Women Empowerment: Does Family Size matters?

Dr. Ramakant Sah

Research Scholar, VBP University

Abstract
Women empowerment has become a buzzword for international development and needs
immediate attention of policy makers and researchers. The study aims to develop a model to
investigate the determinants of women empowerment in Haryana and access the moderating
effect of family size on determinants of women empowerment in case of family managed
business. Primary data was gathered from 198 women borrowers of Haryana on which PLS-
SEM and Multi group analysis is applied to fulfill the objectives of the study. Results exhibit that
family decision ability, conflict and earnings are significant contributors towards women
empowerment level. Moreover, family system does not act as a moderator towards women
empowerment. The study recommends microfinance institutions to orient women with the
benefits of starting their own enterprise rather than forwarding the loan proceeds to their family
members. For the said purpose, business training should be given to the clients of microfinance
institutions.

Keywords: Women empowerment, PLS- SEM, Multigroup analysis, Microfinance institutions,

Family size.

1. Introduction

Nation’s financial system plays key role in economic transformation. It works as a channel
which helps in mobilization of funds from saving into productive purposes. Sustainable growth
of the financial sector plays a vital role in prosperity of a country and a key driver for developing
countries to alleviate poverty. Main determinants of this system are productive use of savings,
effective allocation and distribution of funds, and regulated payment system.

Banking institutions plays a prominent role for the growth of India’s rural sector. They extend
financial support to rural community to help them to increase their economic exposure thus
leading to empowerment. They fulfill the credit requirements of each sector like manufacturing,
agriculture, trade etc. for their long-term growth and day to day functioning of their business
operations.

As per the agenda of United Nations, it is important to achieve sustainable development goals by
2030 to fight against the changes happening in economic, environmental and political scenario
globally. Sustainable development goals can be achieved through poverty alleviation and
formulating policies for common people. Microfinance plays an important role in achieving
development goals thus carrying out financial inclusion in the country. Empowerment of women
is an important area which needs further enhancement and it can be done by way of access to
financial services. Growth of microfinance in recent years provides a foundation for researchers
to measure its impact on their beneficiary empowerment level.

Lack of easy availability of loan from formal sector impel the poor people to satisfy their credit
needs from moneylender, who exploit the poor and demand excessive high interest rates from
them (Rallen and Ghazanfar, 2006). The cost of loan rises for formal institutions due to the
inability of such poor people to prove their creditworthiness and high default risk attached with
them, which in turn limits the formal institutions to fulfill their credit needs.

The concept of microfinance was present in society from the gothic times but it gained
popularity with the evolution of Grameen Bank in Bangladesh. As per Sengupta & Aubuchon,
(2008) microfinance movement was seen as an instrument to alleviate poverty. After the success
of microfinance in Bangladesh, the movement embarked its presence across the globe such as
Latin America, Africa, United States and India. SEWA bank was introduced in India in 1972 to
provide financial services to women engaged in their own business. Prof. Yunus realized that
lack of credit was the reason for the people living in acute poverty in Jobra Village of
Bangladesh. In 1976, he started to provide small loans to such people and finally in 1983
Grameen Bank came into existence. After its success, a similar model was adopted by other
countries.

In rural areas of developing economies, women have always been overlooked. Such disregard
behavior presses them down in society with regard to political, economic and social aspects.
Formal Institutions hesitate to offer credit to them because of their inability to prove
creditworthiness and high default risk. As a result of this, the cost of loan rises which limit the
formal institutions to fulfill the credit needs of such people (Bhatt and Tang, 2001). It was
observed that female borrowers cannot bring empowerment until the social customs existing in
the society are changed (Beteille, 1999). Hence, Microfinance is a favorable scheme for women
which clear their way for easy availability of credit which they do not have from banking
institutions. It was noticed that payment rate of microfinance loan was high among women
borrowers.

The term microfinance is usually used interchangeably with microcredit. It provides various
financial services to poor people like credit availability, transfers, savings and insurance. Also,
United Nations has declared 2005 as the “Microcredit Year” for its historic contribution towards
the global development of nations.

Empowerment of Women

Empowerment is described as the ability of the person to make effective use of available
resources that helps them to increase their income level and take part in decision making activity.
According to Johnson et al., (2005), women empowerment is that “enable women to access skills
and resources to cope more effectively with current as well as future stress and trauma”. In rural
provinces of developing nations, women are generally neglected in society, they are denied of
their basic necessities of living and hence are enforced to live on the borderline. This further
worsens them in society and results in their disempowerment.

Women empowerment is multidimensional which guides a women to get acquit of their potential
in all facets of life. Similarly, (Ukanwa et al., 2018) also found that after joining microfinance
program Nigerian women are able to meet their end needs like education and food. Findings of
the study also show that microcredit is usually seen as a burden on family which affects their
capacity to pay off the loan installments. Several studies also found that microfinance program
strengthen the skills of women and add to their economic and social development.

Social development of women is described as their participation at family matters or community

related decisions, thus offering equal footing to women in community. This helps them to realize
their self- worth, gain confidence, independence to move freely and ease of access to education.

The women economic development is referred to the accessibility of their assets and income
which strengthen their economic status and essential for to attain empowerment. Women’s
involvement in microfinance program results in family conflicts (Armendariz and Roome, 2008).
In developing countries, women are more deprived in all spheres of life than men and are easily
influenced by the societal norms (Behrman and Schnieder, 1993; Kabeer, 2005). In male
dominated society, men take decisions for use of loan amount given to women by microfinance
institutions which results in gender gap. India’s position has fallen to 112 from 108 out of 153
countries (World Economic Forum, 2020). However, 35.4 percent women participate in
economic activities of the country and country holds a position at 149 th rank. This indicate that
the transformation in cultural and social phenomena are in progress but will take some time to
happen.

2. Theoretical Framework

2.1 Theories on Poverty Eradication

Microfinance plays an important role in alleviating poverty by offering services to vulnerable
people. Access to credit enables the poor to get engage in income generating activity which help
them to meet their basic needs and go away with poverty. Microfinance institutions aimed to
provide capacity building opportunities to the target population to sustain their living and
minimize their vulnerability to exceptional events. The success of MFIs will be determined by its
ability to offer financial support to its prospective clients. The biggest challenge for MFIs is to
focus on its outreach while managing its sustainability at the same time. It is necessary for
microfinance institutions to gratify the financial necessities of poor people while maintaining
their long-term sustainability. There are two viewpoints to the microfinance movement- welfarist
approach and institutionalist approach which is referred to as “microfinance schism” (Bassem,
2012).

