1Women are the primary clients of many microfinance programmes, especially in the group based (self-help group [SHG] and Grameen) models. Does the role of women as microfinance clients translate into empowerment for them? Or is it merely instrumental, to ensure discipline and repayments? Questions about women’s empowerment are among the key research questions of the impact assessment study.

2Impact assessment is essentially about whether a programme is meeting its objectives. The overall goal of the MFSP is “substantial poverty elimination and reduced vulnerability in India amongst users of microfinance services, especially women”.

3The impact assessment study therefore has a wide agenda, exploring issues of outreach, and different dimensions of poverty (income and non-income related) and vulnerability. It was designed within a social/development audit framework that explores the objectives and indicators of different stakeholders in a programme – incorporating the perspectives, in this case, not only of the donors (DFID and IFAD) but also the implementers (SIDBI, the microfinance institutions [MFIs]) and their clients. It also, accordingly, incorporates elements of market research, exploring the different approaches to microfinance delivery, alternative financial services (formal – banks/informal – moneylenders, chit funds) and access to these, and client feedback on their utility.

4The overall study covers 20 MFIs selected to represent different models of microfinance (group based and individual banking) and regions of India. In line with best practice in impact assessment, it combines both quantitative and qualitative methods, with a substantial sample size for both: 5,600 households interviewed by questionnaire (4,000 clients, 1,400 non-clients, 300 dropouts), 260 focus groups and 150 case studies. It is a longitudinal study, presently at the baseline stage. Since the aim is both to document impact for the end-users and also to improve the practice of microfinance, the baseline data have been analysed to provide interim findings and recommendations.

5This note therefore summarises one component of the overall study, reflecting on the combination of different methodologies used to explore the role of women as microfinance clients, and presenting some of the baseline findings.

1. Research approach

1.1. Hypotheses

6The key research hypothesis is Microfinance contributes to women’s empowerment at individual, household and community levels and sub-hypotheses studied include:

1.2. Study variables

7The input variables are the services that vary across MFIs – savings (internal circulation), credit, support services (to group, enterprise related, other development) and insurance services as well. While MFI inputs vary, they are also local and context specific (socio-cultural variations) and tempered by the MFI approach to microfinance (group based or individual banking), MFI focus (credit only or plus), intensity of client interaction with the programme (such as number of loans and who has access), status of a woman client within the household, whether she is educated or is the sole bread winner and so on.

1.3. Impact indicators

8Those included in the study’s conceptual framework are:

1.4. Indicators of change mentioned by women include:

1.5. Methods

9Typically, we start with a discussion with the management and staff of the MFI to understand the MFI’s gender focus, activities and their views on local women’s issues. The three main study tools are surveys, focus groups and case studies.

• Household survey: to profile socio-economic characteristics, and to quantify the following variables.
• Focus groups: to identify significant changes from the women’s perspective, and obtain their feedback on microfinance products and services; also to obtain men’s views on the same.
• Case studies: to explore in detail different contexts, the process of change (or lack of it) and the reasons thereof.

10Triangulation is key – for example, if a client reports no savings in a questionnaire, then we would follow it up with an informal discussion with peers or MFI field staff to cross-check the data and also to find out what situation has led to this. Informal discussions with the neighbourhood including local stakeholders as well as observation provide insight into local dynamics.

1.6. Relevance / limitations

11The relevance of different methods is discussed in good research manuals, and our experience strongly endorses the principle that a combination of quantitative and qualitative methods helps to understand the direction of change (Focus Group Discussions), the process of change in different contexts (case studies) and to quantify that change (quantitative data). Each approach by itself has limitations, and requires careful sampling and research rigour.

2. Findings

2.1. How do Micro Finance Institutions (MFIs) view their women clients?

12The key reasons that emerge are instrumental ones – women are sincere, disciplined and interested in small transactions or benefits reach families through women. Group based microfinance may be seen as a “women’s movement” in terms of targeting women as clients. MFIs that focus on financial services – especially those based on the Grameen model – tend to be “gender-neutral”: they provide basic finance related training (group norms, procedures, signing one’s name) whilst MFI staff conducts all transactions.

