JBS Special Issue - Microfinance - 2012 - Does Microfinance Promote Women's Empowerment? An Empirical Investigation

The role of microcredit in promoting women empowerment remains a subject matter of academic as well as
policy interest. The related empirical assessments are often flawed by the shortcomings associated with the
methodologies employed that fail to tackle such issues as non-random participation and self-selection of
program participants influenced by their unobserved characteristics. This paper employs suitable econometric
techniques to overcome these problems while using a large household database providing information on
individual characteristics of women, which makes it possible to construct several empowerment indicators.
Given the nature of the available information, both the panel data modelling strategy and appropriate estimation
procedures for cross-section data are used in empirical investigations. The results support strong positive effects
of microcredit programs on women's empowerment.