Problematizing Microfinance as an Empowerment Strategy for Women Living in Poverty: Some Policy Directions

Abstract

Does microfinance empower women in poverty? If not, how can it do so? These are urgent questions that this article seeks to answer by looking at microfinance practice in the Philippine setting. In the debate highlighted, one side espouses the neo-liberal, minimalist model, emphasizing financial sustainability and claiming that providing credit per se automatically empowers women clients. The other side of the debate promotes the credit plus or integrated approach and stresses that women's empowerment is the result of many mutually reinforcing interventions that go beyond mere lending and seek to transform social relations towards both poverty alleviation and gender equality. This article summarizes the critique articulated since the late 1990s, initially focused on gender inequalities, and later widened to include accessibility issues amidst increasing commercialization of microfinance, sustainability issues amidst worsening poverty, and missing elements which make women's empowerment so elusive in existing microfinance practice. Finally, it recommends policy directions, including gender mainstreaming, aimed at government, bank institutions, cooperatives, non-governmental organizations (NGOs) and people's organizations (POs) engaged in microfinance practice.