Today, empowerment is the most commonly used concept in development dialogue. It is also the most indefinite and extensively applied concept. It has become both a tool for analysis and an umbrella concept to justify nearly every conceivable development activity.
The concept of women’s empowerment is a distinctive result of various key critiques and discussions generated by the women’s movement around the world, particularly by Third World feminists, and it is one of the most pressing challenges in developing countries.
Women’s empowerment has been defined as a process by which those who have been denied the ability to make strategic life choices acquire such ability and women’s empowerment was conceptualized as a comprehensive and holistic strategy and it is identified three dimensions of women’s empowerment – economic, social and political. According to that each component of these dimensions reinforces the other. The economic aspects include increasing women’s access to, and command over tangible and intangible resources, such as wealth, property, employment, knowledge and information. Social aspects include changing discriminatory ideology and culture, which determine the environment for women’s existence. Finally, the political process must strengthen the presence and influence of women in the power structure.
Why Target Women
According to the World Bank, putting resources in the hands of poor women while promoting gender equality in the household and in society has led in significant development. Increasing women’s possibilities in public works, agriculture, banking, and other areas boosts economic growth and helps to alleviate the effects of current and future financial crises. Women’s access to money serves largely to secure the welfare of the family and does little to alleviate issues of women’s oppression and subordination.
High payback rates are interpreted to imply that women are making good use of loans and exercising credit control. It is often accepted that there is a clear and direct relationship between loan availability and an improvement in women’s status within their households and communities. In short, credit is thought to not only reduce poverty, but also to lead to women’s “empowerment.”
Women are an integral part of the society, their participation in decision making through their participation in economic activities is very low. Microfinance plays a significant role in improving women decision making through participation in economic activities.
Participation of Women in the South Asian Microfinance Industry
In the early 70’s, women’s access to formal financial institutions was extremely difficult in several South Asian countries. However, a breakthrough in women’s financing was made when Professor Yunus began a trial initiative in the 1970s to provide financial aid to poor women in Jobra, Bangladesh, through collateral-free microloans. Following the project’s initial success in Bangladesh, the microcredit (later known as microfinance) concept was not only expanded locally, but also swiftly reproduced around the world in a short period of time. In Bangladesh alone, more than four million women now receive microfinance services.
Development agencies are increasingly lauding microfinance programs for women as an effective anti-poverty intervention with a favorable impact on economic growth and a variety of social development indices.
Microfinance for Women Empowerment in Sri Lanka
Women make up more than 53% of the population in Sri Lanka. However, their active participation in the economy is minimal. Female labor force participation in the economy is important for any country. In Sri Lanka out of the total economically inactive population of the country, 69% are females, and out of the total economically active population (i.e. labor force) females account for 34% according to the Department of Census and Statistics (DCS).
The 2004 tsunami and Sri Lanka’s 30-year civil conflict have left many women alone or widowed in the North and East Provinces. Women currently head a greater proportion of families in Sri Lanka. As a result, women have been obliged to take on new obligations in caring for their families, yet they are frequently alienated by their extended families and the larger community for taking on these responsibilities. They continue to face severe obstacles in terms of access to education and health care, as well as economic development. Microfinance is described as a powerful tool for improving post-conflict economic growth and supporting post-conflict rehabilitation aid.
Empowerment of Women through Self-Help Groups (SHGs) in Sri Lanka discovered that the impact of microfinance on women is significant in skill development, courage, confidence building, and women empowerment, but there is no possibility of sustainable rural development, particularly poverty reduction, job creation, and asset creation in rural areas.
In addition, using microfinance facilities creates additional job prospects and a wider range of economic activities, as well as improving household education, family welfare, and women’s empowerment. And some of the studies revealed that microfinance for education and skill development for self-employment has a major impact on rural women and is the most effective strategy for empowering impoverished women in rural areas.
According to a study which attempts to identify the factors influencing on women empowerment of rural area in Sri Lanka through micro finance services summarized the variables into three factors namely decision making, freedom to mobility and family support and which are positively associated with empowerment and concluded that 24.8% of variation in women economic empowerment has been explained by micro finance facilities. These findings have revealed that the micro finance facilities have weak positive impacts on empowerment in rural areas in Sri Lanka.
Facilitating women’s entrepreneurial activity would result in higher living standards for them and their families. This, in turn, would pave the road for the country’s economic prosperity. However, many researchers, say that considerable impediments still persist for women who are starting new businesses or expanding current ones.
A study that conducted in Kandy district Sri Lanka has found that the household income level before taking microcredit, age of the household head and markets availability for products was identified as significant variables affecting women’s empowerment and reducing vulnerability. However, it was indicated that only availability of markets for products was the significant variable affecting women’s empowerment. Women respondents who have the market facilities are empowered by 60% relative to those who do not have market facilities.
