The Illusion of Women Empowerment in Microfinance: A case study Lakshmi Kumar*

Abstract

At the core of all development, poverty eradication and progress lies women. It is believed that their empowerment can bring about the positive change in society. Traditional literature implies women to be empowered when they can exercise choices and are aware of alternatives- microfinance (MF) being one of the most important catalysts. This research attempts to understand the impact of microfinance on women empowerment through a case study by semi- structured interviews in Tamil Nadu.

It is found that even though women have experienced increase in income and consumption, yet, not surprisingly, the main bread winner of the household continues to be their spouses. They still have very little control over resources, assets and do not equally participate in major household decisions. However they have significant influence on the choices that their children make. Given their semi literate stature, their husbands’ complete support and their mediocre entrepreneurial ability, the confidence of these women to act alone and to make choices by themselves is still lacking as they feel that it is less risky to act in conjunction with the spouse on any decision.

The returns from the business are small and most of the same accrue to her family. We found in this research that the real bottleneck is the hierarchical nature of the society, the lack of entrepreneurial talent and risk taking ability in these women. This is also due to the lack in market linkages and network ability. We also found a self selection bias in the group formation comprising of safe members or risky members but a mix of the two were rare.

Ultimately nothing feeds and frees like money. To these women MF seems maybe a path or transformation to economic independence. For MF to effectively contribute to women’s empowerment, or facilitate it at some level, the women involved must perceive themselves as being deprived of choices, which will be taken care of by access to finance. Unless and until this mindset is present, we are not likely to find empirically that MF leads to women’s empowerment.

*Lakshmi Kumar Faculty, Institute for Financial Management and Research, 24 Kothari Road, Chennai 600010 E Mail id: [email protected] The Illusion of Women Empowerment in Microfinance: A case study

The claims of poverty reduction due to microfinance are still a matter of debate among relevant interest groups. The fundamental question that we face right now is has microfinance has actually contributed to the development. The reason the development paradigm becomes important to pursue- particularly in the area of microfinance- is because this involves lending to the poor. Essentially, even if we do not elevate them from their present status we at least should not lead them into a quagmire of loans. The majority of Micro Finance Institutions (MFIs) lend only to women as it is believed that women are disadvantaged both sociologically as well as economically. It could be possible that women are chosen for these loans because of their non- migratory behavior or for they being perceived as more family oriented and responsible compared to their male counterparts. Additionally since MF necessitates attendance in weekly meetings institutions trust women more than men as they are likely to be more disciplined than men. If these are the reasons for selecting women for loan disbursements, it is even more important to raise a question if providing loans to the poor women is resulting in women empowerment as suggested and followed by several microfinance institutions in their mission statements.

In the words of Amartya Sen (1999) ‘development is increasing freedom’. Has microfinance increased freedom and the choices women face? Put differently has microfinance empowered women? Empowerment is a complex word to define in an economic sense and more complex to measure. The central theme of this paper is to question what empowerment is in the context of available literature and in terms of what it means to the women who take loans by an empirical investigation. Specifically, this paper seeks to answer what empowerment is to women who take loans from MFIs and whether these women are empowered by microfinance.

Section 1 discusses the literature in relation to women empowerment, poverty reduction and microfinance. Section 2 brings out the interrelated research questions which form the basis of the questionnaire (Appendix 1). Section 3 discusses the questionnaire and its implementation related issues. Section 4 analyzes the data collected and discusses it. Section 5 concludes the paper arguing what women empowerment means at an individual level in discussion with the literature. Section 1: Literature Review

The 1990s saw the expansion of micro finance and its significant access of small loans and savings to women. It was believed that this will contribute to poverty reduction and economic empowerment of women. The basic premise behind lending to women is that they are not only creditworthy but are less likely to misuse the money and are more likely to share the fruits of the investment with the entire household. In addition to the economic benefits, it is argued that women’s increasing role in the household economy will lead to their empowerment. During the past few decades micro credit has enjoyed tremendous growth and there is great hope that such programs will contribute to the achievement of the Millennium Development Goals (Kabeer,

2005a and Littlefield, Morduch and Hashemi, 2003).