The Welfarist Approach

The welfarist approach view microfinance as a productive approach to overcome poverty and
empower the poor people. According to this theory, microfinance mainly aims to provide an
opportunity to poor people to get engaged in income generating activity to meet their end needs.
Community welfare is the primary objective of this approach; therefore, MFI should serve its
clients without aiming the profits. The shortfall is funded through Government or donors’
support. Such funding is done with the desire to help the society through poverty reduction,
enhancing the living conditions and well-being rather the financial return. This approach works
for the social welfare of the community at large and aims to benefit the microfinance borrowers
to alleviate their poverty level. Due to this reason, some economist has strongly criticized this
approach.

The Institutionalists Approach

This approach primarily focuses on fulfilling the financial needs of unserved population. They
are of view that it is necessary to link the operations of formal banking with the activities of
microfinance institutions. In this approach, the performance of microfinance institutions is
measured from their profitability and not from their client base. This approach is contrary to the
welfarist approach. It gives prime importance to financial sustainability instead of social mission.
However, it takes financial sustainability as a yardstick to achieve their social objective also.
 3. Literature Review

Microfinance is extensively known as an imperative tool to reduce poverty and strengthen socio-
economic well- being of its clients. It benefits the poor people to increase their household
income, improve their ability to deal with unexpected events and encourage empowerment
among them.

In the recent years, women empowerment has gained popularity for the interest of nation’s
economic system which inspired many researchers to study in this area. Many researches have
been carried out to examine the influence of microfinance on women empowerment. Most of the
studies on microfinance are confined to developing countries. Leach and Sitaram (2002) carried
out a longitudinal study in India on thirty women borrowers to find out the sustained changes in
their lives. It was found that microfinance program does not benefit the poor regarding their
marketplace knowledge, seasonal variation in industry, control over assets. In addition, women
borrowers stated that increase in income has favorably helped women to transform the attitude of
men towards them. A similar study was carried out in Bangladesh which exhibit a positive
change in borrower’s income level, creation of assets and higher enrolment of children in schools
(Hasan and Saleem (2017). Moreover, it was also found that the program provides various
income generating opportunity to women for the holistic well- being of their family. Using
experimental and control group approach, Weber and Ahmad (2014) observed that women in
longer borrowing cycles are more empowered than women in their first cycle of borrowing.
Hence, it shows that empowerment increases with high borrowing level among the microfinance
clients in Pakistan. The findings of many researchers also exhibit that women empowerment is
associated with various demographic factors like age of borrower, area of study, education level
of borrower, assets owned, assets inherited, marital status, loan cycle etc. Study by Habibov,
Barrett and Chernyak (2017) found that women empowerment increases with age, higher
earnings or education as compared to husband. Cinar and Kose (2018) report that demographic
factors like age of borrowers, marital status, education level, household income and religiosity
are positively associated with women empowerment. It was also observed that Egyptian
microfinance has influenced greater income for established clients as compared to new clients
and has significant impact on poverty reduction (Elhadidi, 2018). Findings of a study on 400
women borrowers from Bahawalpur district of Pakistan found that male child, capital assets
inherited by father and age of borrower are the major factors that contribute towards women
empowerment (Khan and Noreen, 2012). It has also been disclosed that empowerment of women
is higher if the amount of loan is used by women solitary. Longitudinal study was carried out by
Swain et al., (2009) to examine the level of women empowerment. The results reveal that
borrowers who are a member to SHG group are 26 percent more empowered in comparison to
non-members. Nukpezah and Blankson (2017) emphasizes that Ghanaian microfinance has also
improved quality of life of its beneficiary, enhanced their accessibility to credit and performance
of their business. Based on the findings of logistic regression, Indian microfinance has also
bought a positive change in the living condition of its clients with respect to their education,
spouse education, family income and assets which in turn results in social empowerment
(Vachya, 2015). Using impact assessment studies, Ahmed (2009) found that microfinance
program has increased income of its participants by 8% as compared to non- participants. The
program helps its women borrowers to actively take part in household decisions and strengthen
their self- confidence. The results of various studies depict that microfinance contribute to
increase in women’s recognition in their family and community, provide better nutritional food
to family members and spend more on children clothing (Rubalcava, Teruel and Thomas, 2009).

Many studies have criticized microfinance due to its cost ineffectiveness and benefits offered by
it. Garikipati (2008) which shows absence of control of women over family assets thus leading to
their disempowerment in family- managed business and self- managed business. In the similar
vein, Fontenay & Wood (2018) also report that microfinance does not bring the intended benefit
to its beneficiary. This is because of the higher interest rate charged by MFIs from its client
which limit their ability to innovate and hence they prefer to remain in their existing business.
Using Ordinary least square method, Annim (2018) conclude that microfinance does alleviate
poverty of its clients but the intensity of its reduction is different throughout the regions. Further
it was also determined that clients who receive large amount of money from microfinance
institutions are more able to reduce their poverty level than those who receive small amount.
Also, clients in urban areas are more able to reduce poverty as compared to rural areas. It was
also ascertained by Lyngdoh and Pati (2013) that microfinance act as powerful mechanism for
empowering females even in tribal region.
However, there were some studies which indicate that microfinance does not empower women in
all aspects (Rahman et al., 2017). Goetz and Sen Gupta (1996) acclaims that microfinance has
increased domestic violence against women borrowers in Bangladesh. This is probably when
women pressurize their husband for repaying the loan installment. In Such cases, it is being
noticed that men invest the loan amount which is officially given to women and is not able to pay
off the installment on time. This leads to increased tension within the family thus resulting in
domestic violence. Findings of a study on five states of India found also higher independence in
decision making will not promote empowerment among women until and unless women take
ownership for creating property and assets with the loan amount (Swain et al., 2017). Basargekar
(2009) also found that microfinance does increase women empowerment but it does not exhibit
any improvement in women’s control over savings, decreased dependency on loan sharks and
decisions on use of earning and savings.

