Microfinance Participation and Women's Empowerment: Evidence from a Nationally Representative Sample of Women in Bangladesh

ABSTRACT

More than 30 million married women in Bangladesh access microfinance, an empowering anti-poverty tool, amidst mixed responses from scholars about microfinance's empowering effect. The present study evaluates whether microfinance participation empowers women using a culturally suitable conceptualization of empowerment constituting autonomy, decision-making power in the household, and justification of partner violence. This study utilizes data from a representative probability sub-sample of 6,150 married women aged between 15 and 49 years from the Bangladesh Demographic and Health Survey 2011 to assess the difference in empowerment between microfinance participants and a control group using propensity score matching techniques. Findings revealed that women who participated in microfinance were not statistically different at the 0.05 level from women who did not participate in microfinance in terms of empowerment when groups were matched on socio-demographic variables ensuring that treatment and comparison groups had equal propensity to participate in microfinance, casting doubt on the assertion that microfinance participation positively affects women's empowerment. Future research needs to focus on what empowerment may mean in relation to the outside world; we need to move beyond a familial understanding of empowerment to examine the individual in terms of her individual identity in the socio-political world in which she resides.