Microcredit and women's empowerment in South India

Transcription

1 Microcredit and women's empowerment in South India Paper to be presented at the Second European Research Conference on Microfinance June Groningen Anna-Larisa Snijders (APG Asset Management) And Geske Dijkstra (EUR) Public Administration Erasmus University Rotterdam PO Box DR Rotterdam Abstract This paper examines the effects of microfinance activities on the empowerment of women in the South-Indian city of Puducherry. Following Hashemi et al. (1996), eight different indicators are examined, reflecting Kabeer's (1999) three dimensions of empowerment, access to resources, agency and "achievements". The extent of improvement in empowerment is examined by comparing women having obtained one loan with women having obtained two loans in the program. The overall empowerment level of Puducherry women proves to be low. The paper also concludes that microfinance has a significant positive influence on some indicators for empowerment, in particular on indicators representing the resources and the agency dimensions of empowerment.

2 1. Introduction This paper examines the effects of microfinance on the empowerment of women in the South- Indian city of Puducherry. India has a fast growing economy and with its 1.2 billion inhabitants it is one of the largest countries in the world. However, a large share of this population is still very poor. In addition, women still have a very weak position in Indian households and in Indian society at large. India is one of the countries where a large part of women is simply "missing"; female babies are not registered, they are abandoned or killed just after birth or, increasingly, they are the subject of sex-specific abortion (Sen, 1992; Klasen and Wink, 2003). Discrimination of women is widespread and many women suffer from domestic violence. Although the gap between male and female primary enrolment rates is closing, the female illiteracy rate is still almost double the male rate, 49% against 25% (UNFPA, 2010). In this context, empowering women is important as a goal in itself as means to achieve greater gender equality. But it can be expected that women's empowerment will also be a tool in fighting poverty (Esteve Volart, 2004; Mayoux, 2000). India has seen an impressive growth of microfinance activities over the past decade, of which the largest share belongs to the Self Help Group (SHG) Bank Linkage programs that originated in the 1980s. The SHG Bank Linkage program is an integrated approach to provide low-cost financial access combined with learning programs. The link between a SHG and a bank is established by a Non Governmental Organization (NGO) or a government agency. They initiate the forming of the SHG and the application for a loan, and perform a monitoring function in loan repayments (Sinha et al., 2006: 1). SHGs comprise on average people, usually women (Harper, 2002). Each SHG has regular meetings, usually monthly, in which the request or repayment of the group loan is discussed (Kropp and Suran, 2002). With regards to repayment, a system of peer reviewing is applied, building on highly valued principles of honour and solidarity among the group members to secure individual repayments and establish group responsibility for the loan. The persons receiving loans also participate in financial management and social development programs. These programs not only aim at alleviating poverty, but also at achieving more gender equality by increasing women s social, political and financial power (Basu and Srivastasa, 2006). It is therefore highly relevant to examine the effects of these microcredit programs on women's empowerment. There is already an extensive literature studying these empowerment effects. Most of these studies conclude that there is a positive effect on empowerment, but there are also exceptions. The empirical part of this paper examines the empowerment effect of a SHG Bank Linkage program in Puducherry in the state of Tamil Nadu, South India, operated by the NGO Prime Trust. In this region and particularly in the state of Tamil Nadu, there is a strong microfinance sector (Fouillet and Augsburg, 2007: 8). Prime Trust highly fits the general role of an NGO in the SHG Bank Linkage program, because it independently selects women s SHGs and acts as an intermediary between them and commercial banks (Prime Trust, 2006). Following Hashemi et al. (1996), a survey has been used that includes eight different indicators with several sub-indicators for determining the extent of women's empowerment. As will be explained later on in the paper, unlike Hashemi et al. (1996) we did not follow a zero/one approach to determine whether women are empowered but constructed a continuous scale. 1