Overall, many studies have emphasized on determining the impact of microfinance on women
empowerment but none of the studies have focused on determining the factors affecting female
empowerment with regard to their social and economic development particularly in case of self-
managed business. Also, most of the studies are confined to southern or western region of India
due to the presence of microfinance institutions in these regions. Hence, this study is focused on
northern province of India particularly the Uttar Pradesh region.

Therefore, we are motivated to examine the factors influencing women empowerment in case of
family- managed business in Uttar Pradesh region of India.

Research Objectives

Numerous studies have concentrated on identifying the effect of microfinance on empowerment

of women but no efforts were taken to determine the factors influencing female empowerment in
terms of economic and social development in case of women borrowers who invested the loan
amount in their own established business/ new business. Therefore, the present study is centered
on evaluating women empowerment in case of self- managed businessThus, the study aimed to
achieve the following objectives:
a. To determine the factors influencing the social empowerment of women microfinance
borrowers.
b. To ascertain the factors influencing the economic empowerment of women microfinance
borrowers.
c. To examine the moderating role of family system on social empowerment and economic
empowerment on women empowerment.

4. Research Constructs and Conceptual Model

4.1 Research Constructs

In order to examine the factors influencing women empowerment, we develop the research
constructs shown in Table 1

Table 1: Research Constructs

Type of Construct Abbreviation Reference Studies

Dependent
Social Empowerment SD
Economic Empowerment ED
Women empowerment WD
Latent
Financial Decision Making FDM
Family Decision Ability FDA
Social Belongingness SB
Affection AF
Conflict CF
Lifestyle LF
Asset Enhancement AE
 Earnings E
Borrowing Decision BD

4.2 Conceptual Model

We develop the following conceptual model for this study.In the light of the objectives, a
conceptual model is prepared as showed in Figure 4A.
 Figure 4A: Conceptual model of the study

Family
FDM LF
System
H1 H6

H21, H22, H23, H24, H26, H27, H28, H29

FDA H25 AE
H2 H7
H30
SE EE
H3 H8
SB H10 H11 E

H4 H9

AF H5 WE BD

CF H12, H13, H14, H15, H16 H17, H18, H19, H20

For the present study, the following hypothesis are framed for determining the factors influencing social and economic
empowerment:

H1: Financial decision making positively impacts women’s social empowerment.

H2: Family decision making positively impacts women’s social empowerment.

H3: Social belongingness positively impacts women’s social empowerment.

H4: Affection positively impacts women’s social empowerment.

H5: Conflict negatively impacts women’s social empowerment.

H6: Lifestyle positively impacts women’s economic empowerment.

H7: Asset enhancement positively impacts women’s economic empowerment.

H8: Earnings positively impacts women’s economic empowerment.

H9: Borrowing Decision positively impacts women’s economic empowerment.

H10: Family system moderates the impact of financial decision making towards social empowerment.

H11: Family system moderates the impact of family decision ability towards social empowerment.

H12: Family system moderates the impact of social belongingness towards social empowerment.

H13: Family system moderates the impact of affection towards social empowerment.

H14: Family system moderates the impact of social belongingness towards social empowerment.

H15: Family system moderates the impact of lifestyle towards economic empowerment.

H16: Family system moderates the impact of asset enhancement towards economic empowerment.

H17: Family system moderates the impact of earnings towards economic empowerment.

H18: Family system moderates the impact of borrowing decision towards economic empowerment.

H19: Family system moderates the impact of social empowerment towards women empowerment.
 H20: Family system moderates the impact of economic empowerment towards women empowerment.

5. Methodology

Data Collection MethodsWe have used both primary and secondary data for examining the relationship between the dependent and
latent variable. We have developed a questionnaire that has been administered on

The study makes use of primary and secondary data to meet the objectives of the study. Primary data includes survey design which
involve data collection in the form of a questionnaire from women borrowers to determine which factors explain social and economic
development of women after taking microfinance credit. The policy and operations of microfinance institutions have also been
examined using Data gathered from secondary sources include books, published articles research papers for the purpose of theory
development and published reports of RBI, Sa-dhan and MFIN. for referring the policies developed for efficient working of
microfinance institutions
Sample Size

To determine the minimum sample size, we have used for this research, G*Power (v3.1.9.2) in
accordance with software was used (Faul et al.,, (2007). Based on The minimum sample size
required with a significancet level of 0.05, power as 0.95 and number of predictors as 2 the
minimum sample size is is 50. However, to run the structural model, we proposed to use a
minimum of 210. The questionnaire was filled by means of interview schedule, wherein the
researcher read question and option to the responder in Hindi and make a note of the answer
given by the women respondent. Questionnaire was filled up by 225 respondents. After
segregating the questionnaires with straight line answers and missing responses, we finally used
athe study utilized a total sample of 198 women whoborrowers who have used the loan proceeds
for their family business. Data was collected from 66 borrowers each belonging to Ambala,
Faridabad and Gurugram districts of Haryana (Table 5.1).

Table 5.1: Distribution of respondents (District Wise)

District No. of Respondents % of Respondents

Ambala 66 33.33
Faridabad 66 33.33
Gurugram 66 33.33
Total 198 100
Source: Author’s Calculation

We have used Tools and Techniques

PLS-SEM to identify factors influencing the endogenous construct i.e. women empowerment
with other constructs as exogenous construct.

