micro credit interventions and its effect on empowerment of rural women

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BANGLADESHRESEARCHPUBLICATIONSJOURNALISSN: 1998-2003, Volume: 2, Issue : 3, Pag e: 641-647, Ma y - June, 2009

MICRO-CREDIT INTERVENTION AND ITS EFFECTS ON

EMPOWERMENT OF RURAL WOMEN: THE BRAC EXPERIENCE

Sha hna j Parve en1 and Md . Sajed ur Rahm an Cha udhury2

Sha hna j Pa rveen and Md . Sajed ur Rahm an Cha udh ury (2009). Micro-Cred it Intervention a nd Its

Effec ts on Emp ow erme nt o f Rural Wom en: The BRAC Expe rienc e. Bang lad esh Res. Pub . J. 2(3): 641-

647. Retrieve from http://www.bdresearchpublications.com/admin/journal/upload/08080/08080.pdf

Abstract

The stud y wa s designed to a na lyse rura l wo me n s ec ono mic

emp ow erment a s the o utco me of micro-credit interventions. The studywa s co nduc ted in Shahjatp ur and Jalalpur villag es under Meland aha

Upazila of Jamalpur District. A total of 90 respondents were selected

randomly, out of which 45 were involved in the credit scheme of the

Bang lade sh Rural Ad vanc eme nt Co mm ittee (BRAC) a nd o ther 45 wom en

had no involvement in any credit programme. Both qualitative and

quantitative data were collected through group discussions and

interview s with the respo ndents in Dec em be r 2008. Three ec ono mic

indicators (income, savings and asset) were considered to measure

wom en s em po we rme nt. The indep end ent sam ple t-test w as performed

to evaluate the impact of micro-credit on womens economic

empow ermen t. Results show ed signific an t d ifferenc es betw een BRAC a nd

non-BRAC women in the levels of economic dimensions of

empowerment. Admittedly, the BRAC women were more empowered

economically due to their active participation in various income

ge nerating a c tivities c om pa red to c ontrol groups. This stud y conc luded

that there were some positive contributions of micro-credit interventions

on rural womens economic autonomy. Hence, more loans should be

expanded to the low-income women by development agencies,

especially by the BRAC, in enhancing their economic solvency, domestic

po we r rela tions and psycholog ica l strengths. This c ould und oub ted ly ac t

as catalyst to foster socio-economic uplift of rural women in the study

villages and rectify long standing gender inequality in Bangladesh.

Key words:Rural wo men, micro-credit, imp ac t, emp ow erment.

Introduction

Women in Bangladesh suffer from multiple deprivations in social and economic

sphe res of life d ue to pa triarcha l values preva lent in the soc iety. Most of the wo men live in

rural areas of Bangladesh, where majority of them play a major role in the areas of

management of crops, livestock, fisheries, biological diversity, energy and family. Even

though the economic contribution of rural women is substantial, it is largely

unacknowledged. In addition to their productive work, the traditional division of labour

* Co rrespond ing Author s Ema il: pa rveen_ba u@yaho o.c om or shahnaj1969@gm ail.com

1 Associate Professor, Department of Agricultural Extension Education, Bangladesh Agricultural

University, Mymensingh.

2 M & E Co nsultan t, Prom PT (Promo ting, Particip at ion a nd Training)


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gives women the primary responsibility for such domestic chores as cleaning, cooking,

childcare, fetching water and so on. Womens limited access to markets, economic

servic es, educ ation, health c are a nd po litic s lead s to a lower well-being of the fa mily that

reta rds the de velopm enta l goa ls of the state and traumat ise w ome n (Parveen, 2005).

The e mp ow erment o f w ome n is an essential preco ndition for the a lleviation o f

poverty and the upholding of human rights, in particular at the individual level, as it helps

to b uild a ba se for soc ial cha nge (DFID, 2000). The c onc ep t of e mp ow erment is co mp lex

as its meaning varies depending on the socio-cultural as well as political contexts andhence, it is difficult to furnish a unique definition of empowerment. It is discussed in

literature a s a p roc ess of ga ining p ow er or a c ond ition of b eing emp owe red at individua l

or group level (Dixon-Mueller, 1998). Womens empowerment is the process and the

outcome of the process, by which women gain greater control over material and

intellectual resources and challenge the ideology of patriarchy and the gender based

discrimination against women in all the institutions and structures of society (Batliwala,

1994). Empowerment can be defined as the expansion in peoples ability to make

strategic life choices in a context where this ability was previously denied to them

(Kabee r, 2002).