Despite several methodological variations, evaluation studies fairly widely accept that microcredit does improve household incomes and also linked with other associated benefits like increased livelihood diversification, more labor market activity, more education and better health

(Hulme and Mosley, 1996, Vol.1 and 2; Khandker, 1998; Littlefield, Morduch and Hashemi,

2003; Morduch and Haley, 2002; Mosley and Rock, 2004; Todd, 1999 and Zaman, 2002). There is, however, little consensus regarding the empowerment potential of microcredit and studies have made diametrically opposite claims. While some claim that microcredit has helped women increase their income earning capabilities leading to greater confidence and ability to overcome cultural asymmetries ( Hashemi, Schuler and Riley, 1996; Kabeer, 2001; Pitt and Khandker,

1998 and R. Rahman, 1986); others contend that loans made to women are usually controlled by their husbands which leads to women’s dependence on their husbands for loan installments and may also result in domestic dissension and violence (Goetz and Gupta, 1996; Leach and Sitaram,

2002 and A. Rahman, 1999). Disregarding the conceptual and methodological differences among these studies, the suggestion other studies suggest that while lending to women benefits their households, its beneficial impact on women themselves is somewhat uncertain. (For a discussion on conceptual and methodological issues see de Aghion and Morduch, 2005; Kabeer,

2001 and Morduch, 1999).

The segregation between microcredit, poverty reduction and women are inseparable. Often while looking for literature on studies on the definition of women empowerment, its conceptual clarity is ambiguous as can be seen from the above quoted literature where there is a clear evasion on the central theme. As for example, most of the above mentioned studies suggest that the families are benefitting from microcredit but these studies do not discuss women empowering or disempowering status. Even though while connecting poverty reduction and microcredit, inevitably the focus is women as 90% of the lending goes to women, but issues relating to women empowerment are sidelined.

A conceptual study that defines and tries to measure women empowerment due to microfinance is by Kabeer (1999) who reflects on the ability of a woman to make strategic life choices when she did not have the opportunity to do so before. Her paper describes the three interrelated indivisible dimensions of women empowerment namely resources, agency and achievements which are vital in the process of empowering women. Further the idea of choice that a woman can now exercise is further qualified by referring to the condition of choice, its content and consequences. Hence an attempt at understanding the woman at the individual level is sought here.

Another equally interesting research tries to explain women empowerment as a process is by

Mayoux (2009). The inter linkages as identified by her is explained as a series of “virtuous spirals”. In her work she explains that when a woman gets access to the finance, she can either start her own economic activity or invest in existing activities. This can directly increase her income and bring about potential increase in her assets. Alternatively, she could use the finance for her household well-being such as better food for the family or better education for her children, which results in increasing her status in her family. A combination of women’s increased economic activity and increased decision making in the household over a period of time could make her socially and politically active. She could thereby be a positive contributor to change in society. Hence from individual empowerment through micro finance it is potentially possible that she make make significant contributions by increasing her visibility as agents of economic growth and economic actors in policy decisions.

However, Mayoux cautions by adding that women can get caught into a quagmire of these loans.

This could happen for several reasons and could make them positively disempowering. Some of the reasons are:

 Misuse of credit.

 Use of credit for non economic activities.

 Use of credit by people with low entrepreneurial ability.

When we critique Kabeer (1999) or Mayoux (2009), the focus is on the process of change and the availability of change agents. Both of them reiterate the need for the presence of low cost microcredit which can act as the trigger of change for the woman because she would and is the focus also whom we can call as change agent. We however see two potential problems- firstly, the time lag of change it takes for her to get empowered before her family gets empowered by her and secondly, her desire to exercise independent choices when it is seems less risky to make choices in consultation with her spouse. However, this paper uses the framework provided by

Kabeer (1999) and Mayoux (2009) as a starting point to develop a questionnaire (Appendix 1), which is used as a basic discussion tool to collect information from respondents. The analysis of the respondents is then discussed. Subsequently, we try to compare the framework provided by the above authors in the context of whether we find women empowerment among these semi literate women at the individual level. Section 2: Research Questions

The basic research question of this paper is “Are women microfinance clients empowered?”

