In Mf a Magic Bullet for Women Empowerment

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Is Microfinance a 'Magic Bullet' for Women's Empowerment? Analysis of Findings fromSouth AsiaAuthor(s): Naila KabeerSource: Economic and Political Weekly, Vol. 40, No. 44/45 (Oct. 29 - Nov. 4, 2005), pp. 4709-4718Published by: Economic and Political WeeklyStable URL: http://www.jstor.org/stable/4417357 .Accessed: 21/06/2011 07:06

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I s Microfinance'Mag ic Bul le t ' f o rWomen's Empowerment?

Analys i s o f Findings f r o m S o u t h A s i aOpinionson the impact of microfinancehave been divided betweenthose who seeit as a "magic bullet"for women's empowermentand others who are dismissive of itsabilities as a cure-all panacea for development.Thispaper seeks to examine the empiricalevidence on the impact of microfinancewith respect to poverty reductionandempowerment f poor women. It becomes apparentthat while access to financial servicescan and does make vital contributions to the economicproductivityand social well-being ofpoor women and their households, it does not "automatically"empowerwomen,just aswith other interventions, such as education, political quotas, etc, that seek to bring about aradical structuraltransformation hat true empowermententails. These otherinterventions simply constitute different entry points into this larger project, each with

thepotentialfor social transformation,but each is contingenton context,commitment nd capacity if this potential is to become a reality.NAILAKABEER

Introductionneof theworkshops rganised tthe2004 WorldSocialForum in Mumbai was provocatively entitled 'Ismicrofinance the magic bullet for women's empower-ment?'. The answer to such a question is clearly no becausethere are no magic bullets in the policy world, development orotherwise. That such a question had to be posed is a testimonyto theevangelism with which microfinance is promoted by manyin the development community. At the same time, however, thisevangelism appearsto have triggereda dismissal of microfinancewhich is often as sweeping and as poorly grounded in evidenceas the claims themselves [see discussion in Kabeer2001]. Giventhis polarisation, it is necessary to sift carefully through stories,assertions, opinions and anecdotes in support of one set ofpositions or the other in order to clarify what microfinance hasachieved, and failed to achieve, in the lives of poor women.There is a second set of debates in the field of microfinancethat is of relevance to this paper. This is less about the meritsor otherwise of microfinance andmore aboutthephilosophy thatshould underlie the provision of financial services to the poor.Robinson (2001) outlines two different, and mutually exclusive,approaches to financial services as a way of illustrating thedifferences. She favours what she calls the "financial systems"approach which offers a commercially-oriented, minimalistpackage of financial services for the economically active poor- with subsidised job creation or charity for the rest. She is lesswell disposedtowardswhatshepresentsasthealternative"povertylending" approach which she identifies with donor-subsidised

lending for the poor, particularly the poorest of the poor, oftenlinked to training, social and other support services.The imperatives of cost-recovery and financial sustainabilitywhich drive the financial systems approachclearly resonate with

neo-liberal rientation o marketprinciples. t is not surprisingtherefore hatit has come to assumea hegemonicpositionininternationalevelopmenthinking boutmicrofinance s a toolforpoverty eduction.However,while it is clearthata financialsystems approachmakes fewer demandson donor funds orgovernmentubsidies hana poverty endingapproach,t is byno meansself-evident hat t is also moreeffective n achievingpovertyreduction r women'sempowerment. heevidenceonimpactsreportedby minimalistmicrofinance rganisations sopposedootherswhich akeamore"socially-oriented"pproachis too mixed to allow for such an unambiguousonclusion.Theposition aken nthispapers that heprovision ffinancialservices,like the provisionof anydevelopment esource, ep-resentsa rangeof possibilities,rather hana predeterminedetof outcomes.Whichof thesepossibilitiesarerealisednpracticewillbe influenced ya host of factors, ncludinghephilosophythatgoverns heirdelivery, heextent o whichtheyaretailoredto the needs andinterestsof thosethey are intended o reach,the nature f therelationshipswhichgoverntheirdeliveryand- thatmostelusive of alldevelopmentalnputs the calibreandcommitment f thepeoplewhoareresponsibleordelivery.Thedesignof financialservicesto the poorshouldbe based on anempirically-based nderstandingf the relationshipbetweencontext,approach ndimpact.The aimof thepapers tocontributeo such anunderstandingbyexaminingheempiricalvidence nthe mpact fmicrofinancewithrespect o poverty eduction ndtheempowermentf poorwomen.Itis interestedn theextent o whichaccessto financialserviceshelpspoorwomenaddress heirpracticaldailyneedsas wellastheir trategic endernterests ndwhetherheapproachtakenmakesadifference o theseoutcomes.However, hepaperrecognises hatstrategic ender nterests o to theveryheartofthe structures f patriarchalower: he abolitionof a coercivegender.divisionof labour;of unequalcontrolover resources;Economic and Political Weekly October 29, 20054709 4709


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endingmaleviolence,women's controlovertheirownbodies,the establishmentf politicalequalityandtheendingof sexualexploitation Molyneux1985].Thesearenotstructureshat anbechanged vernight.nstead,theprocessof transformation ayneed tobeginmoremodestlywith the constraintshatpreventwomenfromexercising heirindividualgencyon apracticalverydaybasis.Inanycase,theremaybe manywomen for whom the desirability f this largeragendaof change, f theyhavethoughtabout t atall, is likelyto beovershadowedythedailystrugglesorsurvival. rioritisingstrategic endernterests ver heir verydaypractical eedsmaynotonlyfail toreflect heirown order fpriorities,tmayactivelydiscourage heirparticipation.However, hetwodo not needbe in opposition o each other.Meeting hedailypracticalneeds of poorwomenin waysthattransformhe conditionsn which heyexercise heiragencycanbe seen as partof the processby whichtheyareempoweredotakeon some of the moredeeply entrenched spectsof theirsubordination.n otherwords,how needsare addressedmaybeas criticalas whichneeds are addressed n bringingaboutthelarger tructuralransformationmbodiedn the deaof strategicgender nterests Kabeer1999].