3 The paper begins with a review of different definitions of women's empowerment and ways to measure it. This is followed by a review of empirical studies on the relationship between microcredit and women's empowerment. Section 4 explains the methodology used for the fieldwork among several SHGs in Puducherry, and section 5 presents the results. The final section concludes. 2. Women s empowerment The extensive use and popularity of the term women s empowerment by many international scholars over the years leaves one to think that there is a commonly shared perspective on what it means, but its many different existing definitions and interpretations prove that the opposite is true. In fact, there is no straightforward definition of women s empowerment. Empowerment contains the word power, which has a similar wide-ranging interpretation. Nevertheless, a useful starting point is the definition given by Kabeer (1999) as the process by which those who were denied the ability to make strategic life choices, acquire this ability. Empowerment is the ability to make choices and it entails a process of social change. Some conceptualize empowerment by referring to the importance of social inclusion (Malhotra et al., 2002: 4). Empowerment is to be obtained by the participation of women in society and by, as Bennett (2002, in: Malhotra et al., 2002: 4) states it: the enhancement of assets and capabilities of diverse individuals and groups to engage, influence and hold accountable the institutions which affect them. The notion of power is reflected in this definition. The concept of social inclusion also strongly relates to the definition of women s empowerment by Saraswathy et al. (2008: ), who state: empowerment may be defined ideally as (...) a continuous process where the powerless people become conscious of their situation and organize themselves to improve it and access opportunities, as an outcome of which women take control over their lives, set their own agenda, gain skills, solve problems and develop self-reliance. Related to this is the definition of women s empowerment used by Bali Swain and Wallentin (2007: 1), who argue that empowerment is about women (...) challenging the existing social norms and culture, to effectively improve their wellbeing. Many authors see the dimension of political and social awareness of women as part of the empowerment process (Sabharwal, 2000: 3; Karnani, 2007: 36). Mayoux (2000: 9) calls this social and political empowerment, which is one of the three key empowerment definitions she uses. She explains social and political empowerment by stating that it is about (...) improved women s skills, mobility, access to knowledge and support networks. Status within the community is also enhanced. Part of this social and political empowerment is also the forming of influence groups of women who share similar (social or political) interests or the fulfilment of women of political positions with their governments. Saraswathy et al. (2008: 190) point out that women s empowerment is (a result of) a process of women identifying their inner strength, opportunities for growth, and their role in reshaping their own destiny. This concept of self-efficacy is highly applicable to any empowerment process and should therefore not be left out when empowerment is to be defined. It can be concluded that any definition of women empowerment should contain at least a psychological characteristic besides the social and economic ones that prevail. This refers to the great depth of the concept of power, which ranges from inner power (covering 2

4 characteristics like confidence, will and self-esteem) to societal power (Puhazhendi and Badatya, 2002: v) According to Kabeer (1999), the ability to make strategic choices has three dimensions: resources, agency and achievements. These three dimensions reflect most or all of the aspects and dimensions of empowerment that have been distinguished by the different authors referred to above. Resources can be seen as the pre-conditions for making choices. They include access to and control over physical assets, but also access to social assets such as education and social networks. Agency is the process dimension of empowerment. It is the ability to define one s goals and to act upon them. As with the concept of power, agency has different dimensions. There is first the sense of agency or self-esteem and self confidence ( power within ), second there is the negative dimension, power over, and third the positive dimension, power to. The agency dimension has often been measured as decision-making ability of women, for example decisions on purchases, children s education and health, working outside the home, family planning and marriage of children. The third empowerment dimension, achievements, may be measured as a reduction in violence against women, increased freedom to move, more financial autonomy and more egalitarian gender roles. Malhotra et al. (2002) did an inventory of the most commonly used indicators for measuring women s empowerment. They found that the most universally used indicators are decisionmaking power and access to resources, thus reflecting the two first empowerment dimensions indicated by Kabeer (1999). Malhotra et al. (2002) find that the variable of decision-making is generally measured by looking into women s decisions on finances, resource-allocation, spending, expenditures, social matters and domestic matters and child-related issues. Women s access to resources is generally measured by considering women s access to and control of cash, household income, assets, unearned income, welfare receipts, household budget and participation in paid employment. The third frequently used indicator of empowerment is that of women s mobility and freedom of movement, corresponding to Kabeer s achievement dimension. Malhotra et al. (2002) also noted that women s empowerment is usually measured at three different levels: the household level, the community level and the country level. Usually the legal and political dimensions of empowerment are measured at the community level or higher. The socio-cultural and the familial/interpersonal empowerment dimensions are generally measured on household levels. The psychological dimension (indicated for example by women s sense of self-esteem) proved rarely operationalized in empirical research. In this paper, we follow the operational definition of women s empowerment as applied in Hashemi et al. (1996). They constructed a survey to measure eight indicators of empowerment that together reflect to a large extent the three dimensions resources, agency and achievements as defined by Kabeer (1999). The eight empowerment indicators include economic security, ability to make small and large purchases, involvement in decisionmaking within the household, mobility, legal and political awareness, and political participation. The choice for this operational definition of women empowerment was based on the high feasibility of applying this measurement to the respondents in the field study. It was also attractive because it covers many of the indicators used by several other studies. 3

