Abstract
Microfinance has been widely promoted as a tool for poverty alleviation and women’s empowerment in the Global South. This article critically assesses the empowerment effects of microfinance programmes in rural Bangladesh, examining the gap between policy rhetoric and lived reality. Drawing on Sen’s capabilities approach and feminist critiques of development, we analyse how microfinance participation affects women’s economic autonomy, decision-making power, mobility, and social standing.
Key Findings
The research reveals a more nuanced picture than the polarised debate between microfinance advocates and critics would suggest. While some women experienced genuine gains in economic autonomy and household decision-making power, others faced increased debt burden, domestic conflict, and coercive repayment pressure. The empowerment effects were strongly mediated by pre-existing social capital, household dynamics, and the specific operational model of the microfinance institution. Group lending models with strong social support components produced more consistently positive outcomes than individual lending programmes.
Methodology
A longitudinal mixed-methods design tracks 200 women microfinance borrowers and 100 non-borrowers over three years across four rural communities. Quantitative surveys are supplemented by 50 life history interviews and participant observation of group meetings and household interactions.
Implications
The findings argue for a more context-sensitive approach to microfinance that prioritises genuine empowerment over mere financial inclusion, with attention to the social structures that enable or constrain women’s agency.