IIPoverty,VulnerabilityndSocialExclusionA staticview of povertydefinesit in termsof thecapacity omeet basicneeds. There s, however, ncreasing ecognition fthe need or adynamic pproachwhichallows for thepossibilitythatmeetingone's needstodaydoesnotguaranteehat heywillbe met tomorrow.Theconceptof vulnerability rawsattentionto the basicuncertaintywhich surroundshe capacityof poorpeople to meet their needs on a regularand assured basis.Vulnerabilitymay reflectexposureto short-term ndidiosyn-craticrisksor it maybe theproduct f long-standing,tructural-factors.Thepooraremorevulnerablehan herestofthepopulationbecause heyface a widervarietyof risks and shocks andtheyhave ewerresources ofallbackon: Somepoorhouseholdsmayseekto takeprecautionary easures, uthave o live "diminishedlives"as a result DrezeandSen 1991 11].Others eek tocopewith crisis as and when it occurs.Poverty ndvulnerabilityrenotpurely conomicphenomena,reflectingwhatpeople have, they are also social phenomena,reflectingwhotheyare.The southAsia region s characterisedbyvariouskindsofhistoricallyntrenchedroup-basednequali-ties. Caste,ethnicityandreligionexacerbate he economic di-mensionsof povertyand vulnerability hroughprocessesofculturaldevaluationwhich assign certaingroupsof people alowerpositionin the social hierarchy.Gendernequalitiesutacrossdifferent trata f society.Broadlyspeaking, ominant ultural ormsandvalues n southAsiastressmaleresponsibilityor protecting ndproviding or householdmembers ndconstructwomenastheir ife-longdependents.Menaregiven authoritywithinthe householdandpriorclaimto itsresources. orpoorermen,however,he ailureo ulfil heirgender-ascribedoles, oliveuptosocialexpectationsboutheir apacityto protect and provide can lead to considerable stressanddemoralisationntheirpartswellasdomestic iolence, igh evelsof alcoholism, bandonmentf their amiliesandresponsibilities.Women,on theotherhand,canexpecttobe providedor,butare assigneda subordinate tatuswithin theirhouseholdsand

in society at large. Devalued by the prevailing culture, deniedequal access to resources, facing cultural restrictions on theirphysical mobility, women's dependent status leaves them opento what Cainet al (1979) termed"patriarchal isk",thelikelihoodof abrupt declines in their economic welfare and social statusshould they find themselves bereft of male guardianship. Thegreater their dependence, the greater the risk.However, women from disadvantaged social groups do notalways face the same degree of cultural restrictions on theirphysical mobility as women from more affluent or higher castehouseholds and are more likely to engage in paid work outsidethe home. They may not be economically dependent to the samedegree, but as membersof poor andsocially marginalisedgroups,they face various kinds of gender discrimination from membersof theirown community as well as more powerful actors acrossthe institutional spectrum.

IllMicrofinancetrategiesorPovertyReduction:MarketsndMovementsIt is this context of insecure livelihoods and limited optionsthat gives rise to the need for financial services of a particularkind among the poor, services that will permit them to translate"smallpay-ins" into "large take-outs"when needed [Rutherford2002]. The "pay-ins" take the form of regular contributions to

savings and loan repayments n the amounts thatthey canmanagewhile the "take outs" are lump sums of money in the form ofloans or accumulated savings which can tide households overanemergency or a period of scarcity, or finance life cycle events(births, marriages, burials) or used to purchase productive andother assets. However, these lump sums, though large from theperspective of the poor, are too minuscule, and the associated"pay-ins"even more so, to appeal to formal financial providers.The poor are in any case dismissed by them as unreliable andhence unbankable. Institutionalexclusion from formal financialprovision leaves poor households dependent on informalfinancial services, often at usurious rates of interest which cansend them spiralling into a vicious cycle of impoverishmentand debt.

Microfinance organisations (MFOs) serve to address this dualphenomenon of institutional exclusion, on the one hand, andadverse incorporation,on the other. However, as we have noted,they vary considerably in theirphilosophy, their vision and theirstrategies. At the "market"end of the spectrum are those whoperceive the problem to be one of failure in financial marketsas a result of asymmetrical information and who therefore seekto provide market-likealternatives to excluded groups. These arecloser to the "financial systems" approach and exemplified inthe south Asian context by Association for Social Advancement(ASA), Bangladesh and Society for Helping Awakening RuralPoor through Education (SHARE), India.At theother"movements"end of thespectrumareorganisationswhich perceive theproblem of financial exclusion to be sympto-matic of deep-rooted structural nequalities which notonly curtailaccess to formal financial provision butalso the capacity to parti-cipateinotheraspectsof social life. Theirvision andorganisationalstrategiesseek to address these inequalities. They arecloser to the"poverty enders"approachandexemplified by Centre for Youthand Social Development ( CYSD) in the south Asian context.Other MFOs fall somewhere along this spectrum.

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Most MFOs in the south Asian context, regardless of wherethey areon this continuum, deal primarily with women andtakea group-basedapproach o service provision. However, they varyin their approach to group formation. Some have adapted theGrameen Bank model of the group, e g, SHARE, others promoteself-help groups(ProfessionalAssistance forDevelopment Action(PRADAN) andCYSD) andstill others work with a co-operativestructure (Self Employed Women's Association (SEWA) andCredit andDevelopment Forum(CDF)). They also varybetweenthose like SHARE which offer a minimalist credit-centredprogramme and those which link financial services with otherforms of provision. Some like PRADAN offer primarily live-lihood-based services while others like Bangladesh Rural Ad-vancement Committee (BRAC) may also offer social and legalservices. And finally, MFOs vary in whetherthey are concernedprimarily with economic goals or whether, like BRAC andCYSD, they have a broader social mission as well.Given their financial focus, we would expect most MFOs tohave some economic impact on the lives of the poor. However,there are reasons to expect certain social consequences as well.One is that the majority of MFOs work with women from poorhouseholds andoften from socially excluded groups. Hence theyhave thepotential to addresssocial inequality. The second reasonrelates otheirgroup-based trategies.Thesehold outthe possibilityforbringingaboutsocial change for the simple reasonthatpeopleacting togetherare often able to achieve what they cannot achieveindividually. This is as true of theprivileged sections of a societyas it is of the marginalised, the main difference being that themarginalised find it far harder to undertake forms of collectiveaction which might help to address their social disadvantage.MFO strategies offer them the possibility of belonging to agroup of their choosing in contrast to the socially ascribed oreconomically imposed relationships which tend to make up thebulk of theirexperience, particularly n the case of women. Theyareencouraged to meet on a routine basis with others who sharetheirexperience of marginalisation and to gain access to knowl-edge about the world beyond the confines of their immediateexperience. Such strategies could, in principle, serve to empowerthem, both individually and collectively. Whether they do so inpractice s a matter orempirical investigation.This paperanalysesvarious attempts at such investigation in order to come up withsome answers. It draws on studies carried out under the Imp-Act programme1 on BRAC from Bangladesh and SHARE(AndhraPradesh),CYSD (Orissa) andPRADAN (Jharkhand)aswell as on the wider literature from the region.

IVOutreachndImpactMicrofinance OutreachThe first question to ask in a review essay of this kind is who

precisely gains access to microfinance services. The consensusappearsto be that the majorityof organisations do not reach, andsometimesactively exclude, the extremepoor[HulmeandMosley1996]. This is supportedby recent studies carried out by the Con-sultative Group to Assist the Poorest (CGAP) in a number ofcountrieswhichfound thatasizeable percentageof households thathadnewly oinedanMFO(i e,before heyhadbenefitedfrom accessto financialservices) were not drawn from the poorest 30 percentof thepopulationin the context in which the organisationworked.

