Micro-credit and its impact on women empowerment

The micro-credit system of Grameen Bank is considered as a unique tool to empower women through poverty reduction providing a small amount of loan to extreme poor and uneducated women in Bangladesh. The unique feature is that the loan is given to the landless women without any mortgage. It is claimed that women have become empowered through using micro-loan in different sectors. The poor women have been successful to overcome the vicious cycle of poverty. Their bargaining strength has been increased in decision making process within family. However, there is an argument whether giving micro-credit to women really helps towards eradicating poverty and making them empower. Thus women empowerment through micro-credit of Grameen Bank is a controversial issue. Micro-credit has several negative impacts on poverty reduction and women empowerment in rural area of Bangladesh.
The amount paid as micro-credit is basically a small amount of money ($50-$150) given to poor as a loan for use as a capital in doing small businesses. The needy people have been encouraged to start a free business by the small amount of loan. This small amount of money can be received by rootless or vulnerable people from Grameen Bank only based on trust and without giving any mortgage.
The interest rate of Grameen Bank, around 20 per cent is extremely high in comparison to other commercial banks. Due to high pressure of interest rate, poor women have not been successful to invest their small loan in a high profitable business.
Women empowerment through micro-credit is still far away. Males directly control women's loan whereas responsibility for loan repayment goes to women borrowers. Women sometimes cut their required household basic needs due to the high pressure put by the bank authority for payment of installments as per contract. They also repay their loans from savings when their husbands make bad investments. In most cases, husbands are reluctant to give money for repayment. Thus, women lose their control over credit which reinforces male domination and exacerbates women's welfare.
Women are in vulnerable position in comparison to men. Women are reinforced to get the access of loan from NGOs. Women's contact with most of the largest NGO micro-finance dealings (BRAC, Grameen Bank, Proshika Human Development forum and ASA) could not bring empowerment for women. Lending money to women is an inappropriate decision as men control 95 per cent of these loans. Thus, women have limited access to choice and insufficient protection to their credits. Moreover, MFIs battered women to take responsibility of decreasing transaction costs. Thus, frustration and tension have been increased among household members and in women's group.
Women are mostly engaged in traditional home based works such as paddy husking, tailoring and raising of poultry. These kinds of jobs indicate that there is little improvement in gender division of labour. Women give so much physical labour in traditional jobs but return is low. This low returns increase burden for women during repayment. Moreover, women received credit on behalf of their husbands or other male family members.  
A recent study suggests 7.9 per cent of women replied that they applied for credit on their own preference whereas about 71 per cent of them went for credit programme on their husband's suggestion. It is also seen that 93.4 per cent of borrowers did not use credit for their own purpose. Women did not get any priority in household decision making process because of the cultural construction of submissiveness, appropriate female behaviour, social norms and traditional loyalty of family. Their husband took all kinds of decision although they have access to credit. Thus some women borrowers have lost their land and assets for paying the loan.
Although micro-credit has brought several positive changes for poor women in Bangladesh, it leads some controversial issues in Bengali rural society. Micro-credit does not work for the poorest of the poor. It does not work for them who are mentally and physically disabled, the elderly, street children, the destitute and refugees, and people affected by natural calamity.  It is a part of a poverty reduction strategy and women empowerment, not a panacea. Considering the overall situation, it could not be claimed that Grameen Bank has been fully successful to make women empower through lending a small amount to them.
The writer is a researcher at the AIT Thailand, and Asstt Prof, University of Rajshahi. [email protected]