The interrelated sub themes to be investigated are:

 What were the conditions of these women before microfinance? What was their skill level? Did the MF institution provide skill building training or support? How useful was the same?  Why did they resort to microfinance? Who supported them?  Did MF lead to income generating activities to them, their family etc.?  Did MF lead to increased assets to them, their family etc.?  Did MF lead to their social and political empowerment? Section 3 Questionnaire Discussion

Our methodology used in data collection is Q squared (Hulme, 2007). We felt that a question as complicated as women empowerment needed both a qualitative as well as a quantitative understanding so as to capture the essence of the sample. Merely qualitative will be anecdotal, but wholly quantitative would be just a number crunching exercise. Hence we feel that the present research question warrant a Q squared research. Many of the questions are demographic; many involving capturing numbers but as can be seen from Appendix 1 a lot of questions involve discussions.

In studies that involve soliciting more than just quantitative information, it is believed that the respondent is likely to be candid and give close to right answers on familiarity (Collins, Morduch et al, 2009). In our first meeting with the women clients, we just sought demographic data and got familiar with them. In our second meeting, we asked them about the nature of their MF loans and how they put the loans to use, how they benefitted from it and the problems they faced with the same. In addition, we also sought to get some quantitative information regarding their family income and consumption. In our last meeting, we pointed out to them the anomaly in their under reporting of income as compared to their consumption. We also collected some information on their weekly consumption. Many of them sought to correct their incomes upwardly and were more open to answering questions related to their role in their household, and the restrictions they face, their business, their family relations etc. Section 4: Analysis of Data

Samples of 121 clients were interviewed from January 2010-July 2010, a breakup of which is given in Figure 1. First 70 clients who had taken loans 1-2 times were interviewed both in rural and urban areas. Another sample of 51 clients who had taken a median of more than 3 loans was interviewed in rural and urban areas. Reasons for selecting new1 (1 to 2 loans) and mature2

(above 3 loans) clients were to check if these mature groups had similar or different characteristics from the nascent groups and if they exhibited differences in being urban and/or rural too in relation to women empowerment.

Figure 1: Sample Data Details.

4.1Characteristics of women clients:

Women we met were relatively young- 65% of them being below the age of 35. They showed ability and zeal to succeed and uplift their families to a higher income trajectory. Most of the members were Hindu (96%) and belonged to the backward or the most backward class, which demonstrated that the mission of reaching out to the marginalized class of society was being served. 69% of the women we interviewed belonged to smaller families (3-4 members) and the remaining 31% belonged to large families (5-6 members) both in the rural and urban areas. This was because of the dwindling belief that children are the assets of the future, resulting in families having many children. In rural areas, 75% of the school going students studied in government schools. We found that the dominance of private school education (over 90%) in the urban areas showed the preference for quality, a shift they chose with rising incomes. Overall higher family income was associated with private education, an expected shift. About 75% of both rural and urban clients had some form of assets, land or a house. However the title of the land was in the name of their spouse or in laws.

Figure 2: Husbands Occupation

Figure 2 shows the occupations of the husbands of the microfinance beneficiaries. The figure shows that farming and daily wage earning (coolie) are predominant, particularly in rural areas and private company and shop/business predominant in urban areas. Another interesting finding is that about 12% of these clients had no husbands.

All the clients we interviewed had compulsory 100 day training on the basics of doing business.

This was followed by an optional course on bookkeeping, marketing etc. Most of them (about 80%) attended the classes diligently and found it very useful as a starting point. However, they felt that the reality was quite different as the greatest drawback in the training program was the lack of business ideas. Who is equipped to give the ideas is a contentious issue and needs more research as bad business idea can lead a poor woman to a quagmire of defaults, loans and much more.