In the Indian ontext, he CGAPstudiessuggest hatSHARE,withits minimalistGrameenmodel,did better hanPRADAN,which ombineself-help roupormation ith ivelihoodupport,indrawing n thepooresthird f thepopulationn areas n whichtheyworked Sharmat al2000, Somanathan003]. However,this conclusionwouldbe misleadingbecause he CGAPstudiesmeasure elativerather han absolutepoverty.Given that nci-denceof poverty n AndhraPradesh,where SHARE s based,wasabout11percentaccordingo officialstatisticsandaround44 percentin Bihar/JharkhandherethePRADANstudywascarriedout, it is highlypossiblethatgroupmembers ecruitedbySHARErom hepoorestercileweregenerallyesspoor hanthe majority f groupmemberswhojoinedPRADAN.This issupported y Imp-Actstudieswhichshowedthat over 75 percentof householdsn the areas n whichPRADANworkedhadexperiencedoodshortagesntheprevious earcomparedolessthan 10 percent of households n SHARE'sareaof operation[KabeerandNoponen2004; Cortijoand Kabeer2004].SHARE'sminimalistpproach asclearly uccessfulndraw-ing on the pooresthouseholds n the moredynamicstate ofAndhra radeshwith tsrelativelyow levels of povertybutmaynot haveperformed uiteas well as PRADANself-helpgroupapproachn theextremelypoorandphysically solatedareasofJharkhand.othorganisations,owever,reported igh evelsofsocial excludedgroupsamong ts membership:7 percentofPRADAN' membershipnd83 percent of SHARE'sbelongedto adivasis,dalits and "otherbackward astes".A studyof CYSD carriedout in Koraput, ne of thepoorestdistricts n India'spooreststate,found that it was the savingsfocus of self-helpgroups hat attractedwomen fromverypoorhouseholds.However, t also found hatwhatpersuadedwomentojoinagroupwas notnecessarilywhatkept hem ogether vertime. Thus 93 percent of new memberscited a safe placetokeeptheirsavingsas theirreason orjoininga self-helpgroupcomparedo 23 percent who mentionedaccessto emergencyloans and less than 1 percent who spokeof group unity. Bycontrast, nly63percentof longer tandingmembersmentionedsecure avings,69percentmentioned ccesstoemergencyoansand 17 percent mentionedgroup unity.There s alsoevidence romBangladeshhat upportshe viewthat he extremepoormayrequire different et of interventionsthan the moderately oor.BRACfound thatits "mainstream"ruraldevelopment rogrammes aslargelyby-passingheverypoor.It thereforedevelopeda programmeombiningmonthlyfoodtransfers,avings,creditand raining veraperiodof yearstargetedxplicitly othisgroup.While tcouldbearguedhat heable-bodied xtremepoorwillgainmore romwageemploymentandpublicworks han romattemptso promote heirentrepre-neurship,hisis less easilyextended o poorwomen n regionswhere thereareculturalrestrictions n theirpublicmobility.

Economic Impact of MicrofinanceReviewsofmicrofinancefforts romvarious arts ftheworldsuggeststhat,by andlarge,access to microfinance as had apositive conomicmpact,hat his mpact asbeenoften arger orthose closerto thepoverty ine than hose further wayandthattheyincreasewithduration f membershiprintensityof loansas membersbeginto invest in assetsrather hanconsumption[MorduchndHaley2001,HulmeandMosley1996].However,therearealso examplesto suggestthatprogrammespecially

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designed to serve the needs of the extreme poor can overcomesome of the constraints associated with broader interventions.Findings from the Imp-Act programme provide evidence oneconomic impact in the south Asian context. These studiesconfirm that access to financial services generally improved theeconomic position of households: improving asset base anddiversification into higher return occupations among SHAREmembers in Andhra Pradesh [Todd 2001]; promoting the adop-tion of new agricultural practices and significant increases inincome among CYSD SHGs in Orissa [Dash and Kabeer2004];promoting irrigation and other new agricultural practices, in-creasing ownership of livestock and levels of savings and re-

ducing reliance on moneylenders among PRADAN SHG mem-bers in Jharkhand[Kabeer and Noponen 2004]. Murthy et al'sstudy (nd) of SAPAP self-help groups in Andhra Pradesh alsoreported an overall reduction in poverty, including reductionsamong the extreme poor.While women's needs and interests cannot be equated withimpact at the household level, they are not independent of themeither. Women, along with other members of their households,have a stakein theoverall prosperityandwell-being achievementsof theirhouseholds. However, we are also interested in how thesegains are achieved and distributed. There is a strong possibilitythat in contexts where there are strong restrictions on women'spublic mobility, manyof thedocumented economic consequencesreflect male rather than women's agency and may have littleimpact on intra-household inequalities.Goetz and Sen Gupta(1996) found that 63 per cent of womenloan holders surveyed in their Bangladesh study of three micro-finance programmes had exercised "partial, very limited or nocontrol" in relation to loan use and conclude that they exercisedvery little voice in household decision-making. However, theydo not indicate whether women's say in household decision-making had increased or declined with access to loans andmoreover, as Zaman (1999) points out, their findings couldequally plausibly be interpretedas showing that 61 per cent ofthe respondents had "full, significant or partial control" andhence a fair degree of control.Kabeer (2001) found that the economic agency exercised bywomen loan holders with the SEDP in Bangladesh varied withhousehold wealth, with women from better-off householdsexercising a greater decision-making role in loan-supportedactivities than poorer women. However, wives of male loanholders were found to exercise the lowest levels of economicagency. In theirstudy, Hashemi et al (1996) show that economiccontribution varied by organisation, with Grameen loan holdersreportinghigher levels of contribution than BRAC. Once againnon-loan holders reported the least levels of contribution.

In India, the study of SHARE by Todd reported that the vastmajority of its clients engaged in economic activity, regardlessof durationof membership, an indication of the poverty of theirhouseholds. However, durationof membershipreduced women'sreliance on casual wage labour and increased their engagementin more profitable forms of self-employment, including animalhusbandry.As Todd notes, investment in livestock was one ofthe pathways to higher income among SHARE clients.The CYSD study also found high levels of economic activityamong both old and new members but a greater diversificationout of subsistence agriculture among older members as well aslower rates of seasonal migration. The analysis of PRADANsuggested that membership of PRADAN had reduced women's

reliance on unskilled wage labour activity and increased theirinvolvement in their own cultivation.Murthyet al's study (nd) of SAPAP self-help groupsin AndhraPradesh noted evidence of increased employment opportunitiesover time among group members, an improvement in the qualityof work available as well as diversification into new, non-

traditional activities.MFOs can play an important role as conduit for new formsof knowledge and information, an important causal factor inpromoting women's economic agency. This is likely to beparticularly mportant n remote rural areas such as those whereboth CYSD and PRADAN worked. In the area covered by theCYSD study, for instance, over 60 percent of the sample of bothmature and new members had never listened to a radio whileonly 1 per cent read newspapers. Not surprisingly, CYSD wasa majorsource of new information. Dash and Kabeer found thatmatureCYSD memberswere more ikelytoknow how toundertakebanktransactionsand to deal with government agencies thannewmembers.They also foundthatmaturememberswere more likelyto have adopted land bunding, bio manure,HYV seeds, compostpit, commercial vegetable cultivation andmultiple cropping thannew members, suggesting that some of the practical informationprovided by CYSD had been translated into practice. PRADANplayed a similar role in Jharkhand.Kabeer and Noponen (2004)found that PRADAN members were far more likely than non-members to be able to count large currency notes, to sign theirnames andto calculate interest rates.They also reporteda higherrate of adoption of improved livelihood practices.

