Measuring the Impact of Microfinance on Women and their Families

Are the women who participate in Self Help Groups (SHGs) more socially, politically, and economically empowered than their counterparts? How is “empowerment” defined or measured? Can “empowerment” be attributed strictly to the savings and credit aspect of microfinance, or do more holistic, awareness-based initiatives (ie through SHGs) have a significant role to play as well? 

In terms of the impact microfinance has the family unit, microfinance theorists and practitioners argue that when money is channeled through women, the entire family’s well-being improves. Income tends to be spent on education, nutritious food, healthcare, and daily household expenses, raising the economic, social, and physical well-being of the family. How true are these assertions? What data are available to validate these claims?

 Well, as it turns out, microcapital.org has made an attempt to address these queries in a two part series: A Brief Survey on the Impact of Microfinance on Women Part 1: Targeting Women and its Effect on the Wellbeing of Poor Families and Part 2: Evidence of Women’s Empowerment.  

Some notable points follow after the jump.

Part 1, on the effect of microfinance on the family:

A FINCA Client Poverty Assessment conducted in 2003, of which 81 percent of interviewed clients were women, found that food security was 15 percent higher among their village banking clients than non-clients. The report also showed clients to have 11 percent more of their children enrolled in school with an 18 percent increase in healthcare benefits. Clients’ housing security was reported as 18 percent higher than non-clients. The assessment concluded that microfinance improved the wellbeing of clients and their families.

Part 2, on the empowerment of women, including the creation of an “empowerment indicator”:

The empowerment of women and gender equality, while often attributed as being significantly impacted by women’s access to microfinance, is extremely difficult to measure. In Hashemi, Schuler, and Riley’s “Rural Credit Programs and Women’s Empowerment in Bangladesh”, published in 1996, the authors were able to show that MFIs had a positive effect on the empowerment of women by creating an “empowerment indicator” ,based on eight factors: mobility, economic security, ability to make small purchases, ability to make larger purchases, involvement in major household decisions, relative freedom from domination within the family, political and legal awareness and involvement in political campaigning and protests. A survey participant was considered empowered if she had five out of eight of these attributes.