Rural credit programs and womens empowerment in bangladesh
1. Pergamon
WorldDevelopment, Vol. 24, No. 4, pp. 635-653, 1996
Copyright 0 1996 Elsevier Science Ltd
Printed in Great Britain. All rights reserved
0305750X/96 $15.00 + 0.00
0305-750x(95)00159-x
Rural Credit Programs and Women’s Empowerment in
Bangladesh
SYED M. HASHEMI
Jahangimagar 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 study of Grameen Bank and the Bangladesh Rural
Advancement Committee (BRAC), two programs that provide credit to poor rural women in
Bangladesh. The programs were found to have significant effects on eight different dimensions of
women’s empowerment. The authors use a combination of sample survey and case study data to argue
that the success of Grameen Bank, is particular, in empowering 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
0 1996 Elsevier Science Ltd
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 holis-
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
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 Centm, Canada for this research. We
are grateful to Professor Muhammad Yunus and Muzammel
Huq of Grameen Bank, and Dr. Mushtaque Chowdhury and
M. Ghulam Sattar of BRAC for the valuable insights that
emerged through numerous discussions, and to the field staff
of Grameen Bank and BRAC in Rangpur, Faridpur and
Magura for their generous assistance. We are deeply
indebted to our ethnographic field research team: Tofazzal
Hossain Monju, Nun11 Huda Chanchal, Rubina Ferdousi,
Shamsul Huda Badal, Ashrafunnessa Tinni, Reaz Hossain,
Dihuba Ahmed, Zakir Hossain, Laila Pervin, Shireen
Akhter, Sharif Shamsher, Ahsan Habib Rumi, and Shamima
Akhter. We thank the staff of Associates for Community and
Population Research for carrying out the survey under the
direction of Ghulam Mustafa Kamal, whom we miss and
remember often. We are grateful to Amy Cullum for her
assistance in the statistical analysis. Final revision accepted:
November 15.1995.
635
2. 636 WORLD DEVELOPMENT
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 to 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 purduh
(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
1imited.r 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
programmatic philosophies and strategies; Grameen
Bank was fist and foremost a bank for poor rural peo-
ple, and BRAC took 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-
earning activities. In order to participate, and to be eli-
gible 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 to 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 so 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
(a) 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-
3. RURAL CREDIT PROGRAMS 631
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
was 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.4 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
programs5
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.6 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
had 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.
(c) 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
4. 638 WORLD DEVELOPMENT
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 (e.g., deciding that 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 a cer-
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 purdah 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.9
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 signif-
icant findings; it is 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.
(i) 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 involve-
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
ever gone there. She was given one point for each
place she had visited and an additional point if she
had 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, cooking
oil, spices), one point was given for purchasing
small items for oneself (hair oil, soap, glass ban-
gles), and one point for purchasing ice cream or
sweets for the 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 earned by the respondent herself. A
respondent with a score of seven or better was con-
sidered “empowered.”
- Ability to 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
“empowered.”
- 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
“empowered” 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-
5. RURAL CREDIT PROGRAMS 639
vented from working outside the home. A respon-
dent was classified as “empowered” and coded as
one 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 govem-
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.
