Impact of Microfinance on Empowerment of Women: A Study

Microfinance as a means of providing finance services mainly credit has been argued to be the answer to most of the problems of poverty in the developing world. This source of finance to small entrepreneurs has proved to be successful thereby indicating that the marginalized sections when provided with financial support and services are diligent in repaying the loans and have the desire to increase their inflows and assets.

In addition to providing financial resources, the concept of microfinance is unique as the key players are women and therefore the potential for women empowerment is immense. Women form an integral part of society and part of human resources of any country but are the poorest of the poor and spend their income on the welfare of their households. Governments, experts and benefactor agencies have understood that involving women in the development process will be beneficial to the economy and focusing on microfinance will be a key strategy to achieve empowerment of women. It can be recapitulated by Noeleen Heyzer, Executive Director of the United Nations Development Fund for Women (UNIFEM): “Microcredit is about much more than access to money. It is about women gaining control over the means to make a living. It is about women lifting themselves out of poverty and vulnerability. It is about women achieving economic and political empowerment within their homes, their villages, their countries.” (Microcredit Summit Campaign 2000, Looking ahead).

The functioning and potential of microfinance is therefore very well recognised but the actual extent of empowerment is worth pondering over. In this paper, we will be focusing on the same. The first section will cover the concepts of empowerment and microfinance. The second section will be covering the linkages between empowerment and microfinance through a literature review. The third section will effect of empowerment on the lives of women and conclusion.