© Pergamon World Development, Vol. 24, No.4, pp. 635-653, 1996 Copyright © 1996 Elsevier Science Ltd Printed in Great Britain, All rights reserved (0305-750X/96 $15.00 + 0.00 0305-750X(95)00159-X. Rural Credit Programs and Women’s Empowerment in Bangladesh SYED M. HASHEMI Jahangirnagar University, Dhaka, Bangladesh SIDNEY RUTH SCHULER and ANN P. RILEY* JSI Research and Training Institute, Arlington, Virginia, U.S.A. ‘Summary. — This paper presents findings from a st Advancement Committee (BRAC), two programs that provide credit to poor ru tudy of Grameen Bank and the Bangladesh Rural I women in Bangladesh. The programs were found to have significant effects on cight different dimensions of ‘women's empowerment, The authors use a combinati that the suecess of Grameen Bank, is particular, in em jon of sample survey and case study data to argue npowering women is due both to its strong, central focus on credit, and its skillful use of rules and rituals to make the loan program function. Copyright © 1996 Elsevier Science Lid 1, INTRODUCTION Microenterprise credit for women has become increasingly common as a poverty alleviation inter- vention in developing countries worldwide. The rapid expansion of these programs has been accompanied by a growing emphasis on achieving high repayment rates and promoting efficiency and financial sustain- ability. Other components such as social and political consciousness-raising, literacy training and skill development have been increasingly downplayed. Many of the most prominent examples of “minimal- ist” microenterprise credit programs for women are in Bangladesh. A number of them have been remarkably successful in providing financial services to poor rural women on a large scale, with relatively low and diminishing levels of financial subsidy. Critics of minimalist programs have argued that because of the patriarchal social structure in rural Bangladesh, programs that provide credit with mini- mal training or other supplementary support services do not empower their female participants and may even worsen their situations. Advocating more hol tic approaches, they maintain that strategies such as nonformal education, social and political conscious- ness-raising, or political organizing are needed to con- front patriarchal power structures, and that programs 635 organized around credit cannot achieve this goal They suggest that gender subordination can best be addressed by making confrontation of patriarchy. rather than credit, the focal point (e.g.. Goetz and Sen. Gupta, 1994; Hasan, 1985; Ahmed, 1982; Anisur Rahman, 1986; Nijera Kori, 1990; Casper, 1994). “The authors gratefully acknowledge the support provided by Population Action International, The Summit Foundation, The Rockefeller Foundation, and International Development Research Centre, Canada for this research. We are grateful to Professor Muhammad Yunus and Muzammel Hug of Grameen Bank, and Dr. Mushtaque Chowdhury and M. Ghulam Sattar of BRAC for the valuable insights that ‘emerged through numerous discussions, and tothe field stafT ‘of Grameen Bank and BRAC in Rangpur, Faridpur and Magura for their generous assistance, We are deeply indebted to our ethnographic Geld research team: Tofazzal Hossain Monju, Nurul Huda Chanchal, Rubina Ferdousi, Shamsul Huda Badal, Ashrafunnessa Tinni, Reaz Hossain, Dilruba Ahmed, Zakir Hossain, Laila Pervin, Shireen Akhter, Sharif Shamsher, Asan Habib Rumi, and Shamima Akhter. We thank the staf of Associates for Community and Population Research for carrying out the survey under the direction of Ghulam Mustafa Kamal, whom we miss a remember often, We are grateful to Amy Cullum for her assistance inthe statistical analysis. Final revision accepted: November 15, 1995636 Based on findings from a study of Grameen Bank and the Bangladesh Rural Advancement Committee (BRAC), two rural credit programs in Bangladesh, this paper argues that minimalist credit programs do empower women, The analysis uses a combination of ethnographic and sample survey data to describe and measure the effects of the two programs on eight dimensions and a composite indicator of empower- ment. It addresses issues of women’s control over credit and the relative magnitude of their economic contributions to their families’ support, and discusses differences in the approaches of the two programs. The authors argue that credit programs empower women by strengthening their economic roles, increasing their ability to contribute to their families’ support, and that they also empower women through, other mechanisms. Its consistent central focus on credit explains Grameen Bank's stronger effect on ‘women’s contribution to family support and on empowerment, The ritualistic, disciplined mode in which Grameen Bank, and t0 some extent BRAC, ‘operates strengthens the participants’ ability to control their assets and income, as well as helping them to establish an identity outside of the family, and giving them experience and self-confidence in the public sphere. 2. BACKGROUND Among the poor in rural Bangladesh, systems of patrilineal descent, patrilocal residence and purdah (the practice of secluding and protecting women to uphold social standards of modesty and morality) interact to isolate and subordinate women. Women are socially and economically dependent on men. Cultural norms are based on asymmetrical assump- tions regarding what is appropriate for each sex, what males versus females need, and what they are entitled to, Education is often considered irrelevant for girls, and at an early age they learn to accept deprivation rel: ative to male family members. Because of purdah many women are confined to the homestead and the area immediately surrounding it, and their contacts with the world outside of the family are extremely Fimited,! These social norms curtail women’s involve- ‘ment in market transactions and constrain their poten- tial to generate incomes, reinforcing their economic dependence. Grameen Bank and BRAC, through its Rural Development Program, with about two million and ‘over one-half million female members respectively, are the two largest and best known nongovernmental organizations providing credit to the rural poor in Bangladesh.’ Grameen Bank now works in half of all villages in rural Bangladesh. Both organizations started on a small scale in the early to mid-1970s. In their early years there was a distinct contrast in their WORLD DEVELOPMENT programmatic philosophies and strategies; Grameen Bank was first and foremost a bank for poor rural peo- ple, and BRAC 100k a more multifaceted approach to alleviating rural poverty, with a strong focus on con- sciousness-raising and nonformal literacy training. In recent years BRAC’s Rural Development Program has come to resemble Grameen Bank to a large extent. Both organizations, as they have evolved, have focused their programs increasingly on women, and have attempted to draw women out of isolation mainly by providing them with economic opportunities. BRAC has continued to try to involve men as well as ‘women to some extent, by establishing separate men’s groups, while Grameen Bank’s current program focuses almost exclusively on women, Both programs are believed to be contributing to social change, empowering women by drawing them out of their homes and strengthening their economic roles. ‘At the community level, BRAC and Grameen Bank have similar ways of working. Both organiza- tions employ large numbers of field staff, mostly young men, who live in the areas where they work ‘When a new branch opens the field staff visit nearby villages and explain that the program will provide credit to poor, landless women to support income- ceaming activities. In order to participate, and to be eli- ible to receive credit, women are asked to organize themselves into small groups. There is a mandatory savings requirement, and each woman has her own savings account and passbook. Loans are repaid and savings deposited at weekly meetings. Loans are made to individuals, at commercial interest rates. There is no collateral but the group as a whole is responsible to ensure that each member makes the weekly repayments. The participants themselves decide how t0 use the loans. In most cases the loans are used for self-employment activities such as paddy processing, poultry and livestock, traditional crafts and small trade, The average loan is about $75~100. Before receiving credit, new members must attend training sessions 50 that they understand the pro- ‘gram’s objectives and modes of operation. Grameen Bank has “Sixteen Decisions” having to do with self- improvement, social reform, and community develop- ment, which members must memorize and recite.