Month: February 2024

February 16, 2024 /3BL/ – According to a new UN report, nearly 300 million people around the world will need humanitarian assistance in 2024 – that’s one in every 23 people. Millions of these individuals were driven to the brink over these last 12 months in places like Afghanistan, Gaza, Sudan, and Morocco where lives have been upended by war, earthquakes, and climate disasters. While CARE and their local partners are delivering lifesaving emergency assistance to the most vulnerable – especially women and girls – they are also seeking out new ways to build longer-term stability for communities in the midst of these dire contexts. One way CARE is doing this is by adapting its flagship Village Savings & Loan Association (VSLA) program to emergency situations, the success of which is shown in a recent report from CARE, Building Capital in Crisis.

“The humanitarian community traditionally focuses on meeting urgent needs – including medicine, food, water, and shelter,” explained Vidhya Sriram, Global Director of CARE’s Village Savings & Loan Associations. “While this assistance saves lives, people in emergencies also need interventions which address their longer-term vulnerabilities that are tailored to their current needs. That’s what our VSLA in Emergencies approach aims to do.”

VSLAs are self-managed groups, primarily made up of poor, rural women. Groups meet regularly to save money, access small loans, and obtain emergency insurance. Beyond saving and lending, VSLAs are improving gender equity, increasing the economic prosperity of entire communities, improving access to education, heightening women’s decision-making power and much more. VSLA groups are resilient and resourceful, often leading local response to emerging emergencies.

The premise of the VSLA in Emergencies model is to combine emergency cash assistance with CARE’s VSLA programming. This model aims to support people living in crisis to address and recover from shocks, as well as support them to build more resilient livelihoods. CARE knows that in a crisis context, combining cash assistance with VSLA membership contributes to an average additional 30-35% increase in food security, 70-85% increase in incomes, and a twelve-fold increase in savings.

VSLA in Emergencies was first piloted in Yemen in 2021, years into the suffering this war has inflicted on Yemenis. CARE specifically chose this complex and ongoing emergency to test out this approach, with promising results. Afollow up with the VSLA in Emergencies groups a year after supporting their formation shows that most are now running independently and effectively, showing significant sustainability and resilience, as shown in the report Building Capital in Crisis. The groups are still saving at almost the same level as before, despite the economic turmoil and no additional cash assistance. There have also been some clear improvements in food consumption scores.

Rabyah from near Taiz in Yemen is widowed with ten children, she joined a VSLA in Emergencies group from which she took out a loan to buy a sewing machine to start her own business. She explained: “After I lost my husband, I became responsible for providing essentials for my family. The VSLA group supported us to achieve our dreams. Before we had no idea about saving, marketing, or sewing skills. Thanks to the training, we gained these skills. I hope to continue selling clothes to meet the needs of my family. Finally, our life got better.”

The VSLA in Emergencies model has also seen success in Northwest Syria where the amount of VSLA members with acceptable levels of food security, measured by the Food Consumption Score, rose from 30% to 96%.

“For many of us, our savings are a cushion that we tap into when our car breaks down or as we leave a bad marriage. But for the millions of people globally in CARE’s VSLAs, being in a savings group means you can actively prepare for the next crisis, whether that’s manmade or a natural disaster,” said CARE’s Vidhya Sriram. “You build a network of supporters with whom you’ll weather that crisis. In Yemen, Syria, and Jordan, we’ve seen VSLA members saving a small portion of their cash assistance allowing them to dream again about a life they once had and could finally look forward to rebuilding. We are calling on peers and funders in the humanitarian sector to join forces with us to adopt this impactful model.”

About CARE

Founded in 1945 with the creation of the CARE Package®, CARE is a leading humanitarian organization fighting global poverty. CARE places special focus on working alongside women and girls. Equipped with the proper resources, women and girls have the power to lift whole families and entire communities out of poverty. This year, CARE and partners worked in 111 countries implementing 1,600 poverty-fighting development and humanitarian aid projects and initiatives that reached 174,000,000 people. To learn more, visit www.care.org

For media inquiries, please contact: Ashley.Shackleford@care.org

“Starting a business is especially difficult for women in a male-dominated society like Pakistan,” Fariha Irfan, a small-business owner in Rawalpindi told me when I met her earlier this year. “At every step we need men to assist us, whether that’s our husbands or our brothers.”

“At every step we need men to assist us, whether that’s our husbands or our brothers,” she said.

Because Fariha didn’t qualify for a bank loan, she sought the capital for her Punjab pottery and handicrafts business from her husband, but when COVID-19 put an end to face-to-face sales, she felt like she had nowhere else to turn.

Elizabeth Vargas Vilca and her staff at her shoe manufacturing business. Photo: CARE Peru

Data from the Gates Foundation suggests that investing in the economic power of women like Fariha could boost the global economy by as much as $10 trillion by 2030 – twice the GDP of Japan, the world’s third largest economy.

