BANGLADESH RESEARCH PUBLICATIONS JOURNAL

ISSN: 1998-2003, Volume: 2, Issue: 3, Page: 641-647, May - June, 2009

MICRO-CREDIT INTERVENTION AND ITS EFFECTS ON EMPOWERMENT OF RURAL WOMEN: THE BRAC EXPERIENCE
Shahnaj Parveen1 and Md. Sajedur Rahman Chaudhury2 Shahnaj Parveen and Md. Sajedur Rahman Chaudhury (2009). Micro-Credit Intervention and Its Effects on Empowerment of Rural Women: The BRAC Experience. Bangladesh Res. Pub. J. 2(3): 641647. Retrieve from http://www.bdresearchpublications.com/admin/journal/upload/08080/08080.pdf

Abstract
The study was designed to analyse rural womens economic empowerment as the outcome of micro-credit interventions. The study was conducted in Shahjatpur and Jalalpur villages under Melandaha Upazila of Jamalpur District. A total of 90 respondents were selected randomly, out of which 45 were involved in the credit scheme of the Bangladesh Rural Advancement Committee (BRAC) and other 45 women had no involvement in any credit programme. Both qualitative and quantitative data were collected through group discussions and interviews with the respondents in December 2008. Three economic indicators (income, savings and asset) were considered to measure womens empowerment. The independent sample t-test was performed to evaluate the impact of micro-credit on womens economic empowerment. Results showed significant differences between BRAC and non-BRAC women in the levels of economic dimensions of empowerment. Admittedly, the BRAC women were more empowered economically due to their active participation in various income generating activities compared to control groups. This study concluded that there were some positive contributions of micro-credit interventions on rural womens economic autonomy. Hence, more loans should be expanded to the low-income women by development agencies, especially by the BRAC, in enhancing their economic solvency, domestic power relations and psychological strengths. This could undoubtedly act as catalyst to foster socio-economic uplift of rural women in the study villages and rectify long standing gender inequality in Bangladesh.
Key words: Rural women, micro-credit, impact, empowerment.

Introduction
Women in Bangladesh suffer from multiple deprivations in social and economic spheres of life due to patriarchal values prevalent in the society. Most of the women live in rural areas of Bangladesh, where majority of them play a major role in the areas of management of crops, livestock, fisheries, biological diversity, energy and family. Even though the economic contribution of rural women is substantial, it is largely unacknowledged. In addition to their productive work, the traditional division of labour
* Corresponding Authors Email: parveen_bau@yahoo.com or shahnaj1969@gmail.com
1

Associate Professor, Department of Agricultural Extension Education, Bangladesh Agricultural University, Mymensingh. M & E Consultant, PromPT (Promoting, Participation and Training)

Parveen and Chaudhury

642

gives women the primary responsibility for such domestic chores as cleaning, cooking, childcare, fetching water and so on. Womens limited access to markets, economic services, education, health care and politics leads to a lower well-being of the family that retards the developmental goals of the state and traumatise women (Parveen, 2005). The empowerment of women is an essential precondition for the alleviation of poverty and the upholding of human rights, in particular at the individual level, as it helps to build a base for social change (DFID, 2000). The concept of empowerment is complex as its meaning varies depending on the socio-cultural as well as political contexts and hence, it is difficult to furnish a unique definition of empowerment. It is discussed in literature as a process of gaining power or a condition of being empowered at individual or group level (Dixon-Mueller, 1998). Womens empowerment is the process and the outcome of the process, by which women gain greater control over material and intellectual resources and challenge the ideology of patriarchy and the gender based discrimination against women in all the institutions and structures of society (Batliwala, 1994). Empowerment can be defined as the expansion in peoples ability to make strategic life choices in a context where this ability was previously denied to them (Kabeer, 2002). Micro-credit has been claimed to be a solution to integrate marginalised women into socio-economic activities, decision-making and poverty alleviation. Micro-credit is a small loan to a client involved in some kinds of entrepreneurial activities for a living, which is made by a bank or other institution. Micro-credit can be offered, often without collateral, to an individual or a group through lending. It has proven an effective and popular measure in the ongoing struggle against poverty, enabling those without access to lending institutions to borrow at bank rates and start small business (Microfinance Gateway, 2008). Womens participation in credit programmes leads to them contributing to family income, taking greater role in household decision-making, having greater social networks and freedom of mobility and exercising more control over their fertility (Banu et al., 2002; Basher, 2007; Webb et al., 2002; Pitt et al., 2003 and Sukontamarn, 2007). Group savings and credit programmes act as the driving force to help illiterate rural women start small-scale economic activities (Acharya et al., 2007). It strengthens coping mechanisms during crisis, diversify income generation, build assets and improve the status of women (Hashemi et al., 1996; Montgomery et al., 1996; Husain et al., 1998; and Morduch 1998). So access to micro-credit is one of the very important components in empowering income for poor women. But very few studies have so far been focused on micro-credits impact on womens empowerment. The impacts of micro-credit need to be examined through research, which measures how the services of a microfinance institution like BRAC contribute to the lives of its clients in such areas as employment, income, nutrition, education, health and gender equity. It is the primary tool used to determine the effectiveness of microfinance as a development intervention (Microfinance Gateway, 2008). Keeping this views in mind, this study was undertaken considering the following objectives: i) to measure the financial resources of rural women; ii) to assess the extent of rural womens economic empowerment and iii) to measure the impact of micro-credit on rural womens economic empowerment.