13Some SHG-model MFIs are gender-supportive: the approach provides for the involvement of members in group-based activities and decisions, with a greater role for group leaders (managing accounts, taking responsibility for group meetings and activities) and also parallel development programmes (especially health, hygiene, reproductive health, sometimes enterprise skills) – though these do not necessarily reach microfinance clients. None in our sample (though there are a few such MFIs in the country) have a ‘gendertransformative’ approach that incorporates a policy of gender equity.

14MFIs that primarily target men believe that overall economic development takes care of the gender imbalances and so, specific targeting of women may not be required.

2.2. Who are the women clients?

15In terms of schooling 60% had none and 31% have completed primary education. 82% in southern India and 65% in northern India are productively engaged, with 35% in the south and 9% in the north involved in casual labour work. In terms of social background of the households, 32% are scheduled castes, 37% are backward caste and 17% upper caste. As for the wealth categories, 41% are poor and 37% are borderline (around the $ 1-aday international poverty line) (Sinha 2003).

16Savings with MFI groups are important and many women clients, especially the poor saving for the first time feel that saving in small amounts is convenient and safe. 96% of women clients compared to 21% women in non-client households contribute to household savings.

17Access to loans has provided an option to borrow. Women clients mention that loans are important to meet a range of household as well as enterprise needs and increase creditworthiness. The study findings indicate that men often play a role in the access and use of credit as women manage less than half the enterprises they take loans for (42% in the south and 33% in the north). There are many cases of loans passed on to husbands for their enterprise, without women’s involvement (26% in the south, 51% in the north).

18In India traditionally, men own assets and in terms of stated ownership of assets (productive, household and housing) in the previous two years, the findings indicate that they still continue to do so. However, microfinance has made some difference – 40% of the productive assets purchased in client households are in the women’s name, compared to 17% in non-client households. In terms of total value of assets purchased, 50% is in the men’s name, 31% is held jointly, and 19% is in the women’s name.

19On a series of questions related to awareness about MFI procedures just eight women clients knew all the answers (sub sample of 92 women clients).

• Two-third knew their savings amount, but less than half knew the interest rate payable on savings.
• Half the SHG sample did not know what records are kept with the group.

2.3. Feedback gathered from FGDs and case studies

• 60% of the SHG sample and 40% of the Grameen sample knew the loan terms.
• Roughly half the women clients in the sub-sample had visited a bank, which was more likely for SHG clients.

20At the community level, there are hardly any initiatives. Groups would like to take action against alcoholism – but group based initiatives within the community in our sample were few, and not necessarily successful.

21There is also less positive feedback that group leaders get more opportunities than other members, that women sometimes find it difficult to find the time for meetings and that there is some continuing discrimination against lower caste women in mixed groups.

3. MFI practice can be more empowering

22In the context of the socio-cultural limitation on the role of women, targeting women for financial services seems to be a good start. A detailed look at various microfinance practices in India suggests certain strategic features that could make MFI practice more empowering. These features are given in Box 1 with rationale/explanation in Box 2.

23We marked 16 MFIs that aim to work with women on the 10 empowering components on a simple scored index (0-1).

• Only 1 scored well (0.9) and 2 scored more than 0.5. All 3 are the SHG model – south.
• Average scores – 0.4 for SHGs, 0.1 for both Grameen and individual banking.

24It is clear that the impact of microfinance on women’s economic integration and empowerment is conditioned significantly by the local context, influenced by the existing social and cultural milieu and the available livelihood opportunities. There are also strong indications that access to finance has begun to alter the economic opportunities available to poor women as well as men. MFIs that target women clients need to understand the regional and local contexts and adapt their approach/strategies and products accordingly.