Term Report

Microfinance

Title

The Role of Microfinance in Women Empowerment in Bangladesh

Prepared For Hossain I. Adib Course Instructor Masters in Development Studies United International University

Prepared By Prepared By: Shanita Ahmed ID: 125121003

Date of Submission December29, 2012

Table of Content
Content
Abstract

Page
03

1. Introduction 2. Objective 3. Scope 4. Methodology 5. Looking on to The Issue 5.1. Gender

04 05 05 05 06 06 06 06 07 07 08

5.2. Basic Concept of Gender Conflict 5.3. Women Empowerment 5.4. Situation in Bangladesh

5.5. Microfinance and Women Empowerment Women Empowerment 6. Recommendation 7. Conclusion 8. Reference 9. Annex

5.6. Debate on Positive and Negative impacts of Microfinance on 10 11 12 14

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Abstract
The NGOs, in Bangladesh has come up with many different concepts to give the poor people monetary stability. Among those all, microfinance is the most popular and effective concept that has successfully put a remark of poverty alleviation. Bangladesh has one of the longest histories with microfinance. Now, Bangladesh boasts a large number of well-known microfinance institutions (MFIs) including Grameen Bank, BRAC, and the Association of Social Advancement (ASA). Microfinance mainly aims to empower the rural women and it has mostly successful in doing so. However, there are some small dark spots on the successful surface of microfinance in case of women empowerment. Although, the spots are in insignificant shape at present, but lack of attention can influence them to decrease the positivity of the microfinance in women empowerment. In general, the objective of the report is to measure the role of the microfinance in women empowerment. However, the specific focus will be given in to identify the negative effect of microfinance in women empowerment. Although microfinance as a concept is too wide with many wings to discuss on, but the report will confine it within a defined perimeter.It will just focus on the negative impact of microfinance in case of women empowerment. The report will not look for any primary data, it will completely based on secondary data. Throughout the entire report, the effort will be involved to bring out the actual scenario regarding the negative effect of microfinance only in women empowerment. Micro-finance is a very useful development tool for women in Bangladesh but the evidence showed the picture has a mixed view of both positive and negative shades. Microfinance projects can therefore be strengthened by specifically addressing gender issues. The microfinance projects that most successfully address the issue of womens status do their homework first regarding possible gender impacts. This will help microfinance to address the other hidden issues that drop the negative spots on women empowerment process. Thus microfinance can work more efficiently on their goal of women empowerment process.

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1.0 Introduction
If development is the stair to reach the success then Bangladesh is definitely climbing up the stairs toward success. In present time, any discussion for development focuses on poverty alleviation by empowering the poor in different ways. The researchers, development workers and donors are undertaking different sectors to stabilize the poor, this includes- shelter, food, employment, education, women empowerment, child mortality, child labor, disaster protection, domestic violence etc. The last decade has been the notionofemergingmany new NGOs who are playing a vital role in the development of Bangladesh. NGOs can reach to the mass people more deeply than government organizations, and people tend to trust them more as they find NGOs beside them in every necessity. As a result it becomes easier for the NGOs to execute any concepts specially in case of monetary issues. The NGOs, in Bangladesh has come up with many different concepts to give the poor people monetary stability. Among those all, microfinance is the most popular and effective concept that has successfully put a remark of poverty alleviation.A good definition of microfinance as provided by Robinson is, Microfinance refers to small-scale financial services for both credits and deposits that are provided to people who operate small or micro enterprises where goods are produced, recycled, repaired, or traded, provide services, and to other individuals and local groups in developing countries, in both rural and urban areas. Bangladesh has one of the longest histories with microfinance. Now, Bangladesh boasts a large number of well-known microfinance institutions (MFIs) including Grameen Bank, BRAC, and the Association of Social Advancement (ASA). Microfinance mainly aims to empower the rural women and it has mostly successful in doing so. However, there are some small dark spots on the successful surface of microfinance in case of women empowerment. Although, the spots are in insignificant shape at present, but lack of attention can influence them to decrease the positivity of the microfinance in women empowerment.