5 3. Previous studies This section reviews studies that explore the relationship between microcredit programs and women s empowerment. It first describes studies that find a positive relationship and then reviews studies with more negative results. Hashemi et al. (1996) carried out a longitudinal study between 1991 and 1994 among 1300 married women under the age of 50 in Bangladesh. They examined the effect of two different credit programs, the Grameen Bank and the Bangladesh Rural Advancement Committee (BRAC), by using two groups for the participants of the two different credit programs plus a control group. The control group was split up in a group of women with physical access to the same banks and another group with no access to credit at all. They concluded that the involvement in credit programs empowers women. The results indicate that participation in both credit programs (...) increases women s mobility, their ability to make purchases and major household decisions, their ownership of productive assets, their legal and political awareness and their participation in public campaigns and protests (Hashemi, et al., 1996: 650). The women participating in BRAC were more active in political campaigns and protesting than those in Grameen. According to the authors, this is probably due to the training programs offered by BRAC. Bali Swain and Wallentin (2007) examined the effect of Self Help Groups on women empowerment in five Indian states. They compared the increase in empowerment between 2000 and 2003 for 805 women who were member of a SHG and had access to credit, and a smaller (156) control group of women who did not have access to SHG or credit. Empowerment was measured by looking at the total value of the land owned, the total value of assets owned, whether women are main household earners, whether they earn at all, literacy, whether women are engaged in farm activity and agricultural wage labour, household income and women s own income. Furthermore the respondents responses to fictive abuse were asked in order to measure their independent status in the household, as well as political participation both locally and regionally. They found a significant empowerment improvement from 2000 to 2003 for the SHG group as opposed to the control group. Holvoet (2005) selected five different credit programs operating in India, including both female and male programs, and measured the effects on the household decision-making agency of the participants. The credit programs were the male and female Integrated Rural Development Program (IRDP) and the Tamil Nadu Women s Development Program (TNWDP) which was intermediated by either NGO Myrada or Rido, of which Myrada members were separated into old group members and young group members, while Rido members were automatically old members. The sixth group was a control group. The sample included 497 women who received a loan during under the TNWDP, 200 women who received loans through Myrada in , and 420 men and 180 women who received an IDRP loan, leading to a total sample of 1297 respondents. Seven types of decisions were included: regarding loan use, expenditures, money management, time and task allocation, family and kinship matters, agricultural business and the cottage industry. Her findings suggest that microfinance has a significant positive effect on women s decisionmaking agency, but only when it comes to household decisions regarding loan use. This means that this increased agency over loan use does not automatically lead to increased decision-making power regarding other household decisions. The effect of the loan is enhanced by (SHG) group membership (as opposed to direct bank-lending), even more so 4

6 when group membership is relatively long and when genuine social intermediation (in the form of peer pressure) takes place (Holvoet, 2005: 97). Puhazhendi and Badatya (2002) measured the effects of the SHG Bank Linkage Program of the National Bank for Agriculture and Rural Development (NABARD), one of the first microfinance initiating banks in India. They looked at the empowerment effects on 115 East- Indian SHG participants during the years , by conducting a survey both before SHG membership and after. The survey included questions on self confidence and self worth, decision making ability, communication skills and behavioural changes, where each of these dimensions had 2 to 4 sub indicators. The findings point towards highly increased self confidence as an effect of Self Help Group membership. 1 Furthermore, significant positive effects of SHG membership were found on the respondents financial confidence (regarding familial financial crises), their treatment by the family, influence on financial decision-making within the household, assertiveness and courage to protest, and mobility. Also, violence was found to have decreased strongly within the participants households. Kabeer (2001) reports on interviews conducted with female and male beneficiaries of a microcredit program in two provinces in Bangladesh. She found that women who received loans have a higher self-worth and more access to money. Even if it has increased their workload, they think positively on their increased contribution to household income. In many cases the loans increased women s decision making ability within the household, and they led to more women owning assets and to more education for daughters. Berglund (2007) examined empowerment effects by conducting interviews with 16 female SHG participants in the East-Indian state Andhra Pradesh. The loans were received during the years He found empowerment effects of SHG membership on mobility, decision making, knowledge of economic and social situations, voting independently and contesting in elections. He also points towards other factors of influence on the empowerment process than the microfinance through SHGs, like the respondents socio-economic status. Women with a weak socio-economic status may actually be disempowered by microfinance, because SHG membership leads to the more pressure from familial expectations of bringing in higher income. The findings also show that SHGs have considerable empowerment effects on the individual members, but do not lead to increased empowerment of the group, which is demonstrated by the lack of group ideas for business, collective support for individual political participation or moral support for violence against a member for example (Berglund, 2007: 74). Lakwo (2006) examined the effects of access to credit on sustainable livelihoods and on empowerment of women in Uganda. While access to microcredit did not change material wellbeing in households, it did foster women s empowerment, at three levels. At the individual level, the self esteem of women improved, they achieved a higher status and have taken up roles that previously were only assigned to men. Within the household, women gained decision making power over household assets and livelihood strategies, and began to work further away from their homes. At the community level, women have taken up leadership positions and have more actively opposed polygamy or exploitation by the bank. 1 21% of the participants were considered confident pre-shg membership versus 78% post-shg membership (Puhazhendi and Badatya, 2002: 43). 5