4.2 Loan usage

A look at Figure 3 to understand what the MF loans went for and the reasons for the same and the discussion on its profitability and sustenance yielded some insights. As mentioned in the earlier section, we interviewed both nascent and mature groups to understand the consequences of the loans being taken for a wrongly conceived business proposition given that these women were in the margins of poverty. We compared nascent and mature groups to see the evolution of the groups, their activities and how they faced problems. As can be seen in Figure 3, in rural areas, 66% women took loans to buy cows as the cows provided a maximum of six liters of milk per day. The profit derived in the first ten months (the repayment period) was just a little after they met their costs, but after this period, there was a clear profit of about 20%. This venture was profitable because of the presence of a dairy cooperative in the village where they could supply their milk. However in the same district in another village we found the absence of a cooperative which made their profits volatile and there was an oversupply of milk in that market driving down prices and making this business less lucrative. The second best alternative, goat rearing (12%) seemed lesser profitable as benefits accrued only on their reproduction and consequent selling. It resulted in an oversupply of goats in the village. Both these activities were very common animal husbandry activities pursued in these rural areas as a means of diversification from farming but scaling up was an issue as they were not aware of how to integrate their business to markets and they seem to operate just within their villages.

In urban areas, women used the MF loan in their business or their husbands’ shop/business to buy inputs (about 20%). Cloth/Saree selling (15%) and tailoring (12%) contributed other major activities but with low margins. Other activities pursued were embroidery, rice flour making, pickles and catering. The dominance of loans for working capital requirements in already existing business was prevalent. This business was started before she took the MF or was run by the family. In the former case, MF was very useful as interest rates were lower than local money lenders but in the latter case of family run business, benefits accrued to the family. We also found that several members in a group who started a new activity had a tendency to follow the same business activity as their peers- rather emulate one another. One reason for them to take the same business as their peers could be because they saw their peers successful, though they reported that they met with a little success. This could be because of the oversupply of these goods in the market. In addition, due to their lack of time and mobility on the part of these women, they did not look for other market opportunities and hence ended up saturating their market. Figure 3: Loan use of Microfinance percentage wise

Of all the interviewed clients in both rural and urban areas, only 31% felt that there was an increase in their economic activities. The rest showed that either the choice of their business was incorrect or they could not sustain selling the same. Stagnation in business activity always leads to a loss of one’s self esteem and this needs addressing. Access to markets was available to about 42% of the clients but translation of the same to profitable ventures on a sustainable basis was done by only a small number. The absence of a business plan was the reason for failure.

Most of these women just emulate an already successful woman without understanding the basic nuances of business. Even though their SHGs gave them basic ideas, however, other things needed for sustainable business, such as, access to markets, networking other than figuring out quality, costs etc were missing. Even when they had a competitive product, most of the time selling goods on a sustainable basis had been a problem, either due to oversupply or lack of knowledge about marketing the product. We recommend that further studies be done on this aspect as creating millions of micro entrepreneurs in India with dreams but no paths could potentially be dangerous.

The members of the nascent groups reported that their incomes are volatile; hence, many of them are looking for some kind of stable income before expansion. Since they were over burdened both financially as well as physically they wanted to be sure that benefits would accrue to them/their family before taking the risk of expansion. However, a majority of the members of the mature groups who had taken more than three loans seemed more confident of their activities. Most mature groups were headed by very dominating educated women (both in rural and urban areas) who seemed to exert a lot of influence on every member and who knew the nuances of every member’s life. As Banerjee et al (1994) described the dominance of the facilitator of the group though good for monitoring could be overbearing. We found that even after a woman failed in her first business, she went for second and third loans and tried new activities. It is this risk taking ability in relation to their entrepreneurial ability and strategy that needs further investigation. Figure 4: MF loan support

Figure 4 shows that the support for MF activity comes from the spouse. Many of these women found comfort in the encouragement and support from their family particularly from their husbands. They seemed to have derived a lot of courage to leave the cozy confines of the home first and foremost with the 100% support from their husbands. It therefore felt rather ironic to ask them if they felt empowered or independent. We found that in the first few years, they took almost all decisions in consultation with their spouses. The reasons for this could be the following:

 Men are the breadwinners and head of the family. They have higher incomes or their businesses have higher returns and hence women are more dependable.  Women do all the household work which leaves them little time to purse productive/rewarding activities. They want to get the first hand experience from their spouse.

