Microfinance Is The Panacea For Gender Empowerment - Essay Example

? “Microfinance is the panacea for gender empowerment” Introduction Microfinance programs contribute significantly to enhancing economic, social, and political empowerment. Some credit programs promote group formation and facilitate women to generate income, hence availing potential for both economic and political empowerment. However, donors and advocates of microfinance constantly over-exaggerate the power of microfinance and related assistance while at the same time disregarding critical and deeply embedded concerns that can be regarded as apparent to the intertwining setback of poverty and empowerment of women. The present wave of euphoria over microfinance overlooks the salient question: since a majority of women has been inducted into microenterprises, why is women’s empowerment still elusive? It is apparent that microfinance is hardly a panacea for gender empowerment; besides, microfinance has failed to triumph over overbearing patriarchal structures that propel subordination of women at either households and/or society level. The paper examines the assertion “microfinance is the panacea for gender empowerment”, the associated problems/concerns, and available proof and appreciates that micro lending plays a critical function in revolutionizing women’s economic empowerment; however, microfinance possesses the possibility of adversely affecting the general health of gender empowerment endeavours, especially if it exclusively spotlights the financial aspect of women’s empowerment. The paper discovers that there has been an exaggeration regarding the gender empowerment impact of microfinance. In practice, however, microfinance is only a step in the long road of empowering poor rural women and not a panacea for gender empowerment. Microfinance Revolution Microfinance infers the provision of savings, credit, and/or related financial and business products that are predominantly micro in size to poor clients, traditionally considered lacking the competence to save and the capability to pay the high interest rates charged by commercial banks on credit (Onyuma and Shem 2005, p.199). The significance and consideration linked to microfinance was emphasized at the 1st Microcredit meeting held in Washington (1997). Remarkably, the UN General Assembly adopted a resolution (A/60/210), recognizing the significance of microfinance in attaining the MDGs, outlining the significance of microfinance in attaining the MDGs, especially concerning goals 1 (reducing poverty) and goal 3 (revolving around gender parity and women’s empowerment). The accomplishment of some microlenders working with the poor, especially in Asia has put microlending high on the agenda of numerous development agencies. Numerous microfinance initiatives have been undertaken right from South America, to Asian and Africa, undoubtedly registering contrasting results (Onyuma and Shem 2005, p.199). Over the last two decades, microfinance initiatives have primarily been directed at poor women populations with the argument taking root on the question regarding whether microlending is, in essence, a decisive element to gender empowerment. This contest can be regarded as bordering west/south divide, and envelops theoretical analysis of studies touching on empowerment, especially on the link between microlending/microenterprise and gender empowerment that has constantly shaped microfinance discourse (Khandker 2005, p.263). The sociocultural landscape in target groups plays a critical function in shaping the results that can be derived from microenterprise projects and their relation to gender empowerment, rebutting one of the overriding hypotheses detailing that gender empowerment entails a routine result of micro lending (Mayoux 2002, p.77). In one phase of the continuum, proponents advance that microfinance bear constructive influences on aspects such as equality between genders, gender empowerment, and overall domestic/household wellbeing. In line with this thought, microfinance is considered as the panacea for gender empowerment. Conversely, on the contrasting end of continuum, microcredit is considered to herald damaging influences to their clients (Hulme 2000, p.8). Microfinance as the Panacea for Gender Empowerment Advocates of microlending perceive the programs as cost effective means of building an entrepreneurial culture; increasing domestic economic capacity; alleviating poverty and unemployment; promoting rural growth, and enhancing women empowerment. Microlending is, therefore, viewed with a lot of interest and considered leading the way to a new economic progress within developing countries (Christabell 2009, p.189). As a microenterprise development model, microfinance is perceived to be critical poverty eradication strategy, as well as a gender empowerment tool. Findings on a considerable number of studies indicate that; indeed, awarding microcredit to rural poor women has the potential of enhancing financial liberty, as well as enhancing their threat points within the household. These benefits are manifested broadly across the society, thus changing the prevailing gender customs and the status of women at familial and societal level. Microcredit clients can utilize earnings from the microenterprises to reinforce their