Social Impact of MicrofinanceThe review of impact studies by Morduch and Haley (2001)

providesexamples of the social impactMFOs,have hadincludinganumber ocated inthe southAsian context. These includehealth,nutrition and education. The Imp-Act studies also provide evi-dence of MFOs' social impact. Studies of PRADAN andCYSD.both located in remote and highly food insecure regions, reportsignificant improvements in food security and quality of diet,access to clean drinkingwater andimprovements in housing. Thestudy of SHARE also noted nutritional improvements andimproved housing. Murthy et al (nd) found that members ofSAPAP self-help groups in Andhra Pradesh reported improve-ments in regularity of meals, levels of child nutrition and lowerlevels of infant mortality in the past five years.Where findings are disaggregated by gender, it is possible toascertain owhatextent the social impactalso encompassed genderdisparities. Thus Murthy et al (nd) noted that women memberswere more likely to report eating together with male membersof the family, less likely to reportdisparities in food distributionand less likely toreportsevere malnutritionamong girlchildren orfemale infantdeaths in the past year. Loans to women, however,had positive and significant effects on children's status with astrongeffect for girls thanboys. Loans to men did not have suchanimpact.BRAC studies reporteddecline in severe malnutritionamong children with stronger effects for girls than boys.While children's education is frequently found to improve withaccess to microfinance, the findings on gender disparitiesare notconsistent. Some reinforce the importanceof loans to women forbothgeneralbut also gender-equalising results. Khandker 1999),for instance, found that a 1 per cent increase in loans to womenborrowers with the Grameen Bank increased the probability of



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school enrolmentby 1.9percent forgirls and 2.4 percent for boyswhile a 1percent increase in creditto male loan holders increasedboys' enrolment by 3.1 per cent but had no effect on girls.Kabeer(1999) found that children of women loan holders withthe SEDP were more likely to be at school than children of maleloan holders. In addition, women loan holders with the SEDPwere more likely to send girls to school that were male loanholders. The presence of BRAC within a village was found toincrease overall enrolmentratesby 6 percent, andgirls' schoolingby 8 percent. However, this is likely to reflect BRAC's schoolingprogrammes rather than access to credit per se.In India, two separate studies of SHARE [Todd 2001, Cortijoand Kabeer 2004] both found that while SHARE membershiphad a positive effect on boys' education, it had almost no effecton girls. In fact, Cortijo and Kabeer found that mature SHAREmembers were more likely than new members to report nvolve-ment in waged labourand other forms of paid work as a primaryoccupationforgirlsandless likely toreportschooling as aprimaryor secondary occupation. Andhra Pradesh has of course thehighest levels of child labour in India so the findings suggestthat while SHARE was contributing to its reduction, its effectwas confined to boys' labour.Nor was it necessarily the case that more socially-orientedMFOs reportedgreater gender equity in theirimpact. In the caseof CYSD SHGs. children of new membersreported higher levelsof literacy andgreaterlikelihood of going to school than maturemembers. On the other hand, Kabeer andNoponen (2004) foundthat children of PRADAN group members more likely to go toschool thanchildren of non-members. Moreover, while a higherpercentage of boys went to school than girls for both membersand non-members, the gender gap was smaller for PRADANmembers.

VGender ndPowerwithinHouseholdsClaims thatparticipation in microfinance activities has impli-cations for women's empowerment within the household wereinvestigated by a number of studies with varying results. Intra-household decision-making was one commonly investigatedindicatorof women's empowerment. While there is evidence thatmicrofinance can have an impact on women's role in householddecision-making, it has not occurred evenly in all contexts orin all areas of decision-making.Kabeer 2001)foundthatmale loanholderswithSEDP generallyreportedsole decision-making in relation to use of loans, the run-ning of loan-fundedenterpriseanddisposal of income fromtheseenterprises, suggesting that wives of male loan holders did not

have a great deal of say on these matters.While SEDP's womenloan holders did appear to exercise a greater degree of saythan the wives of male loan holders, they were more likely toreport joint and less likely to report sole decision-making thanmale loan holders.According to Hashemi et al, both membership of GrameenBank or BRAC and duration of membership had significantpositive effects on involvement in major decisions within thefamily as well in making large and small purchases.In India, the study of CYSD found that membership of SHGshadlittle impactonpatternsof household decision-making. In thecase of PRADAN as well, therewas little difference found in ownor joint decision-making between members and non-members

but where differences were found to be statistically significant,they did not provide evidence of positive impact. PRADANmembers were found to be less likely to participate in decisionsabout amilysize andvisiting theirnatalfamily thannon-PRADANmembers. However, a further comparison between those SHGmembers who had or had not participated in PRADAN's live-lihood support programme found that the additional supportsignificantly strengthened women's sole decision-making roleon a wider range of different decisions, including children'seducation, choice of livelihood activity, use of loans, purchaseand sale of assets and visits to natal family.Murthyet al (nd) reportedthat SAPAP self-help group mem-bers were far more likely than non-members to report makingdecisions about a range of "reproductie rights" issues, particu-larly the decision to have an abortion, but also the nature of thecontraception, how many children to have and the age ofmarriagefor their daughter.Holvoet (2005) carried out one of the more carefully designedstudies of the impact on decision-making in the context of TamilNadu. She compared patternsof decision-making forthreegroupsof women: MYRADA-organised SHG members who receivedloans fromtheWDP since 1993-94 andrepresenteda morerecentcohort of loan holders; SHG members organised by MYRADAand RIDO who had received loans from the Tamil Nadugovernment's Women's Development Programme since 1990-91 and represented an older cohort; and a third group made upof women and men who received individual loans from thegovernment's IRDP programmes. She explored a number ofdifferent areasof decision-making using four differentcategoriesof decision-making: women dominated decision-making maledominated decision-making, norm-following decision-making,and bargaining over decisions.She found that channelling loans through women's groupsrather than to individual women substantially increased thelikelihood of female decision-making and bargainingrelative tomaledecision-making andnorm-following. This was particularlythe case for loan use, money management, time and task allo-cation anddecisions related to cottage industry.While the timingof loans to women who belonged to MYRADA groups madelittle difference to patternsof decision-making, a comparison ofRIDO and MYRADA groups who had both accessed loans atthe same time suggested that, along with membership ofgroups, the strategy for group organisation had an importanteffect on findings. The shift from norm following to bargainingfor different areas of decision-making was far more striking forMYRADA than for RIDO group members. Thus, the studysupports the view that not only does group-based lending towomen have a greatereffect on intra-householddecision-makingthan individual lending but also that strategy used in groupformation (such as frequency of meetings, investment in groupformation, more intensive training) is also likely to make moreof a difference than duration of group membership per se.The issue of domestic violence is anotherareathathas featuredin investigations of the impact on intra-household that micro-finance has had. Once again, findings vary. Goetz and SenGuptasuggest an increase in domestic violence but offer onlyanecdotal evidence. However, an ethnographic study byRahmandid provide quantitativeandqualitative evidence to thiseffect (1999). He reported that out of 120 women borrowerswith Grameen Bank in one village, 18 per cent reported adecrease in violence while 70 per cent reported an increase in



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violence within the household as a result of their involvementwith the bank.