(ii) Indicator of contribution tofamily 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 all,
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) Control 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,
zero if not), religion (one for Hindu, zero for Muslim),
whether she ever attended school (any schooling is
one, no schooling is zero),lOan 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
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 statistical
effect of participation in the programs, therefore, may
be exaggerated.” In the 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.i2 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
6. 640 WORLD DEVELOPMENT
Table 1. Percentages and means of study variables by exposure to credit programs, married women aged less than 50,
Bangladesh
GrameenBank BRAC Grameen Bank Comparison
members members nonmembers group
Mean (years)age 3 1 (7.9)* 31 (8.1) 26 (8.1) 29 (7.7)
Mean number of surviving children 3.5 (1.8) 3.5 (2.1) 2.4 (1.7) 3.0 (2.0)
% with one or more surviving sons 84 79 68 78
% with one or more surviving daughters 82 81 69 72
% Ever attended school 29 23 18 18
% Poorer households 43 39 59 67
% Chittagong division 19 10 22 15
% Dhaka division 30 49 33 38
% Khulna division 9 21 0 16
% Rajshahi division 42 20 44 32
% Contributes to family support 72 40 27 20
Mean duration of credit program
membership (years) 3.9 (2.4) 3.7 (1.7) n/a nJa
8 Beaten by husband in the past year 9 13 21 27
% Classified as empowered on:
Mobility? 30 42 29 21
Economic security 53 39 14 13
Small purchases 61 43 21 19
Large purchases 48 44 24 17
Major decisions 59 42 21 17
Political/Legal awareness 34 38 15 18
Protest/Campaign 32 36 15 21
Freedom from domination 83 75 76 74
Composite empowerment 42 32 10 5
N of cases 284 232 315 394
*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 first 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 turns 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 BINDINGS AND DISCUSSION
(a) Effects of creditprograms on eight dimensions of
empowerment and women’s contribution tofamily
support
The logistic regression models summarized in
Table 2 examine how women’s exposure to credit pro-
7. RURAL CREDIT PROGRAMS 641
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.O.The mod-
els also adjust for the sociodemographic characteris-
tics discussed above, but because we are not con-
cerned 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 to make small independent purchases,
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 s~pp0r-t.~~
Even controlling for membership duration, partic-
ipation in BRAC and Grameen Bank and, in a few
cases, being a nonmember in a Grameen village, has a
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 sig-
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,
political/legal 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. It 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 tofamily support on
empowerment
The contribution to family support variable serves
as a crude indicator of women’s control over their loan
funds. This is distinct from access to resources
(Mason, 1986) which is conveyed by extending loans
to women. In our survey women were asked what pro-
9. RURAL CREDIT PROGRAMS 643
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
loan 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
how its addition to the regressions changes the odds
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 a credit 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,
but contribution is now an independent rather than a
dependent variable in each model. The models shown
in Part B include a multiplicative interaction of contri-
bution to family support and membership in a credit
program.14 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 to 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
times 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
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-
gesting 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 tit 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 is a result of their involvement in a credit
program.
(c) Predictedprobabilities 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), (iii) 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 values for all other variables employed in the
regression modelsI
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 credit program
11. RURAL CREDIT PROGRAMS 645
Figure 1. Predicted probability of empowennent for
Grameen Bank and BRAC members, substantial contribu-
tors, and combinations. Control variables set at average
values (see note 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 to
family support have a 45% chance of being empow-
ered, over 20 times that of women who neither belong
to a 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 1 high-
lights the enormous potential impact of credit pro-
grams and other economic opportunities for
transforming women’s lives. Rutting women’s contri-
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 turn 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 fist on issues
related to 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
12. 646 WORLD DEVELOPMENT
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
earners, 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 of the 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
household 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 household 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 relative
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 in
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
on women’s ability to make a recognized, cash contri-
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
households 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 visi-
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 of their 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 to selling their homestead,
the roof, the house posts, and even their cheap alu-
minium 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
13. RURAL CREDIT PROGRAMS 647
questions: fiit, 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 little 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-
views 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 or 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’scontrol overfunded enterprises
None Partial Significant Full
Old GB village 64% 9% 9% 18%
Old BRAC village 100% 0% 0% 0%
New GB village 18% 18% 36% 27%
New BRAC village 20% 10% 10% 60%
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 more 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 earn 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.
Our 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
door 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
14. 648 WORLD DEVELOPMENT
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 in
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 1.
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
All loans used for own or joint
activities
Some loans used for own of
joint activities
No loans used for own of
joint activities
No loans (Nonmember in
Grameen villages)
No loans (No credit program
in village)
N % empowered
308 49
109 54
80 36
315 15
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
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 field 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 of the 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 political issues. This appears to be
true 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 increases 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, unprompted,
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
15. RURAL CREDIT PROGRAMS 649
he said to my husband, “You had better stop beating and
scolding your wife. Now she has contact with many peo-
ple in society. She brings you loans from Grameen Bank.
If you want to you can start a business with the money she
brings!”
8. SIMILARITIES AND DIFFERENCES
BETWEEN BRAC AND GRAMEEN BANK
The objectives and strategies of Grameen Bank
and BRAC are very similar, and the results presented
above suggest that the two programs have similar
effects on women’s roles and status. Grameen Bank,
however, appears to be more successful in enabling
women to control the loans that they receive; it has a
stronger influence on women’s ability to contribute to
their families’ support, and on several of the economic
dimensions of empowerment. The differences
between the programs are subtle but apparently
important. First, in the communities where Grameen
works it is widely understood that the central purpose
of Grameen Bank is to provide credit to poor women.