 Most women are constrained for time, energy and mobility and go after low income generating activities and often need their spouses’ endorsement for their activity.

 Often the loans are taken by women are just a front for their male counterparts.

Somehow we noticed that most women who took MF loan got family support and hence there was a selection bias in the choice of women. In addition, the hierarchical nature of the society entrenched in them from generations made them believe that making independent choices was incorrect and they would be shunned if they did so. Independence was somehow thought to be a vice.

4.3: MF income generating activities and Status

Increases in income (73%), consumption (65%) and on health expenses (63%) were reported but seemed more to accumulate to the family as compared to the individual. Most of the women found these small “business activities” as a means to hold petty cash to tide through the daily activities without depending on their spouses for money. Ultimately, a woman is part of her family and what accumulates to her family will proceed to her too seems her belief. In that sense her new found economic freedom due to MF is liberating. While this increase in income has helped her gain confidence, it has also helped their husbands to keep their wives off them for small needs. However, these women reiterated that the major family expenditure was the responsibility of their husbands. Tending to the small needs of the family made them feel good but they had to take permission from their husbands for large purchases or decisions. In fact, majority of the women were not hugely perturbed about this, because they did not think this that sub-judicator in marriage was incorrect and felt decisions in partnership were less risky. An earlier result indicated that most women (about 80%) got complete support from their spouses for their “business activities”. This reiterates the hierarchical nature ingrained in the minds of these women. Additionally there also seems a self selection bias in the formation of groups in the sense that safe members (husband support) and risky members had a tendency to come together separately and rarely came together. A mix of the two seemed rare. One reason is because the groups formed by themselves. But this also means that women who had their husbands support may already be ‘empowered’ where as the only the other group may be

‘disempowered’. It remains to see from a larger sample the relationship between group formation, husbands support and risk in project.

4.4: MF and assets

Only 29% of women felt that there was an increase in their assets both in terms of jewellery and/or land. The others felt that there were no dent on the increase in assets as the increase in income led to increase in consumption and hardly provided any opportunity for great savings.

Many women, however, saved small amounts in chit funds to buy sarees, jewellery etc. Access to resources in terms of joint name of land holding, property etc was very low in spite of awareness among these women about their rights. Many women expressed that a discussion of the same led to volatile situations as most men wanted to have control over these assets. Since most of the women we met had access to micro finance for just over two to four years and were just getting confidence in their business, they did not want to rock the boat at home by asking for equal rights. They felt they had already been given a good deal, as they were given an opportunity in independence and exercising more of the same could cause the complete standstill of their present newly found freedom. The opportunity they had to bring a change in terms of more food to the family, educating their children made them believe in their self sacrificing quality rather than creating a secure future for her. In that sense we wonder if she is empowered or is she is empowering, probably a more powerful change.

Our result shows that women who had access with microfinance loans had economic independence. About 70% of them were in the confines of their homes and with the support of their spouses had got an opportunity to earn and contribute to their family. The small increase in income, which provided supplementary funds to their household incomes had given them confidence and made them feel worthwhile even though it had increased their physical burden.

Hence, we found that this new found economic independence gave them a lot of hope. However, we saw the need of distinguishing economic independence from empowerment. We found that, in the beginning, women took loans when they were at home and the reasons for taking loans tended to the family needs, however, later on she did more that fulfilling family needs with the loans. Yet, we found that women did not have equal rights. Equality, in terms of assets or property that the family had was held by the head of the family generally the man. Is this again a deep rooted problem or can we change this by law? So how can MF be women empowering?

Has it given her a greater say in family matters? Has it empowered her to fight for her rights and get the same? Evidence seems the contrary.

4.5: MF and Social/Political empowerment

Most of the women (57%) felt that their status had increased in society. They felt they were heading independent activities. Being involved with SHGs activities brought mobility to their lives because every morning they had reasons to get up other than the household work, resulting in commitments to the outside world as well. This dynamism in life gave them a sense of pride.

