The impact of microfinance on women empowerment: Evidence from Eastern India

This paper contributes to the empirical literature on the women empowerment effects of microfinance. Using data on women borrowers of a large microfinance institution in Eastern India, we examine the effect of access to microfinance by female borrowers on four dimensions of women empowerment, namely (1) whether the borrower manages the microfinance backed enterprise, (2) influence over decision making on credit related issues, (3) influence over decision making on expenditure related issues, and (4) influence over decision making on children related issues. We find that greater access to microfinance as measured by longer duration of treatment is associated with no or negative empowerment effects on the economic dimensions of empowerment i.e., enterprise management, credit related decisions, and expenditure related decisions; but an increase in empowerment in terms of child related decisions, implying a rebalancing of influence between men and women within the household along traditional gender lines.