Principal investigator: Viviane Pires Ribeiro
Paper Title: Rural credit programs and women's empowerment in Bangladesh
Authors: Syed M. Hashemi, Sidney Ruth Schuler and Ann P. Riley
Location of the Intervention: Bangladesh
Sample Size: 120 households
Main theme: Genre
Main Variable of Interest: female empowerment
Type of Intervention: Analysis of the effects of rural development programs
Methodology: Logistic regression models
Microenterprise credit aimed at women has become increasingly common as a poverty alleviation intervention in developing countries. Hashemi, Schuler, and Riley (1996) argue that credit programs empower women by strengthening their economic roles, increasing their ability to contribute to their families' livelihoods, and also empowering women through other mechanisms. The authors use a combination of ethnographic and sample research data to describe and measure the effects of rural development programs by the Grameen Bank and the Bangladesh Rural Advancement Committee in Bangladesh.
Evaluation Context
Among low-income families in rural Bangladesh, patrilineal descent systems, patrilocal residence, and purdah (the practice of isolating and protecting women to maintain social standards of modesty and morality) interact to isolate and subordinate women. They are socially and economically dependent on men. Cultural norms are based on asymmetrical assumptions about what is appropriate for each sex, what men versus women need, and what they are entitled to. Education is often considered irrelevant for girls, and from an early age they learn to accept deprivation in relation to male family members. Because of purdah, many women are confined to the property and the immediately surrounding area, and their contacts with the world outside the family are extremely limited, reinforcing their economic dependence.
The Grameen Bank and the Bangladesh Rural Advancement Committee (BRAC), through their Rural Development Program, with approximately two million participants, including over half a million female members, are the two largest and best-known non-governmental organizations providing credit to low-income populations in Bangladesh. To participate and be eligible for credit, women are asked to organize themselves into small groups. Furthermore, there is a mandatory savings requirement; each woman has her own savings account and passbook. Loans are repaid and savings deposited at weekly meetings. Loans are made to individuals at commercial interest rates. There are no collateral requirements, but the group as a whole is responsible for ensuring that each member makes their weekly payments.
The participants themselves decide how to use the loans. In most cases, the loans are used for self-employment activities such as rice farming, poultry and livestock raising, traditional crafts, and small-scale trading. The average loan is around US$75-100. Before receiving credit, new members must participate in training so they understand the program's objectives and operating procedures.
Intervention Details
The analysis conducted by Hashemi, Schuler, and Riley (1996) uses a combination of ethnographic and sample research data to describe and measure the effects of two rural credit programs (the Grameen Bank and BRAC programs) in Bangladesh across eight dimensions (mobility, economic security, ability to make small purchases, ability to make larger purchases, involvement in major household decisions, relative freedom from domination within the family, political and legal awareness, and involvement in political campaigns and protests) and a composite indicator of empowerment. The authors address issues of women's control over credit and the relative magnitude of their economic contributions to their families' livelihoods, and discuss the differences in the approaches of the two programs.
Ethnographic research was conducted in six villages during 1991–94 to document processes of change in women's roles and status. Data were collected through participant observation and informal interviews. Researchers observed and documented the two credit programs operating at the village level and interviewed program participants. Study sites were purposefully selected to include an area where BRAC and the Grameen Bank had been operating for more than six years and an area where the programs were just beginning; areas where both programs were operating in close proximity were avoided.
Thus, a structured form (“household survival matrix”) was developed to collect detailed information at various times about the economic activities and incomes of the sample members of 120 households. The form also included information on children's schooling and women's participation in credit programs, and families' responses to crises and economically stressful events, such as weddings and other rituals. The information was collected monthly over a period of one year.
Furthermore, a survey of approximately 1.300 married women under the age of 50 was conducted in late 1992. Four separate samples were drawn using a multi-stage cluster randomization design to include villages from all four geographical divisions of Bangladesh (at the time of the survey, the four administrative divisions were: Chittagong, Dhaka, Khulna, and Rajshahi). The four groups consisted of Grameen Bank members, BRAC members, non-members residing in Grameen Bank villages (who would be eligible to join BRAC or Grameen Bank), and a comparison group living in villages without Grameen Bank or BRAC programs but who qualified to join the credit programs. In the credit program villages, nearly all women had been members of the program for at least 18 months prior to the survey. The survey included questions related to women's roles and status in the family and community, fertility, and contraceptive use.
Methodology Details
The analysis begins with sample survey data, using logistic regression models to explore whether Grameen Bank and BRAC affect different dimensions of empowerment. The first set of models examines the effects of exposure to BRAC and Grameen Bank credit programs and sociodemographic variables on the eight aspects of empowerment, the aggregate empowerment indicator, and women's contribution to family support. In the next set of models, contribution to family support is used as the independent variable. These models also examine the interactions between credit program participation and women's contribution to family support. Predicted probabilities from the model employing the composite empowerment indicator are calculated to illustrate the levels of empowerment experienced by women participating in credit programs and those contributing to family support compared to women who are neither in credit programs nor contributing to family support.
