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Conflicts over credit: Re-evaluating the empowerment potential of loans to women in rural Bangladesh
- For development
- Summary created: 2022
This paper explores the reasons why recent evaluations of the empowerment potential of credit programs for rural women in Bangladesh have arrived at very conflicting conclusions.
Microfinance has become a widely used instrument/approach to addressing simultaneously the poverty of households and the exclusion of these households from opportunities to improve their lives. People also hope that targeting these services to women will empower them. The point of this research was to ask the questions: “Does it do that?” To what extent doesn’t it do that? How far does it go?” This article looks at the strength and the limits of microfinance.
Insights
Microfinance has an effect at the individual level, but that it is not a very empowering
It is important to be sensitive to how subordinate groups themselves define positive change in their lives, and also that we need to pay attention to the perspective we take when making evaluations about empowerment.
What it means
There are two main findings:
First, that microfinance has an effect at the individual level, but that it is not a very politicizing process. It doesn’t empower women to take collective action or engage in protest, rather, it improves the boundary of power within their household, and maybe their status within their community.
What this means is that providing people access with credit does not alter the structures that prevent them from responding to different kinds of opportunities. For instance, handing microfinance to women does not necessarily address the segmented nature of labor markets. One dimensional interventions can only take you so far, and multi-stranded approaches are needed.
Second, when doing this research, I did not know what I was going to find. I did not go in with preconceptions, and instead of asking questions like “Do you have great bargaining power?” or “Has violence stopped?”, I asked them “What difference has access to microfinance made in your lives?”. This way, I was able to capture much more open ended and less predictable sets of changes.
This means that it is important to be sensitive to how subordinate groups themselves define positive change in their lives, and also that we need to pay attention to the perspective we take when making evaluations about empowerment. If we make these evaluations with a prior understanding of them, we may not capture the different ways in which people’s lives change as a result.
Suggested next steps
Design your evaluation methodologies in ways that take account of other people's perspectives
Make sure you're not excluding men
In India, Self-Help Group Model
Acknowledgements
Thank you to iDE Global
These insights were made available thanks to the support of iDE Global, who are committed to the dissemination of knowledge for all.
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