The status of women in Pakistan

Pakistani Society is highly patriarchal which is attributed to the age-old traditions of any subordinate role of women. Women constitute about 50 % of the population in Pakistan. Gender relations in the country derive from two basic perceptions. First being the impression that woman are subordinate to men, and secondly a man's honor depends after the women of his family. Thus it is women duty to uphold the family honor. The disparities between men and women prevails in health, education, employment, income opportunities, control over assets and participation in the political process that produce women less empowered as compared to men.

There are extensive complicated aspects adding to the submissive role played by the Pakistani women in the society, leading to a conservative society and to a vicious cycle of poverty under-nutrition and low level of education amidst Pakistani women. To be able to ensure that women do not humiliate their own families, society puts a limit on women's mobility and restricts her activities. For these reasons women live under purdah. Therefore women spend almost all of their lives within the boundaries of these homes. In lots of parts of the country apart from in Islamabad, Karachi, Lahore plus some other rich cities, it is known as shameless if women's mobility is not restricted.

Moreover in Pakistan, working women poses a threat to male self-esteem and identity. Therefore women are mostly engaged in multiple home-based economical activities such as cooking, laundry, agricultural duties etc. and pays them very low wage. Not only are these tasks physically tough and demanding nevertheless they have robed girls of the possibility to study.

However, due to recent concern and emphasis on removing gender inequality and enhancing women empowerment as Millennium Developmental Goal, some efforts at social and official reform have been designed to increase practical literacy of women, providing them with more usage of employment opportunities at all levels in the economy and promoting knowing of women's roles and status. The empowerment of women is one of the main issues in the development process for all the developing countries on earth.

According to UNDP's Human Development Report, Gender Equality Measure (GEM) for South Asia shows the lowest value (0. 235) among all the regions of the entire world. Furthermore, as per Gender development Index (GDI), Pakistan has been noted the poorest (0. 179) among South PARTS OF ASIA where in fact the average index is 0. 226 (MHHDC, 2005). According to UNDP report of 2007-08, the HDI for Pakistan is 0. 551, which ranks Pakistan on 136 out of 177 countries.

Elements of the social, monetary and political participation of women

The low health status of women in Pakistan is the result of women's lower social, economic, and cultural position.

Women do not play any major role is making social and political policies, nonetheless they are equally affected by them as the male members of the society are. Women's elimination from decision-making bodies deprives them of the chance to raise their concerns or advance their perspective. The male-dominated governance structure creates gender inequalities which lead to the social and economic deprivation of women.

Women's exclusion from politics stem from the social and political discourses, political structures and institutions and the socio-cultural and functional constraints that put limits on women's individual and collective agency. Patriarchy as a system of male domination shapes women's relationship in politics. Once the gender role ideology intersects with economic, social and political systems of a specific society; women continue to be defined as private across countries which resulted in their exclusion from politics.

Male domination of politics, political parties and culture of formal political structures is another factor that hinders women's social, economic and political participation. Often male dominated political parties have a male perspective on issues of national importance that disillusions women as their perspective is often ignored and not reflected in the politics of their parties. Also women are usually not elected at the positioning of power within party structures because of gender biases of male leadership.

The gender status quo is maintained through low resource allocation to women's human development by the state of hawaii, society and the family. This is reflected in the social indicators which reflect varying levels of gender disparities in education, health, employment, ownership of productive resources and politics in every countries. Additionally gender is mediated through class, caste and ethnicity that structure access to resources and opportunities. The socio-cultural dependence of women is one of the main element detrimental factors to their political participation.

Sources and the extent of women deprivation and exploitation

In Pakistan, there is a huge diversity in the status of women across different classes and regions. Gender is one of the key ideologies of Pakistani society. An artificial divide between production and reproduction, has given women the reproductive roles as mothers and wives at home and men are given the productive role as breadwinners which eventually contributes to a lesser investment in women. Thus, low investment in women's human capital, along with the beliefs of purdah, negative social biases, and cultural practices lays the foundation for gender discrimination and inconsistencies in all aspects of life.