Next, the article turns to data from an ethnographic study of six villages. Economic case studies, bivariate analyses, and qualitative results are used to further explore the question of how credit strengthens women's empowerment, beginning with the effects on women's economic roles and proceeding to discuss other aspects of women's lives, such as physical mobility, interactions in the public sphere, and domination and violence within the home.
Results
The goals and strategies of the Grameen Bank and BRAC are very similar, and the results suggest that the two programs have similar effects on women's roles and status. The Grameen Bank, however, appears to be more successful in enabling women to control the loans they receive; it has a stronger influence on women's ability to contribute to their families' livelihoods and on several economic dimensions of empowerment. The differences between the programs are subtle but seemingly important. First, in the communities where Grameen operates, it is widely understood that the central goal of the Grameen Bank is to provide credit to low-income women. BRAC appears to be an organization more broadly concerned with community development: it promotes education for girls and runs non-formal schools for children who have dropped out of the formal system or have not enrolled for economic reasons; and it has a separate health program and, in collaboration with the government, runs grain distribution programs for needy women.
Of the eight dimensions of empowerment, participating in BRAC had a stronger effect than participating in the Grameen Bank in two dimensions: mobility and participation in political campaigns and public protests. This may be because BRAC offers more opportunities for its members to participate in training programs, which often give them the opportunity to travel outside their villages, and because of its greater emphasis on raising awareness about social and political issues. BRAC's more holistic approach was even more pronounced in the past. When it began in the early 1970s, its emphasis was primarily on awareness-raising and organizing, and credit was a relatively minor component of its program.
Secondly, Grameen Bank grants more loans and with shorter time intervals. Members obtain their first loan in two weeks, whereas BRAC members used to complete a three-month awareness and training course. As long as Grameen Bank members repay their loans on time, they obtain subsequent loans almost automatically. With BRAC, the process takes a little longer. Furthermore, Grameen Bank grants separate loans for house construction, with the requirement that the land on the property be registered in the borrower's name. In some cases, this encourages men to transfer title to their land to their wives.
The third difference is the Grameen Bank's greater emphasis on discipline, rules, and rituals. Members must greet each other, sit on the floor in rows, and sing at weekly meetings. BRAC meetings are more informal, and women often come and go as they please.
Credit is at the heart of the Grameen Bank program. Every aspect of the program is geared toward facilitating the basic task of granting loans to low-income women and ensuring high repayment rates. This doesn't mean Grameen isn't interested in empowering women; it simply means its founder and directors see credit as the best way to achieve this. Grameen Bank's guiding vision revolves around poverty alleviation and social equity, and even women's empowerment is essentially seen as a means to those ends. While BRAC's broader goals of social transformation and economic development are similar to Grameen's, its strategy for achieving those goals is multifaceted. BRAC primarily provides loans to women through its Rural Development Program, which is very similar to Grameen Bank's program in how it operates, but is generally less regimented and ritualized, less rigorous, and not exclusively focused on credit.
Lessons in Public Policy
The success of the Grameen Bank, BRAC, and other similar programs in Bangladesh challenges the conventional idea that it is primarily sociocultural norms that discourage women from seeking paid employment. The success of these programs in reaching a large number of women is clearly due to the promotion of economic opportunities. Although working women are sometimes criticized, especially if they work outside the home, there is no lack of demand for jobs among low-income rural women. In the six villages of the ethnographic study, there were abundant examples of women asking researchers, as well as women who already had jobs, to help them find paid employment. Rather than a lack of demand, it appears that a severe shortage of paid employment opportunities is limiting women's economic participation and hindering women's empowerment in Bangladesh.
Analysis suggests that involvement in credit programs empowers women. Participation in the Grameen Bank and BRAC increases women's mobility, their ability to make purchases and major household decisions, their ownership of productive assets, their legal and political awareness, and their participation in public campaigns and protests. Despite focusing narrowly on credit, the Grameen Bank (and, to a lesser extent, BRAC) acts as a catalyst in transforming women's lives. Minimalist credit programs provide access to an important economic resource and thus allow women to overcome gender barriers, increase their control over their own lives, and improve their relative positions within their families. Most women involved in these programs retain a significant measure of control over their assets and income. Although the magnitudes of their incomes may be relatively small, the effect on women's empowerment is substantial.
References
HASHEMI, Syed M.; SCHULER, Sidney Ruth; RILEY, Ann P. Rural credit programs and women's empowerment in Bangladesh. World development, v. 24, no. 4, p. 635-653, 1996.
