The Impact of Lending to Women on Household Vulnerability and Women's Empowerment: Evidence from India

Abstract

Evaluation studies routinely find that lending to women benefits their households, they are however vastly divergent in their conclusions regarding its empowering potential. This paper investigates this paradoxical suggestion by examining a case study. Survey data from two drought prone villages in rural India shows that while lending to women has helped households reduce their vulnerability, the results on empowerment are less emphatic. On examining a combination of loan-related data and borrower-testimonies we find that high demand for credit for use on family farm/business combined with women's lack of co-ownership of family's productive assets may result in this perverse effect. If women's empowerment is a crucial objective then the patriarchal hold on productive assets must be challenged.

Keywords: group lending, household vulnerability, women's empowerment, India

JEL Classification: O12, O29, R29, Z00