The Impact of Microfinance on Factors Empowering Women: Regional and Delivery Mechanisms in India’s SHG Programme

Ranjula Bali Swain, Department of Economics, Uppsala University & Södertörn University, Stockholm

(with Fan Yang-Wallentin, Department of Statistics, Uppsala University)

IFPRI Seminar, Washington D.C, 20 July 2015

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• Objective

• Literature and past research

• Self Help Groups Bank Linkage program (SBLP)

• Econometric Estimation

• Results

1. Outline

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Investigate how the regionally imbalanced microfinance development and type of delivery mechanisms (linkage models) have resulted in significant differences in the process of women empowerment in India?

•Location (south states, other states)•Type of group linkage

Group maturity (comparing old and new with control)Different education categories (uneducated, primary, secondary or higher education)

2. Research Objective

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• Household Bargaining literature (Browning & Chiappori 1998; Karlan & Yin 2006; Armadariz & Morduch 2005; Duflo 2003)

• Autonomy & Decision making (Anderson & Eswaran 2005; Goetz & Gupta 1996)

• Political & Social Inclusion (Armedariz & Morduch 2010; Dijkstra 2002; Beteta 2006)

• Large body of empirical literature

3. Literature

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• Does Microfinance (SHG) Empower Women? (Bali Swain and Wallentin, 2009) – Yes, significant empowerment (25% more) of SHG treated group as compared to control group

• Within Microfinance (SHG) which factors are more empowering? (Bali Swain and Wallentin, 2012) – Economic factor is the most empowering. Greater autonomy and social attitudes have a significant impact on women empowerment

Related Earlier Work

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Economics of Development Lecture 3 6

Self Help Group Bank Linkage Programme 6

By 31 March 2010

about 7 million savings-linked Self Help Groups (SHG) more than 4.9 million credit linked SHGs covering 97 million poor households under microfinance program.

4. SHG Bank Linkage Program

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Empowerment of women is interpreted as a process in which women challenge the existing norms and culture, to effectively improve their well being (Bali Swain 2007, Bali Swain and Wallentin 2009, Bali Swain and Wallentin 2012).

Efficiency improving activities (existing gender norms) ; community development activities – not necessarily empowering the women

Women empowerment – multi-locational (Johnson, Kabeer )

Women Empowerment

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• Structural Equation Model Measurement model: measures latent factors that have an

impact on women empowerment using observable indicators

Structural model: use factor loadings of the latent factors to measure the impact on the latent women empowerment variables

Estimation: Robust maximum likelihood (RML) method

Statistical package: LISEL

See Path Diagram

5. Estimation Strategy

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Structural Equation Model

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SIAS Data:

5 states

659 households

5. Results

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Differential impact in States

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Covariance matrix of independent variables and women empowerment

for the SHG members

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Southern States women empowerment of women through economic factors

Other States – significant correlation between women empowerment and autonomy in women’s decision-making & network; communication & political participation respectively

No differential causal impact of different delivery (linkage) methods on empowerment

Impact is Differential!

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Thank you for your attention!

Ranjula.Bali@nek.uu.se

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