BRAC is perceived as an organization concerned
more broadly with community development. BRAC
promotes education for girls and runs nonformal
schools for children who have dropped out of the for-
mal system or have failed to enroll for economic rea-
sons. BRAC has a separate health program and, in col-
laboration with the government, runs foodgrain
distribution programs for destitute women. Of the
eight dimensions of empowerment, participating in
BRAC had a stronger effect than participating in
Grameen Bank on two: mobility, and participation in
political campaigns and public protests. This may be
because BRAC provides more opportunities for its
members to participate in training programs, which
often give them an opportunity to travel outside of
their villages, and because of its greater emphasis on
creating awareness of social and political issues.
BRAC’s more holistic approach was even more pro-
nounced in the past. When it started in the early 1970s
its emphasis was mainly on consciousness-raising and
organizing, and credit was a relatively minor compo-
nent in its program.
Second, Grameen Bank gives more loans, more
quickly. Members get their first loan within two
weeks, while BRAC members used to have to com-
plete a three-month awareness-raising and training
course. (Now this waiting period has been reduced to
four weeks; but at one time it was a year.)16 As long as
Grameen Bank members repay their loans on sched-
ule, they get subsequent loans almost automatically.
With BRAC the process takes somewhat longer. In
our sample survey the Grameen Bank respondents had
received an average of 3.9 loans, compared with 2.1
for the BRAC respondents, even though the mean
duration of membership of the Grameen respondents
was only slightly longer (47 months compared with 45
months for BRAC members). This probably is one of
the reasons why more Grameen Bank members make
a substantial contribution to their families’ support.
The potential to use credit to acquire productive assets
may explain why Grameen Bank membership has a
stronger effect on the “economic security” dimension
of empowerment (Tables 2 and 3). In addition,
Grameen Bank gives separate loans for house con-
struction, with the requirement that the homestead
land be registered in the name of the female borrower.
In some cases this encourages men to transfer title of
their homestead land to their wives.
A third important difference is Grameen Bank’s
greater emphasis on discipline, rules and rituals.
Members must salute, sit on the floor in rows, and
chant at weekly meetings. In some centers the mem-
bers are required to do physical drills. The Grameen
Bank worker sits in front of the women in a chair,
whereas in BRAC’s weekly meetings the field orga-
nizer typically sits on the floor with the women.
BRAC’s meetings are more informal, and the women
often come and go as they please. The women nor-
mally refer to Grameen Bank workers (most are men)
as “The Sirs,” or ‘The Bank Sirs.” BRAC field staff
are somewhat more likely to be female (though BRAC
too employs mostly men), and they are more likely to
be addressed as “Brother” or “Sister.” Much of the
discussion at Grameen Bank’s weekly meetings has to
do with maintaining regular attendance and discipline
in repaying loans. Women who miss meetings or fall
behind in their repayments are publicly scolded, and
may be visited in their homes by Bank Workers or
other members.
The regimented, ritualistic style of the Grameen
Bank program appears to have several effects. The
women develop an identity outside of the family, and
they become experienced in interacting with male
authority figures. The weekly rituals plainly cast them
in a subservient role. but it is typical in interactions
with government officials, and even representatives of
nongovernmental organizations, for the poor to be
perceived and to perceive themselves in a subservient
role. At least in this case the women rather than their
husbands are the ones interacting with the outsiders.
Having a connection with someone more powerful is a
source of status, and increases the women’s self-con-
fidence. Hierarchy and regimentation are common
elements of social life in the public sphere from
which Bangladeshi women are usually excluded.
Intentionally or unintentionally Grameen Bank has
succeeded in coopting these styles of behavior to
empower rural women.
