Microcredit: Empowering women in Bangladesh

Manifold problems of women cannot be overcome only by small IGAs and credit support. A package programme consisting of leadership and managerial development, of rights and laws, of education, credit, income, health and reproductive issues seems to be appropriate for removing these problems and for stepping up women's position in the society.

Presently in its wider dimension microcredit is known as microfinance and seen as a legitimate economic tool in the fight against poverty. It is very difficult for the poor to get small working capital from formal banking system for various reasons. A collateral free working capital loan is the requirement at the door steps of the poor at the right time to help them facilitate and start feasible intended income generating activities (IGAs). It is with this background that microfinance is seen as one of the significant approaches to poverty alleviation.


Microcredit programme (MCP) in Bangladesh is women client based. Over 84 per cent of the MFI programme borrowers are women. As rural women have a higher propensity to save and a habit of repaying credit in time than rural men, MFIs have found a dependable client base in rural poor women.


Interventions  Government of Bangladesh (GOB): Like many other developing countries, the GOB has also undertaken a wide range of programmes spreading across sectors and ministries to create wage as well as self-employment opportunities, created separate ministry for women and changed strategies and policies in favour of development of women.


Scheduled commercial banks: Four nationalised banks -- Sonali, Janata, Rupali and Agrani Bank, two government owned agricultural banks -- Rajshahi Krishi Unnayan Bank and Bangladesh Krishi Bank, one specialised bank -- BASIC and one private sector bank -- IBBL which operates on Islamic principles of borrowing and lending, are found more or less active in microcredit programme.


Non-government organisation-microfinance institutions (NGO-MFIs): A large number of NGOs are also involved in creating employment opportunities through the provision of collateral free microcredit to the poor. Many NGOs were formed in the country immediately in post-liberation war period for resettlement and rehabilitation of war victims. Later on, they moved towards self-reliant development through a process of empowering women. With the success of Grameen Bank's programme, large NGOs in Bangladesh introduced MCP for their members. Although NGOs replicate the Grameen model in general for MCP, many have introduced some innovative variations on the basic structure i.e., in terms and conditions of products, and in methods of implementation. An estimated 600 microcredit programmes of MFIs for rural women are operational.


Palli Karma-Sahayak Foundation (PKSF): GOB set up the Palli Karma-Sahayak Foundation (PKSF) in May 1990 as an apex funding organization to provide loans to the NGO-MFIs which in turn would provide collateral free credit to their poor members. PKSF is a second tier funding institution operating through its 180 Partner Organisations (POs) with focus on poverty alleviation. At the end of June 2001, the total number of borrowers was 2.36 million and PKSF is providing about 23 per cent of the revolving loan fund of the microcredit sector.


Strategies of MFIs
NGO-MFIs in Bangladesh have been following basically two strategies -- financial intermediation or "credit alone" approach and various "credit plus" or social development programmes such as skill training, social awareness building, education, health, agricultural development etc for the poor receiving microcredit from them in addition to providing lending services. BRAC and Proshika follows a "credit plus" by offering health, education and agricultural programmes. ASA, Grameen Bank follows "credit alone" approach but Grameen Bank supports some social development activities for its borrowers.


Impact of women participation
When we talk about the impact assessment of women's participation in MCP two different but closely linked types of changes are expected:
Conditional change: It is essentially welfare-based focusing on increased health, education or livelihood provisions for women in order to improve their immediate circumstances.
Positional change: It occurs when women are able to increase their decision-making role, and to take control over key aspects of their lives, i.e. they have increased power.


