This guest post is by Roxana Zadeh. After working at Glaceau VitaminWater and Stella McCartney, Roxana was an analyst with The Ackman-Ziff Real Estate Group. She studied at the American University of Paris and received her BA in Business Administration from Boston University in 2010.

Women around the world are taking pocket change and changing the world. It’s true–with microloans as small as $100, women in developing countries are reshaping the future for themselves, their families and communities. With the help of this microfinance, these women are key agents of social change, combating poverty and igniting empowerment.

What is Microfinance? Microfinance is an increasingly popular development approach in which small loans (microloans or microcredit) are provided to low-income or poor individuals in developing countries who would normally have no access to traditional financial lending in order to help them develop small businesses. Over time, lending institutions have emphasized the success of their programs with women as they have used microfinance to be the driving force of social change.

With microfinance as a tool, women across the globe have been able to jumpstart small local businesses and become microentrepeneurs. Money from microloans have provided them with enough capital to purchase tools and raw materials to expand their businesses and end the cycles of poverty they were forced to succumb to.

Five Ways Women are Using Microfinance to Make a Change:

1. Reducing Vulnerability to Poverty. There is proof that providing women access to finance can lead to empowerment as they become more affirmative at home and in social affairs. Through their newfound ability to hold active roles in their own lives and the lives of their families, women are becoming less vulnerable to poverty.

2. Promoting Collective Welfare. In its report, the Special Unit on Microfinance of the UNCDF explains, “Women’s success benefits more than one person. Several institutions confirmed the well-documented fact that women are more likely than men to spend their profits on household and family needs. Assisting women therefore generates a multiplier effect that enlarges the impact of the institutions’ activities.” Studies show women spending a majority of their income on education, diet, healthcare and clothing for the household whereas men ration a majority of their income for themselves.

3. Sustainable Results. Repayment records and cooperation from females have shown to be much superior to those of their male counterparts. Thereby, women have promoted the efficiency and sustainability of these programs.

4. Women’s Rights. Providing women with equal access to financial resources addresses the human rights issue of poverty reduction and the government’s responsibility of meeting commitments to women’s rights.

5. Empowerment. Microfinance is an effective entry point to the empowerment of women. Placing financial resources in the hands of women levels the playing field and promotes gender equality. Through these programs, women are now able to make strategic choices in their lives that require access to both material and social resources such as credit, money, education, and business knowledge. Their newfound ability to define goals, make choices and work towards them has empowered women across the globe. It is empowerment at an individual level that stimulates social change as women are seen gaining self-esteem, allowing them to increasing their status and active roles in their families and societies.

Sources: Micro Credit Summit; Oprah; Accion

For more on women helping women, read: Women Investing in Women: Golden Seeds