Other variables that contributed significantly and positively to empowerment included the age of the household head with higher age leading to greater empowerment and the household’s income level prior to taking a micro loan, which no doubt proxies enough capital for the new or existing enterprise.
Distance to the nearest MFI, credit plus services, number of family members in the household, number of years the credit has been taken, rate of interest on credit, credit amount, education level of the household head, and ownership of a micro enterprise were found to have a negative impact on empowerment.
Microfinance for Women Empowerment in Afghanistan
Afghanistan is one of the world’s least developed economies, relying heavily on foreign help for much of its financial support. Poor Afghans have a high demand for cash. Previously, women were completely excluded from economic activity, and the banking sector was almost non-existent. Today, Members of local organizations are now given loans averaging US$ 130, with a 17.5% “service charge.”
Recognizing the need for poverty alleviation and empowerment in Afghanistan, BRAC chose to transfer development knowledge from Bangladesh to Afghanistan. It has collaborated closely with the Afghan government and has grown to become one of the major non-governmental organizations in the country.
Microfinance (MF) services are new to Afghanistan, but they are fast growing across the country, through Micro-Finance Investment Support Facility (MISFA) and 13 Micro-Finance Institutions (MFIs). In August 2006, the number of active clients in 20 provinces and 150 districts reached 223,000. Women receive 75% of microfinance savings and credit services.
The potential for women’s empowerment is higher when savings deposits and microcredit are combined in one product targeting women in savings-and-credit groups (SCGs) than when the service is credit only. So far, there has been little economic collaboration among women’s groups, but they do serve as a venue for the slow development of empowerment and social capital.
The misery of Afghan women during the Taliban regime drew international attention, and the following gradual establishment of democratic institutions under successive Karzai governments heralded a new age of new prospects and hope for the female half of the country.
Although the majority of loans are offered to women, the limits that women face in terms of mobility in most places of Afghanistan ensure that men remain actively involved when it comes to purchasing or selling things in the market. This has raised questions about whether women are simply fronts or conduits for resources that ultimately benefit men. However, it is also stated that the loans are used to fund a family business, benefiting all members. The woman’s status as a loan recipient, together with membership and training in the women’s group, may lead to her empowerment.
Access to microfinance had been a more unambiguously beneficial experience for women. It not only aided household goals and living standards, but it also had a variety of personal consequences. A number of them had been able to use the increased income flows into the household to achieve goals that were important to them, such as securing the tenure of their homes, educating their children, hosting guests, participating in social networks, and being able to pay for marriage-related expenses that were important to their reputation and social standing. One of the most essential of these goals was children’s education, and having some of their own money allowed mothers to send their daughters to school, which their fathers did not always prioritize.
Microfinance for Women Empowerment in India
In India, states with a higher level of microfinance outreach also have a higher level of women’s empowerment. As a result, it is expected that an all-inclusive microfinance system would boost India’s financial inclusion process and thereby increase women’s empowerment.
Taking lessons from Bangladesh, India’s microfinance program has grown significantly. In fact, India has made significant progress in expanding the reach of microfinance institutions to assist the socioeconomic growth of underprivileged women. According to current statistics given by the National Bank for Agriculture and Rural Development (NABARD), around 80% of self-help groups (SHGs) were created only by women, and their share of loan disbursement is approximately 85.5%.
The establishment of rural branches in India greatly reduced rural poverty between 1961 and 2000. The expansion of economic options through banking inclusion has an indirect impact on the attainment of education and health chances, which in turn leads to women’s social, financial, and economic empowerment.
Interestingly, India has made significant progress in expanding the reach of microfinance banks in just six years. Outreach and overall borrower share increased from 18.64% in 2005 to 53.38% in 2011. India is now overtaking Bangladesh in terms of outreaching its microfinance program and so providing access to microcredit to member households.
The program of SBLP is specifically developed to meet the demands of the female population. It was discovered that around 80% of the SHGs linked were exclusively women SHGs, with a percentage of loan disbursement of approximately 85.73%. However, all accessible secondary data solely shows the supply side of microfinance outreach.
Individual indicator research indicates that southern states like as Andhra Pradesh, Karnataka, Kerala, Puducherry, and Tamil Nadu score relatively higher in terms of women’s economic and financial empowerment. Expanding women’s access to literacy is another crucial aspect of women’s empowerment in the social realm. Most union territories (including Goa, Puducherry, and Andaman and Nicobar) score considerably higher in terms of social empowerment. Overall, the ranking of women empowerment index establishes the dominance of southern Indian states.
In this aspect, Goa ranked first in the women’s empowerment rating, followed by Puducherry and Kerala. Andhra Pradesh, Tamil Nadu, Karnataka, New Delhi, Andaman and Nicobar, Himachal Pradesh, Odisha, Sikkim, Maharashtra, and Tripura are among the ten states with a medium level of women empowerment, with a women empowerment index score ranging from 1.73 to 1.07. All of the remaining 18 states have low levels of women’s empowerment, with index values ranging from 0.99 to 0.48.