Many of them tried to get involved in community activities. They were often influenced and helped friends, though at times, this led them to problems as there were very few to guarantee the poor. They were however not confident to be change agents of society as they faced several problems in business such as sustained selling due to which they lost their confidence. Hence they felt a lack of confidence to take up leadership position in public activities.

To a large extent confidence to assert at home for minor decisions and later for major decisions comes from doing well in business. Ultimately success is the greatest confidence builder. When these women find that they need to go back to their husbands to either pay back their loans or for business help they lose confidence. Only when one gets confidence at home can one represent ones society/village etc. Hence we find that unless there are sustained efforts from the local

NGO it is very difficult to get these women to be change agents in their society. Section 5 Women empowerment at the individual level

Both the “virtuous spirals” as described by Mayoux (2009) and Kabeer (1999) have sought to

explain the conditions necessary for women empowerment. The former is of the belief that the

provision of MF should in itself trigger a series of positive effects for the women. Kabeer (1999)

is cautious in her expression of the indivisibility of the triangulation of recourses, agency and

achievements and the conditions of choice that the women have. She points out that

measurement is the key at each stage.

Sl. Dimensions of Women Empowerment Variable identified No. 1 Resource Preconditions Land 2 Agency Process 1. Educating Child

2. Major Decisions

3. Minor Decisions 3 Achievements Outcomes Literacy rate

Table 5.1 Dimensions of Women Empowerment

From the framework provided by Kabeer (1999) Table 5.1 has been deduced. It is an attempt to

try to put some variables from our study into her framework and try to understand if there is

women empowerment in the broad sense according to her framework. To exercise strategic life

choices poor women need to be aware of alternatives and choices and must be in a position to

exercise the same. To develop and understand if they can do the same or if MF facilitates the

same the above table can be used. One important precondition or resource that a woman can

have is access to land. The title of land in her name can give her comfort both in living with her husband in terms of respect she yields from her husband or her in laws as well as from her children in her old age. Though laws in India are for equal rights, we find that in reality most land holdings are in the names of men and the women do not exercise their rights for want of domestic peace. Hence the precondition of women empowerment is absent in a majority of cases causing domestic tension if women try exercising it.

Minor decisions of educating the children are often the women’s prerogative but most major decisions like buying of land/house are taken by the men. This again does reflect the process, namely the agency which is strongly aligned towards the patriarchal system ingrained historically. Again we reiterate that women have economic independence but their empowerment seems a moot point.

Literacy is an important social indicator that shows progress in society in terms of achievement.

Again we find that the most literate among our sample were the group leaders and undoubtedly the most successful among their peers. Basic business acumen comes from understanding not just the immediate surrounding but having the foresight into the future. This kind of strategic thinking was found in a few who had basic education.

The framework provided by Mayoux (2009). in assessing women empowerment with our data shows that most women have increased income but this income has lead them to only increase their expenditure in small consumption needs and not for large consumption needs. Her influence in the family as well as society has just been marginal and hence this small loan has not translated into a “virtuous spiral” as projected. The women seem having increased income but not significant enough to enable them to bring significant changes in her life or for that matter to her family.. This is not to belittle microfinance, but this is not to idolize the same into delivering what it cannot.

Does the progress of the family ensure the advancement of the self? Even though, we strongly agree that the self is the subset of the family, often benefits which accrue to the family do not accrue to the women, maybe more due to her selflessness than any compulsion/unequal distribution of the fruits of her efforts. Freeing oneself from the bondage of family, making decisions by oneself as suggested by several authors namely the freedom of choice is probably not enjoyed by a majority of women who are semi literate. Most of the women we met were coming out of the house on independent activities with the support of their husband.

Two opposing conclusions of this research namely that women accepting the hierarchical nature of society as well as that most of the women get support from their spouses for their “business activity” imply that there is mutual support in the family. It seems as though in the first place that the woman itself is not disempowered. It points to the fact that her semiliterate status did not give her an opportunity to venture out of the confines of her home earlier. Her increasing income indicates economic independence, a precursor for development and empowerment.