Moreover early marriages of girls, excessive childbearing, high level of illiteracy and nutritional deficiencies negatively affect women's health. Gender biasness in the health service delivery system which range from insufficient female service providers, ignorance of women's essential and reproductive health needs further aggravates women's health status.

Women are officially authorized to own property from their own families, however very few women have admission and control over resources. Mostly women in Pakistan lack ownership of useful property or assets. Similarly, formal finance institutions do not focus on women's credit needs. Commercial banks pay no attention to women clients because of their defined views on women's creditworthiness for their dependency on men for physical collateral, high transaction cost of small loans. The Agriculture Development Bank of Pakistan and First Women's Bank Limited and now Khushali Bank are the only banks who've credit programs that cater to women. Other sources of credit to women include informal sources such as nongovernment organizations, friends, relatives, and moneylenders and microfinance institutions.

Women in Pakistan are facing various varieties of violence. Domestic violence is rather widespread across all classes. Due to this fear and sense of being inferior, imposed by the traditional thoughts of any male dominated society, women are suffering immensely which issue needs our utmost attention.

An overview of the microfinance constitutions and microfinance lending

Microfinance was were only available in the 60's and 70's, when organizations such as ACCION International Opportunity and Grameen Bank began to grant small loans (significantly less than 100 dollars) to microentrepreneurs, mostly women, backed by an organization guarantee, thus overcoming the collateral that was the primary reason for the lack of attention paid by commercial banking to the low-income segments of the populace. Microfinance has experienced considerable growth ever since. Mohammad Yunus was the first and the foremost person to introduce the concept of microcredit with the aid of Grameen Bank into an a lot more important instrument in the struggle against poverty.

Inspired by the Nobel Peace Prize winning Grameen Bank in Bangladesh, there's been a growth of microfinance institutions in developing countries; Pakistan is no exception. Growth and diversity in its microfinance sector have been encouraged by the microfinance Ordinance 2001, which led to the establishment of the First Microfinance Bank in Pakistan. Before the promulgation of the microfinance ordinance, the main providers of microfinance services in Pakistan were NGOs and government-sponsored rural support programs.

Gaining usage of finance in Pakistan has an important potential for considerable advances in the economy. Credit to the private sector is add up to 29% of gross domestic product (GDP), individuals and SMEs choose to rely on retained earnings to finance their working capital, investment, housing financing, and other financial needs. Of the total population, 14% get access to formal finance, and about 40% haven't any financial usage of formal or informal financial systems altogether. However, usage of financial services remains quite limited in Pakistan. The predominant share of the economic climate, the banking sector, is mostly centered on large enterprise lending, with a growing desire for consumer financing and neglects SMEs, rural areas, microfinance, and the indegent. SMEs comprise of almost 90% of all enterprises in Pakistan, they employ 80% of the non-agricultural work force and their share in the total annual GDP is 40%, approximately. This innate feature of SME helps it be essential that there must be a system by which it support running a business including technical up gradation, marketing, and human resource training & development.

The beginning of microfinance sector in Pakistan has its roots in the rural development project. The Agha Khan Rural Support Program's development model can be used all over Pakistan. Along with poverty alleviation, microfinance in Pakistan has been seen as an important instrument for gender empowerment. Microfinance in particular has shown to be a highly effective tool for poverty easing and creation of employment prospects. The GOP has formulated comprehensive Microfinance Sector Development Programme with the help of Asian Development Bank to broaden the microfinance sector. This can be attained through the creation of conductive policy environment, developing appropriate financial infrastructure, promoting and strengthening microfinance institutes, developing linkages with NGOs and community organizations, investing in building social capital, mitigating risks of poor households and institutional development. THE FEDERAL GOVERNMENT of Pakistan (GOP) and various rural support programs in the country feel that by providing credit to women, which is used for income generation and consumption, the social and financial status of ladies in the household and at the community level can be improved.

