Microfinance Syndrome: Is it for Empowerment or Disempowerment of Women?
This paper defines the concepts of microfinance and women’s empowerment, highlights gaps between the concepts and actual practice, and recommends measures for bridging these gaps.
The paper observes that although microfinance encompasses various financial and non-financial services to the poor, it is often equated with microcredit. Similarly, the concept of women’s empowerment through self-help groups (SHG) surpasses the economic domain and extends to internal change and collective mobilization. The paper examines the social and ethical aspects of microfinance and identifies four forms of empowerment. It discusses major events in the microfinance sectors that have influenced empowerment, and lists formal and non-formal microfinance systems and procedures in India.
The paper recommends several measures for bridging the gaps between concept and practice in the empowerment process. These include:
- Identifying and targeting the poor by adhering to government poverty indicators;
- Building capacity and nurturing social capital;
- Focusing on social, cultural and spiritual aspects for holistic empowerment;
- Including financial and non-financial aspects in microfinance plans of SHGs;
- Introducing mechanism for coordination at district level;
- Developing SHG federations into self-reliant MFIs.