Role of Microfinance in Promoting Women’s Social Capital and Normative Influence
Since the founding of the Grameen Bank in Bangladesh in 1983, microfinance has become a prevalent poverty-reduction tool in developing countries around the world. The most well-known microfinance product, microcredit, involves extending loans to low-income individuals who lack access to credit through formal financial institutions. Microcredit is overwhelmingly focused on women borrowers, and usually uses a group-lending approach in which groups of women are held responsible for each other’s repayments. Research on the effectiveness of microfinance — aspects of which have come under fire in both Bangladesh and India in recent years — has primarily focused on the economic impact it has on individual borrowers, as well as households.
A 2009 study from Wesleyan University published in the American Sociological Review, “From Credit to Collective Action: The Role of Microfinance in Promoting Women’s Social Capital and Normative Influence,” aims to go beyond the economic impacts of microfinance and determine if “structuring socially isolated women into peer-groups for an explicitly economic purpose … has any effect on the women’s collective social behavior.” The researcher interviewed 400 women from 59 different microfinance groups in rural West Bengal, India, and defined “collective action” as when portions of groups, entire groups, or coalitions of groups join together to pursue an action proposed by any of the above.
The study’s findings include:
- One-third of the microfinance groups studied had engaged in some form of collective action. None of the 400 women had participated in collective action before they became involved with their microfinance group.
- The increase in women’s participation in collective action was deemed to be a result of the “social capital” and “normative influence” women gained from their participation in the microfinance groups.
- Microfinance groups were found to increase women’s social capital and influence through several mechanisms: 1) the increased trust and affinity among the women due to the frequent interactions required by group lending; 2) the increased ability to organize because of both women’s individual lending groups and the larger community of women’s microfinance organizations; and 3) the increased agency women experienced as a result of their participation in the groups.
The author concludes that participation in groups designed to increase women’s economic empowerment can lead to social empowerment and that microfinance programs potentially offer benefits “that go beyond economic survival and promote the advancement of women.”
Note to instructor: The suggested assignments are designed for flexibility. They can be used in whole or part and can be adapted to a particular task -- for example, the newswriting assignments could be applied to the writing of the headline, the lead, the nut graph or the full story. Material from the assignments could also be combined with other material, for example, in the writing of a background, feature or local-angle story.
Read the American Sociological Review study “From Credit to Collective Action: The Role of Microfinance in Promoting Women’s Social Capital and Normative Influence.”
- Summarize the study in fewer than 40 words.
- Express the study's key term(s) in language a lay audience can understand.
- Evaluate the study's limitations. (For example: Do the results conflict with those of other reliable studies? Are there weaknesses in the study's data or research design?)
Read the issue-related New York Times blog "A Fresh Look at Fighting Global Poverty."
- What are some of the key ideas and issues in the study and blog post that journalists should be aware of as they explore issues of global poverty and development? What are some of the important ambiguities that attend these issues?
- Write a lead (or headline or nut graph) based on the study.
- Spend 60 minutes exploring the issue by accessing sources of information other than the study. Write a lead (or headline or nut graph) based on the study but informed by the new information. Does the new information significantly change what one would write based on the study alone?
- Interview two sources with a stake in or knowledge of the issue. Be prepared to provide them with a short summary of the study in order to get their response to it. Write a 400-word article about the study incorporating material from the interviews.
- Spend additional time exploring the issue and then write a 1,200-word background article, focusing on major aspects of the issue.