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2.0 Objective
In general, the objective of the report is to measure the role of the microfinance in women empowerment. However, the specific focus will be given in to identify the negative effect of microfinance in women empowerment. It is clearly visible and understandable that microfinance is working like a blessing for the rural people. It has brought a drastic change in rural livelihood in terms of education, employment, financial, social status as well as mental strength. On the other hand a big fact is waiting with hidden appearance and that is no good comes without a bad. This is what actually happened in case of microfinance practice in rural Bangladesh. In the course of availing all the positive aspects of microfinance, the negative aspects have been ignored from the attention. The focus of the study will be to find out the negative aspect of microfinance in case of women empowerment. It is true that microfinance has empowered the rural women significantly, but there is evidence that, sometimes the process of empowerment creates conflict in the household and turns out the result innegativity. The report will try to bring out the actual situation in this regard.

3.0 Scope
Although microfinance as a concept is too wide with many wings to discuss on, but the report will confine it within a defined perimeter.It will just focus on the negative impact of microfinance in case of women empowerment. The report will not look for any primary data, it will completely based on secondary data. Throughout the entire report, the effort will be involved to bring out the actual scenario regarding the negative effect of microfinance only in women empowerment.

4.0 Methodology
The report will be qualitative in nature and it will use the secondary data only to draw out the scenario. The analysis portion will be compiled in the literature review focusing on the following facts1. The existing gender conflict in rural household, where women face power of men in case of financial matters 2. The overall women empowerment agenda and process of microfinance to manage the poverty situation of Bangladesh
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3. The negative effects of microfinance in women empowerment process faced by the rural household

5.0 Looking on toThe Issue

5.1 Gender This term, of course, refers to the cultural constructions through which the differences and relationships between the sexes are understood in a given society (cf. Ortner and Whitehead 1981). As such, the concept of gender has as much to do with men as with women. As Flaxnotes, From the perspective of social relations, men and women are both prisoners of gender, although in highly differentiated but interrelated ways (1987:630). Moreover, the concept of gender extends beyond the social roles and relations of the sexes. As an analytical tool, the concept of gender helps us look at the ideological constructs as well as everyday practices that express, reproduce, and sustain unequal distribution power, prestige and resources between boys and girls and between men and women in various spheres of society. 5.2 Basic Conceptsof Gender Conflict Patriarchy is defined as the male-dominated structures and social arrangements where women are systematically excluded from the product or economic spheres of life and where womens sexuality is always a matter of scrutiny. Here, dominance is not always coercive, rather it leads to a passive consent of the subordinated group where this group (women) accept to be dominated considering their status as natural (Hartmann 1981). Patriarchy is composed of six structures: paid work, the household, the state, male violence, sexuality, and culture, to which special attention must be paid (Walby 2010). 5.3 Women Empowerment Empowerment is defined as an institutional environment that enables women to take control over their material assets, intellectual resources, and ideology (Fernando 1997). Also, a process aimed at changing systemic forces which marginalize women in a given context. (Batliwala 1994).Womens empowerment is thus dened by the United Nations Population Information Network (POPIN) who have based it on ve components, which are as follows: Womens sense of self-worth. Their right to have access to opportunities and resources.Their right to have the power to control their own lives, both within and outside thehome.Their