* ‘Along the same lines, BRAC has “Seventeen Promises.” 3. METHODOLOGY AND DATA (2) Six-village ethnographic study Ethnographic research was undertaken in six vil- lages during 1991-94 to document processes of change both in women’s roles and status and in norms related to reproduction. The data were collected through participant observation and informal inter-RURAL CREDIT PROGRAMS 637 views, supplemented with various structured instru- ments, The researchers observed and documented the ‘two credit programs in operation at the village level and interviewed program participants. Grameen Bank as operating in two of the villages, BRAC was in two villages, and two of the villages had no credit pro- grams. ‘The study sites were purposively selected to include one area where both BRAC and Grameen Bank had been in operation for over six years, and one area where the programs were just starting; areas where both programs were operating in close proxim- ity were avoided. The general areas were identified with guidance from the central offices of the two orga- nizations, after deciding that the six villages should be concentrated in two groups to facilitate frequent inter- action with the local Principal Investigator.‘ Once the two geographic areas had been identified, village selection was influenced by availability of living accommodations for the researchers. This component of the study was intended to provide insights into the social processes through which normative changes come about; the villages were not intended to be rep- resentative of the geographic areas in which they are located, nor of villages with credit programs Although we had expected to find greater program impact in the older villages, it happened that they were located in an area of the country that is particularly poor and economically depressed; program perfor- mance (in terms of repayment of loans) and impact appears to be greater in the newer villages, where there are far more economic opportunities. The ethnographic team consisted of six women and six men. The team received intensive training in qualitative research methods at the beginning of the project, and the principal investigators provided con- tinuing informal training throughout the study, One male-female team resided in each village for a period of about two years, and made occasional visits during the following year. Their observations and interviews, focused in particular on a quasi-random subsample of 120 households (20 from each village), about half of whom were households of credit program partici- pants. The respondents were selected from poor fami- lies who were participating, or would have been elig- ible to participate, in BRAC or Grameen Bank's programs.> ‘A structured form (“household survival matrix”) was developed to collect detailed information at sev- eral points in time about the economic activities and earnings of members of the 120-household sample. The form also included information about children’s schooling and women’s participation in credit pro- grams, and households’ responses to crises and eco- nomic stress events such as weddings and other ritu- als, and major investments. Information was collected monthly for a period of one year. This information was supplemented with economic analyses of women’s microenterprises and information about control over various aspects of family enterprises and income (b) Sample survey of credit program participants and comparison groups A survey of about 1,300 married women under age ‘50 was conducted in late 1992, Four separate samples ‘were drawn, using a random multistage cluster design to include villages from all four geographic divisions of Bangladesh The four groups consisted of Grameen Bank members, BRAC members, nonmem- bers residing in the Grameen Bank villages (who would have been eligible to join either BRAC or Grameen Bank), and a comparison group who lived in villages with no Grameen Bank or BRAC program but who would have qualified to join the credit programs.’ In the credit program villages almost all the women hhad been members for at least 18 months prior to the survey. (See Schuler and Hashemi, 1994 for a more detailed discussion of the survey design.) The inter- viewers were all women who had previous experience in conducting demographic surveys. The survey included questions related to women’s roles and status, within the family and community, and fertility and contraceptive use. (©) Operational definitions of survey variables Developing valid and reliable measures of ‘women’s empowerment was one of the most difficult tasks of this study. Behaviors and attitudes that might be used to measure women's empowerment in one society may have no relevance in another. Even though the population of rural Bangladesh is relatively homogenous in terms of its language and cultural tra- ditions, many of the specific details of women’s lives vary because of small differences in social norms and because the geography, the physical infrastructure, and the configuration of social and economic opportu- nities varies from place to place. Nevertheless it was important to ask very specific questions because of the potential ambiguity of general questions. In this study series of questions related to a variety of different aspects of empowerment were developed through extensive observation, personal interviews with respondents in the ethnographic study villages and with credit program staff, and from baseline survey data.* (For more details see Hashemi and Schuler, 1993.) The responses were consolidated into eight indicators. The eight indicators were constructed as scale vari- ables. In two of these the components were given dif- ferent weights (the scores for making large purchases and involvement in family decisions): in the other six638 equal weights were assigned to all components. In ‘most instances weights were not used in creating the scales because of the arbitrary judgements that this ‘would have entailed (€.g., deciding chat buying hair oil is twice as meaningful as buying ice cream). In addi- tion, the layout of village paths and major roads, and ‘geographic variability in access to markets and facili- ties influences many of the behaviors that comprise the empowerment indicators, such as mobility and ‘making purchases in the market. Women living close to one particular market may have easy access to acer- tain set of goods and services while others might have to travel a considerable distance to get the same things; some villages have vendors who sell particular ‘goods door to door, making it easier for women to make purchases without violating purdak norms. In creating the empowerment indicators, therefore, we intentionally included a variety of specific actions or items in each one, and made minimal use of weights All of the operational measures of empowerment employed in this analysis reduce the