Currently, the network of microfinance providers is 1, 343 branches with about Rs 15 billion portfolio. Among microfinance providers, Khushali Bank alone provides coverage in 86 districts. The three microfinance entities, namely, National Rural Support Program (NRSP), Khushali Bank, and Kashf Foundation accounted for about 70% of the sector's active clients. However, there are two main challenges faced by the microfinance institutions of Pakistan. The first challenge for microfinance is perfect for service providers to become profitable so that service provision to poor people can grow over a sustainable basis. A report of South Asian MFIs done in 2005 showed that only 42% of microcredit borrowers in Pakistan received services from profitable MFIs which is the lowest percentage in South Asia (Microfinance Information Exchange, Consultative Group to Assist the indegent, and the globe Bank (2006). Most microfinance providers rely on the mixture of donor/noncommercial funding, and cannot claim commercial viability, with the exception of the recently formed Microfinance Banks (MFBs). The second challenge is the fact microfinance is almost exclusively centered on loans, while other financial services, savings, transfers/remittances, and insurance tend to be more popular by poorer households.

Gender norms of microfinance institutions and microfinance lending

Microfinance programs are recognized to empower the indegent men and women. In these programs, the partnership between your provider and your client is inherently empowering. Because of this, microfinance has turned into a vital element of several donor agencies', poverty alleviation, and community development strategies. Micro-finance programs are not only known for giving both men and women credit and usage of savings, they also reach people around the globe and bring them together in organized gropus. They play a significant role to market gender equality also to empower women. By enabling women to earn income, these programs have the potential to boost the welfare of women and their own families and hence empower them.

Microfinance in Pakistan has been viewed as an important instrument for gender empowerment. THE FEDERAL GOVERNMENT of Pakistan (GOP) and various rural support programs in the country feel that by providing credit to women which is utilized for income generation and consumption, the social and economical status of can be improved. Because of this, microfinance has gained immense popularity for poverty alleviation, women empowerment and community development strategies. However, capturing and measuring 'empowerment' and emancipation is a particularly trial.

Within the group of NGOs recognized Kashf Foundation and ASASAH were befitting this study. Moreover, it will also be noted that Khushali Bank does not have a gender-specific program in rural areas but works with a third party retail organization, Family Planning Association of Pakistan (FPAP), to provide loans to poor ladies in urban slums of Lahore therefore khushali bank clients were strategically left out.

Kashf Foundation, a non-profit NGO based MFI, started its functions in Lahore District in 1996. Kashf started with the mission to `provide quality and affordable microfinance services to low income households, especially women, to be able to improve their economical role and decision making capacity. ' Kashf provides four types of loan products: Firstly, the essential loan product is the general loan; secondly, it has an emergency loan which is confirmed only if the credit committee takes responsibility for repayment; thirdly, there is certainly the house improvement loan for old and reliable clients; and fourthly, Kashf has introduced a business loan for the missing middle market. The most popular one is the general loan, which should be repaid over a period of 12 months at mortgage loan of 20%.

Kashf's solidarity group lending model is a Grameen Bank replication with some adaptations. In the first, the branch officers find women in the neighborhood area who want to set up a center. The guts is sub divided into five groups and each group has a leader. Together, these seven women form the credit committee and are responsible for maintaining credit discipline in the center.

ASASAH is a non-governmental and non-profit organization established in 2003 with a mission to provide quality health and social services to underserved communities. Among the core objectives outlined by ASASAH is the empowerment of women. The business has launched its microcredit program, as part of its commitment to work at the training of women as agents of socioeconomic development. It sees a huge chance to fill today's gap in the microfinance industry by developing an ground breaking model that brings creates a sustainable and cost effective financial services institution serving underneath of the pyramid.

Keywords and definitions

Microfinance: offers a broad selection of financial services to low-income clients, including consumers and the self-employed. These services include housing loans, savings, medical health insurance and remittance transfers to help them grow very small businesses. The local MFI may also offer microfinance plus activities such as entrepreneurial and life skills training, advice on subject areas such as health and nutrition, sanitation, bettering living conditions, and the importance of educating children.

