Household welfare and women empowerment through microcredit financing: Evidence from Malaysia microcredit

Microcredit and Gender: Are There Differences in the Credit Conditions?

“…In addition, studies also point out the influence that microcredit has on welfare, such as the case developed by Al-Shami, Majid, Mohamad and Rashid (2017), indicating that productive microcredit loans have a significant positive influence over family welfare.…”

“…Microcredit programs can therefore be considered one of the most popular development strategies (Enimu et al, 2017;Ghosh & Neogi, 2017;Ugwuja & Nweze, 2018;Wahidi, 2017), whose objective is to serve the poor, many of whom do not have access to traditional banking services, without the need for the borrower to present some kind of guarantee (Al-Shami et al, 2017;Armstrong, Ahsan, & Sundaramurthy, 2018;Milanov, Justo, & Bradley, 2015;Thanh & Duong, 2017;Wahidi, 2017).…”

“…This happens because, without access to financial resources, individuals face difficulties in starting, maintaining and expanding their economic activities, sustaining poverty and income inequality (Bilau & St-Pierre, 2018;Chliova, Brinckmann, & Rosenbusch, 2015;Soares, Barreto, & Azevedo, 2011 In Brazil, following the logic outlined above, microcredit is the most visible and developed part within a complex set of tools for generating income and combating poverty. This means low-value loans for small entrepreneurs, microenterprises and small-sized companies that have no access to the traditional financial system, mainly because they cannot offer real guaranties (Al-Shami et al, 2017;Serrano-Cinca, Gutiérrez-Nieto, & Reyes, 2016).…”

“…In this sense, the concept of empowerment is highlighted in the logic of microcredit provisions for women, since this reflects women's capacity to undertake new economic activities (Al-Shami et al, 2017;Bahta, Strydom, & Donkor, 2017;Bezboruah & Pillai, 2017;Tahir, Kauser, Bury, & Bhatti, 2018;Zhang & Posso, 2017 Empowerment can be understood as a changing process through which individuals increase their ability to exercise their choice and freedom, which contributes positively to their well-being (Ganle, Afriyie, & Segbefia, 2015). In other words, empowerment means having broadened choices in life, gaining more control over it, and generally reaching the capacity to live it as one wishes to live (Mahmud, Shah, & Becker, 2012;Tahir et al, 2018).…”

“…It is also worth noting that there are several theoretical reasons that explain a possible gender difference in the access to financial services, such as: (a) there may be taste discrimination in the sense that the financial system is dominated by man and the barriers related to financial services are consequently higher for women than men; (b) there may be statistical discrimination in the sense that a lower education level and involvement in the formal market economy is a barrier that prevent women from having access to formal financial services; (c) a lower involvement in the formal market economy may also reflect a distribution of traditional roles in society, in which women focus on domestic activities and men focus on the market economy (Al-Shami, Majid, Mohamad, & Rashid, 2017;Aterido, Beck, & Iacovone, 2013;Corsi & Angelis, 2017).…”