On the otherhand,Hashemiet al foundthat women loanholdersin theirsample reported ower levels of domestic violence than didwomen in a control group - 9-13 per cent compared to 21-27percent. They found that one routeby which this apparentdeclineappears o have occurredwas the increased awareness on the partof family membersthatwomen now had a public forumin whichto discuss matters which had previously been private. A BRACstudy reportedhigher levels of domestic violence among mem-bers than the comparison group (9 per cent compared to 6 percent), but found that violence declined with duration of mem-bership and with the addition of training to credit provision tolevels lower than that of the comparison group (3.4 per cent).Kabeer's analysis of responses by women loan holders of theSEDP reported hat most women felt that violence hadgone downas a result of women's access to loans for a number of reasons:the easing of economic stress had reduced one of the causes ofviolence and the fact thatwomen were now seen to be sharing theresponsibility for family provisioning with men rather han con-stitutingpartof male responsibility. Women also felt that hey hadgreater bargaining power within the family and could (and did)withhold co-operation if husbands proved extremely abusive.In the Indiancontext, the PRADAN studydid not findany signi-ficant difference in the incidence of domestic violence reportedby members and non-members. However, Murthy et al (nd)assessment of SAPAP found that 64 per cent of non-membersreporteddomestic violence, with29 percent reportingwife beating,compared to just 45 per cent of SAPAP members who reporteddomestic violence, with 14 per cent mentioning wife beating.Otherstudies provide other kinds of insights into the impactsin terms of intra-household relations. The CYSD study foundthat not only were mature members more likely to believe thattheir economic contributions within the family were highlysignificant than new members but they were also more likelyto reportthat theirfamily members shared this view. PRADANmembers were less likely than non-members to reportpressureto bear sons and more likely to keep back part of their incometo dispose of. Murthy et al found that a higher percentage ofmembers reported the freedom to visit and invite their parentsandsiblings and while a much lower percentage of both membersand non-members said that they allowed adolescent daughtersas much freedom as they allowed sons, memberswere still morelikely to report such freedom.

VIWider ocialImpactA less researched impact relates to the likelihood of changesbeyond the individual member and her family to relationshipsin the wider community andpolicy domain. These were touchedon in anumberofstudiescarriedout under heImp-Act programme.However, in contexts where different types of developmentalorganisations were active, it became necessary to separate outthe consequences associated with different interventions. Thestudy of BRAC by Kabeer and Matin (2004) found that manyBRAC members were also members of at least one other NGO.

Using regression analysis to control for alternative NGO mem-bership, they found high levels of trust in other group members,regardless of number of years of BRAC membership, but thatolder group members were significantly more likely to express

trust n relationto membersof the ward-level federationof BRACgroups as well as members of other religions.The study also found that years of BRAC membership in-creased levels of trust expressed in locally elected male as wellas women members of the union parishad and its chairmanandreduced the likelihood of having paid a bribe in the past year- although not of "ever" having paid a bribe. It also increasedlikelihood of access to government programmes, of voting innational and local elections and of accurately naming the locallevel elected woman representative.It was clear from the study that type of group membershipmattered. Controlling for membership of other NGOs allowedthe separationof benefits/consequences from different forms ofmembership and suggested that these could be mainly attributedto yearsof membershipof BRAC. Since these other NGOs tendedto be far more minimalist MFOs than BRAC (most frequentlyASA and Grameen) this is not surprising.

Cortijo and Kabeer (2004) also used regression analysis tocontrol for the fact thatmany of SHARE's members(40 percentof mature and 31 per cent of new SHARE members) were alsomembers of the government's DWCRA programmein the areasof AndhraPradesh where theirstudy was conducted. Their resultssuggested thatmembershipof SHARE groups led to an improve-ment in business relationships within the community whileDWCRA membershipwas more strongly associated withgeneralrelationships with the rest of the community. Membership ofDWCRA was also associated with increased likelihood of womenhaving access to government programmes orthepoor,of meetingwith variouselected andgovernmentofficials, of attendingvariouspublic meetings (gram sabha,janma bhumi and collectors griev-ance day), of participating in political protests and campaignsand of the ability to name the mandal president and the primeminister of the country. SHARE membership had a weaker ornegligible effect onmostof thesepoliticaloutcomes,once DWCRAmembershiphad been controlled for, but it did have a significantindependent effect on the likelihood of members voting at thelocal gram panchayat elections.Qualitativefindings from Todd's study appearto corroboratethese results. Based on her interviews with a numberof SHAREmembers, she concluded that while SHARE membership hadincreased theirself-confidence andentrepreneurialactivities andbroughtthem greaterrespect within the community, the majorityhad no active involvement in community affairs and no desireto get involved.Both CYSD andPRADAN work with some of the poorest andmost socially excluded sections of India's population and rep-resented the only forms of developmental group activity in theareasstudied.Levels of participation n the formal public domainwere found to be extremely low in these areas, regardless ofwhether or not they were membersof SHGs, a reflection of theiroverall isolation. The traditionalpanchayatsystem did not func-tion particularly effectively in these villages and village-levelgram sabha meetings were held on a very irregularbasis.However, given these low overall levels of participation,PRADAN membership made a difference. Eleven per cent ofPRADAN members had attended such a meeting compared tojust 1percent of non-members and 15percent hadapproachedabankforan ndividual oan(indicative of theexercise of individualinitiative) compared to just 2 per cent of non-members. Thesedifferences were both statistically significant. The CYSD studyalso found higherpercentages of matureCYSD membersrelative