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right to have and to determine choices.Their ability to inuence the direction of social changes to create a better social and economic order, nationally and internationally. 5.4 Situation in Bangladesh Women and men are by constitution equal of the Peoples Republic of Bangladesh, but in reality they are not (Islam, 2000).There is a gross disparity between women and men in every sphere of life, especially in economic aspects, since the agricultural sector which dominates the national economy is controlled mostly by men. Traditionally, men are the breadwinners and economic dependence makes women socially backward and considered to be a burden on the family. However, the subordination of women in Bangladesh is a consequence of the existing patriarchal social system which determines power relations within households and the bargaining power of household members through the organization of the family, kinship and marriage, inheritancepatterns, gender segregation and associated ideologies (Khair, 1998; Kabeer 1999; Naved, 2000). Womens powerlessness arises from their illiteracy, lack of awareness, poor knowledge and skills and also from their lack of self-esteem and confidence (Lazo, 1995). Thus, even though women constitute almost half of the population in Bangladesh, their status has been ranked the lowest in the world on the basis of twenty indicators related to education, health, marriage, children, employment and social equality (NCBP, 2000). Bangladeshi women are the most battered in the world, an estimated 47 per cent have suffered from different types of assault (Mahmood, 2004). As a result of these norms and practices, women lack choice and agency decisions that shape their welfare (Mahmud, 2003). Thus, most aspects of womens lives, particularly womens freedom of choice, decisionmaking power and access to resources are controlled by the norms of the patriarchal society (Sebstad and Cohen, 2002). Consequently, they are marginalized as production units for bearing and rearing children (Ahmad, 2001). The empowerment of women could be the principal strategy to tackle these crises and upgrade their status. 5.5 Microfinance and Women Empowerment Microfinance attempts to address the lack of access to financial markets by the poor. It focuses on providing micro-credit - small collateral free loans to the very poor for selfemployment. Around two thirds of microfinance clients around the world are women. Under the first rationale for investing in microfinance (integrated poverty program) the focus tends
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to be on women because they are often the poorest and are responsible for household welfare, whereas in the second, women are the focus because they tend to have higher repayment rates. Microfinance empowers women by addressing their economic vulnerability through selfemployment and training. Research performed by Nobel laureate AmartyaSen indicates that female support through work and educational strategies (the premise behind most microfinance programs) leads to higher social standing and increased bargaining power within their households. This claim is bolstered by Jude Fernando, who states that improvement in economic status has a positive effect on womens empowerment allowing them to interact within a group, initiate educational programs, and pursue other dimensions of social change (Fernando 1997). Laurie Garret, Pulitzer Prize-winning science journalist and Senior Fellow in Global Health Council on Foreign Relations further claims that microcredit is not only a tool for empowerment but a life-saving mechanism against spousal abuse and disease. 5.6 Debate on Positive and Negative impacts of Microfinance on Women Empowerment PositivesOne of the most important studies by Hashemi, Schuler and Riley with sample survey data from interviews and observations of 120 households and a survey of 1,300 married women, finds evidence of empowerment across several indicators: including mobility, reduced domestic violence, purchasing, decision making, political awareness and activism. Similarly, Kabeers mixed study of quantitative data from 700 households and the testimonies of 50 women, reports positive findings, that micro-finance had given women courage and confidence in their dealings with others, promoted greater social inclusion, reduced tension, violence and conflict within the household increased voice in household decisionmaking, created secret savings, and asset accumulation, all of which serve to strengthen a womans break-down position. There is strong evidence for micro-finance participation creating a suitable environment for public action to thrive. Several studies concur in finding an increase in social capital among women participants leading to practical collective action against injustices Kabeer (2011), Moniruzzaman (2007) and Baylugen(2008).Osmanis positive study says that inter-household

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bargaining power being a key factor for Bengali women. This is strongly linked with the breakdownposition, the position a woman would find herself in if the marriage broke down. NegativesOne of the main studies that considers micro-finance to be disempowering is Karims ethnographic work which details that it is inappropriate to load up poor women with debt as a vehicle for development, and states that men control 95% of these loans. Karim advances the concept the economy of shame to explain her findings that rural women are manipulated by micro-finance owing to their relative insecurity and lack of choices. These findings are echoed by A. Rahmanas he said that womens positional vulnerability relative to men encourages NGOs to target women for reasons of profit. Both Rahman and Karimare concerned that granting loans to women that are then appropriated by men, reinforcing existing patriarchal norms. Cons and Paprocki share some of these views in their work carried out in Arampur in Northern Bangladesh. They concurreports of abuse by male field officers and that this adds up to a constriction of choices and options rather than the reverse. Although women are increasingly being targeted in microfinance and microenterprise projects, this does not necessarily mean that gender relations are being taken into account. Rather, targeting women raises a host of questions about the context in which women are operating their businesses or handling microfinance. These questions need answering if we wish to understand whether women are able to use the services and make the anticipated improvements in their livelihoods (Mayoux 1999).No intervention can have neutral effects when the players do not start as equals. Women face a variety of obstacles or constraints to taking and repaying credit, starting up and developing their businesses, and responding to policy incentives. These obstacles are the outcome ofexisting gender relations. The matrix below identifies some of the obstacles which might prevent women from utilizing microfinance or business development services in the ways they might wish. These constraints interact and reinforce each other: Individual refers to constraints thatoperate because of the woman sownendowment of skills, experience,knowledge, confidence, etc. Household refers to social relationswithin the household which are mostlytalked of in relation to husbandsandwives.
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The relevant table has been given at appendix part. Thus there are studies large and small, qualitative and quantitative, showing both positive and negative responses to micro-finance and its empowerment potential. There are several key areas where authors findings differ; these important contested areas of debate are: loan control; violence, gender relations, mobility, education; and the concept of do no harm.

