Group-based activities, mutual support and poverty relief: Women in microfinance in South Africa

Economic  characterisation places South Africa amongst upper-middle income countries, but in reality, it is one of the world’s most unequal societies. Women are disproportionately represented among the poor, requiring greater assistance to develop sustainable livelihoods than men. However, as nurturers and homemakers, they are dominant in family and community maintenance. Consequently, women are the preferred targets of financial institutions offering poverty relief, including those in the micro-finance industry. Control of the credit to which women have access is often influenced by traditional, mainly kinship, factors, particularly the fact that women are regarded as minors and possessions of their patriarchal families. Furthermore, the collectivist spirit associated with ‘community’ and the notion of ubuntu that are manifest in principles of interdependence and participation by all the members of a group in activities that affect it, also impact on the use of credit. These issues have significant implications for women’s involvement in microfinance.

Against this background, and drawing on qualitative research, this paper discusses how group-based activities and mutual support contribute to poverty relief among women who are members of the Small Enterprise Foundation (SEF), a SME (Small and Medium Enterprise) in South Africa. SEF’s operations in a province characterised by one of the highest unemployment rates in South Africa are primarily based on the voluntary formation of small groups of women who provide mutual support and morally binding assurances to each other, based on social and cultural factors that produce close relationships between them.  Negative implications of women’s access to credit are significant, but in the impoverished rural environment where the women live and work, access to microfinance to establish micro-enterprises demonstrates the value of microfinance where no other forms of sustainable livelihood are available.