Normally, any savings or asset that a woman might
have can be legitimately (at least from her husband’s
point of view) appropriated by him. Grameen Bank
recognizes that this is a central problem in loan pro-
grams for women, and its style of operating reflects
this concern. In addition to the general tactics of intim-
16. 650 WORLD DEVELOPMENT
idation and confidence-building, Grameen counsels
women to help them hold on to their loan money when
their husbands try to take it away from them. Grameen
communicates to the men, through the women, that if
their wives fail to make loan repayments their names
will be mentioned in public, and they may face embar-
rassment and harassment by visiting Bank staff and
members. At the same time, the men see that families
who pay their loans on time immediately receive sub-
sequent loans, that if they follow the rules they are
ensured continuing access to larger and larger
amounts of credit. BRAC uses some of the same tech-
niques, but the program is more informal, and the
direct communication with men (who are also invited
to join the program) may make it less essential to put
pressure on the women and to coach them in standing
up to their husbands.
Grameen Bank’s strategies induce many of the
husbands to let their wives use the loan money for
their own economic activities, as the program intends.
In other cases the members’ husbands appropriate part
or all of the money, but they give their wives enough
each week to meet the loan installments and required
savings deposits. Realizing that some appropriation of
loan funds by husbands is inevitable, the participants
are given practical advice. For example, the
researchers observed one training session in which the
Bank Worker said:
Give your husband some of the loan but not all of it. Keep
some of it yourself. Use the money for activities that
don’t require much investment, like raising poultry or a
calf. Your husband is getting this loan because of you.
Live in harmony with your husband. Try to make sure
that he does not misuse the loan.
Credit is the center of Grameen Bank’s program.
Every aspect of the program is intended to facilitate
the basic task of making loans to poor women and to
ensure high rates of repayment. This is true even of
the Sixteen Decisions, which the women are made to
memorize and chant as a way of establishing disci-
pline. This does not mean that Grameen is not inter-
ested in empowering women; only that its founder and
directors see credit as the best way to achieve this.
Grameen Bank’s guiding vision has to do with
poverty alleviation and social equity, and even
empowerment of women is seen essentially as a
means to these ends. While BRAC’s broad goals of
social transformation and economic development are
similar to those of Grameen, its strategy for achieving
these goals is multifaceted. In fact, in its “Strategy for
the 1990s” (Korten, 1989) credit is given relatively
little emphasis. BRAC provides loans to women
mainly through its Rural Development Program,
which is very similar to Grameen Bank’s program in
the way it operates, but in general is less regimented
and ritualized, less strict, and not focused as single-
mindedly on credit.
9. CONCLUSION
The success of Grameen Bank, BRAC and other
similar programs in Bangladesh challenges the con-
ventional idea that it is primarily sociocultural norms
that discourage women from seeking paid employ-
ment. The success of these programs in reaching out to
the vast numbers of women is clearly due to their pro-
motion of economic opportunities. Although women
who work are sometimes criticized, particularly if
they work outside of the home, there is no demon-
strated lack of demand for jobs among poor rural
women. In the six villages in our ethnographic study
there were abundant examples of women asking the
researchers as well as women who already had jobs to
help them find paid employment. Rather than a lack of
demand, it appears that a severe shortage of paid
employment opportunities is limiting women’s eco-
nomic participation and holding back women’s
empowerment in Bangladesh.
It has been argued that women’s empowerment
can only be achieved by increasing women’s con-
sciousness about gender and class relations, and orga-
nizing them to engage in grassroots struggles for
women’s rights. Critics of minimalist credit contend
that the participants typically cede financial and man-
agerial control over funded enterprises to males within
their households (Goetz and Sen Gupta, 1994). In fail-
ing to focus directly on challenging power relations,
they argue, such programs enroll large numbers of
women and give them access to a resources without
eroding the basis of gender subordination.
This analysis, however, suggests that involvement
in credit programs does empower women.
Participation in Grameen Bank and BRAC increases
women’s mobility, their ability to make purchases and
major household decisions, their ownership of pro-
ductive assets, their legal and political awareness and
participation in public campaigns and protests.
Another analysis suggests that the programs also
decrease women’s vulnerability to family violence
(Schuler et al., 1996). In spite of focusing narrowly on
credit, Grameen Bank (and to a lesser extent, BRAC)
functions as a catalyst in transforming the lives of
women. Minimalist credit programs provide access to
an important economic resource, and thus enable
women to negotiate gender barriers, increase their
control over their own lives, and improve their relative
positions in their households. The majority of the
women involved in these programs maintain a signifi-
cant measure of control over their assets and incomes.
