Creating women’s capabilities through microcredit in Bangladesh

Abstract

Group-based microcredit, an extension of small amounts of collateral-free institutional loans to poor with limited access to formal credit markets, has become one of the most popular development strategies in Bangladesh. The underlying logic behind the group lending model is that the provision of small loans for poor women, in particular, could facilitate socioeconomic development and livelihood improvement in the rural areas. Microcredit to women is considered as a tool for empowering women with increased self-esteem, decisionmaking capability and new income-earning opportunities. However, the impact of microcredit on marginalized people remains debated. While the positive impact of microcredit on millions of poor people's lives has been documented by various studies, there are also studies that challenge the arguments about women empowerment through microcredit involvement. Based on interviews with 175 of economically and socially vulnerable female microcredit borrowers, the present study contributes to the continuing debate over how or if microcredit intervention enhances women's capabilities in achieving health care utilization, food and nutrition security, and personal freedom at the local level in Bangladesh. Indices were developed to quantify the capabilities of women. To measure different aspects of capabilities, variables were analyzed through univariate and bi-variate analyses. The results of the present study confirm that microcredit involvement improves women's basic capabilities but it is not as significant as attested by earlier studies.

Delving into the Determinants of Default Risk in Savings Groups: Empirical Evidence from Ecuador

“…The second Yunus's core purpose was the focus on women because they are more vulnerable. Worldwide women have been historically disadvantaged in terms of education, social exclusion, discrimination, and access to assets or other resources (Demirgüc-Kunt et al 2018;Raihan and Uddin 2018;Fafchamps et al 2011;Pitt and Khandker 1998). In addition, women are considered better administrators than men and are more concerned about their families.…”