6. Findings

6.1 Profile of Respondents

Table 6.1: Demographic profile of respondents

Variable(s) Description Self- Managed Business (198)

Number of %
respondents
 Age 20- 28 years 38 19.19
 28- 36 years 66 33.33
36- 44 years 56 57.1
44- 52 years 33 16.67
52- 60 years 5 2.5
Marital Status Married 193 97.47
Widow 3 1.52
Divorced 2 1.01
SC 27 13.64
Caste ST 17 8.58
OBC 39 19.7
General 14 7.07
Minority 101 51.01
Family System Nuclear 136 68.68
Joint 62 31.31
Number of No Children 4 2.02
children 1 19 9.59
  2 29 14.64
  3 63 31.81
  4 29 14.64
5 24 12.12
More than 5 30 15.15
Education level Below 8 standard 174 87.87
  8- 10 standard 12 6.06
  10- 12 standard 7 3.53
  Standard 12/ Metric 2 1.01
  University degree 3 1.51
Source: Author’s calculation
Table 6.1 exhibit the brief details of respondents in data. Most of the respondents are in their
middle age group of 28- 44 years (90.43%) followed by 19.19% belong to 20- 28 years and only
2.5% are of 52- 60 years. Out of 198 respondents, 193 (97.47%) are married, followed by widow
(1.52%) and divorced (1.01%). Nearly, 51.01% belong to minority class, OBC (19.7%), SC
(13.64%). SC and ST makes up a total of 15.65% in the sample data. 68.68% of borrowers live
in nuclear family system and 31.31% live in joint system. Approximately, 31.81% have 3
children followed by 14.64% have 2 and 4 children. Most of the borrowers (87.87%) have below
8th standard level of education and 6.06% have education from 8th to 10th standard and only
3.53% have 10th to 12th standard education.
Majority of the respondents were married in case of self- managed business (87.2%), while the
rest of the respondents were widow (9.9%) and divorced (2.9%). In case of self- managed
business, 25.5% of the participants belong to SC and OBC category each, followed by 22%
belongs to minority, ST (14.2%) and general (12.8%).

Majority of the respondents have nuclear family system in case of self- managed business
(64.5%), followed by joint family system of 35.5% in self- managed business.

Most of the participants have three children in self-managed business (31%). While,
approximately 14.9% of the respondents have 4 children in self- managed business.
Approximately, 9.9% of the samples have 5 children in self- managed business. However, 7.4%
of the participants have more than 5 children in self- managed business.

At 73%, majority of the respondents have education below 8 in case of own business. This was
followed by 8- 10 standard of education level in 14.9% in self- managed business. However,
4.3% of respondents reported to have education up to 12 standards, while approximately, 1.8%
of the sample hold university degree.

At 43.3%, a significant proportion of the participants have 2 years of membership with

microfinance institution in case of self- managed business, followed by 2- 3 years of membership
(27%), 3- 4 years (15.2%), 4- 5 years (7.1%). While, 7.4% of respondents have more than 5
years of membership with microfinance institution.

Most of the respondents have availed loan two times i.e. 50.3% in case of self- managed
business, followed by one time (22.7%), three times (17.4%), four times (6.4%), five times
(2.5%), more than five tiOverall, the distribution of respondents is suitable for analysis in line
with the objectives of the study.

6.2 Assessment of Measurement Model

The measurement model (shown in Figure 1) assesses the internal consistency reliability,
Cronbach’s Alpha, discriminant validity and convergent validity (Hair et al., 2017). Cronbach’s
Alpha is used to “measure the reliability of items in a scale” (George and Mallery, 2003). Higher
value of Cronbach’s Alpha signifies more reliability and good internal consistency of items in a
scale (George et al., 2003). The Cronbach’s Alpha value for all constructs is more than 0.70
(Table 6.2) which indicates that the items in the scale are reliable (Hair et al., 2011).

Figure 1: Measurement Model

Source: PLS-SEM

Table 6.2: Measurement Model

Construct Indicator Loading CA CR AVE

Financial Decision FDM1 0.880
0.803 0.908 0.831
Making FDM2 0.943
FDA1 0.944
Family Decision Ability 0.707 0.863 0.760
FDA2 0.793
SB1 0.764
Social Belongingness 0.819 0.879 0.787
SB2 0.995
AF1 0.958
Affection 0.781 0.893 0.807
AF2 0.834
CF1 0.862
Conflict 0.772 0.895 0.810
CF2 0.937
Lifestyle LF1 0.826 0.704 0.867 0.766
 LF2 0.922
AE1 0.871
Asset Enhancement 0.818 0.912 0.838
AE2 0.957
E1 0.830
Earnings 0.702 0.867 0.766
E2 0.918
BD1 0.964
Borrowing Decision 0.766 0.882 0.791
BD2 0.808
SE1 0.833
Social Empowerment SE2 0.753 0.760 0.861 0.675
SE3 0.874
EE1 0.663
EE2 0.866
Economic Empowerment 0.718 0.817 0.531
EE3 0.738
EE4 0.624
WE1 0.737
Women Empowerment WE2 0.868 0.734 0.847 0.650
WE3 0.808
Notes: CA signify “Cronbach’s Alpha”; CR signify “Composite reliability”; AVE signify
“Average variance explained”
Source: Author’s Calculation
Internal consistency reliability refers “to the extent to which the item measures the construct”
(Richter et al., 2016). Composite reliability is used “to measure internal consistency reliability”
(Hair et al., 2014). Reliability of an indicator was measured through their outer loadings and
reliability of a construct was measured with the composite reliability. Table 6.2 show that the
composite reliability exceeds the minimum threshold value of 0.70 of all constructs (Gefen,
Detmar and Boudreau, 2000).

Convergent validity (CV) is defined as “the extent to which a measure correlates positively with
the alternative measures of the same construct” (Hair et al., 2014, p. 102). CV is decided through
average variance explained (AVE) (Hair et al., 2017). All the cases of AVE, in this study, are
above the threshold limit of 0.50 (Bagozzi and Yi, 1988). Indicators having outer loading less
than 0.40 were removed and whose loading are from 0.40 to 0.70 were taken into consideration
for removal where deletion of such indicators results in increase in composite reliability and
average variance explained (Hair et al., 2017). Although, in Table 6.2 the factor loadings of other
indicators such as ED1 and ED4 are less than the standard limit of 0.708, still these indicators
were retained as the AVE of the construct has achieved the desired level of 0.50 (Avkiran, 2018).
Discriminant validity (DV) means “that a construct is unique and captures phenomena not
represented by other constructs in the model” (Hair et al., 2014). DV is measured through
“Fornell & Larcker Criteria”, “Cross Loadings” (Hair et al., 2014) and “Heterotrait- Monotrait
Ratio (HTMT)” (Henserler et al., 2015). As per Fornell & Larcker Criteria, “the square root of
AVE of each construct should be higher than its correlation with other construct’s” (Vinzi et al.,
2010). It means that the indicator is more associated with its construct than any other construct.
The results in table 6.3 depict that the diagonal values are higher than the values underneath and
besides it, thus fulfilling the Fornell & Larcker Criteria.
 Table 6.3 - Fornell & Larcker Criteria

