This assignment aims to shed some light into the turbidity of women’s access to microcredits and their corresponding empowerment. Despite there is a range of literature reviewing the success of specific microfinance programs in different communities, here an overall picture of microcredits’ capabilities to empower women will be developed.
From 1997 when the first Microfinance Summit took place until today, 18 summits brought together microfinance practitioners, educational institutions, donors, financial institutions and non-governmental organizations to facilitate knowledge experience sharing in microfinance. While pushing this topic forward, the Microfinance Summit Campaign works on four issues. Next to “Reaching the Poorest”, “Financial Self-Sustainability” and “A Positive, Measurable Impact” is “Empowering Women” among the top four goals. Thereby microfinance and empowering women just covers two essential objectives of the United Nations Development Goals set in 2015. But the potential to empower the poorest people of the world were already recognized in the 1970’s and 1980’s when the first microfinance intuition, the Garmeen Bank in Bangladesh, was established. In the following decades, microfinance instruments, especially microcredits, underwent a unique success story and became one of the most popular development tools. In 2013, microfinance institutions counted 211 million clients, among them 114 poorest borrowers.
Table of Contents
1. Introduction
2. The Advent of Microfinance Institutions
3. Conceptualization
4. Why are women better clients?
5. Why may effects of microcredits be higher when they are provided to women?
6. Four schools
7. Evidence on women’s empowerment
7.1. Economic empowerment
7.2. Socio-cultural empowerment
7.3. Interpersonal empowerment
7.4. Psychological Empowerment
7.5. Political and Legal Empowerment
8. Empowerment vs. financial sustainability
9. Contra arguments
10. Access= Empowerment? Bringing all together
Objectives & Core Topics
This paper examines the effectiveness of microcredits as a developmental instrument for empowering poor women in developing countries, analyzing both the potential benefits and the critical limitations of current microfinance programs.
- Theoretical conceptualization of microfinance and women's empowerment
- Rationale behind targeting women as primary microfinance clients
- Multidimensional evidence of empowerment: economic, socio-cultural, interpersonal, and political
- Critical analysis of the tension between financial sustainability and poverty alleviation
Excerpt from the Book
7.2. Socio-cultural empowerment
Empowerment in the social and cultural realities enables women to move freely within the community, to participate in social spheres (like programme meetings and other activities) and to educate herself and her children on a self-determined and equal basis. Women can use their additional financial resources to contribute to the community which gives them a higher legitimacy to make decisions, a greater attention to her voice and even more entitlements in return. A female client in Tanzania describes the change in respect that corresponds to their success in business “Before the credit support we never even went to the market. We were solely dependent on our husbands. Now group activities and the intensive training from the scheme have opened our eyes. We now know that we are better in business than men. We were the only women selling kerosene in the village. The whole community admired our determination. We have urged our fellow women to put their veils down. Some have started their own income generating activities.”2
But most studies that are pointing towards an increase in respect measure women’s perception. It might be the case that their answers differ from reality and are influenced by their psychological empowerment (Cheston & Kuhn, 2002). As an additional limiting factor, Shrestha (1998) found evidence for an increase of mobility of Nepalese Women, but only with regard to their business activities. Therefore it might be possible that other empowerment dimensions are restricted to activities directly related to the programme, too.
Summary of Chapters
1. Introduction: Presents the development of the microfinance sector and outlines the central research question regarding the effectiveness of microcredits in empowering women.
2. The Advent of Microfinance Institutions: Explains the origins of microfinance and the group-lending model as a solution to the lack of collateral for poor entrepreneurs.
3. Conceptualization: Provides definitions for microfinance and defines empowerment through dimensions of process and agency.
4. Why are women better clients?: Analyzes why women are the preferred target group, citing high repayment rates, risk-aversion, and low mobility.
5. Why may effects of microcredits be higher when they are provided to women?: Discusses the leverage effect where investing in women improves the economic and social situation of the entire family.
6. Four schools: Categorizes the general academic and practical views on the relationship between microfinance and women’s empowerment.
7. Evidence on women’s empowerment: Reviews empirical evidence across five specific dimensions: economic, socio-cultural, interpersonal, psychological, and political/legal.
8. Empowerment vs. financial sustainability: Contrasts the poverty alleviation paradigm with the financial sustainability paradigm in microfinance.
9. Contra arguments: Critically examines potential negative outcomes, such as male control over loans and the exclusion of the poorest people.
10. Access= Empowerment? Bringing all together: Concludes that while microfinance has potential, it requires holistic, context-specific approaches to be truly effective.
Keywords
Microfinance, Microcredits, Women's Empowerment, Developing Countries, Financial Sustainability, Poverty Alleviation, Gender Equality, Economic Development, Group Lending, Agency, Empowerment Dimensions, Social Change, Microfinance Institutions, Impact Assessment, Gender Roles.
Frequently Asked Questions
What is the central focus of this assignment?
The assignment investigates whether microcredits serve as an effective developmental tool to empower women in developing countries by analyzing various empirical dimensions of empowerment.
What are the primary themes discussed in the paper?
The paper covers the origins of microfinance, the specific reasons why women are chosen as primary clients, the multidimensional nature of empowerment, and the conflict between financial sustainability and poverty alleviation.
What is the core research question?
The research asks how microcredits can be assessed in terms of their effectiveness as an instrument to empower poor women in developing nations.
Which methodology is applied?
The paper employs a comprehensive literature review and comparative analysis of existing studies and theoretical frameworks to assess the impact of microcredit programs.
What is the main argument regarding financial sustainability?
The paper highlights the tension between the poverty alleviation approach, which focuses on the poorest, and the financial sustainability approach, which prioritizes the long-term viability of the institutions themselves.
What characterizes the identified "four schools" of thought?
They range from those who believe in a strong correlation between microfinance and empowerment, to those who blame poor program design, those who see microfinance as only one part of a broader development strategy, and opponents who view it as a waste of resources.
What is the "backlash effect" mentioned in the text?
This refers to the potential rise in domestic violence when women gain financial independence, as their husbands may feel threatened by the shift in traditional power dynamics within the household.
Do microcredits successfully reach the poorest individuals?
The paper argues that there is evidence suggesting that the poorest of the poor are often systematically excluded, as institutions increasingly prefer "slightly" poor clients who are more likely to repay loans.
- Citar trabajo
- Anna-Lena Prüser (Autor), 2017, Microcredits. An Effective Tool to Empower Women in Developing Countries?, Múnich, GRIN Verlag, https://www.grin.com/document/445277