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to newer ones had interactedwith government officials in orderto address some problem and had participated in the palli sabhaand gram sabha meetings, although as in the PRADAN context,overall levels of participation were low.Dash and Kabeer also explored various forms of politicalagency on thepartof CYSD members.Itfound that he percentagesvoting in elections were highest at local level ward level, for thesarpanch, or the samity member andzilla elections, with maturemembersreporting ignificantly higher evels of participationthannew members:generally between 80 and90 percent. Percentagesvoting declined athigherlevels (legislative assembly andnationalelections) and differences between mature and new membersdisappeared. Much lower percentages of both mature and newmembers campaigned in these elections but mature membersgenerally reported significantly higher percentages of participa-tion in election campaigns as well as the desire to contest a localelection. The differences were statistically significant.Finally, the study found that while overall levels of partici-pation in protestsandcampaigns were low, 43 percent of maturemembers and 37 per cent of new members had taken part inprotests against the making and selling of liquor while 55 percent of mature and 30 percent of new members hadparticipatedin anti-liquorcampaigns within theircommunity. Interest in thisissue has to be interpreted in terms of the strong relationshipbetween male alcoholism and violence against women as wellas the drain that alcohol consumption represented on familyresources. Education was the other issue around which memberswere active, with mature members reporting higher levels ofactivity than new. Such action generally took the form of demandsfor schools under the education guaranteescheme in areaswhichlacked schools as well as protests against teacher irresponsibility.Murthyet al (nd) explored the "sociability" impact of partici-pation in MFO groups in Tamil Nadu. They reportedthat 91 percent of members hadvisited new places in theprevious five yearscompared to 31 per cent of non-members; 83 per cent reportedan increase in friendships compared to 26 per cent of non-members,withahigherpercentageof the formerreporting riendsfrom other castes. While 34 per cent of dalit members reportedcaste-based violence in the public domain compared to 23 percent of dalitnon-members, 64 percent of dalit membersreportedthat group membership had reduced caste-based violence com-pared to 25 per cent of dalit non-members.The study also reportedthat95 per cent of the group membershad voted during the last panchayat elections, many discussingtheprosandcons of candidatesduringgroupmeetings andaround15 per cent said that they had abided by decisions taken duringthese forums. Women members had contested between 20 and25 percent of reservedseats for women duringthe2001 elections.Only 18 percent had won but the process of contesting electionshad been an important experience, both for those who ran andfor those who voted for them.

VIIPovertyReductionndSocialChangeThe far-rangingimpact of microfinance has been discussed inthis paper, some positive, some negative and some more con-sistent thanothers.Evidence thatfinancial services help toprotectlivelihoods by regularisingincome flows andreducing variabilityin consumption levels appears to be fairly consistent across arange of different approaches to financial service provision.

There are also consistent findings that microfinancehelps to meeta variety of basic needs andpromotes improvements in standardsof living. We noted such evidence in relation to household foodsecurity anddiversity of diet, to quality of housing andaccess toclean water. While there is generally positive evidence in terms ofchildren's health, nutritionandeducation, the findings on genderdisparities in these outcomes are weaker and less consistent.The findings in this paper partly supportHulme andMosley'scontention that poverty impact tends to be strongest for thoseclosest to the poverty line and weaker for those further away(1996). Security of consumption needs, andthe capacity to copewith crisis, may have to be built up before poor households areprepared o take risks. However, findings from both Imp-Actandother studies challenge the apparentcornllary implication drawnby Hulme andMosley as well as Robinson(2001) thatthe extremepoor will not benefit from access to financial services. Theysuggest instead that the extreme poor can also benefit fromfinancial services provided these are designed with their needsand constraints in mind.As faras women's economic agency is conrcerned,he evidencereported n this paperis positive, but thereareexceptions as wellas variations in the nature and strengthof impact by context andbyorganisation.Financialservices were found topromotewomen'sparticipation npaidwork in contexts where they had been deniedsuch possibilities and to have diversified their economic optionsin contexts where they may have been economically active butfaced limited options. The evidence also suggests an increasedvoice in household decision-making, in some cases, as soledecision-maker and in others, in joint decision-making. In othercases, however, decision-making impact was negligible. Accessto financial services was found to exacerbate domestic violencein some cases but to lead to a decline in others as a result ofan increase in the size of women's economic contribution, orin thedurationof membershiporwith the introductionof trainingand other services.

A number of studies also reported gender-related impacts inthe wider community. These included improvements in relation-ships within the community, access to government services aswell as political participation,protests andcampaigns. They alsoincluded higher levels of trust towards fellow group members,towards elected officials as well as towards members of othercastes and religious groups.One of the limitations of conventional impact studies is thatthey tend to compare current participants of microfinanceprogramme either by loan cycle or duration of membership orelse in relation to non-participants.While such studies have oftendocumentedvarioussourcesof dissatisfactionwiththeprogrammesas well as negative or negligible outcomes along with evidenceof their positive impact, they do embody a "selection bias"towards the views of those who stay within programmesagainstthose who have left.

Attention to the views of those who have left the programmecan help to correct this bias, but this is less frequently done. Areview of "exit" studies carried out in relation to some of theorganisationsassociated withtheImp-Actprogramme ound bothindividual and programme-relatedreasons featured in explana-tions given for exit. In the case of SHARE, the only south Asianorganisation included in the review, the reasons given includedthe amount of time spent at weekly meetings, the requirementof having to guarantee each others' loans, expulsion for fallingbehind on repayments, failure of their businesses, particularly



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among hose who had no priorexperience,andin a few cases,displeasurehatpeople from all castes were permittedo joinSHARE'sgroups[Todd2001].However,t shouldbe added hatastudyofex-clients,madeupas it is of thosewho have chosen to leaveor beenexpelled roman organisation,mightbe expectedto be biased towards hosewithvery negativeviews of the organisation.But Toddfoundthat 30 per cent of the ex-clients were willing to return oSHAREwithoutanyconditions,while another 0 percentwerewillingto returnf some changeswere madein organisationalpractices.Finally, t shouldbe pointedout thatwhilethere s reasonablyrobust vidence hataccess to microfinanceeadsto bothdirecteconomicandsocial mprovements ithin hehousehold, swellaschanges nrelationshipsnthe widercommunity,here s lessevidence o supporthe view that t helpspoorpeopleto "grow"out of povertyand graduation owardsmainstreaminancialservices s less robust.Thismay partlyreflect ack of attentionto such longer-term onsequences n existingliterature, ut itshouldalso raisequestionsaboutthe limits to microfinance swell as the persistenceof exclusionarybarrierswithinformalfinancial nstitutions.Pathways to Change:Resources and Relationships

Analysisof thepathways hroughwhich he variousdirectandwider ocialbenefits/consequencesccurcan makean mportantcontributiono ourunderstandingf processesof socialchange.It also contributes o policy debatesaboutthe philosophyandpracticeof microfinance or the poor.One obviousand directroute hroughwhichchangeoccurrednthe studies eviewedwasvia increasedaccess to economicresources,both the financialservicesprovidedas well as the expanded evels of economicactivitythat these madepossible.A seconddirectrouterelated o theprovisionof other ervicesoften linked to financial service delivery,such as livelihoodssupport,healthandlegal training.They served to bringaboutcognitiveand behavioural hangeswhichinteractedwith,andamplified, hangesbrought boutbyaccesstofinancial ervices.The act hat heseresources nd erviceswerechannelledhroughwomenin contextsin which women have often been deniedindependentccesstoeconomicresources ndhad imitedaccessto servicesmeant hat heseroutesalsobrought bout mportantgender-relatedhanges.AlongwiththesemoreeasilyattributablehangesassociatedwithMFOactivities,however, herewere otherchangeswhichcouldnotbetracked seasilyto theprovision ffinancial ervicesbecause heyoperatedhroughesseasilydiscernible relational"pathways.The provisionof financialandotherresourcesdoesnot occur n a socialvacuum,t occurs n thecontextof specificsocial relationshipsand promoteschanges in others.Theserelationships,heexperiences nd he nteractionsssociatedwiththem, an nturnbring bout hangeswhichareonlypartly elatedto the financialservices in question.Two specific sets of social relationsare directlyassociatedwiththe provisionof financialservices. The firstrelateto in-teractionswiththestaffof theorganisationsn question, nter-actionswhichcarrythe potential or bringingabout both theintended hangesof the organisationhrough raining,motiva-tional and otheractivities.They also carrythe potentialfor