Construct AE Affection BD Conflict EE Earnings FDA FDM Lifestyle SB SE WE

AE 0.915                      
AF -0.092 0.898                    
BD 0.159 -0.262 0.889                  
CF 0.023 -0.423 0.127 0.900                
EE 0.107 0.123 0.107 -0.139 0.729              
E 0.364 -0.264 0.186 0.210 0.246 0.875            
FDA 0.217 -0.233 0.256 0.022 0.253 0.392 0.872          
FDM 0.174 -0.233 0.382 0.027 0.295 0.314 0.716 0.912        
LF 0.174 -0.270 0.233 0.003 0.146 0.477 0.285 0.275 0.875      
SB 0.165 -0.222 0.163 0.217 -0.030 0.210 0.137 0.129 0.139 0.887    
SE 0.195 0.035 0.077 -0.284 0.598 0.195 0.309 0.238 0.227 0.101 0.821  
WE 0.295 -0.076 0.246 -0.114 0.577 0.293 0.432 0.378 0.264 0.139 0.672 0.806
Source: Author’s Calculation

Another method of determining discriminant validity is cross loadings. Cross loading means that “the indicator’s loading should be
highest with its construct rather than with another construct” (Hair et al., 2014). The problem of discriminant validity arises when an
indicator’s loading exists on some other construct other than its own construct. Table 6.4 exhibit the cross-loading value of each
indicator. There is no issue of discriminant validity as the indicator factors loading are highly associated with its construct (Hair et al.,
2014).
 Table 6.4 - Cross Loadings
Construct AE Affection BD Conflict EE Earnings FDA FDM Lifestyle SB SE WE
AE1 0.871 -0.068 0.160 0.023 0.069 0.315 0.192 0.172 0.170 0.202 0.180 0.242
AE2 0.957 -0.095 0.140 0.020 0.117 0.349 0.206 0.155 0.156 0.124 0.180 0.291
-
AF1 0.958 -0.259 -0.431 0.099 -0.243 -0.215 -0.199 -0.240 -0.203 0.038 -0.059
0.073
-
AF2 0.834 -0.202 -0.304 0.137 -0.240 -0.211 -0.240 -0.262 -0.202 0.020 -0.089
0.106
BD1 0.190 -0.249 0.964 0.111 0.118 0.208 0.300 0.395 0.243 0.189 0.108 0.256
BD2 0.047 -0.219 0.808 0.126 0.054 0.085 0.089 0.251 0.148 0.063 -0.013 0.156
-
CF1 0.050 -0.398 0.123 0.862 0.209 0.016 0.071 0.015 0.166 -0.203 -0.046
0.063
-
CF2 0.000 -0.374 0.109 0.937 0.177 0.023 -0.008 -0.006 0.218 -0.295 -0.143
0.170
E1 0.266 -0.181 0.124 0.128 0.175 0.830 0.266 0.203 0.341 0.186 0.090 0.170
E2 0.359 -0.270 0.191 0.226 0.246 0.918 0.403 0.330 0.477 0.184 0.229 0.321
-
EE1 0.058 0.108 -0.042 0.663 0.126 0.128 0.217 0.016 0.028 0.234 0.319
0.044
EE2 0.195 0.135 0.167 -0.190 0.866 0.199 0.292 0.275 0.132 -0.041 0.595 0.588
EE3 0.035 0.165 -0.086 -0.193 0.738 0.132 0.090 0.102 0.128 -0.086 0.566 0.381
EE4 0.039 -0.082 0.144 0.156 0.624 0.302 0.203 0.312 0.128 0.071 0.169 0.312
FDA1 0.272 -0.225 0.263 0.034 0.249 0.418 0.944 0.725 0.340 0.122 0.328 0.447
FDA2 0.048 -0.175 0.164 -0.006 0.182 0.222 0.793 0.478 0.095 0.122 0.177 0.269
FDM1 0.139 -0.200 0.303 0.014 0.231 0.273 0.551 0.880 0.204 0.088 0.175 0.293
FDM2 0.174 -0.223 0.384 0.032 0.299 0.298 0.730 0.943 0.287 0.139 0.248 0.384
LF1 0.143 -0.282 0.184 0.134 0.102 0.526 0.190 0.208 0.826 0.130 0.111 0.182
LF2 0.161 -0.209 0.221 -0.088 0.148 0.350 0.294 0.267 0.922 0.118 0.262 0.268
SB1 0.161 -0.262 0.086 0.227 - 0.280 0.065 0.042 0.121 0.764 0.017 0.065
 0.038
-
SB2 0.158 -0.206 0.169 0.206 0.190 0.142 0.137 0.136 0.995 0.110 0.144
0.027
SE1 0.191 -0.006 0.019 -0.240 0.452 0.195 0.309 0.217 0.216 0.150 0.833 0.521
-
SE2 0.024 0.019 -0.121 0.464 0.147 0.184 0.176 0.133 0.053 0.753 0.449
0.021
SE3 0.265 0.061 0.133 -0.311 0.551 0.142 0.260 0.194 0.203 0.049 0.874 0.660
WE1 0.168 -0.114 0.297 -0.004 0.412 0.233 0.368 0.372 0.200 0.137 0.363 0.737
WE2 0.331 -0.105 0.180 -0.082 0.520 0.316 0.420 0.360 0.282 0.137 0.662 0.868
WE3 0.184 0.029 0.152 -0.172 0.453 0.150 0.258 0.197 0.146 0.067 0.547 0.808
Source: Author’s calculation

In addition, Heterotrait- monotrait (HTMT) is used to measure discriminant validity. HTMT is defined as the “mean value of item
correlations across constructs relative to the geometric mean of the average correlations fort the items measuring the same construct”
(Hair et al., 2014). This implied that all the constructs of the study are different. The maximum permissible value of HTMT ratio is
0.85 (Henseler et al., 2015) and 0.90 (Gold et al., 2001). To instigate discriminant validity, a new measure of Heterotrait- Monotrait is
used in this study, known as HTMT . As per this method, the confidence interval of all HTMT values should be less than 1. In
inference

this, the confidence intervals for HTMT inference of all constructs are within the limits, thereby constituting distinctiveness of all
constructs in the model. Table 6.5 shows the HTMT criteria. Hence, it is concluded that there is no problem as far as discriminant
validity is concerned.
 Table 6.5 - Heterotrait- Monotrait (HTMT) Criterion
W
Constructs AE Affection BD Conflict EE Earnings FDA FDM Lifestyle SB SE
E
AE                        
0.119