negotiating muscle at the familial level, besides amplifying their say within familial and societal level, especially on matters centring on financial decisions. However, the process propelling gender empowerment of the beneficiaries of microfinance is not automatic, but draws from many factors such as abilities, environment, initiative, and the status of women as a group. As an intervention, the influence of microcredit on gender empowerment can be regarded as contingent upon the milieu and commitment, plus capacity/platform on which it is offered if its potential is to become a reality (Beneria and Gita 1997, p.42). For the bulk of microfinance women borrowers, credit is regarded as much more than mere access to money. It is about women finding a way of lifting themselves out of poverty, and attaining economic and political empowerment within the community. For instance, case studies reveal that close to 40% of poverty alleviation within rural Bangladesh is attributable to the role of micro credit. Other case studies reveal that combining education and financial services programmes in Nepal has been the backbone of women empowerment, especially in guaranteeing that women have equal access to food, medical care, and schooling. Micro financing has given women a stronger role in property transactions, as well as in domestic and familial choices (Shakya and Rankin 2008, p.1214). The most successful microfinance schemes remain balanced by access to other resources such as land and poverty, finance, and marketing skills, as well as services that curtail women’s household and care-giving burden. Women can become powerful catalysts for development when empowered via microfinance, but they also require access to health, childcare, employment opportunities, education and skills, and greater control over their fertility so that they can effectively take advantage of the opportunities that microfinance can avail. Microcredit and Women’s Empowerment It is frequently alleged that microlending has overall been a valuable and effective instrument for driving growth and tackling paucity, plus minimizing entrenched gender discrimination. Microfinance remains credited for contributing to the reduction of the paucity by enhancing spending by microfinance clients, as well as their families. Other accompanying benefits include broadening access to vital resources such as education and diet, besides other offshoots such as expanding disposable income and promoting entrepreneurship (Pitt et al. 2006, p.791). Evidence indicates both constructive and depressing results of microcredit in gender empowerment. In majority parts of Africa, studies on the impact of microfinance showed significant potential to empower women, especially economically. In Ghana, for instance, research exploring the connection between microlending and gender empowerment suggest that, admittance to well structured microcredit programs allows women to sustain excellent relationships with key stakeholders such as customers and distributors, besides enabling women to attract admiration and belief amid the extended business community (Regmi 2011, p.100). Furthermore, the research revealed a remarkable attribute detailing that, it was rare for the women’s credit or income to be directed over by their husbands. Thus, by subscribing to microcredit, clients have been able to attain oversight over decisive resources, plus resolution making capability. This stems from accommodative gender associations that facilitate capability of women to rise above subordination and discrimination and transform the financial empowerment into general empowerment touching on the political, societal, and business arena (Pitt et al. 2006, p.792). Nevertheless, a comparable study conducted in Nepal indicated fairly dissimilar results. A research carried out within the rural community of Nepal revealed that female members within the nuclear family unit background were competent to prosper in their microenterprises and succeed in gaining oversight over the microenterprise’s ownership and profit (Mayoux 2002, p.76). Nevertheless, their counterparts from extended families were comparatively unsuccessful. In general, in the two divides, women benefited minimally from the business compared to their male counterparts, despite the fact that women were the prime target for the microfinance initiatives (Bista 2008, p.291). The study on Nepal microfinance initiatives indicated that women have become significantly multi-burdened by their tripartite role play at office, farm, and home (Regmi 2011, p.99). Microfinance access has also been linked to a reduction in violent behaviour among intimate partners within households via engagement of women in microenterprises, as well as generation of social capital for the clients (Julia et al. 2007, p.1994). Women’s access to microcredit has been linked to an improvement in women’s financial autonomy consequently yielding improvement in women’s confidence, and their standing in their families (Pronyk et al. 2008, p.1559). Furthermore, women’s participation into microcredit programs remain associated with improvement in their capability to implement oversight over intra-familial procedures (Armendariz and Morduch 2007, p.4). This yields an improvement in women’s welfare, which in turn, results to a reduction of