The Politics of Microfinance: a Vehicle for Women's Empowerment and Political Participation

• In Event: Engendering Economic Empowerment?

Abstract

Globally the number of poor families receiving microloans has grown more than 18-fold in the past fifteen years, with women constituting nearly two-thirds of microfinance recipients. The recent and significant expansion in the number of female microcredit clients begs examination of the political consequences of microfinance institutions (MFIs). Yet, little is known about the political effects of these organizations for women in the developing world. To date, most research on microfinance has focused on explaining outcomes for women in economic terms. Only recently has research begun to examine the political consequences of MFIs on women’s role in decision-making at the local level and women’s political representation, with confounding results. This study contributes to assessments of the effects of MFIs by specifying mechanisms and processes within these organizations that encourage and enable women to participate politically. To do so, I employ concepts and theories from the literature on women’s empowerment to answer the following questions: (1) Do MFIs empower women? (2) If so, what effect do processes of empowerment have on women’s decisions to participate politically? (3) How do MFIs influence women’s decisions to participate in institutional and non-institutional political acts? To answer these questions, I analyze qualitative data collected from interviews with over 100 women participating in one microfinance institution in Guatemala. I find MFIs empower women to participate in non-institutional politics by enhancing women’s motivations, capacities and opportunities for non-institutional political action. While evidence shows MFIs inspire and facilitate women’s participation in non-institutional politics, I do not find evidence of equivalent effects on women’s decisions to engage in institutional politics. This study, by specifying micro-level processes within women’s organizations, contributes to more general theoretical explanations concerning the causes of women’s political participation and the role of women’s organizations in developing democratic contexts.

Author

• Lindsey E Richardson, University of Colorado/Boulder