Participation and empowerment
A rapid impact assessment study conducted by the World Bank/IDA through Bangladesh Institute of Development Studies (BIDS) from 1997-2000 was with a view to monitor and assess the impacts of MCPs undertaken by the POs of PKSF. It has found microcredit in rural areas as one of the major factors for upgrading the status of women both in the family and the community and point towards an overall positive direction as follows:


Women's social position
Women's social position in the community is evaluated through three indicators:


Employment: Women have very limited opportunities for employment and face strong supply barriers as well. Self-employment is slightly more common than wage employment and generate more days of employment for all categories of households. But these do not help to dispense with or reduce the existing workload of women in the family like cooking food, nursing babies, sending children to schools, taking care of other members of the family, washing cloth, cleaning the house, attending poultry birds and livestock, and backyard vegetable garden. The credit programmes bring additional work for women even though sharing of family work responsibilities by the other members of the family takes place to some extent.
Mobility: It plays a major implication in matter of employment, social awareness, confidence building and increasing status of relative position in the community. Generally, the restriction on women's mobility is positively related to the degree of male dominance of the public space.
The study shows that by 2000, there has been a tremendous increase in the extent of women's mobility in all household groups, especially with respect to visits to the most male dominated public space, i.e. the then headquarters or the bank. The extent of mobility however varies from household to household. In the study it is found 30 per cent to 70 per cent programme women have visited health centres, thana headquarters and parents' houses. It is found mobility of programme women has encouraged non-programme women also to increase their mobility.
Hence participation has a large positive effect in expanding women's sphere of movement outside the home leading to an improvement in their position in the community. This is quite significant in the context of rigid rural social environment of Bangladesh.
Birth control measure taken: During the last two decades small family norm has gained widespread credibility and contraceptive use for birth control had become widely acceptable as legitimate behaviour. The incidence of using contraceptive is significantly higher among the MFI participants than the non-participants. Through demonstration effect non-programme households have picked up the use of birth control methods.


Women's intra-household position
Another aspect of women's empowerment is the relative position of women within the household through the following process indicators:
Household income control: Income inequality persists in the rural household processes like access to and control over household budget (income and expenditure). It is found that women have relatively lesser control on income and expenditure decisions, particularly with regard to income generated by males outside the households. There is significant channeling of funds borrowed by females to support male activities.
Impact studies find that women are gaining greater say in income and expenditure decisions to the extent of 25 per cent 30 per cent of households. Programme women's participation has increased in expenditure decisions relating to poultry rearing, schooling of children and health care.
Fertility regulation: In Bangladesh fertility regulation is seen as the responsibility of women. Since women are expected to bear all the cost of using contraceptives fertility regulation is a highly inequitable household process. Therefore the degree of gender equality in fertility regulation is reflected by the extent of husband's responsibility for regulating fertility. The study shows that increase in the use of male methods was greater among continuous programme participant households.
Women borrower's perception: Programme women's perception about their status in the family, relationship with husband and self-esteem are good subjective indicators of perception. The study shows borrower's perception about the extent of improvements through their involvement in micro-credit programmes as follows:
* All aspects of life: 37.6 per cent of the programme women
* Relationship with husbands: 38 per cent of the programme women
* Self-esteem: 44 per cent of the programme women
Improvement in self-esteem was the highest followed closely by relationship with their husbands and all aspects of life. In matter of improvement in all aspects of life the study took cognizance about opportunities to enhance income, acquire self-reliance, 'improve health and sanitation and facilitate education of children etc of the MCP participants.


Future expectations
Violence against women and dowry demands are still the curse in the society. But there was no evidence of casualty between violence and microcredit programme. However, income from microcredit or the credit itself may have been used in paying dowry. Through social awareness exercised in group meetings, dowry and other social violence of rapes, acid throwing can be addressed. With this in view, practice of male spouse's participation in group meetings occasionally to discuss social awareness building issues, sure would help to mitigate social unrest to some extent.
It is expected that women should be out of the poverty trap, reduce credit dependency, combat the risks on non-repayment due to shock or disaster when income and consumption for them decline suddenly.
At the other end many programme women are moving up the scale and their need for credit fund is increasing. Real challenge for the future of women MCPs lies in meeting the need for innovation and diversification in delivery method and introduction of new MCP products.


Conclusions
Manifold problems of women cannot be overcome only by small IGAs and credit support. A package programme consisting of leadership and managerial development, of rights and laws, of education, credit, income, health and reproductive issues seems to be appropriate for removing these problems and for stepping up women's position in the society.


Parveen Mahmud, FCA is Adviser, PKSF