male bias in welfare outcomes within the household (Schuler and Hashemi 1994, p.66). Microcredit is not a Panacea for Women Empowerment The popular misconceptions centring on impacts of microfinance pervades the present rhetoric on impacts of microfinance on gender empowerment and encourage its mischaracterization as a panacea. Numerous claims have been advanced that some microfinance programs have changed the lives of their clients, especially poor women and enabled the women to leap from the poverty trap (Gobezie 2010, p.23). However, microfinance has its flip side too and may not, in essence, be the panacea for gender empowerment. The discussion does not necessarily endeavour to wipe out the constructive influences of microcredit. In a research undertaken by Goetz and Gupta (1996), the authors employed an appraisal with a broad collection of enquiry that explored subject’s direction over financial resources and resultant productive procedure and employed a catalogue exploring credit control by women and their engagement is the said procedures. The authors established that the bulk of poor women’s microenterprises are directed by men, irrespective of the fact that women borrowers bear the responsibility for repaying the loans. Apart from women having little and/or no control over the advanced microloans, the study found that the bulk of advanced loans financed masculine endeavours. In a majority of the instances, owing to the weight for implementation of credit contracts, clients are forced to cut fundamental spending for household basic needs in order to dedicate the saved money to repay the advanced loans (Goetz and Gupta 1996, p.46). The study exposed the frailties of microcredit and reinforced the notion that male direction over loans is, in essence, highly probable to occur. As a result, the women’s loss of direction over their credit has buttressed prevalent gender customs and aggravated the interests of women. As the amount of the money increases, there is of failure of direction over critical resources by women as their husbands solely arrive at decisions regarding where, when, how, and who to control the resources (Kabeer 2001, p.63). Moreover, minimal evidence suggests sweeping transformations in the separation of labour by gender heralded by women’s admittance to microcredit programs (Al-Amin and Chowdhury 2008, p.17). Although, not disregarding the massive constructive impacts presented by microlending programs on gender empowerment, extra research exploring the potential harmful influences of microcredit programs may aid to shed more light on the ambiguities and grounds following the negative impacts. Most significantly, grounded in the results of research probing the failure of microfinance in delivering gender empowerment and confronting the entrenched gender customs, the findings can have powerful insights to the designing of suitable and valuable strategies for microlending programs (Mahmud 2003, p.578). Hence, it is proposed that the gender empowerment capability of microcredit is uncertain. Microfinance programs may be essential programs, but not a magic bullet that ends all the setbacks for gender empowerment (Schuler and Hashemi 1994, p.65). Conclusion Looking at the notion “microfinance is the panacea for gender development,” one can point out numerous results of researches on microlending and gender empowerment presented in studies. Majority of researches has revealed that; indeed, awarding microcredit to poor women has been pivotal in increasing women’s income and bringing about other benefits such as such as access to enhanced self confidence among beneficiaries, healthcare and education, as well as household violence reduction. Conversely, other researches reveal that, frequently, the advanced loans are essentially managed by men, which renders the women vulnerable to subordination and increasing domestic violence. It is evident that, whereas admittance to microcredit programs can and do render significant input to the economic efficiency and communal wellbeing of targeted beneficiaries. Microfinance fails to out rightly deliver gender empowerment, as is the case with related intercessions such as education pursuing a fundamental structural change that proper gender empowerment necessitates (Mahmud 2003, p.577). Microfinance is yet to be a panacea for gender empowerment and can be regarded as “other” interventions constituting an entry point into this larger project, but with the potential to bring significant social transformation. Thus, microfinance should be freed from the role of panacea. References List Al-Amin, M. & Chowdhury, T. (2008). Women, poverty and empowerment: An investigation into the dark side of microfinance, Asian Affairs 30 (2). pp.16-29. Armendariz, B. & Morduch, J. (2007). The economics of microfinance, Cambridge, MIT Press. pp.4 Beneria, L. & Gita, S., (1997). Accumulation, Reproduction and Women’s Role in Economic Development, Boserup Revisted. In The Women, Gender and Development Reader. Nalini Visvanathan, Lynn Duggan, Laurie Nisonoff and Nan Wiegerma (eds.). London, Zed Books. pp. 42-50. Christabell, P. J. (2009). Women empowerment through capacity building: The role of microfinance, New Delhi, Concept Publishing. pp.189-193. Gobezie, G. (2010). 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