Women Empowerment Through Microfinance Services

Topics: Poverty, Microfinance, Poverty reduction Pages: 9 (2999 words) Published: January 15, 2013
Women Empowerment through Microfinance Services

Email Id – deepika.baranwal@yahoo.com

The UN commission on status of women observed ‘ women who contribute half of the world’s population by virtue of an accident of birth, perform two-thirds of the world’s work, receive one-tenth of its income and owns less than one-hundredth of its property’. In India, women produce 30 percent of all food commodities consumed but get only 10 percent of the property or wealth of the country. Women have been deprived of economic independence. The empowerment of women considered as an active process enabling women to realize their full identity and power in all spheres of life. Against the background of the patriarchal system of society, the women need special attention to ensure their development and participation in the decision making process at home, in the community and governance. Hence what is needed is a conducive environment to maximize their potentials. This conducive environment should include basic amenities such as better health and nutrition, education and sensitization to their rights and protection under the law and employment opportunities, etc. Over the decades, various strategies have been adopted to empower rural women with some mixed results. One of the viable strategies, quite often talked about, is the role of enterprise to empower rural women. For example, promotion of rural enterprise makes full use of family labor, requires less capital in production and uses locally available raw material. In addition, family ties and kinship linkages may help in promoting rural enterprise. Thus, enterprise development has been considered, among other factors, a powerful tool to eradicate poverty especially among rural women as they are at the lowest rung of poverty ladder in almost all Afro-Asian countries. Microfinance lending is often focused on women for a number of reasons. First, there is a growing body of evidence that gender inequalities in developing societies inhibit economic growth and development. The greater the level of gender-based discrimination in a given society, the more likely the society is to experience higher levels of poverty, stagnant economic growth, and weaker governance. Additionally, those within societies where gender discrimination is the greatest tend to also have a lower standard of living.3 Women are disproportionately represented among the world’s poorest people. Some advocates assert that increasing women’s access to microfinance services will enable women to make a greater contribution to household income. This, in turn, will translate into improved standards of living. Moreover, because women have fewer resources available to them, they tend to be more vulnerable when economic challenges or unforeseen circumstances arise. By providing access to loans for income-generating activities, microfinance institutions can significantly increase a woman’s resources, thereby reducing her overall vulnerability. Furthermore, it is well-documented that women are more likely than men to spend their income on household and family needs.4 Assistance to women has therefore been shown to generate a multiplier effect that improves the welfare of the whole family. Women self-help groups:

One of the powerful approaches to women empowerment and rural entrepreneurship is the formation of Self Help Groups (SHGs) especially among women. This strategy had fetched noticeable results not only in India and Bangladesh but world over. "Women self-help groups are increasingly being used as tool for various developmental interventions. Credit and its delivery through self-help groups have also been taken as a means for empowerment of rural women.5 this integrated approach, whereby, credit is only an entry point, and an instrument to...

References: 1. Susy Cheston and Lisa Kuhn. “Empowering Women through Microfinance.” UNIFEM. Paper Submitted to Microcreditsummit-5. (2002), 7.
2. Zeller.M(2000).“Product innovation for the poor: The role of microfinance”, Policy Brief No
3. Susy Cheston and Lisa Kuhn. “Empowering Women through Microfinance.” UNIFEM. Paper Submitted to Microcreditsummit-5. (2002), 7.
4. Linda Mayoux. “Reaching and Empowering Women -- Gender Mainstreaming in Rural Finance: Guide for Practitioners.” (IFAD Rome April, 2009)
5. ‘SHGs help to promote women entrepreneurship’ The Hindu, Jan 24, 2005
6. ‘Where HLL Shakti comes from’, The Hindu Business Line, May 29, 2003
7. ‘Microfinance: Banking for the poor and not poor banking’, The Hindu Business Line, Mar 15, 2005.
8. Khandker, Shahidur R and World Bank, “Fighting poverty with microcredit: experience in Bangladesh”. Oxford University Press, 1998.
9. ‘Micro Credit: Looking beyond group lending’, The Hindu Business Line, April 14, 2006.
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