Does Microfinance Empower Women? Evidence from Self Help Groups in India

This study argues that women empowerment takes place when women challenge the existing social norms and culture to effectively improve their well being. The paper:

• Empirically validates its hypothesis by using quasi-experimental household sample data collected from five states in India during 2000 and 2003;
• Constructs a general structural model by treating the ordinal variables and estimating the impact of the self-help group (SHG) on women empowerment for 2000 and 2003.

The paper finds that:

• On an average, there is a significant increase in the women empowerment of the SHG members group as compared to the members of the control group.
• Some members of the SHG group are more empowered than others.
• The differences in pace of empowerment might be a result of:
  • Household and village characteristics;
  • Cultural and religious norms within the society;
  • Behavioral differences between the respondents and their family members;
  • The training and awareness programs that the women have been exposed to.

The paper concludes that an important direction for future research is a need to find which of these factors have a greater impact on empowering women.