While the magnitudes of their incomes may be rela-
tively small, the effect on women’s empowerment is
substantial.
We do not mean to suggest that the Grameen strat-
egy holds the ultimate resolution to gender subordina-
tion in Bangladesh, nor to downplay the need for con-
sciousness-raising, organizing and struggling for
17. RURAL CREDIT PROGRAMS 651
women’s rights. Minimalist credit programs do, how-
ever, provide a cost-effective means of transferring
scarce resources to the poor through women. Even
though putting resources in women’s hands violates
patriarchal norms, in a situation of pervasive poverty
such resource transfers are welcomed.
The Grameen approach does not constitute a sus-
tained movement to organize women at the grassroots
level for a political struggle against patriarchal institu-
tions. The organizational modality for this mobiliza-
tion cannot be credit programs (regardless of whether
they are directly focused on gender issues), or for that
matter any organization whose lifelines are connected
to donor financing and state licensing. Within the
existing spectrum of development interventions in
Bangladesh, however, it appears that the Grameen
model is more effective than programs that profess to
combat gender inequality more directly, both in its
demonstrated ability to reach poor women in large
numbers, and in its potential to empower women.
NOTES
1. For a more detailed description of the purdah system
see Abdullah and Zeidenstein (1982); Cain, Khanam and
Nahar (1979); Mandelbaum (1988); Memissi (1987);
Papanek and Minault (1982).
2. For more details on the two programs see: Bangladesh
Rural Advancement Committee (199Oa, 199Ob); Chen (1983,
1989); Chowdhury (1989); Fuglesang and Chandler (1986);
Grameen Bank (1989, 1990); Holcombe (1995); Hossain
(1988); AtiurRahman(1986); Rahman andHossain (1986); R.
Rahman (1986); Ray (1987); Todd (1995); Wahid (1993).
3. Grameen Bank’s “Sixteen Decisions” are: 1. We shall
follow and advance the four principles of Grameen Bank -
Discipline, Unity, Courage and Hard Work-in all walks of
our lives; 2. Prosperity we shall bring to our families; 3. We
shall not live in dilapidated houses. We shall repair our
houses and work towards constructing new houses at the ear-
liest; 4. We shall grow vegetables all the year round. We shall
eat plenty of them and sell the surplus; 5. During the planta-
tion seasons, we shall plant as many seedlings as possible; 6.
We shall plan to keep our families small. We shall minimize
our expenditures. We shall look after our health; 7. We shall
educate our children and ensure that we can eam to pay for
their education; 8. We shall always keep our children and the
environment clean; 9. We shall build and use pit-latrines; 10.
We shall drink water from tubewells. If it is not available,
we shall boil water or use alum; 11. We shall not take any
dowry oat our sons’ weddings, neither shall we give any
dowry at our daughters’ weddings. We shall keep the center
free from the curse of dowry. We shall not practice child mar-
riage; 12. We shall not inflict any injustice on anyone, neither
shall we allow anyone to do so; 13. We shall collectively
undertake bigger investments for higher incomes; 14. We
shall always be ready to help each other. If anyone is in diff-
culty, we. shall all help him or her; 15. If we come to know of
any breach of discipline in any center, we shall all go there
and help restore discipline; 16. We shall introduce physical
exercise in all our centers. We shall take part in all social
activities collectively.
4. We also avoided areas where other research studies
were being conducted, and sites that were obviously excep
tional in terms of access to various services, access to trans-
portation, and economic base. The six villages are located in
Magura, Faridpur and Rangpur Districts. One of these com-
parison villages was located in an area where a family plan-
ning nongovemment organization (NGO) has been working,
to provide an independent assessment of the impact of better
access to family planning services on family planning prac-
tice and on empowerment.
5. To maximize the number of potential users of family
planning in the 120-household sample, only households with
a married woman age 39 or younger, with at least one living
child, were included in the sampling frame. A household cen-
sus was done in each of the six villages. The households were
then stratified to get live households of nonparticipants and 15
households of participants in each of the four villages covered
by the credit programs. Within these groups, stratification by
age group was done to ensure a reasonable distribution.