To give a better explanation of the association between the outreach of microfinance and women empowerment, Indian states can be classified into four categories: vicious cycle (low microfinance outreach—low women empowerment), lopsided microfinance outreach (high microfinance outreach— low women empowerment), lopsided women empowerment (high women empowerment—low microfinance outreach), and virtuous cycle (high microfinance outreach—high women empowerment).
Microfinance plays a larger role in empowering women in states with low levels of financial inclusion (like Tripura and Odisha). However, in states with a well-developed financial network (like as New Delhi and other union territories), the link between microfinance outreach and women’s empowerment is shown to be poor. As a result, the majority of states in the vicious cycle should increase their efforts to expand microfinance outreach, which is projected to serve as a vehicle for empowering women. In other words, it is preferable to create conditions for expanding the reach of microfinance programs, particularly in low-income states, in order to enhance women’s empowerment.
Microfinance for Women Empowerment in Pakistan
Women’s empowerment is critical in developing nations such as Pakistan, where 22.3% of the population lives in poverty, almost 40% of women are poor, and nearly 30% are both economically and socially impoverished.
According to the United Nations Human Development Report 2011, Pakistan placed 115th out of 187 countries on the HDI in gender equality. As a result, these statistics provide a foundation for advocating for a greater emphasis on gender equality.
Microfinance for Women Empowerment in Rural Areas of Bangladesh
As a developing country, Gender discrimination is a barrier to growth in Bangladesh. The neglect of women in Bangladesh has become obvious following the report of the gender gap Index of the World Economic Forum. According to the report, women make up 55% of the workforce in Bangladesh, while men make up 88%.
Microcredit is also thought to alleviate poverty, which will eventually lead to women’s empowerment, and the programs for women are increasingly seen by development agencies to have a positive impact on social development. While the majority of the world’s finance for small businesses continues to go to men, microfinance programs have targeted a considerable number of women who have been excluded from formal credit institutions.
In Bangladesh, men are given preference in making decisions, particularly crucial household decisions. This type of male control is more prevalent in Bangladesh’s rural areas, and as a result, women in these areas lag behind in terms of education, work, money, and social exposure to life outside of their families. After focusing on these concerns, many development organizations throughout the world are including gender issues (such as gender inequality, gender disparity, gender discrimination, women’s involvement in the labor force, women’s empowerment, and so on) in their agendas.
Women Empowerment through Microfinance
Measuring empowerment is a tough process, and the meaning, intentions, and effects of measuring varied based on a certain area’s culture, social, economic, and political context.
Women’s empowerment through microcredit programs is a questionable issue in developing nations such as Bangladesh and neighboring India. Women’s financial conditions as well as cultural and political situations in these regions impede women’s empowerment through microcredit programs, and there may be no impact of microcredit programs on women’s income or decision making process in India.
Bangladesh Rural Advancement Committee (BRAC) and Grameen Bank are investigating the effects of microcredit programs on women’s development and empowerment in Bangladesh. BRAC’s female members exhibited a negative link between access to assets and microcredit membership in this investigating, and some reported having to repay the loan by selling their own assets. In a patriarchal country like Bangladesh, women’s primary responsibility is to care for their children and her husband. Participating in microcredit programs may raise a woman’s level of work and responsibility. A woman must then do additional effort to repay the loan in addition to her primary responsibility of caring for her family.
A study conducted clearly articulated the influence of microcredit programs on women empowerment or wellness in Bangladesh, almost 95% of female members of microcredit programs cannot afford to use medical facilities owing to a lack of funds, and 71% of members stated that there is no association between microcredit and an improved living standard.
When a study revealed that 73% of female microcredit members in Bangladesh are still below the poverty line, and the first microcredit client of Grameen Bank in Bangladesh, a woman named Sufia Begum, died in hunger and without basic needs, it is clear that microcredit programs are failing to empower women.
Empowerment is dependent on several factors, including (1) a member’s background (family background, educational background, self-awareness level, health consciousness, and so on), (2) the nature of the loan (residing place of the members, goal of the lending organization, such as whether the organization works for women empowerment, improving its members’ consumption level, or bringing about family wellbeing, amount of the loans given, and so on) and (3) utilization of the loans (controlling of the loans, spending authority of the loans and accountability and responsibility of repayment of the loans). Which means the effects of microcredit programs on women’s empowerment, consumption levels, and household well-being may vary depending on the organization’s location, the members’ overall circumstances, and the program’s design and goal.
And therefore, microcredit programs, rather than having long-term benefits or effects, solve the day-to-day demands of its members or satisfy minor requirements such as purchasing household products, purchasing modest pieces of furniture for the family, and so on.
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