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.
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.
Combined quantitative and qualitative methods, using surveys of men and women. In the surveys tested some of the findings that others have reported, e.g. Who controls the credit? How was the money from income used? Additionally, asked more open ended questions, e.g. What difference has it made in your life? Combined both qualitative and quantitative questions to address ongoing debates in the field and to offer own research findings.
One important warning is to remember this is a single study and you cannot generalise from any single study. This research’s findings are a valid evaluation for the specific organisation investigated, however findings must be located within a broader literature about microfinance.