Is Microfinance a 'Magic Bullet' for Women's Empowerment? Analysis of Findings from South Asia
This article investigates the empirical evidence of the impact of microfinance on women empowerment. It draws on studies carried out under the Imp-Act programme on BRAC, SHARE, CYSD and PRADAN. The author makes a distinction between:
- Commercially oriented minimalist financial services;
- Donor subsidized & other support services-linked poverty lending approaches among microfinance organizations (MFOs).
The review cites studies with conflicting results, but elucidates that microfinance does address the socially disadvantaged position of women.Despite the skepticism on its outreach and impact, the article supports, with empirical data, the poverty focus and economic, social and (to a lesser extent) political impact of microfinance. However, the indicators score higher for the group which has access to service providers of both approaches.The paper states that there is no conclusive evidence on the long term impact of MFOs, in actually bringing clients out of poverty.It concludes by:
- Cautioning against the growing hegemony of the 'financial systems approach'; the financial system approach requires to be complemented with building of organizational capacity of the poor and broader pro-poor policy support;
- Arguing that women empowerment entails radical structural transformation which has no set formula;
- Reasoning that microfinance is just another entry point, like education, access to work and positive discrimination, in this larger project.