Efficacy of micro-financing women's activities in Côte d'Ivoire : evidence from rural areas and HIV/AIDS-affected women

N. Binaté Fofana

Research output: Thesisinternal PhD, WU


This thesis deals with the effectiveness and the capability of microfinance institutions in enhancing women’s livelihood and empowerment, and mitigating the effects of HIV and AIDS on affected women and their households in Côte d’Ivoire. This study was carried out within the framework of the AWLAE (African Women Leaders in Agriculture and Environment) Project. The AWLAE project addresses the theme of the role of women in food systems and effects of HIV and AIDS on rural livelihoods.

Microfinance has been recognized as a significant means of economic development in developing countries, especially in Africa where most of the economies are based on agriculture. Microfinance as a credit institution is seen as one of the relevant tools that can provide small loans for poor people especially women who have no access to formal banks. Therefore MFIs have attracted more attention from governments, NGOs, researchers and civil servants since the microcredit summit in 1997 and the nomination of the year 2005 as the International Year of Microcredit by the United Nations General Assembly.

Studies have shown that the effects of MFIs on women’s activities differ between countries and between regions within countries according to factors including the environment, and the socio-demographic characteristics of the beneficiaries. This heterogeneity renders the effects of MFIs inconclusive and explains the necessity and the relevance to conduct this empirical study in Côte d’Ivoire.

The objective of this study is to gain insight into women’s needs in terms of support for economic activities and empowerment in rural areas and the way in which MFIs address these needs. Specifically, the study aims at assessing whether microfinance services provided for women in Côte d’Ivoire fit their needs in terms of improving their incomes, productivity, decision-making power, human and social capital. Special attention is paid to HIV-affected women. To achieve these objectives, the study tends to respond to four main research questions: 1) What are women’s needs for credit in rural areas? 2) How do women have access to MFI credit in rural areas? 3) What are the effects of participation in microfinance programs on women’s practical and strategic gender needs? 4) What is the relationship between microfinance programs and women coping with HIV/AIDS? These research questions lead to the formulation of hypotheses that are confirmed or rejected.

This study uses both a theoretical and empirical approach that represents the interaction of women’s livelihood, microfinance and HIV and AIDS. The empirical analysis consists of an in-depth analysis of microfinance institutions and a survey analysis applied to cross-sectional data collected from 440 women in the Abengourou region located in the Central Eastern part of Côte d’Ivoire. The sample was divided into four categories of women as follows: Non-HIV affected women with and without MFI credit; HIV-affected women with and without credit.

This study gives a descriptive analysis of the study country, and the response of the state to promote the microfinance sector and to mitigate the effects of HIV and AIDS on the individual, household and communities in Côte d’Ivoire. Women in the Abengourou region are basically involved in agriculture from which they earn their livelihood and the opportunity to produce food for household consumption. The type of activities carried by women depends on their access to credit. Those who have no access to MFI loans were mainly engaged in farm activities while women with access to credit were mainly traders. They were also able to undertake both agricultural and trade activities. From these results, it appears that women in rural areas need MFI credit for trade purposes and to a lesser extent for agricultural activities.

This study found a significant relation between savings and credit, meaning that access to MFI credit was fundamentally conditioned on the provision of savings from the borrowers that most of the rural population did not have. MFIs use savings as collateral to prevent defaults. In addition, MFI membership and the type of activity are also important to obtain MFI credit. Furthermore, access to MFI credit depends on factors linked to the characteristics of female borrowers including, marital status, wealth status of the household, ethnicity and the empowerment of women, and trade activity. These determinants positively affect the probability of obtaining MFI credit in rural areas. The study reveals that MFIs prefer to finance trade activity rather than agricultural activity as the latter is seen as risky and associated with unpredictable income.