7 Other studies have less positive results. Goetz and Sen Gupta (1996) studied the effects of a microcredit program in Bangladesh and found that in the majority of cases men controlled the use of the loans that were given to the women. This was especially the case for married women. At the same time, however, women were considered responsible for repayment. This situation increased tensions in the household and led to more, not less violence against women. A similar conclusion was drawn by Rahman (1999) on the Grameen microcredit program in Bangladesh. Gibb (2008) conducted a study of a microcredit program in the Bolivian cities La Paz and El Alto. She carried out about 100 interviews, including women beneficiaries and a control group of women with no access to the credit program. The group of beneficiaries was split into a target group (poor women) and a group with higher incomes. She found that the loan program did have a positive effect on the businesses of the women and on household assets, but not on level of education of the children or on women s empowerment. With respect to the latter, she looked at how the important decisions in the household were made, and at the division of labour regarding household chores. The most important decisions were made jointly by men and women in all groups, but in the control group it occurred a bit more often that men took important decisions on their own. On the other hand, men in the control group proved more cooperative in carrying out household tasks than in the groups where women had had access to credit. In this area, women with access to microcredit were not empowered. For rural India, Garikipati (2008) draws a similar conclusion as Gibb does for Bolivia. She finds that microcredit programs targeted to women led to more household assets. However, since there was no change in discriminatory ownership rules and since co-ownership of assets was not possible, this worsened the position of women in the household. In sum, it seems that most studies find positive effects of microcredit programs on women s empowerment or at least on some dimensions or indicators of women s empowerment. However, a few studies conclude that these positive effects did not occur; microcredit programs were not able to change ownership rules or gender relations in households and therefore they increased tensions in households and sometimes even disempowered women. 4. The field work This study examines empowerment effects on women participating in SHGs that were set up and coordinated by Prime Trust. The field work was conducted in May By then, Prime Trust had 63 active SHGs, all of which had a limit of 20 members in order to secure reasonable oversight for its staff and to be able to offer full services to its members. Out of the 63 SHGs, 60 were female and 3 male. There were no mixed gender SHGs. Apart from its financial intermediary work, Prime Trust also incorporates social awareness and training programs. These are voluntary programs for the SHG members and (their) children, teaching them about health, hygiene and nutrition, the importance of education, children s rights and women s rights and stimulating the debate on domestic violence and dowry problems. Holvoet (2005: 76) calls this a credit-plus approach, of which it is often argued that it has more empowerment possibilities than credit alone. The programs are usually implemented via workshops with role plays and group discussions. In 2009, three different awareness programs had been initiated by Prime Trust: a nutrition program, an HIV/Aids program and a domestic violence program. In addition, Prime Trust offers vocational trainings to women in SHGs to increase their capacities of using the received microloans effectively and efficiently. This is 6