Methodology
The study was conducted in Shahjatpur and Jalalpur villages under Melandaha Upazila of Jamalpur District. A total of 90 respondents were selected through stratified random sampling method, out of which 45 were involved in the credit scheme of the BRAC and other 45 women had no involvement in any credit programme. Both BRAC group and control group had a similar socioeconomic status. Three indicators, such as personal income, savings and assets were considered to measure womens economic empowerment. In order to collect qualitative data, two group discussion sessions were arranged in two villages. Each group contained 10 participants. The qualitative data helped the researcher to design interview schedule for the study. A personal interview was conducted with the 90 respondents through the interview schedule in December 2008. Simple statistics such as percentage, mean, standard deviation (SD) and coefficient of

http://www.bdresearchpublications.com/journal/

Micro-credit Intervention and its Effects

643

variation (CV) were calculated. The independent sample t-test was performed to evaluate the impact of micro-credit on rural womens economic empowerment. The Statistical Package for Social Science (SPSS) was used for data entry in the computer.

Measurement of empowerment indicators

Income of the respondents was measured in terms of money (taka) generated annually. Both farm (vegetables, livestock and fisheries) and non-farm income sources were considered in measuring annual income of the respondents. Income of the respondents was categorised into five (e.g. very low income, low income, medium income, high income and very high income) in order to measure empowerment index. Savings of the respondents was measured in terms of money (taka) saved annually. Different forms of savings, such as cash savings at home, savings as crops, savings in NGOs or rural co-operatives and savings in bank were considered in measuring savings of the respondents. Savings of the respondents was categorised into five (e.g. very low savings, low savings, medium savings, high savings and very high savings) in order to measure empowerment index. Asset of the respondents was measured in terms of money (taka) value of the assets at the time of interview. Both productive (cattle, goat and poultry) and nonproductive (jewellery, TV, radio and furniture) assets were taken into consideration in measuring the asset of the respondents. Asset of the respondents was categorised into five (e.g. very low Asset, low Asset, medium Asset, high Asset and very high Asset) in order to measure empowerment index. Cumulative Economic Empowerment Index (CEEI) was measured by summing up of income, savings and asset categories of the respondents. The CEEI score varied from 1 to 15, where 1 indicated very low level of empowerment and 15 indicated very high level of empowerment.

Results and Discussion

Personal profile of the respondents
Data presented in Table 1 show that the respondents were 34 years old on average. They had on average up to three class of education, which is not satisfactory at all. Poor education prevents them from investing the loan in a high-return activity (Zaman, 1999). They had three children on average. About six persons lived together in a single household. Their average family farm size was 0.22 ha. The respondents received credit of 10044.56 taka on average to run different income generating activities. Table 1. Summary of household characteristics of the respondents (n = 90) Factors (units) Age (years) Schooling (years) Children (number) Household size (number) Family farm size (hectares) Credit received (taka) Mean (% CV) 34.52 (31) 3.09 (117) 2.69 (59) 6.14 (37) 0.22 (45) 10044.56 (125) Observed range 14 - 58 0 - 14 0 - 10 2 - 14 0.01 - 0.93 0 - 50000

Figures in the parentheses indicate CV = (SD / Mean) 100.

Financial resources of the respondents

Information in Table 2 indicate that the respondents earned an amount of 7965.00 taka on average annually from both farm and non-farm sources. Among farm sources, poultry bird was the major income earning source and earned an amount of 1462.78 taka. Among non-farm sources, service was the major income source (6200.00 taka)

http://www.bdresearchpublications.com/journal/

Parveen and Chaudhury

644

followed by handicraft production (1516.67 taka) and small business (433.33 taka). Such economic activities enabled women to have a better access to basic needs and make important contribution to household decision making and ultimately have positive impact on women empowerment (Parvin et al., 2004). Table 2. Income of the respondents from farm and non-farm sources Income sources Vegetables Livestock Poultry Small business Service Handicrafts Total income Mean value in taka (CV) 457.78 (172%) 104.44 (557%) 1462.78 (222%) 433.33 (433%) 6200.00 (259%) 1516.67 (210%) 7965.00 (146%)

Figures in the parentheses indicate CV = (SD / Mean) 100.

