Practice what you preach: Does the legal status of microfinance institutions matter in gender equality?

Abstract

Considering the importance of promoting gender equality, Microfinance Institutions (MFIs) have emerged to reduce the gender gap by supplying credit opportunities to women. However, the microfinance literature has largely focused on the role of women in the client base while devoting less attention to their representation in the organizational structure of MFIs. This study aims to fill this gap. Using ANOVA and random effects models, our purpose is to investigate which types of MFIs more intensively promote gender equality within their workforce, at any of the organizational ladders. We analyze data from 1222 MFIs across 102 developing countries from 2010 to 2018. Empirical evidence reveals that the presence of females in both the workforce and the client base is significantly lower in commercially motivated MFIs (e.g., banks and other for-profit institutions) compared to non-government organizations (NGOs), and —to a lesser extent— credit unions, cooperatives and rural banks. Our results suggest that the microfinance sector would benefit from a stronger emphasis on NGO-driven initiatives to promote female representation in terms of both employment opportunities and access to credit.