unanticipated changes through, for instance, offering newrole-models for women to aspire to or providing a forum forinteractions between poorer and less poor sections of the com-munity which need not (necessarily) be based on client principlesof deference and authority.The second set of social relations are those between membersof the groups organised by MFOs. However, these groups donot embody the same principles of organisation or the same kindof relationships between members. For instance, Thornton et al(2000) noted this in their review of some of the larger NGOsinBangladesh.They distinguishedbetween(i) thoseorganisationswhich were largely focused on the provision of financial services(such as Grameen Bank and ASA); (ii) those like BRAC whichcombined financial provision with a range of social, legal andother services; and (iii) those like Nijera Kori which had groupsavings but otherwise eschewed financial services and focusedon social mobilisation.

They notedthat thegroup meetings organised by theminimalistfinancial organisations' programmeswere largely taken up withmatters relating to loan disbursement and repayment. Sincemembers were requiredto act as guarantorsof members' loans,meetings were often characterised by some amount of tensionand conflict. By contrast, group meetings organised by NijeraKori generally focused on training and reflection on economicand social issues of concerns to members.They tended to be morerelaxed and to cover a wide range of topics.Some of the Imp-Act studies also highlight differences in thegroupcultureof differentorganisations. The BRAC studycarriedoutby Kabeer and Matinreported hatmaturemembers observedwith regret that the nature of group meetings had changedafter BRAC began to expand its lending operations in the mid-1990s and to concern itself with financial sustainability andrepayment rates. Earlier meetings had given them a chance tolearn about the world and to discuss their own problems butmeetings now hada much narrower ocus on loan disbursementsand repayments.SHARE's weekly meetings generally focus on loan-relatedmatters. Interviews with 109 ex-clients found that 40 per centgave the length of the meetings as their reason for leaving,meetings were often not brought to a close until all membershad paid their loan instalments. Another 22 per cent objectedto group pressure to repay loans while some others left becausehusbands objected to the requirement that groups must jointlycover any arrearsby individual members.Loan-relatedconcerns play amuchsmaller role inthe formationof self-help groups of the kind organised, for instance, byPRADAN andCYSD. The CYSD study provides useful insightsinto theprocess of groupformationas one means by which socialchange can be brought about [Dash and Kabeer 2004].It suggested that CYSD did not necessarily build new socialrelations from scratch since strong ties already existed betweenmembers of isolated tribal communities, but it did help to di-versify associational life within the community and to promotenew ways of taking collective decisions, new resources to shareand new forms of leadership.We would expect to find that the nature of organisationalrelationships promoted by MFOs will have implications for thekinds of impact they are able to achieve, particularlythe socialimpact. This is partly supported by some of the evidence citedin this paper. We reported, for instance, Holvoet's finding thatmembershipof particularkinds of self-help groups (MYRADA)



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had a far greater impact on women's role in intra-householddecision-making than membership in other kinds of self-helpgroups (RIDO).We also found that it was membership of BRAC, withits combination of Grameen style groups and linked social andlegal services, rather han the other more minimalist MFO groupsto which some BRAC members simultaneously belonged, thatexplained a series of wider benefits, including the likelihood ofvoting in local and national elections, reduced likelihood ofhaving paid a bribe in the previous year, improved access togovernment programmesfor the poor and higher levels of trustin elected officials.On the.otherhand, we found that changes directly attributableto membership of SHARE were largely confined to women'sgreater sense of self-confidence within the household and im-proved business relations within the community. Other forms ofwider impacts, including improvements in relations with thewider community, participation in local village assemblies,interaction with local government officials and participation incampaigns were generally more strongly associated with mem-bership of DWCRA, with SHARE membership reinforcing thechange in some, but not all, cases.

VIIIAlternativepproacheso Microfinance?The analysis in this paper suggests that financial services canplay an importantrole in the lives of poor women but that theirphilosophy and design will determine the extent to which theypromotewomen's well-being andagency as well as theirlonger-term capacity to reflect and act on their strategic interests.However, the implications of this are difficult to raise and toexplore in the face of the growing hegemony of the "financialsystems approach"among donors and governments.There are understandablereasons for the appeal of the latter

approach.Incomparison with thepatronage, corruption, eakagesand default rates which characterised earlier subsidised creditdelivery to the poor by governments as well as the welfaristphilosophy which underpinnedso many programmesforwomen,an approach which stresses commercial principles as the basisfor lending and financial sustainability as the organisational goaloffers some obvious advantages.Moreover, such organisations may well be better suited tocertain contexts than the poverty lending approach. In contextscharacterisedby a vibrant ocal economy, functioning markets ingoods andservices and the absence of entrenched inequalities inthe economic opportunities and life chances of specific socialgroups, a financial systems approach may not only succeed incompensating for any short-term failures in financial markets,but may serve in the long run to create a more integratedfinancial system. In such contexts, women with entrepreneurialcapacity may have as much to gain from a financial systemsapproach as men.However, the financial systems approach, with its roots inmethodological individualism and a "competitive equilibrium"view of the world, is best able to deal with the financial exclusionof the poor when it reflects individual deficits (of assets, edu-cation, health, etc) and market failure (problems of asymmetricinformationandcontractenforcement). It is less able to deal withproblems of financial exclusion when they reflect socialexclusion in situations of structural inequality. Individual

