Microfinance Impact on Poor Rural Women Empowerment: A Household Level Bargaining Analysis

This paper empirically investigates whether access to credit from Dedebit Credit and Saving Institution (DECSI) can help poor rural women in the Tigray region of northern Ethiopia in improving their intra-household level bargaining power.

The paper uses a household bargaining model and a gender and empowerment analysis framework to empirically measure women’s bargaining power and empowerment. It uses randomly collected cross section data on DECSI microfinance program participants and non-participants in the Tigray region. The study adopts a methodology that allows for the possibility of self-selection. Study findings confirm that linkages between DECSI’s microfinance intervention and women’s empowerment:

• Are weakly significant;
• Have positive effects on some spheres of economic empowerment within a household;
• Are insufficient to address non-economic empowerment dimensions that can reduce intra-household gender inequality.

The primary policy implication is that it is important to integrate the region’s financial access programs with interventions that target gender equality with community norms and values. Further, investigations should question a program’s actual achievements and impact, in terms of capital formation beyond access.