Does access to credit help improve women’s status in the household? Who really benefits from micro-loans – women or men? Do existing programmes rely too much on the hype surrounding micro-credit?

Micro-credit programmes are popular in the development world at present. Not only are they accredited with poverty-alleviation; it is also believed that they lead to the empowerment of women. Access to credit, it is assumed, leads to an automatic improvement in women’s status in the household. Given the huge number of loans provided to women, and the high rates of repayment, it is easy to see why they are so popular.

This research looks at whether micro-credit programmes live up to expectations. Staff of micro-credit NGOs in India and Bangladesh see credit as a major strategy for empowering women. Yet in many cases, women do not control their loans or the assets that come from them. To genuinely further women’s empowerment, credit programmes need to focus much more on strategies that can transform gender relations.

Research suggests that the link between credit and empowerment is not automatic. In this paper, the authors review literature on the gender impact of micro-credit and report on their interviews with micro-credit NGO staff and women credit-takers in India and Bangladesh.

Significant results reported in the paper include:

• NGO staff tend to overestimate the amount of control women have over their loans. Interviews suggest that male family members have a higher degree of control over loans than staff estimate.
• Few mechanisms are in place to monitor who controls loans, or their impact on wider social aspects such as violence against women, dowry, divorce and polygamy.
• Women are more likely to control loans if their husbands are absent, or if the money is used for a ‘traditional’ female activity.
• There is some evidence that access to credit for women leads to more schooling for girls. However, none of the NGOs visited had any information on the impact of their activities on girls’ education or other aspects of girls’ lives.
• Credit may not increase women’s mobility as much as expected. Discussions with women’s groups suggest that factors such as extreme poverty and landlessness may be more significant.

The research suggests that certain programme factors will increase the likelihood of a woman controlling her loan and the income generated from it. These are:

• a project-wide understanding of gender issues and women’s rights
• NGO fieldworkers who are committed to equality for women
• close monitoring by the NGO of different aspects of control of credit
• clear messages from the NGO regarding the importance of women having some control of decision-making, loan use and ownership of any income and assets generated
• technical training that supports women in managing and using the loan themselves, and focusing on increasing the productivity of their labour
• other strategies, such as linking credit provision in skills training, training in marketing, or improving access to markets, may also improve women’s control over loan assets.

Source(s):
‘Pathways to empowerment? Reflections on microfinance and transformation in gender relations in South Asia’ by J. Hunt and N. Kasynathan in Gender, Development and Money, Focus on Gender Series, Oxfam, C. Sweetman (ed), 2001 Full document.

Funded by: Winston Churchill Memorial Trust (Australia) and Oxfam Community Aid Abroad

id21 Research Highlight: 13 January 2003

Further Information:
Nalini Kasynathan
Community Aid Abroad/Oxfam Australia
156 George Street
Fitzroy
Victoria, 3063
Australia

Tel: +61 3 9289 9444
Fax: +61 3 9419 5318
Contact the contributor: Nalinik@caa.org.au

Oxfam Community Aid Abroad

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