The role of microfinance as a tool for economic empowerment of women in Lahore and adjoining rural areas

Abstract

During the last three decades, the micro finance sector has witnessed immense growth, being seen as a tool for poverty alleviation and bringing financial sustainability through provision of micro loans to lower income groups in most parts of the developing world. However, researchers are widely divided on the efficacy of the contemporary micro finance model to achieve the desired goals including as a source of socio-economic empowerment for poor people, especially women. This research is undertaken to evaluate the impact of microfinance on women empowerment in Pakistan to determine how the provision of microcredit to women from lower income groups affected their lives and brought betterment or otherwise. More specifically it looks at whether women were able to enhance their income and control over assets, self-confidence, participation in household expenditures, decision making power and autonomy as outlined in the analytical framework of the ‘Virtuous Spiral’ presented by Mayoux. The research adapts a qualitative approach and is based upon semi-structured interviews and focussed group meetings, which leads to an examination of what motivated women to acquire micro loans, how these loans were used and what effects did these loans have in generating economic activity and increasing their income. The study has its limitations and is confined to slum/rural areas adjacent to the provincial capital of the Punjab province of Pakistan, Lahore, on account of its scope, time, resources, and budgetary constraints. The researcher is cognizant of the fact that these very constraints and limitations do not allow the researcher to thoroughly examine the above stated phenomena and the hypothetical framework in as much detail as required by the much larger scope of the contemporary micro finance model. However it can be expected that the research provides for a limited input regarding the impact of micro loans on the socio-economic status of poor women within their households in a male dominated society like Pakistan; a country ranked very low by international agencies in terms of gender equality and high on discrimination against women. The study concludes with the results in relation to the above mentioned questions and revisits the Virtuous Spiral framework.