Gender Dynamics and Control Over 
Agricultural 
Microcredit: Evidence 
from Self-help Group in Bihar,India

Abstract

This study examines decision-making determinants of microcredit expenditure by female self-help group (SHG) members in rural agricultural households of Gaya district, Bihar. SHG loans give women access to credit without collateral for 1% interest, compared to 5% by typical moneylenders. This study examines credit decision-making authority rather than loan repayment as a proxy for women’s empowerment. Unlike previous findings, poor agricultural households may struggle with repayment, but their female members can often make decisions. Male and female household members are included in the study, and females are considered decision-makers only when male members acknowledge their expenditure decisions. Loans in agricultural households are mainly used for consumption and farming, reflecting family priorities over personal empowerment. The descriptive statistics analysis and binary probit regression show that Scheduled Caste (SC) and Other Backward Class (OBC) women are more likely to participate in financial decisions than General caste and joint family women. Although SHG loans empower women as key financial agents in households where men lack equivalent credit access, the results show that women frequently hand over control of the loans to male family members, limiting their agency. The study shows that microcredit reduces poverty and improves household welfare, but does not empower women in patriarchal societies.