Microcredit: identifies the loans and credit needs of the poor people, especially farmers and small-scale entrepreneurs who cannot get access to normal bank loans and permits them to become self-employed.

Empowerment: is a process of awareness and capacity-building leading to greater participation, greater decision-making power and control over one's life and other processes.

Economic Empowerment: Women's usage of savings and credit gives them a larger economical role in decision-making giving them the power to decide the use of credit. When women can make decisions regarding credit and savings, they'll optimize their own and the household's welfare.

Social and Political Empowerment: is a blend of women's increased control over income caused by usage of microfinance with improved women's expertise, mobility, and education status.

Women's status: Women's position relative to that of men in a society.

Grameen Bank: is a microfinance organization and community development bank started in Bangladesh which makes small loans (known as microcredit) to the poor without requiring collateral.

Study objectives

This study aims to check out and measure the status of women in selected semi urban areas in the outskirts of Lahore city. Furthermore we will determine the factors related to the empowerment of women. Lastly we will determine the role of microfinance lending upon women empowerment in Pakistan.

In order to do this objective, the study seeks to comprehend how microfinance opens up economic opportunities for women and their families, increases earnings and reduces their vulnerability, and brings about potential changes in women's social and economical roles that eventually can result in greater empowerment of women. The analysis also seeks to determine different pathways by which such social and economic transformations are better (or less effectively) managed and explain negative consequences which may be faced.

Chapter 2 Literature Review

To understand the impact of microfinance on women empowerment we look at two sets of literature; women's empowerment and microfinance institutions. Within the first group of literature we review how microfinance institutions work and in the next group of literature we review what is understood as empowerment for females and how far microfinance institutions are successful in empowering women.

2. 1 Informal credit markets in developing countries

Informal credit markets are those that are not regulated or monitored by the banking authorities and these account for much of business credit in developing countries. Regardless of the development of formal financial markets, and the propagation of micro-credit institutions, informal lenders continue to play a key role in the provision of credit to rural households generally in most developing countries. This is so because the process of establishing and maintaining a network of rural finance institutions is expensive, and managing their businesses is difficult especially in the lack of proper training, monitoring, and incentive structures. The informal sector has commonly been considered unregistered sources of credit, such as money lenders, pawnbrokers and traders, along with rationing services and credit associations (ROSCAs), accumulating savings and credit associations (ASCRAs) and deposit takers. Moreover, formal providers are the ones that are at the mercy of banking laws of the country of operation, those which provide retail services to the clients and engage in financial intermediation. Based on the World Bank, the traditional provider types of 'informal' and 'formal' have been complicated by the arrival of microfinance institutions (MFIs) which may be regarded as 'semi-formal' (World Bank, 1997).

Capital is an important factor in the development of any project. Kurwijila and Due (1991:91) declare that the key hurdle to micro-enterprise development is lack of capital. When the indegent lack usage of the standard resources of credit, they are exploited by loan sharks and other illegitimate market operators. Following this reason, it is recommended that increasing state efforts are required to eliminate informal finance, while boosting the availability of state-sanctioned financial intermediaries, especially microfinance programs specialized in poverty alleviation.

Savings are an important determinant of wellbeing at both individual and national levels. For individuals, savings may be motivated by investment opportunities, the desire to smooth consumption keeping unpredictable incomes at heart, or the necessity to accumulate resources for large purchases. Households in low-income countries have a variety of mechanisms designed for saving. These mechanisms range from formal institutions such as banks and credit unions to less formal mechanisms such as holding cash, asset accumulation, and participation in rotating-savings-and-credit-associations (ROSCAs).