empowerment data to dichotomous variables. The cutoff points for empowered versus unempowered were based on per- centage distributions for each dimension. Each mea- sure attempts to separate those women who stand out as being relatively more empowered than most other poor women, but does not single out highly unusual respondents. The cutoff point for empowerment was made at around the 25th to 30th percentile for most dimensions. The cutoff points were not difficult to decide on because in most cases a move down one space on the scale would classify more than half the respondents as empowered and a move up one space would exclude all but the top 10% or less.” We acknowledge that the concept of women’s empowerment is elusive for a variety of reasons (see Mason, 1984, 1987), and that the potential for struc- tured surveys to contribute to our understanding of it is inherently limited, Although the measures devel- oped in this study are the result of a long process involving extensive preliminary data collection, pretesting, reflection and discussion, at best they can only partially capture the phenomenon of women’s empowerment. The inherent shortcomings of the empowerment indicators, however, would tend to diminish the chances of producing statistically sign icant findings; itis unlikely that the multivariate mod- els using these indicators would overstate the relation- ship of either credit programs to empowerment or empowerment to contraceptive use. The operational measures of the survey variables are described below. ( Empowerment indicators ‘The eight indicators are: mobility, economic secu- rity, ability to make small purchases. ability to make larger purchases, involvement in major household decisions, relative freedom from domination within the family, political and legal awareness, and invoive- WORLD DEVELOPMENT ‘ment in political campaigning and protests. — Mobility: The respondent was presented with a list of places (the market, a medical facility, the movies, outside the village) and asked if she had cever gone there. She was given one point for each place she had visited and an additional point if she hhad ever gone there alone, A respondent with a score of three or better was classified as “empow- ered” and coded as one. (In all of the empower- ment variables “not empowered” was coded as zero.) — Economic security: One point was given if the respondent owned her house or homestead land, ‘one point for any productive asset, one point for having cash savings, and an additional point if the savings were ever used for business or money lending. A respondent with a score of two or better was classified as “empowered” and coded as one. — Ability to make small purchases: One point was given for purchasing small items used daily in food preparation for the family (kerosine oil, cook oil, spices), one point was given for purchasing sinall items for oneself (hair oil, soap, glass ban- gles), and one point for purchasing ice cream or sweets forthe children. For each of these types of purchases one additional point was given if the purchases normally were made without asking for the husband’s permission, and another additional point if the purchases were made at least in part ‘with money eared by the respondent herself. A respondent with a score of seven or better was con. sidered “empowered.” — Ability 10 make larger purchases: One point ‘was given for purchasing pots and pans, two points for children’s clothing, three points for saris for ‘oneself, and four for buying the family’s daily food. An additional point was given for each cate- gory if the purchase was made, at least in part, with money earned by the respondent herself. A respon- dent with a score of five or better was considered — Involvement in major decisions: One point was given for making a decision (individually or jointly ‘with the husband) within the past few years about house repair or renovation, one point for a decision to take in a goat to raise for profit, three points for deciding to lease land, and four points for deciding to buy land, a boat or a bicycle rickshaw. An addi- tional point was given for each category if money earned by the respondent was used. A respondent with a score of two or better was classified as smpowered” and coded as one. — Relative freedom from domination by the fam- ily: The respondent was asked if, within the past year, money had been taken from her against her ‘will; land, jewelry or livestock had been taken from her against her will; she had been prevented from visiting her natal home; or she had been pre-RURAL CREDIT PROGRAMS vented from working outside the home. A respon- dent was classified as “empowered” and coded as cone if she said that none of these things had hap- pened to her. Political and legal awareness: One point each was given for knowing the name of a local govern: ‘ment official, a Member of Parliament, and the Prime Minister, and one point each for knowing the significance of registering a marriage, and knowing the law governing inheritance. A respon- dent was classified as “empowered” if she had a score of four or five. — Participation in public protests and political campaigning: The respondent was classified as “empowered” if she had campaigned for a political candidate or had gotten together with others to protest: a man beating his wife, a man divorcing or abandoning his wife, unfair wages, unfair prices, misappropriation of relief goods, or “high-handed- ness” of police or government officials. — Composite empowerment indicator: A woman was classified as empowered if she had a positive score (was coded as one) on five or more of the eight indicators described above. i) Indicator of contribution to family support This variable was based on the woman's rough assessment of her relative contribution. A dummy variable was created in which women who said that al, most, half, or some of their family expenses were met through their own earnings were given a score of one. ‘Those who said they provided hardly any or none of their family’s support were given a score of zero. (iii) Exposure to credit programs Four dichotomous, mutually exclusive variables indicate whether the respondent was a participant in BRAC’s Rural Development Program, a Grameen Bank participant, a nonparticipant living in a Grameen Bank village, or a resident of a comparison village where no credit program existed. In all multivariate analyses the reference category is women from com- parison villages. Another variable measures duration of membership, converted from months to years. (iv) Controt variables The analysis included three control variables related to women's demographic and socioeconomic status, These are respondent's age (coded in single years), whether she had at least one surviving son/daughter (one if she had a surviving son/daughter, zer0 if not), religion (one for Hindu, zero for Muslim), whether she ever attended school (any schooling is ‘one, no schooling is zer0)."