Results from the Ignite program, a partnership between CARE and the Mastercard Center for Inclusive Growth supporting women-led small businesses, have provided us with countless examples over the years of how this can work.

But despite growing evidence of a massive, missed opportunity, women entrepreneurs are prevented from fulfilling their potential due to numerous barriers, including harmful social norms, limited access to capital, networks and training, and discriminatory laws in 176 countries.

For Fariha, her story didn’t end with her husband’s money. Ignite helped Fariha gain the skills and resources she needed to build an online store and extend her sales globally.

With lots of hard work and a little assistance, Fariha grew her business into a thriving enterprise that helps support her family of six as well as several local artisans who embroider and make pottery.

A woman working in Ban Thi Tham’s tea cooperative, Vietnam. Photo: Bui Hoang Quan / CARE Vietnam

A win-win situation

Investing in women isn’t just the right thing to do, it is smart economics. Which is why CARE and the Mastercard Center for Inclusive Growth are renewing our partnership to launch Strive Women, a new four-year program that will continue to work in Pakistan, Peru and Vietnam; strengthening the financial health and resilience of more than 300,000 entrepreneurs and unlocking greater access to adapted financial products, critical support services and markets.

The success of Ignite clearly shows the appetite and justification for women to gain more financial power. From 2020 to 2023, Ignite directly assisted over 150,000 growth-oriented small businesses in the three countries, unlocking $154.9 million in loans and providing a return 29 times greater than the $5.26 million initial investment by the Mastercard Impact Fund.

Both partners used their best practices in developing gender equality programming while working with both local and global networks. More than 35 local partners (11 core service delivery partners) were involved in doing the ground-level work to develop effective solutions to hurdles faced by women entrepreneurs like Fariha in three disparate markets.

The repayment rates on loans to women-led businesses in the three countries were 95 to 100 percent, with zero defaulters on one loan product in Pakistan — so our partners benefitted, and so did the women of Ignite.

When the three-year program concluded earlier this year, eight out of ten entrepreneurs had increased their sales, nine out ten said the quality of their lives had improved, and a similar figure (89 percent) felt more confident about being able to run a business. The full Ignite Learnings report can be accessed here and the close-out video can be viewed below.

Our recipe for success

Ignite focused on three strategies to empower these entrepreneurs, and to get them the support and funding they needed:

Creating financial products and services through women-centered design processes that improved access and usage for women, while driving good business for financial service providers.

Investing in strategic and diverse partnerships to enable greater reach, deliver a wider range of services, and promote long-term sustainability of services for women entrepreneurs.

Employing strategic and targeted outreach campaigns to influence the small business ecosystem; drive awareness and uptake of adapted products; and address restrictive norms and behaviors that uniquely impact women.

Unlocking women’s economic power isn’t rocket science.

All it requires is that we commit to and intentionally invest in prioritizing and designing products and services that women want and need with the recognition that in doing so we’re capitalizing on an enormous triple-bottom-line opportunity.

For example, “Emprendiendo Mujer,” a loan product we co-designed with Financiera Confianza in Peru doesn’t require a woman’s credit history or consider her husband’s debt (unlike other products there), and even includes breast cancer screening.

It’s been so successful, it’s being copied by competitors.

Similarly, in Pakistan, where digital and financial literacy are low, we combined social media with mobile money wallets to enable women without bank accounts or credit cards to receive payments. And in Vietnam we developed networks that helped women entrepreneurs create critical connections with customers and suppliers.

Striving and innovating

The innovative partnership with the Center for Inclusive Growth and $9 million investment in Strive Women from the Mastercard Impact Fund will enable CARE to expand its role as a market convener for women-led small businesses in Pakistan, Peru, and Vietnam. We will deepen and grow our partnerships and build dynamic ecosystems with even more stakeholders to spark new ideas, design useful and affordable women-centered products, and provide insights into how to leverage and scale innovation to close the gender gap.

Strive Women also gives us an opportunity to ideate and create market-based solutions for two of the most pressing issues for women in our time: childcare and climate change. Women bear disproportionate responsibility for childcare, spending more than 2.4 hours per day on average, on unpaid care work compared to men. Strive Women will explore solutions to childcare to reduce women’s stress and time poverty.

Likewise, with women and girls experiencing the greatest impact of climate change, Strive Women will increase financing and assistance for green businesses and practices as we experiment with adaptations to the crisis and activate sustainable support for these businesses.

Hand-in-hand with women and like-minded partners, we are growing resilient, inclusive ecosystems and economies where women can unlock their full economic power, not only because it’s the right thing to do, but because failure to do so will mean we have lost a real multi-trillion-dollar opportunity.

If you are committed to the financial health and inclusion of women entrepreneurs, join us to build a more equitable ecosystem.

By Rathi Mani-Kandt, CARE Women’s Economic Justice

Find out more about CARE’s Strive Women Program supported by the Mastercard Center for Inclusive Growth.