Again the self selection bias, a finding of this study shows that groups are chosen such that marginalized women have a tendency to be left out or form separate groups. To these women, empowerment seems a non-issue as they grapple with sustained incomes and market reach.

Empowerment is an issue only to those who have faced discrimination and have not been given their rights. Additionally if by consulting your spouse you are better off will you want to be making choices by yourself just because it is empowerment? Strangely, most of these women were not worried that the assets were not in their joint name as they felt that pressures from society would take care of them. Unless and until this mindset is present, we are not likely to find empirically that MF leads to women’s empowerment. Women’s empowerment seems a non-issue to them, hence an illusion, at least as of now in the short run.

Ultimately though nothing feeds and frees like money. To these women in the short run MF seems a transformation to economic independence. For MF to effectively contribute to women’s empowerment, or facilitate it at some level, the women involved must perceive themselves as being deprived of the same and/or choices, which will be taken care of by access to finance.

Also, we need to understand what a typical woman client prioritizes after borrowing from an

MFI. Self emancipation from various financial dependence or well being of the family as a whole. This remains a moot point. This can be understood by studying the groups in the long run. Moreover there could be a threshold of loan size over and above of which women can empower herself. One cycle of loan may be insufficient.

As future work we do plan on researching the same groups after they have taken more than three loans to see the economic and social impact it has created in their lives and the transformation the significant transformation they have brought to society due to the MFl loan and their activity. 1 &2: It has been recognized by most MF lending organizations that in your first and second loan cycles your credit history builds up which is used to further higher loans. Hence when a woman is in her first or second loan it is call a new loan and the same argument follows for the mature loan. References:

1. Banerjee, Abhijit, Timothy Besley and Tiomothy Guinnane, 1994, “Thy neighbour’s keeper:The design of a credit cooperative with theory and a test.” Quaterly Journal of Economics, 109(2): May ,491-515. 2. Gotez, A M and R S Gupta, Who takes the Credit? Gender Power and Control over Loan Use in Rural Credit Programs in Bangladesh, World Development, Vol 24, No. 1, (Jan 1996), pp.45-63. 3. Hashemi, S M, S Schuler, and A P Riley, Rural Credit Programs and Women’s Empowerment in Bangladesh, World Development, Vol. 24, No. 4 (May 1996), pp. 635- 53. 4. Hulme, D. and P Mosley, Finance Against Poverty, Volume 1 & 2 (Londond:Rooutledge,1996). 5. Kabeer, N., Resources, Agency, Achievements: Reflections on the Measurement of Women’s Empowerment, Development and Change, Vol. 30,No. 3,(July 1999),pp 435- 464. 6. Kabeer, N., Conflicts over credit: Reevaluating the empowerment Potential of Loans to Women in Rural Bangladesh, Women Development, Vol. 29, No. 1 (January 2001), pp 63-84. 7. Kabeer, N., Gender Equality and Women’s Empowerment: a critical analysis of the third millennium development goal. Gender and Development, Vol. 13, No. 1, (March 2005a), pp 13-24. 8. Khandker, S., Fighting Poverty with Microcredit: Experience in Bangladesh (New York: Oxford University Press for the World Bank, 1998). 9. Leach, F. and S Sitaram, Microfinance and Women’s Empowerment: Lessons from India. Development in Practice, Vol. 12, No. 5, (November 2002) , pp 575-88. 10. Littlefield, E., J Murduch and S Hashemi, Is Microcredit an effective Strategy to reach the Millennium Development Goals?, (CGAP Focus Note 24, 2003). 11. Mayoux, L., Women’s Empowerment thorogh Sustainable Microfinance: Rethinking ‘Best Practice’, Discussion Draft, Enterprise Development impact assessment information service (September, 2005). 12. Mayoux, L., Gender and rural microfinance: reaching and empowering women, IFAD, August 2009. 13. Morduch, J. and B Haley, Analysis of the effects of Microcredit on poverty reduction, New York, University Wagner Working Paper No. 1014 (Hull: Canadian International Development Agency 2002). 14. Collins. D., Morduch. J., Rutherford. S., and Ruthven. O., Portfolios of the Poor: How the World’s poor live on $2 a day, Princeton University Press, New Jersey, 2009. 15. Mosely, P. and J Rock, Microfinance, Labor Markets and Poverty in Africa: A study of six Institutions, Journal of International Development, Vol. 16, No. 3, (April, 2004), pp. 467-500. 16. Rahaman, A., Microcredit initiatives for equitable and sustainable development: Who pays?, World Development, Vol. 27, No. 1 (January, 1999), pp. 67-82. 17. Rahman, R. I., Impact of Grameen Bank on the situation of poor rural woman, Grammen Bank Evaluation Project Working Paper No. 1(Bangladesh Institute of Development Studies, 1986). 18. Sen, Amarytaya., Development as Freedom, Oxford: Oxford University Press, 1999. 19. Todd.H., Women at the Centre: Grameen Bank Borrowers After One Decade (Colorado:Westview, 1996). 20. Zaman, H., Assessing the Poverty and Vulnerability impact of Micro Credit in Bangladesh: A Case Study of BRAC, Background paper prepared for WDR. 2000(Washington: World Bank 2002). World Bank., Microcredit in India : Issue, Challenges and Policy Options, (Washington DC: World Bank, 2003). Appendix 1 Women empowerment-Questionnaire January 2010 Lakshmi Kumar, IFMR

