In 2005, I traveled to Hambantota, Sri Lanka, where I met Shareena at her little roadside food stand, selling homemade snacks. A year after the 2004 tsunami, relief had poured in. However, signs of devastation were still everywhere: broken-down houses, boats beached on roads a mile from the shoreline, and tattered relief tents still being used as shelter.
Shareena had received a microcredit loan from a local women's organization, which was administering a U.S. aid-supported program to help women pick themselves back up. With her $50 loan, Shareena was able to rebuild her business: She bought a new stove that she made snacks on to sell near her home, supporting her son and disabled husband.
This, of course, is the kind of women's microcredit success story the world loves to hear. Women get small loans, work hard, and more than 95% of the time, they repay their loans. In fact, Women Thrive Worldwide (of which I am Co-founder and President), advocated with members of Congress to set up the post-tsunami, women-focused small-grants fund that enabled Shareena to get her loan.
However, while microcredit has earned its rightful place as a player in the global economy and as a tool to reduce poverty, I've also seen firsthand its limitations. Shareena and millions of women like her have to be more focused on repaying their debt than on investing in growing their business.
Microcredit produces micro-income, and, because of the unique barriers that women face, there's often no place beyond “micro” for women to go. For example, Shareena could never access the $5,000 loan she would need to expand her business because she doesn’t own land or any other collateral to obtain a loan.
There are more than one billion people worldwide living on a dollar a day or less, the majority of whom are women. We are not going to reach all of them with individual $100 loans. There is not enough microcredit, and microcredit is not enough.
Large-scale, sustainable change must address fundamental barriers that affect women. Because land is the most important (and often most inaccessible) asset for the world’s poor, system-changing solutions must include land and legal reform. Further, providing secure land rights to women gives women and their communities a foundation for economic growth. Investing in women’s land rights is not only the right thing to do, but also the smart thing to do.