°an indicator of the relative economic level of the respondent's household (one if the house was made at least partly of concrete or had a tin or tile roof, zero otherwise), and the geographic division in which the respondent was living (at the 639 time of the survey the four administrative divisions were: Chittagong, Dhaka, Khulna and Rajshahi). (d) The issue of selection bias The potential to measure effects of credit programs on women's empowerment and other outcomes is lim- ited by selection bias because women who are rela tively innovative or empowered may be more likely than others to join credit programs. The statistic effect of participation in the programs, therefore, may be exaggerated." Inthe absence of longitudinal data it is important to identify factors that might be influ- enced by selection bias and adjust for these to the extent possible in multivariate analyses ‘A review of the background variables for the four groups (Table 1) suggests some selection bias, but that in most cases the differences between the four groups are not large. Women in both programs are two to five years older on average than nonmembers, and there- Fore, are more likely to have at least one surviving son or daughter. Women in both credit programs, but par- ticularly Grameen Bank, are more likely to have had some education. Although both the credit program participants and comparison groups are poor in that they come from families with little or no land or other productive assets, credit program members are less likely to be among the poorest members of their com- ‘munities than were women in either of the comparison groups. (Some of the difference in wealth may be a result of participation in the credit programs. ) Our sta- tistical models partially adjust for selection bias by controlling for age, education, relative wealth, reli- gion, geographic division and surviving sons and daughters We acknowledge, however, that women who are already relatively more empowered for reasons unre~ lated to the control variables may be more likely to join credit programs and, therefore, selection bias may exaggerate a statistical relationship between pro- ‘gram participation and empowerment. In addition to controlling for the respondents’ demographic and socio-economic characteristics in the multivariate regression models, this study attempts to address the possibility of selection bias in other ways. One is by including nonparticipants as well as participants in Grameen Bank villages and comparing them with ‘women residing in villages where the program is not operating. In a previous analysis (Schuler and Hashemi, 1994), participants and nonparticipants, were combined and compared with residents of villages without credit programs, in order to look at village-level effects. In addition, a_membership duration variable tests whether the effect of credit programs on women’s empowerment increases over time. That women who are more empowered also may be more likely to join a credit program is40 WORLD DEVELOPMENT ‘Table 1. Percentages and means of study variables by exposure to credit programs, married women aged less than 50, Bangladesh Grameen Bank BRAC Grameen Bank Comparison members members nonmembers sr0up Mean age (years) 109" 316.) 268.1) 207) Mean numberof surviving cildsen 35(18) asQ 240.7) 3020) % with one or more surviving sons 8 » 6 * % with one or more surviving daughters 82 81 @ n % Ever attended school » 2B 18 8 5% Poorer households 43 39 9 6 % Chitagong division 19 10 2 1s % Dhaka division 30 49 3 8 5% Khulna division 9 2 0 16 4% Rajshahi division 2 20 “4 2 Contributes to family suppor n 40 2 20 Mean duration of eredit program membership (years) 3.9(24) 3741.7) wa a 4 Beaten by husband inthe past year ° B 21 n 4 Classified as empowered on: Mobility 30 2 29 21 Economic security 3 39 14 13 Small purchases ot % 21 9 Large purchases 48 “4 24 7 Major decisions 9 2 21 7 Political/Legal awareness 34 38 15 18 ProtesuCampaign 2 36 15 2 Freedom from domination B 8 %6 74 ‘Composite empowerment a 32 10 3 Nofeases 284 2m 3is 304 Standard deviation, expected, but a significant duration effect would strongly suggest that credit programs further empower the women who join them. The analysis also adjusts for geographic division because both credit programs began operating in different parts of the country at different times. Thus, duration may function as a proxy for division as well as indication length of time in the program, (e) Analytical procedures The analysis begins with the sample survey data, using logistic regression models to explore whether Grameen Bank and BRAC affect different dimensions ‘of empowerment. The frst set of models examines the effects of exposure to BRAC’s and Grameen Bank's credit programs and the sociodemographic variables on the eight aspects of empowerment, the aggregate empowerment indicator, and women’s contribution to family support. In the next set of models contribution to family support is used as an independent variable. In these models interactions between credit program participation and women’s contribution to family sup- port are also examined. Predicted probabilities from the model employing the composite indicator of ‘empowerment are calculated to illustrate the levels of ‘empowerment experienced by women participating in credit programs and those contributing to family sup- port compared with women who are neither in credit programs nor contributing Next the paper tums to data from the six-village ethnographic study. Economic case studies, bivariate analyses and qualitative findings are used to explore further the question of how credit empowers women, starting with effects on women’s economic roles and proceeding to discuss other aspects of women’s lives such as physical mobility, interactions in the public sphere, and domination and violence within the household. 4, SURVEY FINDINGS AND DISCUSSION (a) Effects of credit programs on eight dimensions of empowerment and women’s contribution to family support The logistic regression models summarized in Table 2 examine how women’s exposure to credit pro-RURAL CREDIT PROGRAMS oat grams affects each of the eight empowerment indica- tors, the composite empowerment score, and women’s; contribution to family support. Each row in the Table represents a separate regression model: the dependent variable is identified along the horizontal axis of the table, Findings are presented as odds ratios and their 95% confidence intervals for key variables. Odds ratios greater than one indicate positive relationships between the independent and dependent variables; those less than one indicate negative relationships Statistical significance (p < 0.05) is indicated when the confidence interval does not contain 1.0, The mod- els also adjust for the sociodemographic characteris- tics discussed above, but because we are not con- cemed here with the magnitude of their effects on empowerment, and in the interest of parsimony, their estimates are not shown, The effect of membership duration in either pro- gram is shown in column 1. Duration is statistically significant for three of the eight empowerment indica- tors: ability 10 make small independent purchase involvement in major family decisions, and participa: tion in political campaigns or public protests; it is nearly significant for mobility. In addition, the odds ratio for membership duration is significant in the models with contribution to family support and the composite empowerment score as the dependent vari- ables. These findings demonstrate that the longer a woman is a member of either BRAC or Grameen Bank, the greater the likelihood that she will be empowered based on these indicators, and the more likely she is to make a substantial contribution to her family’s support." Even controlling for membership duration, partic- ipation in BRAC and Grameen Bank and, in a few cases, being anonmember in a Grameen village, bas 2 Significant effect on women’s empowerment. These findings may result from several relationships which we cannot separate statistically with our cross-sec- tional data. The residual program effect may result in part from selection bias because, as noted earlier, ‘women who are relatively more empowered probably are more likely to join a credit program than others. It is also possible that the programs have an effect on. some aspects of empowerment soon after a woman joins, with little additional effect thereafter. Our abil- ity to adjust for duration of membership was con- strained by the fact that (with the exception of a few women who joined between this survey and a previ ‘ous