October 21, 2022


In India, there are several financial schemes that come into existence for women’s empowerment – microfinance is one of those. This is one of the financial schemes that aim to help those people who are not able to get loans from banks or other financial institutions. Empowering women is one of the purposes of microfinance.

Microfinance is an important practice of extending those small collateral-free loans or financial assistance for those underserved individuals mainly for developing those areas without getting any access to credit.

You will come across various microfinance institutions that include those of financial inclusion and also non-government organizations generally target those of browsers. Microcredit offers adequate financial support for maximizing the exact value of physical capital.

The main purpose of this research is mainly for evaluating the great impact of those microfinance programs primarily including complete access to microcredit and also then saving groups. It thus helps in women’s empowerment.

How Microfinance Empowers Women in India

Women in many developing areas play a significant role when it comes to agricultural production mainly by contributing to crop processing. But, the labor is fully non-monetized and also complimentary for rather than similar to those of man’s labor.

Apart from this, those women who lack marketable education and skills and also have higher fertility rate reflect that they are fully occupied with those children. Apart from this, land and various other traditional assets are generally passed onto those of sons even without wages or savings.

As far as microfinance services are concerned, these are something that includes savings, credits, insurance, remittances, loans, housing, and money. These services enable women to participate in various activities that work great when it comes to the alleviation of their patriarchal control over those assets. Thus, it fosters both economic progress and also gender equality.

The major purpose of microcredit is to allow women to get financial assistance even without any collateral or any income proof. They can get microcredit in a range of sizes. You need to choose the right option for yourself depending on your needs.

Women can get the flexibility to repay the loan in different installment options be it daily, weekly, or monthly. Most importantly, these types of financial assistance are offered at a nominal interest rate, especially when you compare it with those of formal institutions including banks.

Microfinance works effectively in empowering women by increasing their courage and also those of self-esteem and lets you avail of the formation of different networks with those of other women in their community.  It also improves their decision-making capability in their household.

Women are popular as reliable borrowers compared to men as they have higher loan repayment rates. If we talk about men, they are likely to misuse this type of financial assistance for gambling, consuming liquor, and more. Women, on the other hand, get loans and invest their money in various economic activities. It helps them get more income for their children.

It helps them get economic gains in terms of higher consumption rates, good nutrition, asset accumulation, and also more enrollment in various schools. We all are aware of the fact that women’s empowerment is something that is directly related to the economic growth of any area.

It reflects that many microfinance institutions (MFIs) see financial assistance like microfinance as a complete strategic tool that involves women in the development process. Though these types of financial assistance are available in women’s names, several studies already prove the fact that a loan has good control over a spouse. It indicates that women can never misuse their loan amount for any wrong purpose.

Apart from this, numerous women generally transcend those of conservative gender roles, they may be at a higher risk for domestic violence. The reason is men often try to reconfirm their position of power.

Apart from this, there are several critics of microfinance that have said that many microfinance institutions are known for having higher recovery strategies. They sometimes seize borrowers’ assets as well. Furthermore, they also push defaulter women into poverty.

To make a complete assessment of the effect of microfinance on women in many developing countries, the actual concept of women’s power is something that should be defined operationally.

Female empowerment is something that one can categorize as an increased capability of women for making their life choices in a connection where this was generally defined for them. It improves their decision-making capability and thus helps them make an active contribution to their well-being.

You will come across two possible methods for making a complete assessment of the actual impact of microfinance on empowering women. You can also witness several process-based impact studies that suggest that empowerment is a fully dynamic process that one can determine only with the help of several indirect factors including managerial control over microloans, accounting knowledge, intra-household spending control, and many more.

Apart from this, you will also come across numerous indicators that measure health, literacy, nutrition, contraception, labor force participation, asset ownership, and many more.

If we talk about several outcome-based evaluations, these are something that uses those direct indicators that include the assessment of various social networks and also a great belief about life’s outcomes.

It’s crucial to take into account that it can change the actual structures of gender inequality, especially within the household and also the community. It’s also vital to take into account that there are numerous factors: availability of time series data, women heterogeneity, and the multi-dimensional nature of empowerment leading to conflicting evidence and also the great impact of microfinance and also empowering women.

Final Words

Microfinance is doing a wonderful task when it comes to improving the lives of women and helping them invest their money properly. Women can easily avail of microfinance loan assistance and can start their business ventures to change their life forever.

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