CI
AF [0.03                      
3;
0.291
]
0.171

CI 0.325
BD [0.08 CI [0.147;                    
0; 0.503]
0.327
]
0.037 0.172
CI CI
0.526
[0.02 [0.05
CF CI [0.401;                  
8; 1;
0.657]
0.212 0.332
] ]
0.146 0.228
CI CI 0.269
0.208
[0.10 [0.12 CI
EE CI [0.114;                
6; 8; [0.187;
0.366]
0.281 0.388 0.388]
] ]
E 0.467 0.351 0.215 0.278 0.358              
 CI CI CI
[0.30 [0.08 CI [0.20
CI [0.184;
8; 3; [0.122; 2;
0.520]
0.624 0.419 0.452] 0.536
] ] ]
0.238 0.28 0.332
CI CI 0.029 CI 0.503
0.308
[0.13 [0.14 CI [0.18 CI
FDA CI [0.151;            
5; 5; [0.030; 8; [0.334;
0.470]
0.403 0.471 0.223] 0.502 0.656]
] ] ]
0.215 0.45 0.399 0.890
CI CI 0.057 CI 0.403 CI
0.303
[0.06 [0.28 CI [0.26 CI [0.78
FDM CI [0.123;          
3; 3; [0.031; 0; [0.244; 4;
0.478]
0.383 0.604 0.221] 0.548 0.554] 0.993
] ] ] ]
0.231 0.292 0.193 0.335
CI CI 0.178 CI 0.692 CI
0.385 0.351
[0.07 [0.13 CI [0.12 CI [0.22
LF CI [0.207; CI [0.189;        
8; 4; [0.092; 2; [0.569; 4;
0.553] 0.517]
0.398 0.464 0.296] 0.382 0.818] 0.508
] ] ] ]
0.145
0.222 0.146 0.104
CI CI 0.292 CI 0.334 0.192
0.324 CI 0.124
[0.08 [0.06 CI [0.07 CI CI
SB CI [0.169; [0.04 [0.052;      
1; 2; [0.114; 1; [0.169; [0.067;
0.480] 9; 0.294]
0.376 0.322 0.461] 0.248 0.490] 0.362]
0.338
] ] ]
]
0.248 0.071 0.103 0.345 0.719 0.251 0.388 0.297 0.287 0.111
SE CI CI [0.051; CI CI CI CI CI CI [0.136; CI CI    
[0.15 0.243] [0.07 [0.220; [0.58 [0.121; [0.21 0.458] [0.138; [0.06
 7; 4; 2; 8; 2;
0.398 0.248 0.490] 0.856 0.428] 0.553 0.463] 0.266
] ] ] ] ]
0.357 0.324 0.748 0.564 0.163 0.855
CI CI 0.13 CI 0.382 CI 0.349 CI CI
0.153 0.490
[0.19 [0.17 CI [0.60 CI [0.41 CI [0.07 [0.75
WE CI [0.085; CI [0.346;  
6; 7; [0.085; 7; [0.230; 1; [0.181; 3; 8;
0.312] 0.631]
0.522 0.478 0.300] 0.887 0.552] 0.712 0.522] 0.328 0.947
] ] ] ] ] ]
Source: Author’s calculation
Once the construct reliability and validity are established then, structural model (as shown in
Figure 2) has been evaluated. For evaluating the structural model, criterion used are – (a)
coefficient of determination (R2), (b) path coefficient significance (β), (c) predictive relevance
(Q2) and (d) effect size (f2).

For determining the path coefficients significance, direct relationship among the constructs has
been examined. Table 6.6 and figure 3 show the outcome of hypothesis testing in context of the
model. To examine the significance of path coefficients and testing the hypothesis, the technique
of bootstrapping with 5000 samples has been conducted to avoid biasness in standard error in
line with Wong (2013). In this study, the standardized loading of β coefficient between financial
decision making and social empowerment is -0.111 (t0.05=1.471) is not significant as given in
Table 6.6 and figure 3. Family decision ability has positive and significant influence on social
empowerment with β coefficient of 0.212 (t0.05=2.839). The positive coefficient of family
decision ability signifies that increase in family decision ability leads to increased social
empowerment of the respondent borrowers. Social belongingness has positive influence on social
empowerment but it is insignificant (β= 0.142, t- value =1.719, p value > 0.05). As per the
study, women are empowered to move freely to visit their friends and family and to make
household purchases after availing microcredit facilities. However, it does not influence the
women’s social empowerment. Affection also has negative and insignificant relation with social
development (β= -0.097, t- value =1.442, p value > 0.05). This means that women are not able to
gain respect from their family members. The result is not in line with Afrane (2002) which
indicate that due to rise in family income, women are getting more empowered. Conflict does
significantly influence the social empowerment with β value of -0.281, t-value = 4.810 and p <
0.05. This indicate that women borrowers are facing less conflicts in their family due to
diversion of loan proceeds to their family business. Hence, conflict act as a determinant for
social empowerment of women. Hence, H2, H5 are supported and H1, H3 and H4 are not supported.

The β coefficient(s) of the path between lifestyle, asset enhancement and borrowing decision is
not significant with economic empowerment with realized values as Lifestyle- β = 0.027 and
p>0.05, Asset Enhancement - β = 0.014 and p<0.844 and Borrowing Decision - β = 0.058 and p
value >0.05 respectively. Positive coefficient of lifestyle shows that women borrowers enjoy
better food, clothing, health and sanitation facilities for themselves and their family members.
However, the same is insignificant to economic development. The results are in line with
Samantaraya and Goswami, (2015). Asset enhancement shows the ability of a women to increase
its assets and to enjoy the acquired assets. It is a strong determinant of women’s economic
empowerment. In this study, asset enhancement is not a significant determinant to women
economic empowerment. Earnings is directly related with the economic empowerment of
women. The results of this study are in conformity with the findings of Nukpezah and Blankson
(2017) and Cinar and Kose (2018) where most of the women borrowers are able to increase their
income level. A positive coefficient of economic development signify that women are capable
enough to take decisions about their business affairs, which exhibit their holistic empowerment.
Therefore, H6, H7 and H9 are not supported but H8 is not supported.

