Small loans for women, often organised in groups, to build their own businesses – that’s a standard model of microfinance, and many microfinance organisations are focused on women. In fact, it used to be the case that 95 percent of Grameen Bank’s borrowers were female.

Through the establishment of self-owned businesses which provide an independent income stream, it is theorised (or often simply claimed) that women will be empowered thanks to microcredit. A compelling argument it is, but the evidence, sadly, is thin.

Many men send their women to obtain loans which they themselves would not be eligible for, as Weber (2002) found. Thereupon they allocate the loan within the family as they see fit, possibly buying a rickshaw which they themselves pull, or on-lend to a relative with an existing business. However, if repayment becomes a problem, it is the woman who is held responsible by the microfinace organisation, and is then subject to legal and social sanctions.

Other researchers, such Kabeer (2000) found that the effects on social roles are ambiguous. Many women, especially the better-off, were found to use their loans in order to withdraw from public life. By using microloans to shift from the market to non-market activities by producing at home, Bangladeshi women removed themselves from the public sphere in order to better conform with traditional purdah norms. In this sense, microcredit often did increase their levels of economic activity and somewhat raise their sense of self-worth, but these women remained bound to their traditional gender roles.

Ethnographic research in Nepal found that increased economic activity did not automatically convey social status, but rather depended on the status of male relatives. And in the U.S.A. – where microfinance too has been adopted as an empowerment tool – women tended to remain locked in traditional ‘female’ activities which produced the lowest financial gains: domestic services, arts and crafts, catering (Rankin, 2001; and Bachrach Ehlers/Main, 1998).

I’m very weak on gender theory and hardly feel capable of getting involved in a debate about how to facilitate “real” empowerment. But I know that it’s a social issue more than a private, household-level one, yet precisely this is the level microfinance seeks to work at. If anything, the facts here should shed some doubt onto the common script that microfinance is the single best means for emancipating women from patriarchal relations.