disadvantagensuchcontexts s theproduct f entrenchedocialrelationshipsf ethnicity, aste andgenderwhichsystematicallyblock he accessof certain ocialgroups o market pportunities,governmentervices nd hecollective orums fdecision-making.A focus on financialservicesbasedon commercialprinciples,costrecoveryand ndividualending n such contextsmayverywell reinforce ocialexclusionandexacerbate ocialinequality.What s needed nstead s a moreholisticunderstandingf thenatureof inequalityand a more comprehensiveapproach otackling t. "Povertyending" n the way it is characterisedyits detractorsoesnotprovidehisalternative:harity, atronage,welfarismand subsidieshave little to offerpoorpeople exceptthe perpetuation f their dependencystatus. A more viablealternativesrepresentedy organisations hichcombine inan-cial serviceswith other orms of support nd whichuse group-based trategieso buildorganisationalapacity f thepoor.Suchorganisations re not indifferent o issues of sustainability utdefine it in terms of the capacityof poor people to sustainthemselves ver ime hroughntegrationntomainstream arketsandserviceprovision atherhan n termsof thecapacityof theorganisationo reproducetself over time.Thereare, of course,otherfar more radicalapproachesostructuralhangethanthose associatedwith microfinance utthey maynotaddress heeverydaypracticalneedsof thepooraseffectivelyasmicrofinance. heappeal f microfinances thatit can providea verypracticalbasis for poorwomen to cometogetheron a regularbasis at the same time as promotingnewideas, opportunities nd social relationswith the potential oaddress trategic ender nterests.Notall MFOSchooseto takeonthis argerransformativegenda or ndeed ould heywithoutunderminingheir oleasefficientprovidersf financial ervices.However, here s noreasonwhy organisationsoncernedwithsocial transformationannot co-exist alongsideorganisationsconcernedwitha narrowerinancialagenda. ndeed, heymayprovecomplementaryrsynergisticntheireffects.Inmystudyof NijeraKori in Bangladesh, or instance,I found that itsmemberswerealsooftenmembers fGrameen ank, hushavingto attend two sets of meetinga week [Kabeer2003 2005].However, heyvaluedtheirmembership f bothorganisationsfor differentreasons.They valuedGrameenBank becauseitprovided hem with access to "usefully arge"sumsof moneywhenthey needed it while they valued their associationwithNijeraKoribecause it helpedthemstandup for themselves.- Similarly, n my study of SEDP, a womanexplainedthedifference etween he raininghehadreceived romSaptagram,anexplicitly eministorganisationorlandlesswomen,and romSEDP,anorganisationorpromotingmallenterprise: BeforeI joined Saptagram,ou couldsay I was stupid...Iwas like achild. Saptagramaughtme to thinkfor myself. With SEDPtraining, alsoleafnt omething ew,how todobusiness.Whichis better?Both are important"Kabeer2001: 79].Conclusion

The indings eviewed n thispaper uggest heneed orcautionin talkingabout heimpactof microfinance,n general,andtheneed otalkabout he mpactparticularrganisationsavehad nparticularontexts.MFOsvaryconsiderablyn thecontexts nwhichthey work, hesectionsof thepopulationheyworkwith,theiranalysisof theproblem ffinancial xclusion, hestrategiesthey adoptto address his problemand the commitmenthey



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bring to bear in the implementation of their strategies.Organisationswith apparentlysimilar approachesmay neverthe-less report very different benefits because of variation in someof these factors.

However, regardless of the pace and the extent of the changethat they bring about, the review in this paper suggests thatmicrofinance offers an importantand effective means to achiev-ing change on a numberof different fronts, economic, social andperhaps also political. The success of MFOs in building up theorganisational capacity of poor women provides the basis fortheir social mobilisation that many other development interven-tions have not been able to achieve. Indeed, their very successmaybe theirundoing:there is growing unease attheway in whichboth governments and populist political parties may be seekingto capitalise on the idea of self-help groups for their owninstrumentalpurposes.An importantquestion that remains unanswered relates to thelonger term impact of microfinance. We noted that there wasvery little evidence relating to the extent to which microfinanceclients graduated out of poverty and into mainstream financialservices. To some extent, this reflects the fact that there arevery few longitudinal studies which track clients over a suf-ficient period of time to be able to tell us how they fared. Thereis clearly a need for microfinance organisations to developsome time frame within which they would expect to see tangibleresults.

But it may also reflect the limits to microfinance as a tool forpoverty reduction. However effective the role of microfinanceorganisations in providing financial services to the poor, theycannot substitute for broader policies to promote pro-poor eco-nomic growth, equitable social development and democraticparticipation in collective forums of decision-making. In theabsence of such policies, microfinance may at most provide asafety net for the poor rather than a ladder out of poverty.And finally, to return to the question with which we startedthe paper, it is clear that while access to financial services canand does make importantcontributions to the economic produc-tivity andsocial well-being of poor women and theirhouseholds,it does not "automatically" empower women - any more thando education, political quotas, access to waged work or any ofthe other interventions that feature in the literature onwomen's empowerment. There are no magic bullets, no pana-ceas, no blueprints, no readymade formulas which bring aboutthe radical structural transformation that the empowerment ofthe poor, and of poor women, implies. These various inter-ventions aresimply different entry points into this largerproject,each with the potential for social transformation, but eachcontingent on context, commitment and capacity if thispotential is to be realised. [1CEmail: [email protected]

Notes1 Imp-Actrefers to "Improving he impactof microfinanceon poverty",afour-year ctionresearchprogramme,undedby FordFoundation,whichbrought ogether30 microfinanceorganisationsand networks romacrossthe world and a small academic team from the Instituteof DevelopmentStudies, Sussex, Bath University and Sheffield Universityto carryoutpractitioner-led evelopmentof monitoring ndevaluation ystems.BRACfrom Bangladeshand SHARE, CYSD and PRADAN from India werethe main organisationsfrom the south Asia context participatingn theprogramme.

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Analysis fromJharkhand,ndia',Imp-Act Working PaperNo 11, IDS,Brighton. www.ids.ac.uk/impact/publications/workingpapers.htmlKhandker,S R (1999): 'FightingPovertywith Microcredit:ExperienceinBangladesh',OxfordUniversity Press, New York.Molyneux, M (1985): 'Mobilisation without Emancipation:Women'sInterests,State and Revolution', Feminist Studies, Vol 11(2), 227-54.Morduch,J and B Haley (2001): Analysis of the Effectsof Microfinanceon Poverty Reduction,CIDA, Ottawa.Murthy,R K, KRajuand A Kamath nd):TowardsWomen'sEmpowermentandPovertyReduction,LessonsfromheParticipatorympactAssessmentof South Asian Poverty Alleviation Programme in Andhra Pradesh,India, mimeo.Robinson,M (2001): 'The MicrofinanceRevolution:SustainableFinancefor the Poor', World Bank, Washington.Rutherford, (2002): The Poor and TheirMoney,OxfordUniversityPress,New Delhi.Sharma,M, R Rangacharyulu,K HanumanthaRao and S Reddy (2000):'Assessing the Relative PovertyLevel of MFI Clients- Developmentof an OperationalTool', synthesisreport or the case studyof SHARE,India, IFPRI,WashingtonSomanathan, R (2003): 'Poverty Targeting in Pradan's MicrofinanceProgramme:A Study of the Jharkhand HGs SynthesisReportfor theCase Study of PRADAN', India, Universityof Michigan and IndianStatisticalInstitute.Thornton, P, J Devine, P P Houtzager,D Wrightand S Rozario (2000):Partners in Development: A Review of Big NGOs in Bangladesh,Prepared or DFID, Bangladesh.Todd, H (2001): 'PathsOut of Poverty:The Impactsof SHARE MicrofinLtd in AndhraPradesh',Imp-Act report.Zaman, H (1999): 'Assessing the Impact of Micro-crediton PovertyandVulnerabilitynBangladesh',policyresearchworkingpaper2145. WorldBank, Washington.

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In Mf a Magic Bullet for Women Empowerment

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