8 particularly important because not all women have entrepreneurial skills or knowledge of what is necessary to generate more income. Others tend to only use the microloans to pay off debts, which does not improve their financial situation. Microfinance through SHGs thus goes hand in hand with training and awareness programs, but the latter remain voluntary (Prime Trust, 2006). Staff members of Prime Trust have a monitoring function for the overall wellbeing of their SHG members. In the case of domestic violence, Prime Trust offers women the possibility to have personal meetings with a case worker. Prime Trust can also initiate meetings with the husbands to stimulate debates on domestic violence (Prime Trust, 2006). Once women in a SHG are accessing a loan, membership of the group is no longer voluntary. Women are stimulated by Prime Trust staff to establish relationships of trust in order to secure group responsibility for timely repayment of the loan. Prime Trust was in the process of professionalizing its monitoring system for repayments. Repayment delays were very limited and cooperating bank had increased their lending activities to Prime Trust s SHGs. Cooperating banks were the Andhra Bank, the Indian Bank, the Puducherry Cooperative Bank, the Baharathiar Bank and the Periakalapet Bank (Prime Trust, 2006). The survey sample comprised 66 women Prime Trust SHG members who lived in the city of Puducherry in the state Tamil Nadu in South India. Within the group of SHG members, the selection of the survey participants was performed randomly. In order to capture the process of empowerment, the sample has been split into two groups, the first group comprising of 36 women who have recently received their first loan and the second group comprising of 30 women who have recently received their second loan through an SHG of Prime Trust. This will provide insights into a possible relation between microfinance and women's empowerment. Secondly, the participation of the women in awareness programs was taken into account, allowing for conclusions on possible empowering effects of these programs besides the loans. This was done by including the participation data of each participant, ranging from 0 to 3 program participations in No data was available on participation in vocational training. As was mentioned above, the survey was derived from Hashemi et al. s study (1996) on Bangladesh. It consists of eight groups of questions representing the eight indicators of women s empowerment. Each group of questions has between 4 and 8 sub questions. The questionnaire was translated into Tamil, the local Indian language, by Prime Trust s staff. The survey translation was done in such a manner that the questions would be understandable for the women, considering their life style and culture. However, the format and style of the questionnaire remained equal to the English version in order to secure convenience in the processing of the responses. Surveys were taken per SHG, and in each group between 10 and 20 members were present. Prime Trust initiated SHG meetings besides the regular monthly meetings in order to facilitate the survey. Participation of the women was voluntary. In these meetings one of the authors of this paper was present and she was accompanied by a female and a male staff member of Prime Trust. The meetings generally took place in the house of one of the members and lasted on average one hour. After an introduction by the researcher on the purpose of the survey and the content of the research, which was translated by the male staff member, the survey was handed out to the women. The male staff member of Prime Trust took the women step by step through the 7

9 survey, explaining each question and explaining how to give answers. The female staff member, who was the coordinator of all SHGs and knew most members personally, assisted by writing their answers for them in cases of illiteracy and answered their specific questions. This method was applied in order to secure active participation of the women and to reduce non-response that could be caused by unclear questions. It proved to be effective, because all surveys were completed and the women showed a lot of interest by discussing questions with each other and by asking questions to the staff members. Presenting the questionnaires in a group meeting instead of in individual interviews thus most likely also reduced the risk of receiving socially desirable answers. The survey questions and the measurement criteria as applied by Hashemi et al. (1996) are as follows: Question 1: Mobility 1. Does she visit the market (alone); 2. Does she visit medical facilities (alone); 3. Does she visit the movies (alone); 4. Does she go outside the village (alone); Criterion: 1 point for every yes, plus an additional point if the respondent goes alone. A score of 3 or better is classified as empowered. Question 2: Economic security 1. Ownership of residence or land; 2. Ownership of any productive asset/income; 3. Having cash savings; 4. Having used cash savings for business or money-lending. Criterion: Having a score of 2 or better is defined as empowered. Question 3: Ability to make small purchases 1. Does she purchase small items used for daily food preparation; 2. Does she purchase small items for herself; 3. Does she purchase ice-cream or sweets for the children; Criterion: 1 point for each yes plus an additional point if the purchase is normally made without asking the husband s permission and another additional point if the purchases are bought at least in part with the money earned by the respondent herself. Having a score of 7 or better is classified as empowered. Question 4: Ability to make large purchases 1. Does she purchase pots and pans; 2. Does she purchase children s clothing; 3. Does she buy the family s daily food Criterion: 1 point for the first question, 2 for the second and 4 for the third question. An additional point is given for each category if the purchase was made, at least in part, with money earned by the respondent herself. A respondent with a score of 5 or higher is considered empowered. Question 5: Involvement in major decisions 1. Has she been involved within the past few years in decisions about house repairs or renovations; 2. Has she been involved in a decision to take in a goat (or other cattle) for profit; 8

