Microfinance and female empowerment: Do institutions matter?

Abstract

Microfinance programmes increasingly target poor women in developing countries with the expectation that, besides poverty reduction, having access to microcredit advances their empowerment. However, research provides conflicting evidence and shows that empowerment may not, or may only be partially achieved. This study explores if variations in the socio-cultural, economic and microfinance organisational contexts explain why some programmes are more successful than others by comparing the results of two microfinance providers in Ethiopia. The study demonstrates that variations in formal and informal rules indeed matter for how microfinance programmes work out. The study also shows that microfinance programmes may enable women to generate extra income and improve their asset base but may also perpetuate inequalities as well as reconfirm a gender-specific division of labour. (C) 2012 Elsevier Ltd. All rights reserved.