The Sebstad & Cohen paper (2000) identified three pathways through which microfinance services can reduce vulnerability for poor households: smoothing income, building assets (financial, physical, human and social) and empowering women. I turned to Michael Woolcock for help in defining social capital in the last post (# 54). 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. They have done as good a job as anybody of summarizing what empowerment has meant to researchers of the impacts of microfinance. I provide here and in the next couple of posts excerpts from Barbara’s and Mona’s fine presentation.
One of the attractions of the microfinance movement is the possibility of a more fundamental “empowering” effect that goes beyond increased economic returns. Proponents of village banking and similar group-based lending were intrigued by the possibility that success with their groups could help members transform an attitude of “I can’t” to “I can.”
Empowerment in its broadest sense refers to an individual’s or group’s increased “power.” In a development context, it refers both to “internal” change within an individual’s sense of self and autonomy, and “external” change in social status and basic power relationships in society. Despite its intuitive importance, the concept of empowerment is difficult to grasp as it is not only abstract but also capable of many different interpretations and expressions.
By offering poor households access to formal or semi-formal financial services, microfinance has the potential to empower its clients in a variety of ways. First, income-generating opportunities can provide greater economic security and power to clients. Second, group formation and management can link clients with networks beyond their neighborhood or community. Microfinance programs that target women in particular are thought to have the greatest empowering potential because women are less likely to have had access to financial services and because, in general, they tend to be more marginalized. Through financial services, women have greater potential to increase their earnings, which fosters internal attitudes (self-reliance, self-confidence and self-worth) which can translate into external changes (greater bargaining power within the household and leadership in the community). Microfinance services that foster group formation and self-management by women have additional potential to empower women through exposure to new ideas, mutual support, fostering an identity beyond the family and the opportunity to cultivate leadership roles and responsibilities. If microfinance truly has an empowering effect, the possibility that increased “power” can foster self-reliance for individuals and groups will have development benefits beyond immediate programmatic effects.
Empowerment seems to be the first and most visible impact of a poverty-lending program. Careful and casual observers alike often remark that they see a difference in the women coming to group meetings even before the first loan is repaid and certainly after two or three loans have been repaid. In the early days of their participation, the women will not look at, much less speak directly to, an outsider in their village. Within months, they are looking and speaking directly to the visitors from afar, often quite assertively. Something is happening at the level of individual self-confidence, which we tend to label “empowerment.”
However, there are many challenges involved in systematically documenting the empowering process and/or empowerment outcomes.
- The concept of empowerment is difficult to define and even more difficult to measure.
- The impacts of empowerment are intangible, including such expressions as self-confidence, status and decision-making. Attitudinal changes are also difficult to measure.
- The process of empowerment is expressed and/or seen in a myriad of ways.
- The manifestations of empowerment differ by sociocultural setting, and even within the same sociocultural setting, empowerment is experienced by different groups in different ways.
Barbara and Mona reviewed the 1990s research of Schuler and Hashemi, who focused on empowerment as “the ability to take action,” Kabeer on empowerment as “the ability to make choices,” Mayoux on empowerment as “power,” Goetz and Sen Gupta on empowerment and “control of loans” and Rahman on “increased tension and physical violence” as a negative effect of microfinance on women’s empowerment. For her research designs in the 1990s in Bolivia and Ghana, Barbara preferred the “Six Domains of Empowerment” of the JSI Empowerment of Women Program, used by Schuler and Hashemi in their research in Bangladesh, which I will write about in a separate post. Here are the six domains:
Sense of self and vision of a future – assertiveness, plans for the future, future-oriented actions, relative freedom from threat of physical violence, awareness of own problems and options, actions indicating sense of security
Mobility and visibility – activities outside of the home, relative freedom from harassment in public spaces, interaction with men
Economic security – property ownership, new skills and knowledge and increased income; engaged in new/nontraditional types of work
Status and decision-making power within the household – self-confidence, controlling spending money, enhanced status in the family, has/controls/spends money, participation in/makes decisions on allocation of resources, not dominated by others
Ability to interact effectively in the public sphere – awareness of legal status and services available, ability to get access to social services, political awareness, participation in credit program, provider of service in the community
Participation in non-family groups – identified as a person outside of the family, forum for creating sense of solidarity with other women, self-expression and articulation of problems, participating in a group with autonomous structure
Only some of these domains and features will be manifest, measureable and/or meaningful in one particular country, culture and location. Barbara found she had to engage in extensive qualitative research to identify appropriate empowerment indicators. The chosen indicators differed dramatically between Bolivia, Ghana, Burkina Faso and Thailand.
The next post will summarize Barbara’s field research and results in the 1990s.