It is depicted from Table 3 that the respondents deposited money in bank (2015.56 taka) followed by in NGOs or co-operatives (920.00 taka), on hand (563.67 taka) and as crops (496.67 taka), respectively. The respondents used the savings during household risks, childrens education and purchasing assets. Table 3. Savings of the respondents in different sources Savings sources Cash savings on hand Savings as crops Savings in NGOs or rural co-operatives Savings in bank Total savings Mean value in taka (CV) 563.67 (147%) 496.67 (210%) 920.00 (125%) 2015.56 (116%) 3995.89 (54%)

Figures in the parentheses indicate CV = (SD / Mean) 100.

From Table 4, it is clear that the respondents owned both productive and nonproductive assets. The mean value of productive assets was cattle - 2333.33 taka, goat 822.22 taka and poultry - 663.89 taka. Regarding non-productive assets, the respondents owned jewellery (mean value: 1733.33 taka), television or radio (mean value: 2066.67 taka) and furniture (mean value: 893.33 taka). Table 4. Assets owned by the respondents Types of assets
Cattle Goat Poultry Jewellery Television/radio Furniture Total assets

Mean value in taka (CV)

2333.33 (212%) 822.22 (209%) 663.89 (114%) 1733.33 (161%) 2066.67 (218%) 893.33 (206%) 11203.89 (114%)

Figures in the parentheses indicate CV = (SD / Mean) 100.

http://www.bdresearchpublications.com/journal/

Micro-credit Intervention and its Effects

645

Previous studies showed that womens asset ownership positively influenced their empowerment at household level (Hossain et al., 2004) and reduced their vulnerability in several ways (Zaman, 1999). It is suggested that womens involvement in NGO programmes like training and credit could increase their ownership of assets through increasing their own income ( Husain and Mallick, 1998).

Extent of empowerment of the respondents

The distribution of CEEI depicted in Figure 1 indicates that vast majority of the women (79%) fall under a low economic empowerment category, 18 percent medium category, while only 3 percent of them belonged to a high economic empowerment level.

18%

3%

79%
Low empowerment Medium empowerment High empowerment

Figure 1. Distribution of rural women on the basis of their CEEI It might be due to the reason that micro credit programme could not reach to large section of women properly. The women might have minimal training for income generating activities. They might not have enough power within households to use their loan as well as to control their income. They mostly depend on their husbands or male members for various purposes because micro-credit programmes are unable to eliminate socio-cultural constraints on womens physical access to market (Parvin et al., 2004). In another study, Parveen and Leonhaeuser (2008) found the economic empowerment of farm women was limited to the low to medium level. Thus, women who are less empowered feel insecure and vulnerable. So, there is a need for enhancing rural womens empowerment to a satisfactory level through undertaking an integrated approach.

Impact of micro-credit and womens empowerment

It is evident from Table 5 that the mean value of BRAC womens empowerment varied significantly from non-BRAC women group and the F-statistics was significant at 1% level (F = 10.065, P = 0.002). That means the level of economic empowerment of BRAC women is higher that that of non-BRAC women. Table 5. Variation of the level of empowerment between BRAC and non-BRAC women Respondents BRAC Women (n = 45) Non-BRAC women (n = 45) F-Statistic = 10.064 (P = 0.002) Mean (CV) 5.36 (50%) 3.29 (38%) T value = 4.708 with 88 df

Figures in the parentheses indicate CV = (SD / Mean) 100.

The findings of Zamans (1999) study supported the view that greater access to resources in terms of micro-credit enhanced female control over their assets. It was found that women who had borrowed more than 10000 taka were more likely to be able to sell poultry and jewellery independently compared to an identical non-borrowing member. In

http://www.bdresearchpublications.com/journal/

Parveen and Chaudhury

646

another study, Amin and Pebley (1994) found that membership in BRAC positively influenced a womans decision-making role, her control over resources and mobility.

Concluding Remarks
From the findings and discussion mentioned above, it can be said that most of the rural women had a very low level of education. Their annual income was less than ten thousands. They deposited money mainly in bank. The rural women possessed both productive and non-productive assets, which secure them during household risks. There was a low level of economic empowerment of rural women. However, significant differences were found between BRAC and non-BRAC women in their levels of economic empowerment. This study provides evidence that economic empowerment of women can be improved through increasing their income, savings and assets. The results also suggest the need to empower women through education. In enhancing womens empowerment in a significant way, the concerned agencies, especially the BRAC, should provide more loans to poor women along with provision of education and training. This could undoubtedly act as catalyst to promote socio-economic uplift of rural women in the study villages and rectify long standing gender inequality in Bangladesh.

