Empowering Women Via Microfinance in Fragile States

This paper argues that the bias in favor of loans to women in microfinance has led to the exclusion of men and that this may prove counter-productive, increase friction within households and threaten the role of men as primary bread winners. The paper states that higher household income in the hands of women might increase health and education for women and their household members. On the other hand, excluding men from access to subsidized finance can diminish the supportive role that women play for their spouses. The paper also examines:

• Positive and negative influence of social and institutional conditions on the , empowerment of women through microfinance initiatives;
• Experiment in South Mexico, where women borrowers were asked to invite their spouses to be part of women-only solidarity groups, to see if this would eliminate potential frictions and enhance women empowerment.

The paper concludes that:

• Social and institutional norms dictate household-level activities such as the expenditure on health and education;
• Empowering women by giving them the opportunity to invite their partners into the solidarity group might help accelerate positive changes in social and institutional norms, although women might not always welcome such an initiative;
• Microfinance initiatives need to be supported by policies at the social and institutional level that focus on women empowerment.