It is important to highlight the distinction between formal and informal institutions for several reasons. Informal finance mechanisms are very prevalent in low-income countries. The good thing about informal mechanisms such as ROSCAs is the capability to overcome some of the information and enforcement problems that often lead to the absence of formal markets. Since savings groups are usually localized, agents on both sides of transactions often know the other person personally. This helps in overcoming the informational problems such as adverse selection, moral hazard, monitoring, and verification. Further, participants in informal savings committees share a social bond (for example, they have a tendency to form among friends, family, neighbors, and coworkers) which gives incentives against voluntary default.

However, such institution is more susceptible to local economic shocks affecting all group members. The formal sector is better on these grounds, and provides some additional advantages on the informal sector, both for the average person and the economy. For depositors, government insurance reduces the default risk of banking. A further distinction between the formal and informal sectors is the fact that effective monetary policy typically relies on central bank or government control over the bank operating system. A large informal financial sector may compromise this ability.

Limited usage of various resources of credit is seen to harm women more when compared with men. This is due to the specific credit needs of women as "their business requires small amounts of capital than are customarily lent, and repayment and collateral requirements must be fairly flexible. " (Reichmann, 1989:135). Also, this is a legal dependence on many countries, asking women to get their husbands signed approval to be able to obtain the loan. Lycette and White (1989:24) cite evidence from Peru that women borrowers usually receive small amounts of loans than men from the banks. However, there's been a continuing debate that women are active in commerce and production activities which require less credit and for that reason it is acceptable to supply them with small amounts of loan. Therefore, it isn't clear whether discrimination exists, avoiding women from obtaining large loans or that ladies deliberately chooses to borrow less than their males.

2. 2 Credit information, credit availability and access

Poor women face much inconveniency and problems in acquiring financial services combined with the standard barriers that low income people have to face when dealing with finance institutions. Illiteracy is a key feature that hampers both women and men's capacity to complete application forms essential to be filled in order to use for loan. It is also an acknowledged fact that female is more illiterate when compared with male in most countries all over the world.

Another drawback faced by women is that they lack the collateral which is required by the formal lending institutions to provide out the loans. As already mentioned almost all of these institutions require the male head of household to sign the contract which makes it difficult for the female headed households to apply for the loan at the first place. Overall, women especially in developing countries don't realize their rights to use for financial services.

In most developing countries, both men and women lack the confidence to activate in private enterprise and take loans from the banks for business purposes. The structure of the formal credit system is usually very hierarchical and it could appear less user friendly to small women entrepreneurs. Low-income women are mostly less educated and they are not used to dealing with formal procedures. Since banks are perceived to be powerful institutions therefore a lot of women may not possess the courage to approach them.

Despite the aforementioned listed difficulties, gaining usage of finances can facilitate women to enhance their skills and finally develop their own independent businesses. Women can boost their skills by accessing technology, recycleables and market information, thereby bettering their monetary roles. Improving women's economical position plays a part in building their confidence, and ultimately enhancing their social and political role as well.

2. 3 Microfinance products and services for deprived and vulnerable

As almost all of the formal sectors banking institutions are unable to reach rural populations, microfinance programs have emerged as a potential solution for overcome the gap between your supply and demand for rural finance. These Microfinance institutions are focused on serving customers which may have been excluded from the formal banking sector and claim to utilize the 'poorest of the poor'.

Many MFIs permit people to access useful lump sums through loans. The currently most popular product (that offered by Grameen Bank and copied by a great many other MFIs) allows borrowers to settle the loan in small and frequent installments. The participation of the poor is thus permitted by the key feature of lending - tiny, often weekly, repayments (Matin and Sinha, 1998; Todd, 1996). Such an organization system allows borrower to settle out of existing income thereby allowing the borrower to get the loan and apply it just how that best fulfills their needs of as soon as. For some borrowers these loans are directly invested in productive enterprises where the returns on additional investment is sometimes enough to make the regular repayments.