6.0 Recommendation
Empowerment cannot just be about womens choice but must accept that these choices must incorporate an assessment of the values embedded in agency and choice, values which reflect the wider context. On the basis of the above discussion about the situation the following recommendations can be drawn to reduce the negative effect of microfinance in case of women empowerment. These are as follows Root level promotional activities to make the rural people understand about the positivity of microfinance to improve the financial condition of the family Increasing the number of field workers to reach to every household. So that,they can deal every familypersonally and counsel them to motivate for women empowerment through microfinance A wider awareness has to be created to make both men and women aware about the facilities of gender equality issues Design microfinance loan scheme in such a way which will include the participation of men along with the women. In order to ensure women empowerment, the loan will be given in a proportionate way where the majority of both loan responsibility and consequent authority will be womens The flow of loan amount can be increased with not only the rate of repayment, but also considering the increasing productivity of the business run by the loan of microfinance. This will motivate the entire household to support the woman to increase the productivity of the business Microfinance institutions can open a sub-wing of monitoring the emerging domestic violence or male domination regarding that particular loan amount

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7.0 Conclusion
Micro-finance is a very useful development tool for women in Bangladesh but the evidence showed the picture has a mixed view of both positive and negative shades. Microfinance projects can therefore be strengthened by specifically addressing gender issues. The microfinance projects that most successfully address the issue of womens status do their homework first regarding possible gender impacts. They also incorporate specific gender indicators in their activity monitoring. Regular monitoring helps to track the effectiveness of the microfinance activity and helps identify potential negative impacts on women early so that they can be addressed.Strategies to facilitate a positive impact on women form a basis for tailoringmicrofnance policies, practice and products to better address gender equality and promote womens empowerment. Crucial components of a proactive womens empowerment strategy include training in gender analysis for MFI staff members, the utilization of female loan officers and the provision of equal employment and management opportunities for women. MFIs should also incorporate empowerment indicators, such as the proportion of women clients in the loan and savings portfolio, into client monitoring and assessment processes.