References
Acharya, S.; Yoshino, E.; Jimba, M. and Wakai, S. (2007). Empowering rural women through a community development approach in Nepal. Community Development Journal, 42 (1): 34-46. Amin S and A Pebley (1994). Gender Inequality within Households: The impact of a womens development programme in 36 Bangladeshi villages. The Bangladesh Development Studies - Special Issue on Women, Development and Change, XXII (2&3): 121-155. Banu, D.; Farashuddin, F.; Hossain, A. and Akter, S. (2001). Empowerment of women: the impact of BRACs rural development programme. Journal of International Womens Studies, 2 (3): 30-53. Basher, M.A. (2007). Empowerment of microcredit participants and its spillover effects: evidence from the Grameen Bank of Bangladesh. Journal of Developing areas, 40 (2): 173-183. Batliwala, S. (1994). The Meaning of Womens Empowerment: New Concepts from Action, in: G. Sen; A. Germain and L.C. Chen (eds) Population Policies Reconsidered: Health, Empowerment and Rights. Cambridge: Harvard University Press. DFID (2000). Poverty Elimination and the Empowerment of Women: Strategies for Achieving the International Development Targets. London: Department for International Development. Dixon-Mueller, R. (1998). Female Empowerment and Demographic Processes: Moving Beyond Cairo. IUSSP Policy and Research Papers 13, International Union for the Scientific Study of Population (IUSSP), Belgium. Hashemi S, S Schuler and I Riley (1996). Rural Credit Programs and Womens Empowerment in Bangladesh. World Development, 24 (4): 635-653. Hossain, M.; Paris, T.R.; Bose, M.L. and Chowdhury, A. (2004). Nature and Impact of Womens Participation in Economic Activities in Rural Bangladesh. CPD-IRRI Policy Brief 7. Centre for Policy Dialogue, Dhaka. Husain, A.M.M. and Mallick, D. (1998). Conclusion and Policy Implications, pp. 173-183, in: A.M.M. Husain (ed.) Poverty Alleviation and Empowerment. Research and Evaluation Division, BRAC Centre, Dhaka. Hussain AM (1998ed.). Poverty Alleviation and Empowerment: the second impact assessment study of BRACs Rural Development Program BRAC publications, Dhaka

http://www.bdresearchpublications.com/journal/

Micro-credit Intervention and its Effects

647

Kabeer, N. (2002). Resources, Agency, Achievements: Reflections on the Measurement of Womens Empowerment, pp. 17-57, in: B. Sevefjord and B. Olsson (eds) Discussing Womens Empowerment - Theory and Practice. Sweden: Swedish International Development Agency. Malhotra, A.; Schuler, R.S. and Boender, C. (2002). Measuring Womens Empowerment as a Variable in International Development. International Centre for Research on Women (ICRW), USA. Parveen, S. and Leonhaeuser, I.-U. (2008). Factors Affecting the Extent of Economic Empowerment of Women in Farm Households: Experiences from Rural Bangladesh. International Journal of Human Ecology, 9 (December): 117-126. Microfinance Gateway (2008). Available at http://www.microfinancegateway.com/section/faq#Q1 (accessed to 18 April 2009). Montgomery R, D Bhattacharya and D Hulme (1996). Credit For The Poor In Bangladesh: The BRAC Rural Development Programme and the Government Thana Resource Development and\Employment Programme in Hulme D and P Mosely Finance against Poverty, Vols. 1 and 2, Routledge, London. Morduch J (1998). Does Microfinance Really Help the Poor: New Evidence from Flagship Programs in Bangladesh, Department of Economics and HIID, Harvard University and Hoover Institution, Stanford University. Parveen, S. (2005). Empowerment of rural women in Bangladesh: a household level analysis. Germany: Margraf Publishers GmbH. Parvin, G. A.; Ahsan, S.M. R.and Chowdhury, M. R. (2004). Women Empowerment Performance of Income Generating Activities Supported by Rural Women Employment Creation Project (RWECP): A Case Study in Dumuria Thana, Bangladesh. The Journal of Geo-Environment,. 4: 47-62. Pitt, M.M., Khandker, S.R. and Cartwright, J. (2003). Does Micro-Credit Empower Women? Evidence from Bangladesh. The World Bank Policy Research Working Paper No. 2998, New York. Sukontamarn, p. (2007). Micro-credit, fertility decisions and womens empowerment in Bangladesh. Scholl of Economics, the University of Adelaide, Australia. Webb, P.; Coates, J. and Houser, R. (2002). Does micro-credit meet the needs of all poor women? Constraints to participation among destitute women in Bangladesh. The Gerald J. and Dorothy R. Friedman School of Nutrition Science and Policy, USA. Zaman, H. (1999). Assessing the Poverty and Vulnerability Impact of Micro-Credit in Bangladesh: A case study of BRAC. Policy Research Working Paper, the World Bank.

http://www.bdresearchpublications.com/journal/