Microfinance has an effect at the individual level, but that it is not a very empowering
Conflicts over credit: Re-evaluating the empowerment potential of loans to women in rural Bangladesh
Professor
Nalia Kabeer
(She/Her)
Professor
London School of Economics (LSE)
Naila Kabeer is the Professor of Gender and Development at the Department of Gender Studies and International Development of London School of Economics; her research focuses on gender, poverty, social exclusion, labour markets and livelihoods.
English
Overview
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.
Key Findings
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.
How to apply research
Design your evaluation methodologies in ways that take account of other people's perspectives. Don't rely on a single input to change peoples' lives.
Make sure you're not excluding men. Lending money to only women will create tensions between genders, making it difficult for women to really benefit from micro-credit lending systems.
In India, Self-Help Group Model: savings led rather than credit led. This allows for people to be trained in livelihood, new skills, learning about their own rights, access to banks, knowledge that gives people a sense of self-confidence and empowerment to tackle constraints.
Let your research make a social impact
About this research
This research was independently conducted and did not receive funding from outside of the university.
Recommended for
UN Sustainable Development Goals
This research contributes to the following SDGs
About this research
This research was independently conducted and did not receive funding from outside of the university.
Recommended for
What findings 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.
Methodology
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.
Glossary
Empowerment
The extent to which a new intervention allowed women to redefine themselves within their households, as contributing members rather than dependents
Class solidarity
Women often stood in solidarity with their husbands who were also, e.g. suffering at the hands of their landlords, and allowed husbands to use loans as a way of releasing their husbands from exploitative relationshiips. There is a shared oppression, e.g. of poverty, within households rather than an antagonistic one that gender inequalities often can presume.
Emic evaluations
Evaluations from the perspectives of those who are being evaluated rather than the external observer, a worldview that values a co-constructed version of reality rather than one that is imposed on another.
The full paper is not available open access
Kabeer, N. (2001). Conflicts Over Credit: Re-Evaluating the Empowerment Potential of Loans to Women in Rural Bangladesh. World Development, 29 (1), 63-84.
