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Archived Events Can Micro Finance Empower Women? Currently, micro finance has become the endorsed solution to poverty alleviation. It is not as if hitherto the poor did not need credit or they did not have means of meeting their credit needs. However, over the past few years, internationally, micro finance has been advocated as the formal route to offering opportunities for livelihoods and pulling the poor out of poverty traps. It has been heralded worldwide as an effective cure for poverty. At the World Micro-Credit Summit Campaign held in Washington DC February 1997, four core themes were stressed as part of a 55 page Declaration and Plan of Action. These were, reaching the poorest; reaching and empowering women; building financially self-sufficient institutions; and ensuring a positive, measurable impact on the lives of clients and their families. Microcredit implies that small sums of credit are made out to poor persons. They are supposed to put the money to productive use .There are ways in which repayment is guaranteed. Small groups are formed that monitor each other, e.g. self help groups (SHGs). Generally, a SHG is formed when members of a community, who have the same or similar problem, come together, meet, share experiences, have discussions, and thereby arrive at solutions. Internationally such groups have been formed around medical problems and addictions. Self-help is seen as an inexpensive way of providing vital community services. As an ethos, a SHG symbolizes community initiatives to tide a problem over and achieve a level of self-sufficiency. The need of the poor for credit is not new. There is an acute need among the poor for credit both for consumption as well as for production. Credit is sought for basic requirements such as food, as well as for income generation activities. The poor are bankable and dependable. It has been proved that the poor are capable of thrift and savings. So far, this need has been met largely by informal sources such as moneylenders, support by kith and kin, friends, employers and landlords. Borrowing from these informal sources often involves exploitative rates of interest and results in strengthening of systems of oppression. The formal sources of credit in India have been banks and poverty alleviation programs promoted by the government. The track record of these formal sources has not been positive. There is a difference between micro credit and microfinance. Microcredit signifies loans of small amounts are given to persons/groups for income enhancement with a schedule of repayment. Microfinance implies that besides micro credit, other financial services are offered, eg, savings, insurance etc. Micro-finance, in the form in which it is being promoted currently, circumvents the drawbacks of both the formal and the informal systems of credit delivery. M icrofinance is hence seen as a special development intervention as it circumvents the drawbacks of both the formal and the informal systems of credit delivery. It ‘pays for itself' since it is supposed to be beneficial to both microfinance institutions as well as clients. Consequently it is hailed as the one method that will address both development and promote market behaviour at the same time. It is seen as remarkable since it can unite the growth and poverty agendas. Women are seen as the most ‘appropriate' for financial services to be directed towards. It is argued that, the entire household benefits when the loans are given to women, compared to men. Women are perceived to be more reliable than men when it comes to repayments. Microfinance has been hailed as a tool for poverty reduction and women's empowerment. Hence the second core theme of the Summit was to reach and empower women. This theme can be further divided into two goals, one is that of reaching women and the second is of empowering them. The first goal of reaching women is not as difficult to achieve since the design of the majority of interventions is through the formation of small self help groups and such groups are those of women. Among the real and potential clients of micro-finance, women are seen as the most reliable in terms of repayment and utilization of loans. There is a also a general perception among practitioners that the entire household benefits when the loans are given to women. Further, it is argued that micro-finance can empower women since it instills a perception of strength and confidence when the poverty traps is broken. Most micro-credit initiatives require the formation of small ‘self-help groups' (SHGs) of 10-20 persons, who come together with the intention of saving and rotating loans amongst the members. This model of functioning is particularly true of micro credit programmes in India . Once these groups stabilize, they are accorded formal support so as to widen their lending capacities. The entire process of forming a group, of functioning in a sustained manner, of regulating finances, and being mutually accountable, is in itself projected as empowering. An important dimension of SHGs is the peer pressure, which the members of a group exert amongst themselves, which acts as a substitute for formal collateral in that it is taken as the guarantee for loan repayment. Empowerment is the most frequently used term in development dialogue today. It is also the most nebulous and widely interpreted of concepts. Advocates of micro finance claim the very process of forming self-help groups is empowering and a critical mass is formed which can be harnessed to pull households out of poverty traps. Empowerment is a process. It is not a goal to be reached. Empowerment is a process whereby constraints that impede equal participation are reduced so that the inequality starts moving towards becoming equality. These constraints are most often structural and connected to both the macro environment and the domestic environment. Empowerment is a process that takes a person from a position of powerless inaction to responsible action. The process moves through several stages from 1) participation, to 2) decision making, to 3) action and, ultimately, 4) the capacity to take responsibility for those actions. In order to understand the process of empowerment on needs to understand the framework of spaces. Spaces influence a person's capacity to act and his or her behavior both within the household and outside it. The stimulus is when something changes in the person's life that expands spaces, allowing for place/freedom/margin to do what s/he intends to do.Conversely, a constriction of space takes away capacity to act and narrows the number of alternatives for behavioral decisions. Economic empowerment through microfinance most often makes positive shifts in physical spaces, since women have to become more mobile, have a better control over their labour. However, e economic empowerment is often less successful in shifting social norms. Hence even while women may earn more, they may still not be able to control their incomes. This space is the most stubborn to move which is why in spite of economic empowerment, caste, religious and family hierarchies are often the same. If the micro finance intervention has caused changes within domestic private spaces that lead to violence and aggravation of gender-based discrimination, then it is a result of the unchanging nature of socio-cultural spaces. The domestic power dynamics can be altered due to an increase in incomes in the hands of women or because of a change in their roles, which are now livelihood generators. Also, it is necessary to examine the distribution of responsibilities within the household. The burden of repayments, of generating livelihoods, of proving to be financially sustainable, of functioning as a member in the self help group (sometimes as an office