As depicted in Table 6.6 and Figure 3, social development (β = 0.509, t 0.05= 8.098) and economic
development (β = 0.555, t0.05= 10.734) have favorable significant relationship with empowerment
of women.

Figure 2: Structural Model

Source: PLS- SEM

Figure 3: Hypothesis Testing

 FDM LF

-0.193 -0.059

FDA 0.215 AE
0.163
SD ED 8

-0.066
0.30
SB 0.425 1.004 0 E

-0.197 0.505

AF WE BDM
0.066

CF

Note: Dotted line represents no influence; solid line represent influence. Significant at p <0.05*
Table 6.6: Hypothesis Testing Results
Hypothesi Std. Beta
Relationship t- value Decision
s (β)
Financial decision making -> social
H1 -0.111 1.471 Not Supported
empowerment
Family decision ability -> social
H2 0.212 2.839 Supported
empowerment
Social belongingness -> social
H3 0.142 1.719 Not Supported
empowerment
H4 Affection -> social empowerment -0.097 1.442 Not Supported
H5 Conflict -> social empowerment -0.281 4.810 Supported
H6 Lifestyle -> economic empowerment 0.027 0.316 Not Supported
Asset enhancement -> economic
H7 0.014 0.197 Not Supported
empowerment
H8 Earnings -> economic empowerment 0.217 2.586 Supported
Borrowing decision -> economic
H9 0.058 0.705 Not Supported
empowerment
Social development -> women
H10 0.509 8.098 Supported
empowerment
Economic development -> women
H11 0.555 10.734 Supported
empowerment
*p <0.05
Source: Author’s Calculation
The value of R2 helps to determine the ability to predict the structural model (Rigdon, 2012). In a
model, greater the value of R2, greater is the explanatory power (Shmueli and Koppins, 2011). In
Table 6.7, as a whole, 50% of the variance is caused by exogenous variables in endogenous
variable i.e. women empowerment. Furthermore, the effect size (f2) is also evaluated in the study.
Effect size helps to measure the effects of exogenous constructs on endogenous construct (Hair
et al., 2014). As seen from Table 6.7, the relation between social empowerment and
empowerment of women indicates a large effect size (f2 = 0.333) whereas the effect of economic
empowerment on women empowerment exhibits a medium effect size (f2 = 0.095). Stone
Geisser’s Q2 value is also assessed to forecast the accuracy of the model. It helps in verifying the
redundancy results of the constructs. In this study, Table 6.7 exhibit that endogenous construct
i.e. social empowerment, economic empowerment and women empowerment have Q 2 with
0.291, 0.024 and 0.308 which indicates medium, small and large predictive relevance of the
model.

Table 6.7: Assessment of R2, f2 and Q2

Hypothesis Relationship R2 f2 Q2
Financial decision making -> social
H1
empowerment
Financial decision ability -> social
H2
empowerment 0.461 0.333 0.291
H3 Social belongingness -> social empowerment
H4 Affection -> social empowerment
H5 Conflict -> social empowerment
H6 Lifestyle -> economic empowerment
Asset enhancement -> economic
H7
empowerment
0.065 0.095 0.024
H8 Earnings -> economic empowerment
Borrowing decision -> economic
H9
empowerment
H10 social development -> women empowerment
economic development -> women 0.500   0.308
H11
empowerment
Source: Author’s Calculation

Before carrying out the MGA analysis to determine the effect of family system on factors
affecting social and economic empowerment of women, it is essential to assess the measurement
invariance (Henseler, Ringle and Sarstedt, 2015; Hair et. al., 2017). To determine measurement
invariance in PLS- SEM, Henseler, Ringle and Sarstedt, (2016) suggest to use “measurement
invariance of composites (MICOM) approach”. Three series of steps are to be followed under
MICOM approach: (a) “assessment of configural invariance”, (b) “assessment of compositional
invariance”, (c) “assessment of scalar invariance”. Table 6.8 shows the results of MICOM
approach for nuclear and joint family system, which indicate the presence of partial measurement
invariance. Hence, the study fulfills the minimum condition of carrying through the MGA
(Henseler et al., 2015). Table 6.8 indicate the significant difference in the mean value of nuclear
and joint family system. Step 3 of MICOM approach describe that WE are significantly low in
case of nuclear family than the joint family system. Table 6.9 shows the results of MGA for
testing of hypothesis. The MGA results were analyzed using two non- parametric approaches:
Henseler’s MGA based on bootstrapping and permutation test (Chin and Dibbern, 2010;
Henseler et al., 2009; Sarstedt et al., 2011). Using bootstrapping, Henseler’s MGA compares the
path coefficients of two groups. The p- value of these coefficients shall be low than 0.5 or more
than 0.95 in order to have significant difference between the two groups (Henseler et al., 2009).
Whereas, p- value in case of permutation test should be less than 0.05 to have significant
difference between the coefficients of two groups.
 Table 6.8: Assessment of Measurement Invariance

