Financial Inclusion and Control over Income 

Moderator/organisers:
Meredith Soule, USAID

Nicole Lefore, Texas A & M University, USA

Innovating asset finance inclusion: A gender-sensitive credit assessment in irrigated agricultural value chains
The research to be presented aims to improve asset-based, agriculture financing to be inclusive and provide women with equitable opportunities for agri-preneurship. The objectives are to identify gender biases in market based finance tools, and to co-develop gender-responsive tools with private sector solar irrigation companies. This study uses qualitative, action-research methods for a case analysis from the solar irrigation private sector in frontier markets in Sub-Saharan Africa. Women face higher socio-cultural barriers and demand and supply credit constraints that prevent them from investing in productive irrigation assets and reaching entrepreneurial aspirations, when compared to men. Solar irrigation pump companies are attempting to fill a general credit gap through asset-based financing, often viewed as innovative. However, companies’ credit risk assessment tools to predict the likelihood of repayment for asset-based loans are not designed to be gender sensitive; companies do not even target women farmers as potential clients. Finance initiatives, while well-intentioned, developed credit scorecards to analyze quantifiable commercial aspects of finance. Scorecard criteria exclude factors known to influence women’s ability to achieve investment returns and repay credit, such as off-farm income, livelihood diversification, group membership and social networks, and financial management. Asset-based finance is considered a high potential solution to credit constraints that builds on the strengths of the private sector for development, but without improvement, could inadvertently deepen women’s lack of access to productive assets. This research has implications for the inclusiveness of irrigation equipment supply chains and women’s equitable participation in irrigated value chains.

Berber Kramer, International Food Policy Research Institute (IFPRI)

Lending her name, but not having a say? Gender norms and credit for agriculture in Odisha 
Smallholder farmers often lack access to credit from formal financial institutions. Expanding access to credit for marginalized (often women) farmers through credit scoring based on remote sensing could help reduce the costs associated with screening and monitoring agricultural loans, expanding access to credit especially for women farmers who typically lack land records; but it could also disempower women, given restrictive gender norms. Using surveys with 1,228 men and women from two rural districts in the state of Odisha, we find that there are strong gender norms around women’s role in agriculture. A minority of women have a final say in the decision to take out an agricultural loan, even though this loan is put in their name. A randomized trial evaluating the effects of video-based gender sensitization, provided as part of a microfinance institute’s product trainings, finds that such gender messaging did not help shift these norms. At the same time, survey evidence suggests that expanding access to agricultural credit through digital technology can potentially increase women’s demand for such loans: although women prefer borrowing smaller amounts than men to invest in the main agricultural season, preferred loan size increases more among women than among men when informing prospective clients that loans will be scored using the technology. We conclude that shifting norms directly through training may be difficult, but that digital technology could help increase the number of women with agricultural loans, increase women’s visibility in agriculture, and thereby shift gender norms.

Grace Nanyonjo, National Agricultural Research Organization, Uganda

Bean Seed Credit Model: A double Edged Sword for Maximizing Benefits for Women.
Availability and access to affordable quality seeds of improved bean varieties threaten women's ability to increase farm productivity, income and improve nutrition and food security. With the recent commercialization of beans, women's access, use, and decision-making processes on seed have reduced due to social structures that promote men's access to agricultural inputs as compared to women. Thus, to ensure equal access to seed by men and women, a seed credit model was introduced by NARO in collaboration with CEDO among bean farmers in central Uganda in 2015. However, since its introduction, little is known whether and how the model has benefited women farmers. Quantitative and qualitative data were collected from 210 farmers in 2021. Results- 67% of women & 33% of men farmers perceived the model as a "blessing" that addressed seed availability and quality challenges. Women & men could access certified seed on credit and share through informal networks to reach last-mile farmers. The model was complemented by training on agronomic and gender, contributing to increased productivity, business skills resulting in economic empowerment. Participation in the model enhanced women's (81%) agency over the beans' sale compared to men's (71%). Nonetheless, the participation of married women was restrained by gender-based constraints- demotivation from the burden of repaying husband's seed loans - increased domestic violence perpetrated by the stereotypes that women cannot be as successful as men. Therefore, if the gender-based barriers to women's participation and decision-making power are addressed, the seed credit model will maximize benefits for married and unmarried women.

Vedavati Patwardhan, University of Washington, USA

Weather Shocks, Household Income, and Women’s Decision-making: Evidence from Malawi 
Covariate shocks such as droughts and floods negatively impact household welfare in LMICs, especially in sub Saharan Africa, where there is high dependence on rainfed agriculture. Several studies examine the impact of covariate shocks on household outcomes, including food security, consumption, agricultural production and income, and migration. Although weather shocks affect women differently from men, their gender-differentiated effect is relatively less studied. I examine the effect of rainfall shocks on women’s financial decision-making in Malawi, using three rounds of the nationally representative Malawi Integrated Household Panel Survey (IHPS). Employing household-year fixed-effects identification, I test whether female control over household farm, nonfarm, and transfer income changes in response to rainfall shocks. I find that in households with both men and women, a rainfall shock (defined as one standard deviation above or below the historical 30-yr average) is associated with a 6% percentage point increase in women’s sole control over farm income (p<0.05) and no changes in total household farm income. I find that the effect on women’s sole control over farm income is stronger in matrilineal districts in the Central and Southern part of the country (9 pp. increase). I find that rainfall shocks are also associated with higher sole female farm management (p<0.05), which may act as a mechanism for higher female decision-making over farm income. The results suggest that climate shocks alter intra-household decision making, particularly related to the farm, and highlight the integral role of women in maintaining household resilience in agrarian economies.