bearer) and also of continuing to be responsible for household work of rearing, caring, cleaning, cooking etc generally falls upon women. If the responsibilities are not shared, then on the surface it seems as if the responsibility of the household has increased, while in reality the burden upon the women has increased. Economic empowerment most often makes positive shifts in political spaces especially for women in collective mobilisation: hold positions of authority; leadership. It is not however not necessary that when spaces expand, it will always result in the process of empowerment. It is important to evaluate the quality of that space. For example often it is found that, an intervention such as micro credit, which has given economic space to a woman in terms of an income, does not empower her, because she has no control over that income. On the contrary it may even lead to an increase in domestic violence. That is because the intervention has not altered her socio-economic space. We have to remember that the woman does not live in a vacuum. In as much as the micro finance intervention does nothing to alter the socio-economic environment of the household, an expansion of economic space for the woman will not empower her. However, if the intervention increases her levels of confidence and self-esteem, then a process of empowerment has been unleashed. Sometimes even before an action is taken, the very mental decision on the part of the person to act instills a feeling of confidence and well being. What actually has to expand is mental space. Mental space is meta-physical in nature and consists of the feeling of freedom that allows a person to think and act. An expansion in this space implies a change in perceptions, which lend a feeling of strength since it precedes action. It empowers even before action is taken since there is mentally a movement away from restriction and constraints. When there is an expansion of this space it facilitates action in a positive direction. Mental space is that space that facilitates 'power within'. While, a constriction of spaces implied a lack of power in all the four dimensions of over, to, with and within, an expansion of spaces does not necessarily imply empowerment. There is no linear relationship between empowerment and the expansion of spaces . The most important condition for empowerment to take place is an expansion of the person's mental space. Economic empowerment can shift mental spaces when women have a sense of achievement due to the increased access to incomes and livelihoods. Confidence levels rise with voice and there is a sense of worth. When women can decide on how the incomes they earn will be spent there is a definite increase in mental space. Empowerment cannot be achieved through the handling of just money since credit by itself does not bond women together enough to unleash a process of empowerment. Other social and development concerns are required to cement groups so that they can metamorphose into vehicles of empowerment. The other issue of debate relating to micro finance and women's empowerment is that credit can only address practical gender need and not strategic ones hence one must not be over-ambitious about the goal of empowerment. The process of a micro finance programme does not directly affect structures within households or attempt to change hierarchies within it. Hence membership within a self-help group does not automatically carry the dynamics of empowerment into the household even if they have begun within the group. No doubt, women can also get empowered by virtue of membership in a group that is struggling towards a common goal of equity. However, often these processes isolate them from the household and there are increased tensions within the family. Hence, involving men, boys and other members of the family in behaviour change communication methods, (which can use posters, songs, skits etc) to change perceptions that assist empowerment for women and households. It has been found that it is when women operate through collectives that the maximum empowerment takes place. Of all the components of macro environment, the socio-cultural environment is the most stubborn and difficult to alter and in consequence, the socio-cultural space is difficult to negotiate. The cost of an expansion in this space is often high for an individual woman since it isolates her. That is the reason why collectives and collective action is a more effective vehicle to set a process of empowerment into motion. Further, a process of empowerment cannot accelerate unless there is an expansion of socio-cultural space. This is because while an expansion in physical, economic and political space can lead to an expansion in mental space, with socio-cultural space the logic has to be turned on its head. There has to first be an expansion in mental space for there to be an expansion in socio-cultural space. Women may come together for various reasons. The collective allows for her to express the injustices she faces while belonging to another collective. The release of mental spaces that allows for action on the part of women is most often facilitated by her membership of a collective that is addressing a similar problem. The formation of a collective facilitates the process of empowerment. Micro credit as is practiced currently in India necessitates the formation of collectives. If the SHG (self help group) is a forum where common problems can be addressed and if there is a feeling of solidarity emanating from membership of these groups then there is hope for empowerment. However if the group is only centered on the collection and disbursement of money then there are fewer chances of empowerment processes to begin. The other significant factor that leads to an expansion of mental spaces is information. Information is a very important source of power as well as an instrument. It is similarly a source and instrument of empowerment. Most often women are oppressed because they are illiterate and do not have access to knowledge. It has been found however that education as is formally understood is not a pre condition for empowerment to take place. In the first place, the information that is most critical to unleash a process of empowerment is knowledge of the structures of power within which lives are placed. Such knowledge changes self-perception and brings about an awareness of the implications of oppression. Another kind of information that is vital is of rights and duties both as citizens of civic society and also as members within families. This information spans across knowing about legal machinery as also about human rights and entitlements. Further, information is very important in social mobilization. Groups, like self help groups, in sharing experiences, often gain in strength and solidarity. Apart from these kinds of information, knowledge about matters related to livelihoods, finances, political processes, etc also equip women to be able to take action in order to change the situation they find themselves in. The intervention of micro credit by definition imparts information to women. This information is about the handling of savings, investments, financial decisions, livelihood choices, etc., but is not geared to question any existing power structures be they related to gender, caste or class. If however, the facilitating organization takes into account hierarchical structures that contribute towards poverty and disempowerment, then micro finance interventions can form the catalysts to initiate processes of empowerment. The framework of spaces is an original framework that can be used simultaneously for understanding power and empowerrment.. See Joy Deshmukh-Ranadive, 2002, Space for Power, Rainbow Publishers, New Delhi |
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