The use of the propensity score matching method led to the following results. MFIs are found to be effective in enhancing a set of variables including income, the level of farm production, human and social capital. MFI credit has enhanced women’s decision-making power within the households too. However, women’s access and use of MFI credit in rural areas did not significantly increase the value of women’s assets but it did significantly enhance the value of household assets. This result on the value of women’s assets did not confirm the findings of several studies which indicated that the provision of credit enables women to build up and improve the value of their assets (Rahman, 2004; Mayoux, 1999, Van Maanen, 2004). The result also suggested that female borrowers were more likely to use their income earned not to build their own assets, but to contribute to the improvement of the household standard of living. Doing so enables these women to achieve more power in fulfilling their practical and strategic gender needs within the household as indicated by the findings of this study.

The effectiveness of MFIs in providing loans for women in rural areas is measured by the loan repayment which is an important indicator for MFI practitioners. It gives insight into the capability of the credit institution to insure its sustainability and to increase its outreach. From our analysis, loan repayment among female borrowers generally was not successful as some borrowers had difficulties to pay back their MFI loan. The non-repayment is mainly explained by the diversion of loans from investment purposes, which has to do with the lack of women’s control over loans. For MFIs, the diversion of loans can endanger their functioning and sustainability and therefore their effectiveness in rural areas. However, this study found the low repayment performance of female borrowers to be contradictory to the positive effect of MFI credit on women’s income and the positive return on investment they achieved. Hence, this study suggests that in addition to the diversion of loans, non-repayment might be linked to other factors especially the unwillingness of the borrowers to repay their loan.

The analysis of the interaction between HIV/AIDS, women’s livelihood and MFIs reveals on the one hand that HIV and AIDS negatively affects both human and physical capital of households through morbidity and mortality. The morbidity of affected women results in a direct negative impact on their livelihood activities and an indirect effect on their income and loan repayment. HIV/AIDS has an impact on the morbidity of household members that leads to the loss of family labour, which is difficult to replace due to lack of resources. In addition, the morbidity results in a drop in the level of education as children are forced to stay at home due to illness. On the other hand, the negative effects of HIV and AIDS on female borrowers entail an indirect effect on MFIs through the incapability of affected borrowers to generate more money and inability to payback their loans. This result essentially has to do with the diversion of loans to meet medical expenditures and the process of the provision of loans that appears to be flawed. In line with this deficiency, the functioning and the effectiveness of MFIs to support and extend their outreach among HIV-affected individuals or households are threatened.

This study contributes to the existing findings about the socio-economic role of MFIs to support women generating their livelihood. It gives empirical findings in the case of rural areas in Côte d’Ivoire. Such study was not done since the implementation of microfinance institutions in the Abengourou region. The study reveals that the activities carried by women can be influenced by their need to have access to MFIs. This means that women will choose to undertake a particular activity to fit the preferences of microfinance institutions. Another important contribution of this study is to empirically link women’s empowerment to their access to MFI credit. The study reveals that women’s empowerment regarding the demand for and the use of credit make them more reliable and give them more opportunity to obtain MFI credit. With regard to HIV, this study highlights the diversity and the specificity of the way HIV-affected individuals are financially supported by credit institutions.

To conclude, the study provides some policy recommendations and interventions in order to make MFIs more effective in offering financial services to individuals and households in general and women in particular in rural areas. Specifically we recommend the provision of loans taking into account the needs of borrowers with respect to the special nature of their activities to be financed. MFIs need subsidies from the state or other potential donors to reinforce the capacity building of MFI credit officers through training and to support the transaction costs linked to the provision of small loans. Doing so will help them to better understand and serve the rural population living in an environment which seems to be complex. The study also recommends further study to be conducted in order to explore the long-run effects of MFI credit in rural Côte d’Ivoire.

Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Wageningen University
  • Antonides, Gerrit, Promotor
  • Niehof, Anke, Promotor
  • van Ophem, Johan, Co-promotor
Award date11 Jun 2010
Place of Publication[S.l.]
Print ISBNs9789085854289
Publication statusPublished - 2010


  • development studies
  • women
  • rural women
  • hiv infections
  • human immunodeficiency viruses
  • acquired immune deficiency syndrome
  • public health
  • socioeconomics
  • rural areas
  • empowerment
  • finance
  • credit
  • cooperative credit
  • cote d'ivoire
  • west africa
  • developing countries
  • microfinance


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