10 3. Has she been involved in deciding to lease land; 4. Has she been involved in deciding on purchasing land, a boat or bicycle rickshaw; Criterion: Category one and two each receive 1 point if confirmed. Category three is given three points and category four is given 4 points. An additional point per category is given if the decision concerned spending money earned by the respondent herself. A score of 2 or better is considered empowered. Question 6: Relative freedom from domination by the family 1. Has money in the past year been taken from her against free will; 2. Has land, jewellery or live stock been taken from her against free will; 3. Has she been prevented from visiting her natal home; 4. Has she been prevented from working outside the home. Criterion: if none of these have happened, one is labelled empowered. These scores therefore need to be reversed from negatives to positives, so that a respondent would have a score of 4 when all answers are no. Question 7: Political and legal awareness 1. Does she know the name of a local government official; 2. Does she know the name of a Member of Parliament; 3. Does she know the name of the Prime Minister; 4. Is she aware of the significance of registering marriage; 5. Does she have knowledge of the law governing heritage; Criterion: One point is given for each category confirmed. A minimum score of 4 is considered as empowerment. Question 8: Participation in public protests and campaigning 1. Has she campaigned for a political candidate; 2. Has she ever collectively protested against: A man beating his wife A man divorcing or abandoning his wife Unfair wages Unfair prices Misappropriation of relief goods high-handedness of government or police officials Criterion: either one of these categories confirmed is considered as empowerment. Overall criterion: A woman is considered empowered is she has achieved the minimum criterion for being empowered in five or more of the eight questions. Hashemi et al. (1996) maintain that their indicators represent women's capacity and resources, and women's agency. But in fact, all three dimensions as identified by Kabeer (1999) can be considered to be reflected. Question 2 refers to the "resources" dimension as defined by Kabeer (1999). Questions 3, 4, 5, and 6 refer to the "agency" dimension, and questions 1, 7 and 8 can be said to represent the "achievement" dimension. Interestingly, just after the fieldwork for this paper was conducted, the group of authors that had designed the survey questionnaire used in this study has re-examined the original indicators, sub-indicators and for empowerment (Schuler et al., 2010). For the context of Bangladesh, they found that economic security is still a relevant indicator, but that the ability 9

11 to make small and large purchases was no longer a relevant measure for empowerment because it depended more on the availability of cash than on permission of the husband. In the resources dimension they propose to add access to media and phone, and in the agency dimension they suggest an indicator on management of family assets. Legal and political awareness was still important, as well as mobility, but within the latter changes are suggested in the sub-indicators. Some other indicators were added, such as political participation, social support and self-efficacy, for example confidence in speaking with outsiders. In our study we apply slightly different measurement criteria than Hashemi et al. (1996) did. They apply a zero/one approach to determine whether a woman is empowered. The outcomes will therefore only tell us whether a respondent is empowered or not empowered either with regards to a specific indicator of empowerment or with regards to all indicators. We think these are arbitrary thresholds and that a lot of information is then lost. For this reason, we apply the same weights within the eight dimensions, but we use the sum of all individual scores by subquestions for the analysis whether women with a second loan are more empowered than women with a first loan. In order to compare the scores on each of the questions/indicators, the scores must be using the same scale. This is why we rescaled the respondents scores on all questions on a scale from 0 to 10. For the overall empowerment score we compute the average score of the rescaled scores on the eight questions. We carry out regression analysis to assess the influence of first loan (group 0) versus second loan (group 1) receivers on empowerment. Another variable included is the number of awareness programs the respondents have participated in in 2009 (the only year available). The scores on participation in awareness programs range between 0 and 3 programs. The age (in years) of the respondents is used as a control variable. The respondents civil status and city of residence are not included in the analysis for the reason that there is too little variance between the respondents on these aspects, making them unfit as control variables. 29 out of 36 women in the first group and 28 out of 30 women in the second group proved to be married, and all women live in Puducherry. In total there nine models have been estimated: eight for all indicators/questions and one for the overall degree of empowerment. 5. Results Table 1 shows the descriptive statistics of the non-rescaled scores on the above mentioned variables that are included in the analysis. The age of the respondents ranges between 23 and 65 years, with an average of The mean scores for economic security, ability to make large purchases, involvement in major decisions and participation in protests and campaigning are above the thresholds as defined by Hashemi et al. for determining whether women are empowered. Regarding mobility, the mean score is just above the threshold, which means that mobility for most women is still limited. The relatively good score for the ability to make large purchases can be explained that four points could be obtained for purchasing the daily food, which actually is perhaps not a very large purchase. For other indicators, such as the ability to make small purchases, freedom from domination from the family and political and legal awareness, the average score is far below the threshold. For the ability to make small purchases and for political and legal awareness it can be said that the threshold is set at a rather high level. For freedom from domination from the 10