one) all women had been involved in Grameen or BRAC for a minimum of 18 months when the survey was conducted. Hence, the models cannot take into account program effects that may occur within a short time after joining. Differences between the two credit programs in the relative magnitudes of the odds ratios may indicate their relative strengths and weaknesses in empowering women or possibly that the programs are differentially selective in recruiting members. Data from our ethnographic research, presented later in the paper, describe differences in the styles and modes of operation of the two programs which account to some extent for the apparent differences in the two programs’ effects on participants Columns 2 and 3 in Table 2 show that (adjusting for duration of the women’s participation in the programs) each of the credit programs has a signif- icant effect on five empowerment dimensions, of which four overlap. Grameen Bank alone has a siz nificant effect on women’s involvement in major decisions within the family, and BRAC alone has a significant effect on women’s mobility. Both pro- grams significantly influence women’s economic security, ability to make small and large purchases, politicalMegal awareness, contribution to family support, and the composite empowerment score. In most cases where both programs have a significant effect on the same outcome, the odds ratios for Grameen Bank are larger. most notably for contri- bution to family support. BRAC, however, has a greater impact. on political/legal awareness. Residence in a Grameen Bank village (for nonmem- bers) has a significant influence on mobility, ability to make large purchases, and the composite empowerment score, but in all cases the odds ratios are lower than for the nonmembers than for Grameen Bank and BRAC members. This suggests either selection bias related to program placement on the part of Grameen Bank, or a spill-over effect of the program. Again, we are unable to separate the two possible causes with these data. As noted ear- lier, lack of an additional comparison group of nonmembers in BRAC villages prevents a like com- parison for that program. Although one would assume that women who are relatively more empowered to begin with are more likely than others to join credit programs. the signifi- cant effect of membership duration on several of the empowerment indicators and the composite empow- erment score indicates a true program effect. Once a woman has joined a credit program, her level of empowerment is likely to increase. Tt appears that Grameen Bank has a stronger effect than BRAC in empowering the women who participate, although selection bias may influence the relative magnitude of the effects of Grameen Bank versus BRAC to some extent (b) Effects of contribution to family support on empowerment The contribution to family support variable serves as acrude indicator of women’s control over their loan funds. This is distinet from access to resources (Mason, 1986) which is conveyed by extending loans to women, In our survey women were asked what pro-WORLD DEVELOPMENT. on 14Bowp Burains“suos Zu ans “a wor8ya1 “yavan 99} 2] woreanp2 40} asnfpe SPOR, (eve 'eco) (eee ure 780) (er wt ssouaseme [e83yp seo ‘qu &q pareumtuop 10N, orl suoisioap sey, ste soseyoind 28:27 oz soseypund yews 087 9L1 [eas ones eaoiuy s2uap4yuo3, spPO. aouapysuo9, 456 456 ‘voreoqpu wuauiramoduig dno oqurouuou sequisu ‘aqqeuea mapusdac wosuredwo. ‘wou, ovus © © 3) saqqeuen mapucdopuy jou uoses3at4 Pu suorsuotutp tuousrnodue 1812 Wo sumiSosd p249 01 aunsodse fo swaffy ~t 219%) wouf sipssanay a>uapifuor a6 pun souns sppo csuoddns &runf 07 wo}RURAL CREDIT PROGRAMS portion of the family's expenses were met through their own independent earnings, and in the sequence of questions it was clear that the interviewer did not consider credit program loans (which have to be paid back) as part of earnings. All women who receive a Joan gain access to additional resources, even if their husbands appropriate the money, but not all women succeed in controlling their loans and using them to generate independent incomes. The next series of models, summarized in Table 3, examines the effect of women’s contribution to family support on the empowerment measures, and shows, hhow its addition to the regressions changes the adds ratios for the credit program exposure variables (Grameen Bank membership, BRAC membership. and membership duration) shown in Table 2 ‘Table 3 is divided into two parts because for two of the empowerment domains and the composite score there was a statistically significant negative interac- tion between contribution to family support and par- ticipation in acredit program. The interactive effect of credit program membership and contribution likely reflects the intermediate position of contribution rela- tive to credit programs and other dimensions of empowerment: credit programs increase women’s ability to contribute to family support, and both fac- tors lead to greater empowerment of women. Part A of Table 3 presents the odds ratios and 95% confidence intervals for contribution to family sup- port, Grameen Bank, BRAC, and membership dura- tion. Their interpretation is identical to that in Table 2, bat contribution is now an independent rather than a dependent variable in each model. The models shown in Part B include a multiplicative interaction of conti bution to family support and membership in a credit program." The interpretation is somewhat different in Part B (except for column 1, membership duration) than in Part A because the reference category is now “not in a credit program and not contributing fo family support.” In column 4, Part B, for example, the odds ratio of 7.61 for small purchases indicates that among ‘women who are not in either credit program the odds, of being empowered for this indicator is over seven mes greater for contributors than for noncontribu- tors, Likewise, the odds ratio in column 5, Part B, for small purchases shows that women who are in Grameen Bank and contribute to family support are more than 11 times as likely to be empowered on the small purchases dimension than women who are not in a credit program and do not contribute. ‘Women’s contribution to family support has a sig- nificant effect on all the empowerment dimensions except for two (relative freedom from domination by the family, and political/legal awareness), and on the composite empowerment score. The strongest effect of contribution to family support on empowerment ‘occurs in the three models with small and large pur- chases and the composite empowerment score as the 6a dependent variables, models which also include the significant interaction between contribution and credit. For these three empowerment measures the ‘odds ratios for women who both contribute to family support and participate in credit programs are large and highly significant The addition of contribution to family support to the models in Table 3 reduces the credit program para. ‘meter estimates shown in Table 2 in most cases, sug- esting that the effect of credit programs on women’s empowerment comes about, at least in part, because credit programs create opportunities for women to earn independent incomes. When the contribution to family support variable is included (in Table 3) the effect of membership duration is somewhat reduced for seven of the empowerment variables, and falls below the 0.05 significance level in one case; it does not increase notably for any dimension of empower- ‘ment, Most odds ratios for Grameen Bank are consid- erably lower in Table 3 compared with Table 2 (for BRAC some odds ratios decrease and others increase). With the exception of the model with rela- tive freedom from domination by the family as the dependent variable, model fit is