Microcredit is seen as a way to improve the income a jobs opportunities of poor who are able to be self employed in lots of ways (Hulme and Mosley, 1996; Yunus, 1983; World Bank, 1994). The primary aim is to supply the household with capital and cause them to become involve in income generating activities, thereby increasing their income and consumption. In Bangladesh, there are more than 750 organizations that will work in rural areas to provide credit and non-credit services to the target population, mainly women from landless households (World Bank, 1996). Grameen Bank and Bangladesh Rural Advancement Committee (BRAC) will be the two main programmes. Grameen Bank is known for its innovative group-based lending programme. BRAC is famous for providing informal primary education and progressive health programmes to the indegent. It lays emphasis more on human capital development such as literacy, skill-promoting training and awareness programmes.

Inspired by the Grameen Bank in Bangladesh there has been a rapidly increasing growth of microfinance institutions in Pakistan and as well just as other developing countries. Growth and diversity in its microfinance sector have been encouraged by the microfinance Ordinance 2001, which resulted in the establishment of the First Microfinance Bank in Pakistan. Table 1 below summarizes the nature of different microfinance institutions operating in the Punjab province of Pakistan, the entire year in which these were operationalized and the concentration of procedures in rural or urban settings.

It is clear from the table that almost all of the NGO based institutions have a gender specific solidarity group approach to microcredit, where they may be catering mainly to female clients. A lot of the microfinance institutions working in Punjab province, except for the rural support programs, are either specialized institutions or have a specialized window for microcredit. Except for ASASAH, most of the institutions have been around in business for quite long to warrant a direct effect evaluation. For this study we have been enthusiastic about specialized institutions using a group solidarity model with a women specific focus. Thus, the province of Punjab was an apparent choice with well known and established NGO-based microfinance institution (MFI). Given enough time and resources available for the study, we've limited our focus on the Lahore district of Punjab, which is the hub of urban microfinance activity in Pakistan, accounting for over fifty percent of the total borrowers in the province.

2. 4 Community participation and group lending experience in microfinance

Grameen Bank is well-known for introducing and expanding its relationships with its customers in a distinctive relationship which is without utilizing legal contracts of requiring collateral, Grameen bank assigns borrowers to "solidarity groups" of five members. Each group is than in charge of the debts of the other four, and in case any group members defaults on her behalf loan, others must repay the defaulted loan or lose eligibility for even more loans from Grameen Bank. This compulsory interdependence sometimes appears to powerfully encourage trust and mutual aid within the solidarity group (Hung, 1997:15).

The group-based lending is very attractive to ladies in low income societies. Hardly any ladies in Pakistan and Bangladesh work in the wage labor market. Therefore their productive inefficiency is associated with the lack of women's labor market participation which motivates them to be self employed by borrowing capital.

Group lending schemes have a casual advantage over outside lenders. Often obtaining information about each member of a group by another lender is costly and subject to misinterpretation, therefore group members can monitor one another with relative ease as well as train and help the other low-productive members. In Pakistan, social custom restricts direct contact between potential female borrowers and male outside lenders. In the case of a credit program, it is simpler for girls, when in the company of larger group to connect to the male coordinator. Therefore, informational advantages of group lending are thus greater for the women when compared with men. Moreover, adverse shocks may impact the ability to repay loans and decrease income and consumption. There is evidence that girls are more susceptible to adverse shocks, related to pregnancy, illness associated with child bearing, and care giving to other family members who fall ill, making them riskier for poorly informed outside lenders (Rashid and Townsend 1993).

2. 5 Microfinance experience and gender empowerment

Some areas of poverty are owed to the inequality between people, therefore it is important to understand and interpret the meaning of the term 'gender'. People have different duties in confirmed culture or location. Gender identifies the social roles of women and men, and is never to be confused with the biologically determined sexes of male and female. Gender is hence a relational concept that analyses women's social roles in relation to the roles of men and vice versa. Gender roles are subject to perceptions and expectations which arise from factors like class, ethnicity, age and religion.