Micro-credit has been claimed to be a solution to integrate marginalised women

into socio-economic activities, decision-making and poverty alleviation. Micro-credit is a

sma ll loan to a c lient involved in som e kinds of entrep reneurial a c tivities for a living, w hich

is made by a bank or other institution. Micro-credit can be offered, often withoutcollateral, to an individual or a group through lending. It has proven an effective and

po pular mea sure in the o ngo ing strugg le ag ainst p overty, enabling those w ithout ac c ess

to lending institutions to borrow at bank rates and start small business (Microfinance

Ga tew ay, 2008). Wome ns participa tion in c red it programm es lead s to the m c ontributing

to family income, taking greater role in household decision-making, having greater social

networks and freedom of mobility and exercising more control over their fertility (Banu et

a l., 2002; Basher, 2007; Web b et al., 2002; Pitt et al., 2003 and Sukontama rn, 2007). Group

savings and credit programmes act as the driving force to help illiterate rural women start

small-scale economic activities (Acharya et a l., 2007). It strengthens coping mechanisms

during crisis, diversify income generation, build assets and improve the status of women

(Hashemi et a l., 1996; Montgom ery et al., 1996; Husain et a l., 1998; and Morduc h 1998).

So a c c ess to m icro-cred it is one of the very imp ortant c omp onents in emp ow ering

incom e for po or wom en. But very few studies have so fa r been fo c used on m icro-cred itsimpa c t on wom en s emp ow erment. The impa c ts of micro-cred it need to be e xam ined

through resea rch, which me asures how the servic es of a mic rofinanc e institution like BRAC

contribute to the lives of its clients in such areas as employment, income, nutrition,

education, health and gender equity. It is the primary tool used to determine the

effectiveness of microfinance as a development intervention (Microfinance Gateway,

2008). Keeping this views in mind, this study was undertaken considering the following

ob jec tives: i) to m ea sure the financ ial resource s of rural wo me n; ii) to assess the extent of

rural wom en s ec onom ic emp ow erment and iii) to me asure the impa ct o f micro-c red it on

rural wom ens ec onomic e mp owerment.

Methodology

The stud y was c ond uc ted in Shahja tp ur and Jalalpur villages under Meland ahaUpazila of Jamalpur District. A total of 90 respondents were selected through stratified

random sampling method, out of which 45 were involved in the credit scheme of the

BRAC and other 45 women had no involvement in any credit programme. Both BRAC

group and c ontrol group had a simila r soc ioec ono mic sta tus. Three indicators, suc h as

personal income, savings and assets were considered to measure womens economic

empowerment.

In orde r to c ollect qualitat ive da ta , two g roup d isc ussion sessions we re arrange d in

two villag es. Eac h group c onta ined 10 partic ipa nts. The q ualitative d ata helped the

researcher to design interview schedule for the study. A personal interview was

conducted with the 90 respondents through the interview schedule in December 2008.

Simp le sta tistics suc h as pe rcentag e, mea n, sta nda rd d eviat ion (SD) and c oe fficient of


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variation (CV) we re c alculate d. The indep end ent sam ple t-test w as pe rformed to

eva luate t he impa ct o f micro-cred it on rural wom en s ec onom ic emp ow erment. The

Sta tistica l Pac kag e for Soc ial Sc ienc e (SPSS) w as used for d ata entry in the c om puter.

Measurement of emp owerme nt indica tors

Income of the respondents was measured in terms of money (taka) generated

annually. Both farm (vegetables, livestock and fisheries) and non-farm income sources

were considered in measuring annual income of the respondents. Income of the

respondents was categorised into five (e.g. very low income, low income, medium

incom e, high incom e and very high incom e) in order to m ea sure em po werment index.

Savings of the respondents was measured in terms of money (taka) saved

annually. Different forms of savings, such as cash savings at home, savings as crops,

saving s in NGOs or rural co -operatives and saving s in ba nk we re c onsidered in measuring

savings of the respond ents. Savings of the respond ents was ca teg orised into five (e .g. very

low savings, low savings, medium savings, high savings and very high savings) in order to

mea sure emp ow erment inde x.

