Microfinance serves female clientele predominantly

Analysis by gender indicates that microfinance in Sri Lanka, as in many parts of the world, serves a predominantly female clientele.

This was revealed by the Microfinance Industry Report - Sri Lanka 2009 published by GTZ- ProMiS (Promotion of the Microfinance Sector) in collaboration with the Banking With The Poor Network.

The report said that there are interesting patterns in the access of the fiancial services by gender. Formal financial sector institutions such as the licensed commercial bank, both state-owned and private, the Rural Development Banks (RDBs) and finance and leasing companies, accounted for a majority (c.61 - 68 percent) of male borrowers.

Institutes such as the Samurdhi Bank Societies (SBSs), Thrift and Credit Co-operative Societies TCCSs and Co-operatives accounted predominantly (c60-67 percent) female borrowers. Since the latter group of institutes consists of microfinance providers, this is a confirmation that microfinance in Sri Lanka serves mostly a female clientele, report said. A similar pattern emerges for saving with 60 - 66 percent of females preferring to save with the SBSs, TCCSs and Co-operatives, while males showed a preference for the state-owned and private sector banks.

Report also revealed on average, males borrow 2.5 times more than females whereas the corresponding ratio for saving is only 1.3.

Close to 30 percent of the number of loans taken by the households and 40 percent of the value of loans taken are for constructions. Loans taken for activities in the primary sectors of agriculture, livestock and fisheries account for nearly 20 percent of the number of loans taken but a considerably smaller percentage of the value of loans taken (c.6 percent).

Although informal credit is believed to be quite widespread, the survey indicates that only 18.3 percent of households have borrowed from informal sources such as moneylenders, family, friends, neighbours, traders, landlords and Rotating Savings and Credit Associations, report said.