Research done by UNDP, UNIFEM, and the earth Bank indicates that gender inequalities in developing societies restrain economical growth and development. A recently available World Bank report highlights that societies which discriminate on the basis of gender are much poor with slower financial growth, weaker governance, and a lesser living standard with their people. There is a quite strong and positive correlation between gender empowerment and Human Development Indices, as projected by UNDP. Overall you can find rising evidence that gender equality is a significant aspect of any development strategy.

Microfinance programmes that 'target women' in isolation might not be gender sensitive. A gender approach evaluates women's and men's social and economical position in the family and at the city level. According to Johnson, this process examines how women and men's financial and social position is strengthened through microfinance institutions, and how traditions preside in the financial and social position of people in a society they are in (Johnson, 1999).

The idea of microcredit falls under a context where gender and labor ideologies clash: The first, the "gender" ideology, have always managed the relations between women and men. It confirms the place of the man in the society as the bread winner, while a female is confined to reproductive roles at the home, as wife and mother. The balance of power inside family members is always in favor of the man who holds the decision-making power. The next one, the "labor" ideology is recent and entails that the employment of women is a dependence on the survival of their household. The new ideology is reinforced regarding very disadvantaged households and the ones where families rely upon the woman as the principal bread winner, a predicament according to statistics, affecting 25% of Egypt's households (Nassar and Zarnouka, 1999). The pressure put by financial conditions has led to the preponderance of the "labor" ideology over the traditional "gender" ideology. A lot more, today a lot of people have a tendency to say that women work will not contradict the original ideology as it is a prolongation of the role as mothers providing the essential needs of their own families.

2. 5. 1 Microfinance utilization and monetary empowerment

It is estimated that 70 percent of the world's population living on significantly less than $1 each day are women (US Expert Group on Women and Finance, 1995). However, it is also true that most low-income women are economically active in some form. Women producers and entrepreneurs are essential economical actors. Though their roles and the value of those roles tend to be undervalued in society, women need and deserve access to information, financial services, and markets (US Expert Group on Women and Finance, 1995). Therefore, usage of credit and other financial services are necessary to provide low-income women with opportunities to increase their incomes and their assets (United Nations Expert Group on Women and Finance, 1995).

The supporters of 'development serving people' argue that microcredit puts people in the heart of the procedure of development and policies elaboration. Secondly, the women's rights defenders assume that microcredit empowers women since it promotes development while concentrating on eliminating gender differences. Thirdly, the poverty reduction approach encourages the offer of microcredit because it empowers the indegent; make sure they are economically independent and less vulnerable when facing economic crises. Finally, the offer of microcredit is supported by the economic growth experts since it promotes the development of minimal advantaged and developed regions, promoting growth over the future.

According to the State of the Microcredit Summit Campaign 2001 Report, nearly 14. 2 million of the world's poorest women have gained access to financial services through microfinance institutions (MFIs), banks, NGOs, and other nonbank financial institutions. The report also states that girls take into account almost 74 percent of the 19. 3 million of the world's poorest population which is currently being targeted by microfinance institutions. These women have credit to purchase businesses that they own and control themselves. Most of them have outstanding repayment records.

Different theories showed the value of microcredit as an instrument to boost economic growth and empower women. When women, who would otherwise stay at home, now, dedicate their period to reproductive tasks, integrate the labor market and new windows of opportunities emerge to them. Moreover, microcredit programs are increasingly targeting women due to a cost-efficiency rationale as women's repayment rates are higher than men. Secondly, the equity concept because women have less usage of productive employment in the developing countries and majorly because women invest largely in their children and households thereby creates a multiplier effect that enhances the effectiveness of the credit funds.

If a microfinance programme specifically targets women, men may sometimes manipulate the programme, leading to loans being disbursed in women's names for other uses. Hence, apart from considering static roles of women and men, we should also try to understand the dynamics of relations between men and women and how a microfinance initiative may alter roles if this will affect microfinance operations.

