The Efficacy of a Microfinance Institution towards Socio-economic Empowerment of Women in Rawalpindi District

Abstract

The study explores the efficacy of microcredit towards empowering the women. It aims to investigate the social, economic, psychological and cultural impact of micro-finance on urban women of Rawalpindi district. It seeks to examine the opportunities offered by Akhuwat (a micro-finance institution) to the under- privileged segment of the society to help them improve their living conditions through provision of interest-free credit. Research in recent decades has reinforced the notion that top-down models of development have been less successful as compared to ‘bottom-up‘people-centered approaches. In this regard, the programs launched by MFIs have played a significant role in heralding a change in the lives of marginalized sections of society across the globe. The micro-credits offered to the un-bankable poor women have been instrumental in not only improving the livelihood patterns of millions but have gone a long way in empowering the womenfolk. In order to gauge the impact of micro credit on women empowerment, two theoretical models for carrying out critical analysis of multiple dimensions of women empowerment have been used. The first analytical tool employed for the study is Longwe’s Women’s Empowerment Framework. It illustrates how empowerment and gender equality can be attained by women. The second framework used for this research is Malhotra and Schuler’s model which focuses on five dimensions of women empowerment: economic, social and cultural, political, legal, and psychological both at household and community levels. Microfinance is considered as one of the most successful social movements in recent times, although it is simultaneously censured for exploiting the poor women by extorting high interest rates as well as for using extreme social pressures to affect recovery. A qualitative research study was carried out to collect data from three dhoks (localities) of Rawalpindi District. This study signifies that female beneficiaries of MFI (Akhuwat) programs have become more empowered after they had availed microcredit. A total of 90 women were interviewed using a questionnaire and in-depth interviews. The data collected illustrates a significant difference in the lives of women availing microcredit. Female borrowers invariably have greater access to income generating opportunities, become more confident, participate actively in decision making processes, experience an enhanced sense of self-efficacy and self-esteem, develop stronger networks and enjoy freedom of mobility. The findings clearly indicate that microcredit plays a pivotal role in enhancing socio-economic empowerment of the female borrowers.