1. Name of the respondent: 2. Group:

3. Age:

 < 35

 36-55

 > 56

4. Religion:

 Hindu

 Christian

 Muslim

5. Caste:

 OC

 BC

 MBC

6. Rural/Urban:

7. Years with HIH

 >3 Years

 2-3 Years

 < 2 Years

8. Number in family

 3-4 people  5-6 people

 > 6 people

9. Number of Students in family:

 0

 1

 2

 3

 4

10. School/College

 Private School

 Public School

 College

11. Husband Occupation  No Husband  Private Company  Coolie  Househusband  Government Job  Shop/Business  Farmer 12. Education  Illiterate  Basic schooling  Class 10 pass  Class 12 pass  Graduate

13. M F for:  Tailoring  Cloth/Saree sales  Rice grinding/packaging  Pickles etc.  Shop/Business etc.  Catering  Embroidery  Diverse small business  Cows  Goats  Education  Consumption expenses 14. Support from:  Self  Spouse  In laws  Children  Parents  Friends 15. Main income before MF:  Self  Spouse  Any other(specify) 16. Main income after MF:  Self  Spouse  Any Other (specify)

Let’s Talk (First four questions. Allow the respondents to chat in detail and note down the details.)

i. What did you use the loan for?

ii. What are your costs from it? iii. What are your benefits from it? iv. What is the profit from it?

v. Did it increase the income you have? Yes/No

vi. Did it increase household consumption? Yes/No vii. Did it increase consumption on health purposes for the family? Yes/No

viii. Has the loan increased the assets in your name? Why? Why not?

ix. Has the loan increased the control over resources? Yes/No Why? Why not?

x. Has the loan enabled you to increase your economic activities through larger amount of money? Yes/No

xi. Has the loan increased your access to the market? Yes/No

xii. Did the loan change the relationship in your family? Yes/No xiii. Has the loan increased your efficiency/productivity Yes/No (Are you using better techniques?)

xiv. Has the taking of the loan enhanced your status in the family and in the society? Yes/No

xv. Are you spending more time with family? Why? Why not? Yes/No

xvi. Has there been a change in the attitude of the men you interact with

Women Yes/No

You Yes/No xvii. In general(substantiate any changes you notice, positive or negative) Are you more involved in Local community activities Yes/No

Helping other women with loans Yes/No

Fighting women’s causes Yes/No

xviii. Do you see yourself as a change agent or a person who has brought about change in attitude in

Your husband Yes/No

In laws Yes/No

Your son/s Yes/No

Your daughter/s Yes/No

Your immediate society Yes/No

Your village/city Yes/No