Asset of the respondents was measured in terms of money (taka) value of the

assets at the time of interview. Both productive (cattle, goat and poultry) and non-

prod uc tive (jewe llery, TV, radio and furniture) assets were ta ken into c onsiderat ion in

measuring the asset of the respondents. Asset of the respondents was categorised into

five (e.g. very low Asset, low Asset, medium Asset, high Asset and very high Asset) in orderto me asure em po werment index.

Cum ulative Ec ono mic Emp ow ermen t Index (CEEI) was measured by summing up

of inco me , sav ings and asset c ateg ories of the respond ents. The CEEI sc ore va ried from 1

to 15, where 1 indic ate d ve ry low level of em po werment a nd 15 indica ted very high level

of empowerment.

Results and Discussion

Persona l p rofile o f the respondents

Data p resente d in Tab le 1 show tha t the respo ndents we re 34 years old o n

ave rag e. They ha d on a verage up t o three c lass of ed uca tion, which is not satisfac tory at

all. Poor education prevents them from investing the loan in a high-return activity (Zaman,1999). They ha d three c hild ren on a verag e. Ab out six pe rsons lived tog ethe r in a single

househo ld. Their averag e fa mily farm size wa s 0.22 ha. The respo ndents rec eived c redit o f

10044.56 taka on average to run different income generating activities.

Table 1. Summ ary of househo ld c ha rac teristics of the respond ents (n= 90)

Fac tors (units) Mean (% CV) Ob served range

Ag e (years) 34.52 (31) 14 - 58

Sc hooling (yea rs) 3.09 (117) 0 - 14

Child ren (number) 2.69 (59) 0 - 10

Househo ld size (num ber) 6.14 (37) 2 - 14

Family fa rm size (hec ta res) 0.22 (45) 0.01 - 0.93

Credit received (taka) 10044.56 (125) 0 - 50000

Figures in the pa rentheses indic ate CV = (SD / Mea n) 100.

Financ ial resourc es of the respondents

Informa tion in Tab le 2 indica te tha t the respo ndents ea rned a n am ount o f 7965.00

taka on average annually from both farm and non-farm sources. Among farm sources,

poultry bird was the major income earning source and earned an amount of 1462.78

taka. Among non-farm sources, service was the major income source (6200.00 taka)


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followed by hand icraft prod uc tion (1516.67 taka) and sma ll business (433.33 taka). Suc h

ec onomic a ctivities enab led wome n to ha ve a better ac ce ss to b asic need s and make

important co ntribution to household d ec ision making and ultimately have po sitive impa ct

on women empowerment (Parvin et a l., 2004).

Tab le 2. Inco me of the respo nde nts from farm a nd non-farm sources

Inco me sources Mea n value in taka (CV)

Vegetables 457.78 (172%)

Livesto c k 104.44 (557%)

Poultry 1462.78 (222%)

Sma ll b usiness 433.33 (433%)

Servic e 6200.00 (259%)

Hand ic raft s 1516.67 (210%)

Tota l inc om e 7965.00 (146%)

Figures in the p a renthe ses indic a te C V = (SD / Me an) 100.

It is dep icte d from Table 3 tha t the respo ndents dep osited mo ney in ba nk (2015.56

taka) followed by in NGOs or co-operatives (920.00 taka), on hand (563.67 taka) and as

c rops (496.67 taka), respec tively. The respondents used the savings during ho useho ld risks,

childrens education and purchasing assets.

Table 3. Sav ings of the respond ents in d ifferent source s

Savings source s Mea n value in ta ka (CV)

Ca sh saving s on ha nd 563.67 (147%)

Saving s as c rop s 496.67 (210%)

Saving s in NGO s or rural c o-op era tive s 920.00 (125%)

Saving s in bank 2015.56 (116%)

Tota l savings 3995.89 (54%)

Figures in the p aren theses indic a te C V = (SD / Me an) 100.

From Tab le 4, it is c lear that the respo nde nts owne d bo th p rod uctive a nd non-

p rod uc tive a ssets. The m ea n va lue of p roduc tive a ssets was c at tle - 2333.33 taka , goat -

822.22 taka and poultry - 663.89 taka. Regarding non-productive assets, the respondents

owned jewellery (mean value: 1733.33 taka), television or radio (mean value: 2066.67

ta ka) and furniture (mea n value: 893.33 ta ka).

