Gender Impact

A 1996 study in Bangladesh acknowledges the “success” of reaching women with microcredit as “highly impressive”, but also notes that loans are often given over to male relatives or husbands. In a minority of cases there was even an increase in domestic violence for women who did not get the loan or had to wait a long time to get the loan. The study also showed that women are more likely to retain control over their loans in traditional women’s work like livestock rearing that are considered “women’s work”. A 2008 study of microcredit programs in Bangladesh found that women often act merely as collection agents for their husbands and sons, such that the men spend the money themselves while women are saddled with the credit risk. The bigger the size of the loan, women lose their control more. For example, a study in Bangladesh showed that women have 100% control over loans that are smaller than 1000 Taka but only 46% of control if the loan is bigger than 4,000 Taka. A study in India showed that women may be put under pressure by their male relatives to join a credit group and indebt themselves. A study in Bangladesh showed that microcredit increases dowries, with women forced at times to take microcredit loans as the only means to pay these increased dowries for their daughters. The first randomized evaluation of the introduction of microcredit, carried out in Hyderabad in India, found no impact on women’s decision-making.

A large majority of microloans is awarded to women, often under the pretense of ensuring their empowerment. Parmar takes issue with the idea that empowerment can be given to women by (mostly male) development practitioners in the form of loans, arguing that empowerment is a self-directed process. Johnson argues for the inclusion of more female employees in microcredit institutions, and gender awareness training for existing staff.Additionally, Leach claims that men must be included in the process of lending to women in order to diminish gender antagonism, as men often feel excluded from microcredit services.

Some authors argue that microcredit not only empowers women, but men as well. For example, Cheston and Kuhn say that microcredit programs have the “potential” to transform power relations and empower the poor — both men and women.