Has access to microfinance empowered women to make decisions?
This study assesses the benefits of microfinance through self-help groups (SHGs), based on a survey conducted in selected villages in Pune, India. It assesses key dimensions of womens empowerment such as expansion of freedom of choice and action to shape their own lives.
Study findings reveal that while the targeting of microfinance through SHGs was unsatisfactory in terms of income, it was better in terms of other indicators of deprivation such as low caste, landlessness and illiteracy. Findings include:
Loans were used largely for health and education of children and production-related expenses, especially by the disadvantaged;
SHGs benefit from the presence of networks;
SHGs contribute to trust, reciprocity and associational capital;
Members of SHGs reported reduced domestic violence;
Greater responsibilities for women also involved longer hours of work.
Savings mobilization through SHGs was highly effective, especially in the context of vulnerability of rural households to idiosyncratic and covariant risks, and the ineffectiveness of informal social networks in protecting them against such risks. The paper demonstrates that benefits through womens empowerment are substantial and reinforce the case for microfinance through SHGs.