2. 5. 2 Economic empowerment, social change and social empowerment

Microfinance progammes have assured social and financial transformation. Targeting women by giving usage of credit is a strategic step taken in order to satisfy the promise of social development. Moreover, women are more likely to spend money on household goods. Therefore, improving women's employment by providing microcredit is believed to be the most efficient gateway to bring social benefits (Armendariz de Aghion and Morduch 2005, Khandker 2003, Pitt et al. 2006).

The great things about microfinance are achieved when usage of microcredit is expected to raise household income by easing the credit constraints imposed on poor and low-asset households who are generally excluded from the formal sector, and by enabling them to purchase income-generating activities. In turn, income effects increase consumption levels and greater cause demand for health services and education services.

Granting loans to women promotes financial sustainability of microfinance providers and helps achieving greater social benefits (Morduch 1999, 2000). Moreover, women are regarded as more risk averse and therefore better and safer customers. They are really easier to monitor and after whom peer pressure and the risk of social sanctions is likely to have greater impact than for men. Alternatively, microfinance allows women to invest in self-employed activities and generate their own income that allows them to bargain a larger share of household's resources.

Microfinance progarmmes tend to be associated with training programmes, which provide skill-based training and require beneficiaries to wait group meetings. These activities are anticipated to help women by giving them with a platform where they can take part in social and financial activities beyond the household and form networks of their own. Through these progammes women are expected to gain self-confidence to challenge prevailing gender norms and negotiate a higher status within family members and at a community level. Additionally it is hoped that making women's lives more public and their economic contribution more obvious will help lower domestic violence because of the greater scrutiny of their peer group (Hashemi et al. 1996, Schuler et al. 1996).

2. 5. 3 Position, identity and household empowerment

A woman's role in the economy can be an important determinant of her ability to provide health care services, education and safe housing for herself and her family. It also has an effect on her decision-making power, as well as her ability to speak and act against inequalities, injustice, and violence in her home as well as in the community. Acquiring working capital is a way to creating a woman's confidence, self-respect, and the capacity to make use of her voice to condition her life and the lives of her family (US Expert Group on Women and Finance, 1995).

It has been illustrated that whenever microfinance programmes target women exclusively, women often act as a 'front' for men who want to gain access to credit (Haddad, 1999; Goetz and Sen-Gupta 1996). Within the context of the Grameen Bank, Goetz and Sen-Gupta (1996) discovered that most women borrowers in their study did control neither the loans received, nor the income made from their micro-enterprises. A substantial proportion of women's loans were actually manipulated by male relatives, who had used the women as a front to gain access to the credit available. Women may willingly keep control over cash they acquired; by contrast, loans enter a difficult decision-making process with baffling impacts on the final results of the bargaining process. In particular, there is evidence that lots of women resign the use with their loans with their husbands (Goetz and Gupta 1996, Kabeer 2001, Rahman 1999).

The motivation of a lady borrower is seen from her ability to help her husband, sons, or other relatives attain higher status and economical prospects. In fact accessing loans or other financial services is rarely taken independently. It is argued that whenever women can generate their own independent income, it creates their position more robust within the household plus they can gain increased access to household resources. Microfinance is therefore a topic for discussion and joint decision-making in the family.

If women give out their loans to the male members of the household, it offers evidence for the kids losing the power to control their loans and doubt the empowering prospective of microfinance. Alternatively, Kabeer (1998, 2001) anticipated that whenever women are in situations of imbalanced interdependence within the family they prefer interventions that empower the household all together rather than enhance their individual situations.

Moreover, access to credit strengthens a women's bargaining position when she can freely invest this capital profitably in an independent activity. Women's bargaining position in the household is reinforced by the availability of credit when this capital is invested in a joint activity where both husband and wife contribute in an equally important way.

On the contrary, "women-only" targeting of credit may place her at risk of domestic violence. Mostly these loans are being used by men to set up ventures over which women have little or no control at all. Also there are a fear that occasionally women's small increases in income decreases male contributions to household expenditure (Mayoux, 1997). It is wrongly assumed that simply by giving loans to women, they have been empowered and also have attained the complete right and decision to work with or control the loan, which is not the case always.

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