Evidence that Microfinance Empowers Women – Freedom from Hunger Studies

For help with empowerment, I turn to my colleagues, Barbara MkNelly and Mona McCord, and their 2001 paper for Freedom from Hunger on the impact of Credit with Education on women’s empowerment. My last post (# 55) provides their summary of what empowerment has meant to researchers of the impacts of microfinance. This post excerpts their summary of results from the 1990s field research by Barbara and others, mostly in Ghana and Bolivia (this research design was described in post # 28) but also in Burkina Faso and Thailand.

Building on the work of Sid Schuler and Syed Hashemi, for the Ghana and Bolivia studies, Freedom from Hunger defined women’s empowerment in terms of 1) women’s self-confidence and vision of the future; 2) status and bargaining power within the household; and 3) status and networks in the community. Although these categories offer important guidance, qualitative interviews were conducted with staff and clients of the local providers (Lower Pra Rural Bank in Ghana and CRECER in Bolivia) to identify manifestations and indicators of empowerment appropriate to the local context and to the relationships being studied.

Despite the difficulty of quantifying the types of attitudinal and social changes that reflect “empowerment,” the Ghana and Bolivia studies did provide evidence to support the idea that Credit with Education was bringing about change at the community, individual and household levels. Here are some details of the evidence from the studies.

At the community level, women’s degree of civic involvement and the strength and variety of social networks they maintain beyond their families improved in all study areas. It appears that meeting and active involvement in non-kin groups has strengthened women’s relationships.

In Ghana, participant women were much more likely than non-participants in the program communities and residents of control communities (statistically significant differences) to report that in the last six months they had helped a friend with his/her work, given advice about health/nutrition and/or business and been a member of a non-kin group or association – and in the past month to have attended non-kin funerals and/or made cash contributions to non-kin funerals.

In Bolivia, like Ghana, participant women were much more likely to have helped a friend with his/her work, given advice about health/nutrition and/or business, and been a member of a non-kin group or association. But women’s empowerment in Bolivia also manifested quite differently – the Bolivian participants were much more likely to have been involved in community political life, spoken at the community’s General Assembly meeting, run for public office or been a member of the community’s sindicato, and traveled to La Paz (the nearby big city).

In Burkina Faso, participating women had contributed to the funding and implementation of village improvement projects. For instance, a great majority of participants stated that their group funds had been used to buy something for the village (a pump, a building, a clinic).

At the individual level, women’s self-confidence, self-perception and attitude improved significantly in Ghana. Questions regarding self-confidence were readily understood in the Twi language of Ghana, but not in the Aymara language of Bolivia, so there is no comparable evidence from Bolivia. This further demonstrates the difficulty in measuring empowerment effects.

Whether women feel more self-reliant and confident about their future is likely linked to whether or not they enjoy economic success. It also seems that education contributes to women’s self-confidence. Unfortunately, Freedom from Hunger’s study design did not permit teasing apart the relative contributions of education and financial services in affecting the effectiveness of women’s actions or the possible synergistic effects of the combined services on women’s empowerment.

At the level of the household, few significant differences were evident in the indicators selected to reflect women’s empowerment, particularly in the area of intra-household decision-making.

We were concerned about women taking on added responsibilities in both Ghana and Bolivia. It cannot be considered particularly empowering if, as women shoulder greater economic responsibility, their husbands withdraw support. A series of questions were included in both the Ghana and Bolivia studies to control for husbands withdrawing or decreasing their support for certain types of household expenditures. In Ghana, findings regarding husbands helping their wives showed greater positive results than in Bolivia.

The fact that fewer differences were found in women’s “empowerment” at the level of the household might be explained by several factors. It may be that these types of subtle shifts in social power are not readily captured by quantitative scales of relative “say” or bargaining power. Or, it may be husbands are resistant to these types of changes. The likelihood of microfinance programs precipitating changes at the intra-household level seems to relate to 1) the size of income women generate; 2) the extent to which they retain control over their loans; 3) the extent to which they can build up independent assets; and 4) the effect of male perception on their activities.

In individual and small-group interviews, women much more frequently described their husbands as being appreciative rather than threatened by their involvement in Credit with Education. Little evidence surfaced during the in-depth discussions to indicate increased household tension or physical violence, although this is a dynamic that arguably requires considerable respondent trust to penetrate. It is certainly possible that some men feel that their role as provider is undermined because of the additional income women contribute. And it is certainly true that microfinance programs in general place additional demands on a woman’s time.

However, another important factor to consider with any impact assessment is the amount of time that is really needed to bring about the types of changes being assessed. One to three years of program participation by women may be too little to change deeply embedded power relationships and expectations at the intra-household level. Referring to the Bangladesh setting, where most empowerment studies have been done and some have found increased household tension or even physical violence against women borrowers, one researcher (Osmani) points out that one generation of extensive exposure to income-earning activities cannot be expected to completely defuse centuries of cultural conditioning. Women in Bolivia and most certainly in Ghana have a longer history of active involvement in the market economy than those in Bangladesh. Still, transformations in personal attitude and social relations may take time to become quantitatively detectable.

The evidence demonstrates that the positive effect of Credit with Education depends on the individual woman’s successful use of the services, her family dynamics, and her group’s internal rules of conduct. Microfinance will not automatically “empower” women. Program design and frontline-staff performance both matter a great deal; they have to be intentionally supportive of women’s empowerment. Treating “clients” as customers who have important feedback fosters in women a sense that what they think and say does matter in general and specifically for the implementation of the program. Frontline staff must work diligently to inspire positive group dynamics and leadership capacity within the groups. Program terms and services must be more flexible within group structure and tolerant of the inherent stress within village banking, such as varying loan sizes and membership turnover (client departure and entry) over time.

In the next post, I will explore the very interesting study by Sid Schuler and Syed Hashemi in Bangladesh, in which they found impacts of group-based microfinance on women’s empowerment and contraceptive use!