significantly improved by the addition of the contribution to family support variable. This suggests that women who earn independent incomes and contribute to their families’ support are likely to be empowered regardless of ‘whether this isa result of their involvement in a credit program, (c) Predicted probabilities of empowerment ‘The discussion now turns to the potential magni- tude of impact of a credit program or other economic opportunity on the life of an individual woman, Using, the composite empowerment score as the dependent variable, probabilities of empowerment were calcu- lated for hypothetical “typical women” with six dif- ferent profiles: (i) women who neither belong to a credit program nor contribute to family support, (ii) BRAC members who do not contribute to family sup- port (either because their husbands appropriate their loans, or they do use the loans successfully to generate income or, in a few cases, because they have not yet received a loan), (ii) Grameen Bank members who do not contribute, (iv) women who contribute but are not in a credit program, (v) BRAC members who con- tribute, and (vi) Grameen members who contribute. We defined a typical woman as one who holds aver- age for all other variables employed in the regression models.'* Figure 1 shows the predicted probabilities of empowerment for women with the six different pro- files. The most striking feature of the figure is the extremely low probability of empowerment (about 2%) for women who are neither in a eredit programWORLD DEVELOPMENT “woddas kjurey 01 aInqqnue> 10u op oy ue surEsBoud paso UI Sunedionzed YOu aBF OY UOWOM Jo caesoud uu pur ‘uoddns {yume 0) uonngunuos “uorstarp sxydedoo8 “sorynep Suratssns ‘sos Sutatasns ‘28e -“voddns fjquryy 0) uonnguniuos pue ‘uorstap aydexood ‘s1onyoup Suanns jab yneom ontejan ‘oivy4 wresfoud yparo ut aH] OU op oy uouiow Jo su09 Kore auasapaAs na Ut dysioquiaur pu woddns >H=PYUED SPO 486 56 556 3556 a Guoddng fuejor—— §uoddng Aes or sKu0 ‘quo (om94) uoneanp wonnquive:) pur yu uoNngeNueD = AD ova syuvg uaouress (rz'sLO) 9zL PTO SRO ssovoxdnutiedure, (sor'or) 82 — (L6T'8GO) OT ssauareie re@ayteonog Gsl'rO 980 (PTL ET Ausey 6q pareuswop 10N, GETS BEL SPOS 99 suorsioag sole wD BZ (809 ore, Ananoos stasouora L786 91 OOTESO HO. eum —omes—=yeasouu = ones eaionmy = ones eauonuy ons eouapUeD — SPPO._—20U0pYTIO —SPPO.—F9URPLIUE SPP. sOUAPLIUe PPO. 86 686 56 656 v saquiou equa (m4) voneanp Jove surg uso daysiaquioyy ©) @ ) nf syouuara aouoprfuod 12 wo aansods wasoud 11p219 pup oddns §junf 04 won yunu02 fo PaHFT € AACRURAL CREDIT PROGRAMS 645 04 Boz I ° tL Sf, - # e a pee ys tors, and combinations, Control variables set at average values (see nore 15). nor contributing to their family support. The probabil- ity of empowerment is eight to 12 times as high for a woman who is contributing to family support or involved in a credit program (and not contributing) This suggests that although credit programs empower ‘woman in large part by strengthening their economic roles, women can become empowered even when this does not happen. In comparison, women in Grameen Bank who also make independent contributions 0 family support have a 45% chance of being empow- ered, over 20 times that of women who neither belong toa credit program nor contribute to family support The situation of the majority of women in rural Bangladesh is best represented by the first profile. Most women do not earn independent incomes that would enable them to contribute to their families’ sup- port (only 20% of the women in our comparison group were contributing), and they do not have the opportu- nity to participate in a credit program, Figure I high- lights the enormous potential impact of credit pro- grams and other economic opportunities for transforming women’s lives. Putting women’s contti- bution to family support and involvement in credit programs in separate analytical categories, however, diverts attention from the fact that a large proportion of the women in the survey are contributing to their families’ support as a result of the credit programs. Seventy-four percent of the Grameen Bank members and 66% of the BRAC members said they used pro- gram loans to initiate economic activities that they ‘were not involved in prior to joining the credit pro- gram. In the sections that follow we tum to the ethno- graphic findings to explain more specifically how Credit programs empower women — to what extent it is the credit per se as opposed to other aspects of par- ticipation in the programs. We focus first on issues related 10 women’s economic positions within their families, and then on other aspects of their lives. 5. THE MAGNITUDE OF WOMEN’S CONTRI- BUTIONS TO FAMILY INCOME The multivariate analyses demonstrate that ‘women’s contribution to family support is an impor- tant intermediate variable explaining the effects of credit programs on women’s empowerment, but they do not assess the magnitude of this contribution. The difficulty of obtaining reliable estimates of income in structured surveys, particularly in populations with varied and inconsistent sources of income, is widely recognized. Therefore we did not attempt to collect this information in the random sample survey. Instead, data from case studies of the 120 households in our six village ethnographic sample were used to estimate ‘women’s incomes, household incomes and, in the four credit program villages, the relative impact of pro- {gram loans on household incomes. Information was collected monthly for each household, and women’s incomes and incomes derived from loan investments were recorded separately. ‘Although these case studies add a level of detail that would be difficult if not impossible to obtain using a highly structured survey questionnaire, the number of cases is relatively small and not representa- tive of any larger population. Twenty household case studies were done in each of the six villages. In order to obtain equal numbers of credit and noncredit house holds, only five households of nonmembers were included in each of the four credit program villages. Given wide variability in economic circumstances among the villages, the sample is not large enough to make valid comparisons between villages, or between credit program members and nonmembers. Other recent studies suffer from similar methodological lim- itations as our ethnographic work — that is, they are based on small and unrepresentative samples, Such data can provide insights into the mechanisms through, which credit programs affect individual lives and, arguably, act as catalysts in altering gender relations, within families and local communities. The data need to be interpreted with caution, however, and the results should not be extrapolated to represent all women involved in credit programs, nor any other population. The case studies from the four credit program vil- lages reveal considerable variability in women’s rela- tive contributions to family income. For the one-year period from April 1992 to March 1993, the average6, income generated by women in credit program house- holds ranged from less than 5% of household income in one village to over one-quarter in another, out of an average cash income of a little over $300, Although ‘one woman contributed over three-quarters of her family’s income (her husband was ill and unable to work for several months), in most households ‘women’s relative contribution represented less than one-third. Average family incomes tended to be lower in households with both male and female income eamers, as opposed to households dependent on ‘men’s earnings alone. In addition, there was a ten- dency for women’s contribution (both relative and absolute) to be higher in the poorest households. This suggests that it is the poorest, most desperate