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8.0 Reference
1. Ahmad, F. (2001) Gender Division of Labour: Bangladesh Context, Steps Towards Development, 6 (1): 7-26. 2. Batliwala, Srilata. (1994) The Meaning of Womens Empowerment: New Concepts from Action In Sen, G., Germaine, A. and Chen, L. C. (Eds) Population Policies Reconsidered: Health, Empowerment and Rights. Harvard Center for Population and Development Studies. 3. Bayulgen, O. (2008) Muhammad Yunus, Grameen Bank and the Nobel Peace Prize: What Political Science Can Contribute to and Learn From the Study of Microcredit. http://ehis.ebscohost.com.libezproxy.open.ac.uk/eds/pdfviewer/pdfviewer? sid=717cb759-1b93-469b-8b8f-72f010464cf6%40sessionmgr113&vid=2&hid=116 4. Fernando, Jude L. (1997) Nongovernmental Organizations, Micro-Credit, and Empowerment of Women. Annals of the American Academy of Political and Social Science,Vol.554, The Role of NGOs: Charity and Empowerment, 150-177. 5. Hartmann H (1981). The unhappy marriage of marxism and feminism: toward a more progressive union. In: Sargent. L (Editor). Women and revolution: the unhappy marriage of marxism and feminism. Boston: South End Press. 6. Hashemi, S. Schuler, S. Riley, A. (1996) Rural Credit Programs and Womens Empowerment in Bangladesh World Development, Vol. 24, No. 4. 7. Islam, M. (2000) Women Look Forward p. 4, in: M. Ahmad (ed.) Bangladesh in the New Millennium. Dhaka: Community Development Library. 8. Khair, S. (1998) Struggling against the Doldrums: the Public-Private Dichotomy and the Bangladesh Women, Social Science Preview, XV (1): 101-118. 9. Kabeer, N. (1999) Resources, Agency, Achievements: Reflections on the Measurement of Womens Empowerment. Development and Change, 30 (3):13-24. 10. Kabeer, N. (2011) Between Afliation and Autonomy: Navigating Pathwaysof Womens Empowerment and Gender Justice in Rural Bangladesh. Development and Change 42(2): 499528. Blackwell Publishing. 11. Karim, L.(2008) Demistifying Micro-credit. The Grameen Bank, NGOs, and Neoliberalism in Bangladesh. http://bangladesh-web.com/dbimages/212040-0 article %20on%20Micro%20Credit.pdf
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International Institute of Social Studies. Published by

12. Mahmood, S.A.I. (2004) HIV/AIDS: Socioeconomic Impact on Women, Independent, 24 December Issue, Dhaka.

The

13. Mahmud, S. (2003) Actually How Empowering is Micro-credit? Development and Change, 34: (4): 577-605. 14. Moniruzzaman, M. (2007) 1, 358. 15. Mayoux, L. (1999) Questioning virtuous spirals: Micro-finance and women's empowerment inAfrica. Journal of International Development 1 1 (7): 957-984. 16. Naved, R.T. (2000) Intra-household Impact of the Transfer of Modern Agricultural Technology: a Gender Perspective, International Food Policy Research Institite, Washington, D. C. 17. NCBP (2000) Gender Equality, Development and Peace for the Twenty-first Century - NGO Committee on Beijing Plus Five. Dhaka: Women for Women. 18. Ortner, Sherry B., and Harriet Whitehead. Sexual meanings, the cultural construction of gender and sexuality. Cambridge: Cambridge University Press, 1981. 19. Osmani, (2007) A breakthrough in womens bargaining power: The Impact of microcredit. Journal of International Development J. Int. Dev. 19, 695716 20. Robinson, Marguerite S, Microfinance: the Paradigm Shift From credit Delivery in Sustainable Financial Intermediation, in Mwangi S Kimenyi, Robert C Wieland and J D Von Pischke (eds), 1998, Strategic Issues in Microfinance, Ashgate Publishing: Aldershot. 21. Rahman, A. (1999), Women and Micro-credit in Rural Bangladesh: Anthropological Study of the Rhetoric and Realities of Grameen Bank Lending. Westview Press. Boulder, CO. 22. Sebstad, J. & Cohen, M. (2000) Microfinance, Risk Management, and Poverty. AIMS Paper, Management Systems International, Washington, D.C. 23. Yuge, Yasuhiko .The Current Situation of Microfinance in Bangladesh: A Growing Concern about Overlapping Loan Problems From a Field Visit to Rajshahi and Comilla. CENTER FOR EMERGING MARKETS ENTERPRISES STUDENT RESEARCH SERIES : The Fletcher School, Tufts University, March 1998. 24. Walby S (2010). Structuring patriarchal societies. In: Giddens A and Sutton PW (Editors). Sociology: Introductory readings. 3rd ed. Cambridge: Polity Press. 30-35. Group Formation and Empowerment: The Case of BRACandProshika in Bangladesh. INTELLECTUAL DISCOURSE, VOL 15, NO

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9.0 Annex
1. Table: Gender-based obstacles in microfinance and microenterprise

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