6. In the first stage, a random sample of branches of each
organization was selected for each of the four divisions.
Next, a random sample was selected from membership lists
of each branch.
7. For Grameen Bank “functionally landless” is defined
as owning less than 50 decimals (l/2 acre) of cultivable land,
and/or owning assets that have a total value of less than the
value of one acre of medium quality land. BRAC targets
households that subsist by selling manual labor, assuming
that such households are functionally landless. Households
that were obviously wealthy and those that owned more than
50 decimals of land were excluded from the control group.
The comparison sample was selected from rural villages that
are located in the same general area as the Grameen Bank and
BRAC sites. The villages in this comparison group were
matched with a credit program site on the basis of region, vil-
lage size, and population density. Villages having an inten-
sive presence of credit or family planning programs run by
nongovernmental organizations were not included. We did
not attempt to include a separate sample of nonmembers from
BRAC villages because BRAC’s general approach is work
with entire villages. In principle, BRAC encourages all vil-
lage residents who are eligible (landless and poor but able to
work) to join. (See Schuler and Hashemi, 1994 for a more
detailed description of the survey methodology.)
8. Some aspects of participation in the credit programs
might be described as empowering, or as manifestations of
empowerment (e.g., belonging to a group outside of the fam-
ily, learning to sign one’s name, having a bank account and
passbook, taking a loan in one’s own name). Since this study
is concerned with documenting effects of women’s involve-
ment in credit programs, however, behaviors that are entailed
in credit program participation were not included among the
empowerment indicators.
18. 652 WORLD DEVELOPMENT
9. We ran a correlation matrix for the eight empowerment
dimensions and contribution to family support. Most correla-
tions were less than 0.20. Those above 0.20 involved aspects
of empowerment that have an economic dimension (making
small and large purchases, economic security) and contribu-
tion to family support. The highest correlations were
between small and large purchases (0.434). and small pur-
chases and contribution to family support (0.408).
10. Since only one-fifth of the women had any schooling
whatsoever, “whether ever attended school” was used rather
than education level.
11. This is somewhat less an issue for BRAC because
BRAC encourages all eligible women in participating vil-
lages to join.
12. As for the possibility of village-level selection bias,
the extensive coverage of the Grameen Bank program,
which was working in l/4 to 113 of all rural villages in mid-
1991 when the sample initially was selected, and now
works in nearly half of all villages, suggests that Grameen
Bank does not apply a narrow set of criteria in selecting
program sites. In our survey, the fact that each of the com-
parison villages was located in the same general vicinity as
a program village also provides some assurance against the
possibility that there are important, systematic village-level
differences. There may be a general tendency for develop-
ment programs such as Grameen Bank to avoid the least
accessible areas of the country when setting up branch
offices, but in observing these programs our ethnographic
study team did not notice a tendency to exclude certain
types of villages once a branch had been established. At this
point proximity to the Grameen Bank branch appears to be
the most important factor determining whether program
activities are initiated in a village. Within a geographic area
that might be covered by a Grameen Bank branch, villages
to which access for some reason is particularly difficult
(e.g., because of flooding) may be left out of credit schemes
and other development programs. But since they also tend
to be avoided by survey teams, it is unlikely that relatively
less accessible villages are overrepresented in our compar-
ison group.
13. As noted below, our models are constrained by the fact
that most women had been members in one program or the
other for a minimum of 18 months. They are also constrained
by a linear specification of the duration variable. We
explored nonlinear specifications of duration and found sim-
ilar results; in addition, categorical dummy variables for
duration of membership had a significant effect on the eco-
nomic security variable.
14. In the regression model the interaction term is calcu-
lated by multiplying contribution to family support by a
dummy variable coded as 1 if the respondent is a member of
either BRAC or Grameen Bank. We also tested separate
interactions between the two programs and contribution.
15. Values are set at the mean or median value for all con-
trol variables as follows: age = 29 years, at least one surviv-
ing son = 1 (yes), at least one surviving daughter = 1 (yes),
education = 0 (none), wealthy household = (no), geographic
division = 2 (Dhaka) and, for credit program participants, a
membership duration of 40 months (the median).
16. The initial training period has been getting shorter. It
had already decreased from one year to 13 weeks when the
study was initiated; since then it has further decreased to nine
weeks.
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