Credit versus Coalition: Exploring the Influence of Microfinance Programs on Women's Agency.

This paper explores the social impact of microfinance programs on women based on interviews with four hundred female participants in India. More specifically it asks, what are the mechanisms through which microfinance programs increase women's agency? These programs are small-scale loan and savings programs targeted at fostering financial self-sustainability of the poor and have gained global popularity as a development strategy since the nineties. They follow a group-based lending approach targeted towards female clients and provide collateral-free loans to the poor. One of their central premises is that giving credit to women, rather than men, leads to women's empowerment by increasing their economic contribution to the household. However, I find that this financial mechanism has very limited influence in increasing the agency of women in male-headed households. Instead, I find that a majority of the women gain agency from the associational mechanism of the group, i.e., from their participation in group meetings and leadership training sessions, their access to an expanded network through the group, and their institutional link with civic organizations. This paper explains how the associational mechanism increases women's agency under optimal operating conditions and how it produces group-based collective actions.This calls for a more sociologically informed analysis of these financial programs and more attention to the social dimensions of interventions geared towards bringing economic development. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]