families that, given the opportunity, are more willing to stretch ‘purdah norms and take the social risks entailed when ‘women engage in wage or self-employment. Two of the credit program villages were in Rangpur District, one ofthe worst areas of the country in terms of economic activities and loan repayments ‘The other two were located in the better-off Faridpur- Magura region, but this was a relatively new area for both Grameen Bank and BRAC, and the participants were only in their second or third loan cycles. The income from credit program loans and the relative contributions to family income of program partici- pants in our sample, therefore, probably were below average, In another recent study of women who had been involved in the Grameen Bank program for over 10 years, in the more prosperous Tangail region, it was reported that the women contributed 54% of total houschold earnings (Todd, 1995). Forty-one percent of this, however, came from borrowing and 19% came from shadow estimates of the cash value of women's unpaid labor contributions at harvest-time. If the amounts from these two sources are excluded, ‘women’s contributions amount to approximately one quarter of all houschold income, about the same as we found in our best-performing village. (In our estimates of incomes the loan money itself was not treated as part of income, and we did not include estimates of income in kind.) Our recalculation of Todd's figures ‘on women’s contributions to family income probably provides a reasonably accurate picture of what can be expected under favorable circumstances, with some ‘women contributing more, and some less in rel terms, depending upon the level of their husband's contribution and the success of their own enterprises. In villages where conditions are less favorable, and limited economic opportunities and social barriers interact to severely restrict women’s involvement independent enterprises, their relative cash contribu- tions drop to almost nothing, Our survey findings also suggest that women's rel- ative contributions to family income tend to be mod- est. Although involvement in credit programs, and particularly in Grameen Bank, has a dramatic effect WORLD DEVELOPMENT ‘on women’ s ability to make a recognized, cash cont bution to their families” support, in most cases these contributions are not large. While 72% of the Grameen bank members and 40% of the BRAC mem- bers in the survey were classified as “making a sub- stantial contribution to family support,” only 26% of Grameen and 12% of BRAC members said that they contributed enough to cover half or more of the fam- ily’s expenses. (In the comparison sample only 4% of the women contributed half or more.) ‘There are two reasons why women’s contributions to household incomes in Grameen Bank and BRAC hhouscholds tend to be so much smaller than men’s First, activities that are primarily controlled by women (such as raising poultry or livestock) are home-based and typically generate only modest amounts of income compared with the daily wage work, services and petty trading activities that men engage in. Second, credit is not used exclusively for women’s enterprises. Grameen Bank and BRAC loans often are invested in more profitable family enterprises or enterprises run by male family members (trading, pulling rickshaw vans), where cash transac- tions typically are conducted by men and where vis ble incomes are attributed to men, In the program- ‘wide sample survey the respondents who had received ‘one or more loans were asked who used the money from each loan. Only 10% of the BRAC members and. 9% of the Grameen Bank members said that they used all oftheir loans exclusively to finance their own eco- nomic activities. But 70% of the Grameen Bank mem. bers and 47% of the BRAC members said that they had used all of the loans that they received at least in part for activities in which they were involved. ‘While the amount that most women in credit pro ‘grams contribute to family incomes is typically small, under conditions of extreme scarcity this small amount of income makes a significant difference to a family’s well-being. It often means that a family can eat two meals rather than only one meal a day during the lean season, or eat one meal a day rather than going. hungry if the husband falls ill and can't work. Often the very poor are reduced ( selling their homestead, the roof, the house posts, and even their cheap alu- rminium cooking pots to survive illness, injury, natural disasters or other crises. Regular access to small amounts of credit often helps families to avoid such distress sales. 6, WOMEN’S CONTROL OVER THEIR ENTER- PRISES AND INCOMES Several studies have pointed out that women in credit programs do not always retain full control over their loans, and that they may not be the managers of the funded enterprises (R. Rahman, 1986; White, 1992; Goetz and Sen Gupta, 1994), This raises twoRURAL CREDIT PROGRAMS questions: first, how much control do Grameen Bank and BRAC participants have over their loans and eco- nomic enterprises; and, second, can credit programs empower women who do not control their loans, The multivariate analyses presented earlier suggest that ‘women with litle or no control over their loans (those who do not contribute to family support) are more empowered than nonmembers. Our ethnographic study explored these issues in detail. Monthly inter- jews of the 60 credit program participants from four villages included a series of questions to elicit the extent of the female loan recipients’ control over the loan money and of their roles in managing the funded activities. The extent of women’s control was catego- rized as none, partial, significant or full for each sepa- rate activity funded through program loans. “Full con: trol” meant control over every aspect of the enterprise including marketing. “Significant control” meant that women were keeping accounts and had control over funds but were not involved in market transactions. “Partial control” referred to women having some knowledge of accounts and having some access to the incomes generated. Table 4 suggests that women’s, control over loan-funded activities varies consider- ably. In one BRAC village, for example, none of the women had any control. At the other extreme (another BRAC village), 70% had full o significant control. In the Grameen villages 27% and 63% had full or signif: icant control, This compares with findings from R. Rahman's study (1986), indicating that three-quarters of the women had significant control over the enter- prises funded by Grameen Bank loans, and Goetz and Sen Gupta’s study (1994) stating that 62% of Grameen women and 28% of BRAC women have full or significant control, Contrary to Goetz and Sen Gupta’s (1994) con- tention that women in minimalist credit programs fail to establish control over their loan-funded enterprises, we conclude from our own research and Rahman's and Goetz and Sen Gupta's studies that Grameen Bank's minimalist strategy is quite effective in foster- ing women’s control over microenterprises. The lower figure of 28% who controlled their microenter- prises in the Goetz and Sen Gupta study referred to their BRAC sample, the less “minimalist” of the pro- grams they studied. Their figure of 62% female con- trol over microenterprises, our calculation of 63% in the newer Grameen Bank village, and Rahman's fig- ‘Table 4. Women’s control over funded enterprises None Panial Significant Full Old GB village 8% 9% HB Old BRAC village 100% 0% = 0% =O New GB village 18% 18% = 36% ©2796 New BRAC village 20% 10% 10% 6 647 ure of 75% are probably quite typical for Grameen Bank. Judging from Goetz and Sen Gupta’s data, BRAC appears to be less successful in enabling its members to maintain control over the use of