12 family the threshold criterion is that women have never been prevented from visiting natal home or working outside the home, and that money or other valuable assets have been taken from them against their will. This is also rather restrictive, but the fact the average is 3.3, meaning that the average women has experienced 3.3 out of four of these circumstances, points to very little power of women within households. Table 1. Descriptive statistics, original scores Threshold criterion Minimum Maximum Mean Age Participation in awareness programs Indicator 1: Mobility Indicator 2: Economic security Indicator 3: Ability to make small purchases Indicator 4: Ability to make large purchases Indicator 5: Involvement in major decisions Indicator 6: Freedom from domination by the family Indicator 7: Political and legal awareness Indicator 8: Participation in protests and campaigning Average score Standard deviation Table 2 shows that the two groups are not very different regarding most empowerment indicators. The exceptions are the indicators of economic security, involvement in major decisions and relative freedom from domination by the family. The second group respondents score much higher on these indicators than first group members. When we look at the overall score, only 25% of the group first loan receivers is empowered, as opposed to 67% of the second group. This suggests a significant empowerment effect of receiving a loan. Table 2. Percentage of women considered empowered, by indicator and overall, and by amount of loans received (original scores) First loan Second loan Mobility Economic security Ability to make small purchases 6 0 Ability to make large purchases Involvement in major decisions Freedom from domination by the family Political and legal awareness Participation in protests and campaigning Overall empowerment N

13 Table 3 presents the descriptive statistics of the rescaled respondent scores that were used for the regression analyses. Note that all variable scores were rescaled to a 0-10 scale, but that not all maximums are 10. This means that regarding question 1, 3 and 5, no respondent scored the maximum score. At the same time the respondents did not score the minimum of 0 on questions 1 and 3 either, while for all other questions they did. Table 3. Descriptive statistics of rescaled scores Variables Minimum Maximum Mean Standard deviation Age Participation in awareness programs Indicator 1: Mobility Indicator 2: Economic security Indicator 3: Ability to make small purchases Indicator 4: Ability to make large purchases Indicator 5: Involvement in major decisions Indicator 6: Freedom from domination by the family Indicator 7: Political and legal awareness Indicator 8: Participation in protests and campaigning Average score Linear regression analysis has been performed for each of the eight indicators and the average scores on all indicators together. This was done using the rescaled respondent scores. Included in the regression analyses are the variables Microloan (0 for one loan and 1 for two loans), Age and Participation in awareness programs. The outcomes are presented in Table 4, showing the coefficients, the explained variance (R²) and the F values of the models, and the extent to which coefficients and F are significant. The models prove to have relatively little explanatory value. The adjusted R squares are all below 16%, and most below 10%. The F-values are only significant for the models 2, 5 and 6, so for economic security, involvement in major decisions, and relative freedom from domination from the family. This means that there are probably many omitted variables: many other factors will be of influence on the different empowerment scores. One of these factors is the education level which, unlike age, has not been included as control variable. The participation in training and awareness programs does not have much influence on empowerment. When it does appear as a significant factor, a positive influence on the participation in public protests and campaigning, and a negative influence on political and legal awareness, the overall models are not significant. The fact that we find so little influence from participation in awareness programs, is probably due to the way this variable has been measured. It only includes training programs given in In addition, the variable has been measured at group level, not at individual level. Since the training is voluntary, not all women of a particular SHG have participated, and the validity of the indicator can thus be questioned. 12

14 Table 4. Results of OLS regression 2: Economic security 5: Involvement decisions 6: Relative freedom 7: Political and legal awareness 8: Participation protests 9: Average empowerment 1: Mobility 3: Small purchases 4: Large purchases Microloan ** ** 0.382** * Age 0.275* Participation awareness * 0.299* Explained variance (adjusted R²) F * * 3.832* * Significant at 0.05 ** Significant at

