| By: |
Beatriz Armendariz (CERMi, Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and Harvard University.);
Nigel Roome (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and TiasNimbas Business School, Tilburg Campus, The Netherlands.) |
| Abstract: |
Ever since microfinance was popularized in the mid-1970s in Bangladesh one of
its salient features has been the overwhelming representation of women, mostly
in fragile states. Institutional structures and social norms in such states
are very rigid. Nevertheless, the trend has increased steadily, particularly
during the 1980s. According to 2006 Microcredit Summit Campaign Report, seven
out of ten microfinance clients are women. Millions of these women are married
or live with a partner, and many have children. Relative to initial lending
practices by the Grameen Bank in Bangladesh, the bias in favor of loans to
women in microfinance has been accompanied by an increasing trend to exclude
men from microfinance services, particularly in the context of loans to those
with very low income levels. The practice of exclusion might however prove to
be counterproductive for it can generate frictions within households, as men
feel increasingly threatened in their role as primary breadwinners within the
household. In this essay we argue that the promotion of women in microfinance
initiatives and the bias against men is taking place in the absence of solid
empirical evidence on the effects of this approach on the balance of power in
households and on the health, education and well-being of all household
members. We hold to these to be key aspects of development. We further argue
that this issue deserves research attention given the possibility of
unforeseen outcomes and adverse consequences that run counter to the goal to
encourage microfinance initiatives as a means to promote development. To
clarify the central issues, on the one hand, higher household income in the
hands of women might increase health and education for women and their
household members –we call this the women-empowerment effect. On the other
hand, the exclusion of men from access to subsidized finance might create
frictions, and rebound effects that diminish the supportive role women play
for their spouses and wider household members in the production of health and
education – we call this the women-disempowering effect. In the event that the
latter effect dominates over the former, then subsidized microfinance for
women might have no overall positive impact, or even worse, a negative impact
on health and education at the household level and the women in households. An
even more challenging issue is to better understand what influence social and
institutional conditions exercise on the empowerment and disempowerment
effects experienced by women in microfinance initiatives and the subsequent
outcomes in terms of development. This issue matters because microfinance
initiatives are specifically directed at household level, and, yet prevailing
social and institutional norms are determined at community or societal level.
In the circumstances where social and institutional conditions dominate the
effects of microfinance initiatives it would imply that microfinance projects
might lead to better outcomes when they are accompanied by measures for
institutional capacity building that promote the rights and role of women in
society. This essay is structured as follows. First, it provides an overview
of what we currently know about microfinance, gender, health and education in
the context of Bangladesh, where most research has been conducted. Second,
some anecdotal evidence from Bangladesh and Africa on the notion of
microfinance empowerment is presented and discussed. This raises questions
about the influence of institutional structures and norms on the enhanced
capacity of women to assert their role as the main providers of health and
education, mainly arising from the fact that the empowerment of women
generates frictions with their partners, which in turn leads to a potential
disempowerment effects. It also suggests that institutional structures and
norms serve to constrain the outcomes of microfinance initiatives. Third,
anecdotal evidence from Chiapas, in southern Mexico, is outlined which
provided the basis for empirical research on new approaches to microfinance
now being undertaken in the region. Fourth, the essay outlines this
experimental intervention in southern Mexico, where the women borrowers in a
microfinance initiative can invite their spouses to be part of women-only
solidarity groups as borrowers, in order to see whether potential frictions
could be eliminated as a way better to enhance women empowerment and provide
for improved access to health and education at the household level. The main
challenges of implementing this type of intervention as revealed through the
experience to date in the South Mexican experiment are described. Finally, a
fifth section spells out some concluding remarks. |