff to deliver their services, making them major employers. For example, Kenya Women Finance employs about 2,000 people. 3) By providing loans and savings opportunities, microcredit helps develop local economies and industries in rural areas, creating more jobs. Long-time microcredit clients in Kenya have not only created their own employment but employed others as well.

1. MICROCREDIT AND JOB CREATION
PRESENTATION AT THE GLOBAL
MICROCREDIT SUMIMIT
BY
DR. JENNIFER N. RIRIA, PHD, MBS,
ICON / HP
NOV 14TH - 16TH 2011

2. PRE – AMBLE
“Financial services to low income people may as
well be the single most effective means to tackle
poverty and create broad – based economic growth.
Financial services increase their assets, their living
standards, and their roles in shaping society”.
Nancy Barry, 1995, 2011.
The ultimate goal of microfinance is to create
wealth, assets and employment . J. Riria 2011
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3. Where women work KEY
( population)
Mean of
45
Employer
40
Mean of self-
35 employed
Share of female
30
population
Mean of wage
25 earner
20
Mean of unpaid
15 worker
10 Mean of
Agriculture
5
Mean of NonLF
0
AFR EAP ECA LAC MNA SAR
Source: National household surveys, most recent year 2000 - 2010
3
2

4. Where men work
( population) KEY
45
Mean of
Employer
40
Mean of self-
35 employed
Share of male
population
30 Mean of wage
earner
25
Mean of unpaid
20 worker
Mean of
15
Agriculture
10 Mean of NonLF
5
0
AFR EAP ECA LAC MNA SAR
Source: National household surveys, most recent year 2000 - 2010
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5. FACTS
• The poor are mostly engaged in subsistence
economy and forced to use the bulk of their
resources just to survive. Majority are women.
• Business knowledge, particularly skill training
is designed and delivered for literate audience –
majority exclusion.
• Geographically isolated – tends to prohibit
access to markets and hinder lateral learning.
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6. • They also are uninformed about what is legally,
economically and politically available to them as a
right.
• Without power, they are rarely consulted by the
authorities and hence their needs remain unheard
and unaddressed – no control of interventions.
• This is even more true of women majority of who are
socially, economically, politically and geographically
isolated.
• Poverty disempowers – hindering gradual
development of individual and collective capacities
for self-determination, making choices and informed
decisions.
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7. • HOW CAN MICROCREDIT CHANGE ALL
THAT AND CREATE JOBS?
• WHAT DOES MICROFINANCE SEEK TO
ACHIEVE AS FAR AS JOB CREATION IS
CONCERNED?
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8. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP
• Kenya women supports the view that “poverty
targeting strategy provides a clear link between
economic empowerment and social empowerment.
• This constitutes Broad – Based development.
Unfortunately, Broad –based development cannot be
achieved unless poverty is reduced.
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9. • Poverty can only be reduced through provision of
access to resources that enhance wealth and asset
creation.
• Microfinance provides the approach, outreach and
delivery mechanism that provides access to
resources for the poor hence facilitating
development.
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10. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP (Continued )
• With development self and formal employment thrives.
For example, Kenya Women delivery mechanisms demand
intensive human resource involvement. It employs about
2000 staff. It is one of the major private sector employers.
(Kenya Women is an equal opportunity employer)
• Microfinance through targeting strategy provides
opportunities from major outreach to other needy people
at times encouraging to start their own business, hence
creating employment as per employing family members
and others. This capacity for major outreach removes
constraints that deter the poor and especially women from
using financial services e.g type of loans, repayment loans,
interest rates, involvement etc.
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11. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP
(Continued)
• Majority of women are excluded from the
financial sector, and hence rendered
unproductive. In sub-Saharan Africa, less than
one in five households have access to
productive resources. Women are the most
excluded. Microfinance provides access. Kenya
Women Clients, who have access over five
years, have not only created employment for
themselves but for other people as well.
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12. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP
(Continued)
• Women are excluded from the modern sector (only 30%), while
presenting 47.8% in informal sector and 54.5% in the
Agricultural sector. The last two sectors are characterized by
small holdings that do not attract big investors. Although in
some economies, these sectors are the mainstay of economies
they do not attract major investments (because they offer lower
returns). Microfinance provides the most needed financing
hence creating livelihoods especially in rural areas.
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13. EXPERIENCE FROM KENYA WOMEN FINANCE GROUP
(Continued)
• Microfinance institutions emphasize the importance
of developing savings culture. Savings mobilization
which is central to Microfinance operations is a
basis for a developed financial market. A developed
financial market creates jobs.
• Gender responsive Budgeting, 200/2010. Pp17
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14. References
1. FDA Kenya, Gender Responsive Budgeting in Kenya
2. FIDA, 2009/2010
3. Removing barriers to economic inclusion World
Bank Report 2011.
4. Marc Gurgand, etalpe, outreach and sustainability
of six rural finance institutions in Sub-Saharan
Africa 1994.
5. C Gap “Reach the poorest-; Lessons from
Graduation model, march 2011.
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15. THANK YOU
DR. JENNIFER N. RIRIA, PHD, MBS, ICON/HP