Configura Compositional Invariance (Correlation = 1) Equal mean assessment Equal variance assessment
l
Invariance Partial
Constructs (same Confidence Difference Difference
measuremen Confidence Confidence
algorithm C=1 Interval p- value (Younger Equal (Younger - Equal
t invariance Interval (CIs) Interval (CIs)
for both (CIs) - Older) Older)
established
groups)
[0.919,
FDM Yes 0.981 0.241 Yes 0.063 [-0.299, 0.300] Yes -0.239 [-0.248, 0.287] Yes
1.000]
[0.911,
FDA Yes 0.996 0.618 Yes 0.054 [-0.295, 0.310] Yes -0.071 [-0.266, 0.315] Yes
1.000]
[0.127,
SB Yes 0.99 0.876 Yes -0.173 [-0.305, 0.298] Yes -0.153 [-0.262, 0.316] Yes
1.000]
[-0.050,
AF Yes 0.656 0.237 Yes -0.103 [-0.307, 0.299] Yes 0.116 [-0.375, 0.415] Yes
1.000]
[0.958,
CF Yes 0.991 0.336 Yes 0.151 [-0.303, 0.306] Yes 0.121 [-0.404, 0.510] Yes
1.000]
[0.278,
LF Yes 0.903 0.290 Yes 0.123 [-0.299, 0.312] Yes 0.369 [-0.493, 0.577] Yes
1.000]
[-0.783,
AE Yes 0.946 0.361 Yes -0.052 [-0.304, 0.307] Yes -0.143 [-0.283, 0.327] Yes
1.000]
[0.885,
E Yes 0.990 0.427 Yes 0.149 [-0.302, 0.301] Yes -0.128 [-0.332, 0.378] Yes
1.000]
[-0.125,
BD Yes 0.961 0.645 Yes -0.152 [-0.306, 0.296] Yes 0.020 [-0.371, 0.442] Yes
1.000]
[0.994,
SE Yes 0.998 0.442 Yes -0.252 [-0.307, 0.301] Yes -0.137 [-0.323, 0.362] Yes
1.000]
[0.967,
EE Yes 0.996 0.631 Yes -0.231 [-0.294, 0.302] Yes -0.116 [-0.372, 0.406] Yes
1.000]
WE Yes 0.994 [0.990, 0.14 Yes -0.030 [-0.293, 0.312] Yes 0.461 [-0.338, 0.403] No
 1.000]
Note: FDM= Financial decision making; FDA= Family decision ability; SB= Social belongingness; AF= Affection; CF= Conflict; LF= Lifestyle; AC= Asset
enhancement; E= Earnings; BD= Borrowing decision; SD= Social empowerment; ED= Economic empowerment; ; WE= Women empowerment
Source: Author’s Computation; p< 0.05

Table 6.9: Results of MGA

Confidence Interval (95%) Bias
Path Coefficient Path P- value Difference
Corrected
Hypothesis Relationships Coefficient Supported
Henseler's Permutation
Nuclear Joint Nuclear Joint Difference
MGA test
[-0.280,
H10 FDM -> SE -0.067 -0.108 [-0.345, 0.159] 0.042 0.790 0.804 No/ No
0.109]
[-0.020,
H11 FDA -> SE 0.173 0.253 [-0.022, 0.491] -0.08 0.605 0.628 No/ No
0.353]
[-0.079,
H12 SB -> SE 0.186 0.050 [-0.122, 0.278] 0.136 0.362 0.443 No/ No
0.336]
[-0.251,
H13 AF -> SE -0.078 -0.004 [-0178, 0.413] -0.075 0.635 0.635 No/ No
0.068]
[-0.413, -
H14 CF -> SE -0.258 -0.322 [-0.466, -0.037] 0.064 0.604 0.619 No/ No
0.126]
[-0.299,
H15 LF -> EE 0.053 0.033 [-0.430, 0.233] 0.020 0.922 0.924 No/ No
0.230]
[-0.267,
H16 AE -> EE 0.051 -0.015 [-0.355, 0.244] 0.066 0.715 0.732 No/ No
0.192]
[-0.045,
H17 E -> EE 0.154 0.354 [0.111, 0.611] -0.200 0.230 0.248 No/ No
0.348]
[-0.266,
H18 BD -> EE 0.068 0.012 [-0.424, 0.185] 0.056 0.764 0.802 No/ No
0.257]
H19 SE -> WE 0.527 0.450 [0.377, 0.664] [0.237, 0.669] 0.077 0.551 0.555 No/ No
H20 EE -> WE 0.282 0.31 [0.122, 0.443] [0.001, 0.584] -0.027 0.864 0.861 No/ No
Note: FDM= Financial decision making; FDA= Family decision ability; SB= Social belongingness; AF= Affection; CF= Conflict; LF= Lifestyle; AC= Asset
enhancement; E= Earnings; BD= Borrowing decision; SD= Social empowerment; ED= Economic empowerment; ; WE= Women empowerment
Source: Author’s Computation; p< 0.05

The outcome of the two methods indicates non- significant difference between the nuclear and joint family system for hypothesis of
FDM (H10), FDA (H11), SB (H12), AF (H13), SB (H14), LF (H15), AE (H16), E (H17), BD (H18), SE (H19), EE (H20). Since, the
results of both the methods are non- significant across the groups it provides a conformation to the findings of this study.
 7. Discussion and Conclusion
The present study attempts to determine the factors influencing social and economic
empowerment of women in case of family- managed business in Haryana state of India. Also,
the moderating effect of family system was identified on the above discovered factors. The study
utilized a total sample of 198 respondents. Data was gathered from Ambala, Faridabad and
Gurugram districts. Sample of 66 respondents was taken from each of these districts. Using PLS-
SEM, factors influencing women empowerment were identified. Furthermore, MGA approach
was used to determine the moderating effect of family system. The findings indicate that
financial decision ability and conflict has a significant impact on women’s social empowerment
while earning is a strong determinant to women economic empowerment. The results are
consistent with the findings of Elhadidi (2018), Maity, (2016), Pitt, Khandker & Cartwright
(2006), Rahman, Khanam & Nghiem, (2017), Sheikh, Meraj & Sadaqat, (2015). Based on MGA
results, family system does not moderate the relationship between microfinance and women
empowerment.

8. Implications of the study

Findings of this study suggest some valuable insights to policy makers and microfinance
institutions having presence in the area of this study. Awareness programs should be conducted
to reach out to more women in order to connect them with microfinance services. MFIs should
focus on making women acquaint with the benefits of starting their own enterprise to become
more empowered socially and economically. This is because real empowerment cannot be
achieved until women are empowered to make independent spending in fulfilling household
needs. For this purpose, necessary training should be given to them to increase their business
skills and self- confidence.

9. Pathway for Future Research

This research was limited to one state of India that is, it is restricted to a geographical periphery
and has assessed the impact of only one factor as a moderator. The future research can be done in
other states of India and across the border as well. The impact of other variables such as
education, marital status, occupation (as a moderator) can be studied. Also, this study is based on
cross sectional data, future studies can be conducted on longitudinal data.

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