15 Age has a significant influence on mobility only, but this model does not have a significant F- value either. With respect to the main variable, whether empowerment has been enhanced by access to microcredit, table 4 shows that this holds for several dimensions of empowerment. There is a significant positive effect on women s economic security, meaning that there have been improvements in women s ownership of land, residence and/or productive assets and/or in control over cash. This indicator is related to the resources dimension of empowerment. In addition, there proved to be a positive effect on indicators 5 and 6, or the involvement in major decisions and relative freedom from the family. These two indicators are related to the agency dimension of empowerment. In all these cases, the F-value is also significant. Our results fail to show a significant positive effect of microcredit on the ability to make small and large purchases, on mobility, on political and legal awareness and on participation in public protesting and campaigning. Some of these indicators (mobility, political and legal awareness, participation in campaigning) are in the "achievement" dimension. Given that we only examine the difference between having obtained one loan and having obtained two loans, it is probably too early to already expect changes in this dimension. With respect to political and legal awareness, the timing of the field work was important. The survey was conducted in 2009 and coincided with a parliamentary election campaign. Political campaigns are run very publicly in India and it is almost impossible to ignore the information stream about candidates and policy programs. This probably led to higher political awareness of all respondents, and made the relative contribution of microcredit irrelevant. The findings show that there is a significant effect on the overall (average over all eight indicators) empowerment score. However, the explanatory power of this regression is not sufficient, with a non significant F-value. Given the highly varying results on the eight components of this average empowerment score, this outcome is not very surprising. Microcredit proved to have a significant influence on only three out of eight of the components of the average score only. However, given the limited validity of variable participation in awareness programs, we also run the regressions with only two independent variables, microloan and age. There are very limited changes in the sizes of the coefficients and no changes in the significance of the coefficients. The F-value for the model on economic security decreases slightly, while those for involvement in major decisions and relative freedom from domination of the family increase. There is also a slight change in the results for the overall score. The coefficient for the microloan is again significant at 5% level, and the F-value is higher leading to near significance at 10% level (0.107) for the overall model. 6. Conclusion This paper has examined the extent of empowerment of 66 women benefiting from a Prime Trust operated SHG Bank Linkage program in Puducherry. It applied a survey developed by Hashemi et al. (1996) in which empowerment has been measured on the basis of eight 14

16 indicators, each divided into several sub-indicators. The indicator economic security measures the resources dimension of empowerment. The ability to make small and large purchases, the involvement in major decisions and the relative freedom from domination by the family reflect the agency dimension, and the indicators mobility, legal and political awareness and participation in public protesting and campaigning represent the achievement dimension of empowerment. A first conclusion is that the average "level" of empowerment is still low. The average woman perhaps does visit the market, medical facilities, or the movies, but not alone. She may have some cash but does not own land or other productive assets. She has the ability to make small purchases but husband's permission is often necessary. Most women experience that money and other valuable assets are taken away against their will/or are prevented from working outside the home or from visiting their natal home. In order to assess the influence of microcredit on the level of empowerment, we compared women who had just received one loan with women who had just received a second loan. When a threshold is used to determine whether women are empowered or not, the results show that 25% of the women in the first group is empowered, as against 67% of the women in the second group. After rescaling the scores on a scale from 1-10 per indicator and applying OLS regressions, we find that there is indeed a significant difference between the first and second group in the overall average empowerment score. However, the explanatory power of the model explaining overall empowerment is just below the threshold for significance at 10% level. Positive and significant empowerment effects were found for the indicators economic security, involvement in major household decisions and freedom from domination by the family, and these models did have sufficient explanatory power. There proved to be no significant effects of microcredit on the other five indicators: mobility, the ability to make small or large purchases, political and legal awareness and participation in public protests and campaigning. The study has several limitations, such as the small number of respondents and the low explanatory power of the regression models. In addition, the paper assesses the influence of microcredit by comparing women who (just) received one microloan with women who (just) received two microloans, thus is only able to assess the (short-term) influence of having obtained and used one loan. Yet, the findings seem to coincide with those of many other studies, and can also be explained by the fact that a short-term influence of one microloan is assessed. The findings point to improvements in the resources and in the agency dimension of empowerment, and not (yet) in the achievement dimension. 15

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