their loans. Our finding (from the program-wide sample survey) that 72% of Grameen Bank members, but only 40% of BRAC members, make a substantial contribu: tion to their family's support is consistent with this conclusion. In the older BRAC and Grameen villages, where the credit programs had been in operation for about eight years, far fewer women had control over the enterprises funded through the loan programs (Table 4). This might suggest that women lose control as time passes. Goetz and Sen Gupta (1994), for exam- ple, found that the degree of women’s control over their loans steadily increased but then started to decrease after women had been in the program for six years or more. It is possible that women who success fully build up a small enterprise by investing their loan funds reach a point after a few years at which they can no longer profitably expand, and subsequently make their loan funds more and more available for their hus- bands’ use. Todd (1995) suggests that since men's enterprises are often mote profitable than women’s, investing loans in men’s activities may be a rational strategy for a woman. While this may be true under some circumstances (depending in part upon what the ‘man does with his profits), this pattern was not evident in any of the villages in our study. The villages where ‘women exercised less control over loan-funded enter. prises were in an economically depressed area, Opportunities for women to eam independent incomes were very limited, and competition for eco- nomic resources was intense. It appears that in situa- tions where resources and opportunities are extremely scarce, men are more likely to appropriate women’s loans and incomes. ur case studies suggest that women’s financial control over funded enterprises tends to be greater when loans are used for poultry or livestock, reflecting. women’s traditional involvement in homestead-based activities and the perception of poultry and livestock as something that can be owned by women. Paddy trading generally refers to women parboiling, drying and cleaning the grain, with men engaging in buying and selling and taking the grain to the mill. In cases, where loans were used for petty trade, the extent of ‘women’s involvement varied; in some cases they were not involved at all, and in others they did everything, including the marketing. Most often, however, in joint enterprises women do the home-based productive work, such as making puffed rice or sweets, and men sell the products at the local market or from door to oor in the village. Although our sample survey did not include spe- cific questions regarding control over loans and loan- funded enterprises, we did ask about use of loans. The648 results are consistent with the finding that Grameen members are more likely than BRAC members to exercise significant control over the use of their loans. As noted above, 70% of the Grameen Bank members, used all of their loans to finance microenterprises which they alone or they and their husbands both were involved, compared with 47% of the BRAC members. Only 9% of the Grameen Bank sample, but 24% of the BRAC sample, relinquished all of their loans to their husbands or other relatives, Even the credit program participants who never used a loan to finance their own economic activities, however, were considerably more likely to be empow ered than women who were not participating in credit programs (Table 5). OF the women who received Grameen Bank or BRAC loans and used all or some of them to finance their own activities, 49% and 54% respectively fell into the “empowered” category. Among the women who were members of Grameen or BRAC but gave all of their loans to their husbands or other relatives, 36% were empowered, compared with only 15% and 9% in the two comparison groups. This is consistent with our interpretation of the predicted probabilities of empowerment shown in Figure | While levels of empowerment appear to be highest among women who maintain control over their loans, and use them to generate independent incomes, partic ipation in credit programs is empowering to some extent even for women who merely provide access to capital for their husbands or other family members, or use the loans for consumption needs. Table 5. Percentage empowered by loan use N empowered All loans used for own ot joint activities 308 49 Some loans used for own of joint activities 109 s4 No loans used for own of joint activities 80 36 No loans (Nonmember in Grameen villages) ais Is No Toans (No credit program in village) 394 9 7. NONECONOMIC DIMENSIONS OF WOMEN’S EMPOWERMENT Ethnographic case studies in villages where BRAC. and Grameen are working show that even women who are used by their husbands to get access to loan funds, often benefit from credit programs. It is unusual for ‘women to participate in any nonfamily group activity. especially when this entails contact with adult men to WORLD DEVELOPMENT ‘whom they are not related by blood or marriage. Most ‘women probably would not be permitted to join if the programs only provided educational or social bene~ fits. But the prospect of getting access to credit induces families to let the women participate. ‘Through the rituals of participation. and the con- tact with other members of their credit group, the women develop an identity outside of their families ‘They interact with men outside of the family and with authority figures, and this increases their self-confi- dence. Several of the women in the ethnographic study told the ficld investigators that through Grameen Bank they had “learned to talk.” and now they were not afraid to talk to outsiders. In both pro- grams some members have the opportunity to play leadership roles. One woman told the researchers, “I have been made the Center Chief. Now all ofthe other ‘women listen to me and give me their attention Grameen Bank has made me important.” Such state- ments convey a sense of self-worth and confidence that is atypical of women in rural Bangladesh. Grameen’s “Sixteen Decisions” and BRAC’s “Seventeen Promises.” help to instill a greater aware- ness of social and potitical issues. This appears to be tue even for Grameen Bank members who typically do little more than to memorize and recite these vows. In BRAC there is somewhat more emphasis on dis- cussing them, Both programs increase women’s ‘mobility within their villages by requiring that they attend weekly meetings. They also create opportuni- ties for women to travel outside of their villages, by requiring some visits to the local program office, and through occasional training programs. Another benefit for the credit program participant is that, even when she hands over her loan money to her husband, the family realizes that she is the source of this income, This inereases her status and bargain- ing power in the household. Among the 60 BRAC and Grameen Bank members in the ethnographic study there were women told the researchers, unprompied, that other members of the family were kinder and more respectful around the time that they were sup- posed to receive a new loan. In some cases the hus- band or other family members provide assistance with cooking, childcare or other domestic tasks to make it easier for the Grameen Bank participant to attend meetings. Some of the women in the study perceived a decrease in physical violence against them around the time of credit group meetings. One woman thought her family was worried that she might retaliate by refusing to get another loan. In two cases the women attributed this to the family’s fear of public exposure (others might see the bruises or wounds, or she might say something in public). One woman told the researcher, In the past my father-in-law would never stop my hus: band from beating me. But after I joined Grameen Bank