Summary by Mara Estes, Research Assistant, TSEDEQ
July 2006
Empowering Women with Micro Finance: Evidence from Bangladesh.Pitt, Mark M.; Shahidur R. Khandker; Cartwright, Jennifer. Economic Development & Cultural Change, 54:4, 791-831
What difference does granting credit to woman over man have on families?
Micro credit was developed in order to aid those with low income through development of small business and enterprise. For women, it has proven to be a means of empowerment and increased respect. One of the most well known agencies, the Grameen Bank, claims that over 90% of their cliental are women. In this article, the authors examine this gender specific situation, and the effects it has on the well being of the family, including education and nutrition of the children.Also, they study how much control the woman is actually given both with the loan and within the family.They further analyze the relationship between women's empowerment, in reference to decision making and autonomy, and micro credit programs.
The data for this article was collected from two different household surveys, one conducted from 1991-1992, and the other, a follow up survey, from 1998-1999.These surveys were performed by the Bangladesh Institute for Development Studies along with the World Bank. For this survey, 87 villages participated. These villages were selected from 29 thanas in rural Bangladesh, 24 which were program thanas. 1,798 households within these villages were randomly selected to participate, 20 from each village.1,538 of the households qualified for program participation based on land ownership, and of these households, 59% participated in a credit program.The conductors of the survey found that 40 villages had both female and male credit programs, 20 villages had female only, and 10 villages only allowed men to participate in credit programs.
Within the survey, the following topics were examined: Purchasing autonomy, access to funds, control over finances, transaction management, mobility, activism concerning the law and politics, household views on women's roles, husband's behavior,and family planning. It was found that with each issue, the husband was heavily involved regarding the woman's control and autonomy within each topic. Due to cultural values, mobility within the community and power within the household are areas that are mainly controlled by the husband. The survey has cited that the main obstacles for woman are lack of education, lack of safety, and religious restriction. For these reason, women are not allowed as much freedom, control, and decision making within the family than men are given.
According to the study, women's participation in micro credit programs significantly empowers all areas of control and decision making that was examined in the survey. In response to questions about control over finances and economic decisions, the likelihood that a woman or man responded that the female had control was significantly higher compared than in families who did not have women participants in credit programs. The same was true for the other areas such as mobility, activism, and family planning choices. Women's participation in credit programs greatly increased both husbands' and their own recognition that they were granted significant power in their own life and the lives of their families.It is found that female participation in credit programs positively influences the nonland assets held by women, male and female labor supply, and fertility. Also, female credit participation was proven to increase the nutrition and education levels of the children.
As compared to women, the benefits of male participation in credit programs were significantly lower.Allowing only males access to credit decreased woman's participation and power within the family. It also showed no sign of positively affecting the well being of the children. This study reflects literature that states a woman's control over the resources within a family is more beneficial to the children than if a man were to have complete control.In granting only males the right to credit negatively affects a woman's role in society, and does not benefit the well being of the family as compared to when credit is given to the female.
From this study, it is seen that granting credit to a woman over a man is more beneficial for the society, family, and woman herself. It has proven to greatly increase the health and education of the children, as well as the empowerment of women. Encouraging women to participate in micro credit programs can improve their status in the family and society. In deciding whether a man or woman should be granted credit in a household, the more beneficial choice would be the woman based on the benefits it could create. It is now obvious to see why the Grameen Bank has made such a difference in the communities where it is present. In addition, the positive effects of focusing micro credit towards women can now be seen not only as something that empowers women, but has the potential to make a significant change in the development of a community.