Is Microcredit a Viable Strategy for Empowering Women?

Abstract

Microfinance institutions (MFIs) grant microcredits to hundreds of thousands of people, particularly women in developing countries with the aim of empowering them. The microcredits in the form of small loans to women are considered a tool for empowering women toward change in their socio-economic conditions. This paper investigates the impact of microcredit as a women’s empowerment strategy. It draws from various impact assessment studies on microcredit programmes in Ghana, Cameroun and Gambia to examine issues on health and nutrition, education and skills development, income generation and, savings and investment as well as critique microcredit policies and strategies. It reveals that microcredit programmes are primarily reaching low income, moderately poor micro-entrepreneurs as target beneficiaries because majority of households have been able to acquire basic durable assets, such as bicycles, cooking pots, basins and roasters (cylinders). It concludes that microcredit programmes have positive impacts on women and the poor in spite of their challenges. It recommends, among others, that microfinance organizations revise their policies to address the challenges of women and target their socio-economic development needs and aspirations. Additionally, access to credit on sustainable basis is more important to the poor than receiving credit at subsidized interest rates.

Key Words: Microcredit, Women’s empowerment, Micro-finance Policies, Non-Governmental Organizations