Over the last three decades, microfinance has featured in the Global South development policies as a potential contributor to inclusive financial services, poverty reduction and women empowerment. However, why women are the primary customers of microfinance banks and institutions remains an ongoing research subject. This article presents a study of women in Rivers State, Nigeria, using qualitative research approach. It was found that microfinance financial inclusion objectives in Nigeria are targeted at the active poor—those who own small business and rely on group lending methodology and collateral substitutes to minimize lending risks. Of the active poor, microfinance prioritizes women because of gender stereotypes that women have more “integrity,” show more commitment to loan contracts and are more susceptible to social pressure and sanctions. Targeting women is, therefore, a deliberate and strategic policy to advance the interest of microfinance backers. Therefore, this author contends that microfinance is not a scheme that provides whole-scale financial inclusion and poverty reduction. Instead, it seeks to leverage income-generating activities of the active poor to extract profits. Consequently, the article contributes towards illuminating the role of gender and local context in microfinance practices.
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