Does Microfinance Empower Women? A Study in Some Selected Areas of Mymensingh District

Abstract

As a lower-middle-income country, Bangladesh has been pioneering microcredit for the past 4 decades. The target group of microfinance institutions (MFIs) is predominantly women, accounting for more than 90% of their members. The study aims to investigate whether microfinance has a significant impact on increasing women’s empowerment. We collected primary data from 200 households, comprising treatment and control groups, in three Upazilas of Mymensingh district. We have used eight indicators to measure women’s empowerment. We found that the treatment group's mean empowerment scores are higher than those of the control group across three of the eight indicators: mobility, ability to purchase, and awareness and involvement in social and political issues. However, based on the logistic regressions, the treatment group is found to be more empowered than the control group on only two indicators: economic security and the ability to purchase. In light of the negative relationship between microfinance borrowing and domestic violence revealed by the logit results, future studies should investigate whether microfinance exacerbates domestic violence rather than enhances women’s empowerment. The logit result also dictates a negative association between microfinance borrowing and intra-household food distribution, suggesting that future research should focus more on investigating this issue. Since a significant proportion of women borrowers lack substantial control over the loan, it is less likely that microfinance improves the entrepreneurial capabilities of the treated women in the sample. In such a context, it is difficult to justify the claim that a tiny amount of funding can lead to significant empowerment of women.