Table 4. Assets ow ned by the respo ndents

Type s of assets Mean va lue in taka (CV)

Ca tt le 2333.33 (212%)

Go a t 822.22 (209%)

Poultry 663.89 (114%)

Jew ellery 1733.33 (161%)

Television/ rad io 2066.67 (218%)

Furniture 893.33 (206%)

Tota l asset s 11203.89 (114%)

Figures in the p arenthe ses indic ate CV = (SD / Mea n) 100.


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Previous studies showed that womens asset ownership positively influenced their

empowerment at household level (Hossain et al.,2004) and reduced their vulnerability in

several ways (Zaman, 1999). It is suggested that womens involvement in NGO

programmes like training and credit could increase their ownership of assets through

increa sing the ir ow n inco me ( Husain a nd Ma llick, 1998).

Extent of empowerment of the respondents

The d istribution o f CEEI depic ted in Figure 1 indica tes that vast m ajority of t he

women (79%) fall under a low economic empowerment category, 18 percent medium

category, while only 3 percent of them belonged to a high economic empowerment

level.

79%

3%18%

Lo w em po we rm ent M ed ium e mp ow erm ent Hig h em po we rm ent

Figure 1. Distribution o f rura l wome n on the b asis of their CEEI

It might be due to the reason that micro credit programme could not reach to

large sec tion of w om en p rop erly. The w ome n might ha ve m inima l training for inco me

ge nerating a c tivities. They m ight not have eno ugh po we r within househo lds to use the ir

loan a s we ll as to c ontrol their income . They mostly dep end on the ir husba nds or ma le

members for various purposes because micro-credit programmes are unable to eliminate

socio-cultural constraints on womens physical access to market (Parvin et al., 2004). In

another study, Parveen and Leonhaeuser (2008) found the economic empowerment of

farm wo men wa s limited to t he low to m ed ium level. Thus, wom en w ho a re less

emp ow ered feel insec ure a nd vulnerable. So, there is a need for enhanc ing ruralwomens empowerment to a satisfactory level through undertaking an integrated

approach.

Impac t of micro-c redit and womens emp owerment

It is evide nt from Tab le 5 tha t the m ea n value of BRAC w om en s

empowerment varied significantly from non-BRAC women group and the F-statistics

was significant a t 1% leve l (F = 10.065, P = 0.002). Tha t mea ns the leve l of ec onom ic

emp ow erment o f BRAC wo men is higher that that of non-BRAC wo men.

Tab le 5. Variation o f the level of e mp ow erment b etw een BRAC and non-BRAC

women

Respo ndents Me an (CV)

BRAC Wom en (n = 45) 5.36 (50%)

Non-BRAC wom en (n = 45) 3.29 (38%)

F-Sta tistic = 10.064(P = 0.002) T va lue = 4.708 with 88 d f

Figures in the p a renthe ses indic a te C V = (SD / Me an) 100.

The find ings of Zama n s (1999) stud y suppo rted the view t hat grea ter acc ess to

resource s in terms of m icro-cred it enha nc ed female c ontrol ove r their assets. It w as found

that women who had borrowed more than 10000 taka were more likely to be able to sell

po ultry and jewellery indepe nde ntly c om pa red to a n id entica l non-borrowing m emb er. In


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another study, Amin and Pebley (1994) found that membership in BRAC positively

influenced a womans decision-making role, her control over resources and mobility.

Conc luding Remarks

From the findings and discussion mentioned above, it can be said that most of the

rural wo me n had a ve ry low level of ed uc a tion. Their annua l inco me w as less tha n ten

thousand s. They d ep osited mo ney m a inly in ba nk. The rural w om en p ossessed both

p rod uc tive a nd non-p rod uc tive a ssets, whic h sec ure them during ho useho ld risks. There

was a low level of economic empowerment of rural women. However, significant

differenc es we re found be twee n BRAC and non-BRAC wo men in their levels of e co nomic

emp ow erment. This study p rovides evidenc e that e c onom ic emp ow erment of wom en

c an be imp roved throug h increa sing their inc om e, savings and a ssets. The results a lso

suggest the need to empower women through education. In enhancing womens

emp ow erment in a significa nt w ay, the c onc erned ag enc ies, espe cia lly the BRAC, should

provide m ore loans to p oor wo men along with p rovision of ed uca tion and training. This

could undoubtedly act as catalyst to promote socio-economic uplift of rural women in

the stud y villag es and rectify long sta nd ing gender ineq ua lity in Bang ladesh.

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