Is Microfinance Empowering Zohra??

Setting the scene:

 

Zohra, is a 46-years-old mother of three sons and three daughters. She is living in one of the poorly developed areas of Rawalpindi, Pakistan. Her husband has been running a general store since 2009 and wants to expand it by purchasing more goods, but because of financial constraints, he finds this difficult. For this purpose, Zohra has requested a loan from Kiva’s partner BRAC Pakistan, for the growth of her husband's general store. He would purchase items such as bread, eggs, detergent, tea, coffee, washing powder etc for his general store .This will help in increasing their monthly savings and improving their children's future as well. She is hopeful that the loan will result in a positive and productive outcome for them so that they can lead a happy life. (from KIVA org)

From the case study it appears that Zohra might not be engaged directly in income generating activities.  Zohra might just be the channel for credit which might still enable her to play a more active role in entire household decision-making, decrease her and the family’s vulnerability and increase investment in family well-fare.  This situation may benefit Zohra’s children through increasing expenditure on their nutrition and education.  It can also lead to improved well-being for Zohra and enable her to bring about changes in gender inequalities in the household.  It is also likely to benefit Zohra’s husband as a result of increased household income. (Mayoux and Hartl,2009)

According to Mayoux and Hartl’s (2009) ‘Virtuous Spiral’, increasing women’s access to microfinance services can lead to their economic empowerment, increased household well-being and social and political empowerment.  In addition these three aspects of empowerment mutually reinforce the ‘virtuous spirals’ and thus contributing towards women empowerment both in household and macro level.

In contrast to that, let us put Zohra in a different context where she was forced to borrow the money for her husband’s business.  She is not allowed to make any decision on household expenditure and got no control over the loan and how it is being spent.  Every time she tries to talk about the loan, she becomes the victim of domestic violence and physically abused.  Zohra decides to borrow more money from another microcredit program to repay her husband’s loan. Zohra ends up joining more than two microcredit programs and gets in serious debt.

There is no denying the fact that, women are vulnerable in the hands of social norms in some societies. Jamal (2008) states the surprising and unexpected impact of microfinance regarding women empowerment, women are often abused by their husbands when they participate in microfinance because the man begins to feel marginalized as the women gain some financial responsibility of the family.  The study conducted by Asim (2008) on the urban slums of the Lahore district suggests that microcredit intervention has no effect on the bargaining power of women within the household for a broad range of decisions including child related, health, economic and social mobility decisions.

Although the government of Pakistan and various rural support programs believe that by providing credit to women to generate income and consumption, the social and economic status of women can be improved (Jamal 2008), microfinance will only be successful in empowering women if there are sufficient norms and practices in place that provide for empowerment in a broader socio-economic and political context. (Hudak 2010)

References

Hudok, C. (2010), ‘Political Institutions & Grass root Development: The Political Economy of Microfinance’

Jamal, H. (2008), ‘Exploring the Impact of Microfinance in Pakistan’ available at http://www.spdc-pak.com/publications/Research%20Reports/RR-77.pdf. Accessed on 6/5/2013

Asim, S. (2008), ‘Evaluating the Impact of Microcredit on Women’s Empowerment in Pakistan’ available at http://www.academia.edu/165769/Evaluating_the_Impact_of_Microcredit_on_Womens_Empowerment_in_Pakistan accessed on 6/5/2013

Mayoux, L. and Hartl, M. (2009), ‘Gender and Rural Microfinance: Reaching and Empowering Women’ available at http://www.ifad.org/gender/pub/gender_finance.pdf accessed on 6/5/2013