Credit Where Credit's Due: The Enabling Effects of Empowerment in Indian Microfinance

Saha, B.; Sangwan, N.

Abstract

We utilise primary data collected from a North Indian village in 2015 to 2016 and examine the impact of women’s empowerment on their creditworthiness measured by the total annual loan amounts. Our key explanatory variable – an empowerment index – has been constructed using four individual-level factors -- economic, social, interpersonal and political. We find that more empowered women received greater cumulative loans. We have instrumented empowerment by the sex of the borrower’s first child being male. It seems that in the male-dominated environment of North India, the ‘luck’ of giving birth to first child as a son helps a woman seize opportunities for empowerment. The village-level finding of empowerment is consistent with the result we obtain for the whole of North India using a separate and national dataset. We also show that for the rest of India education, but not empowerment, is an important determinant of loan volumes.

Citation

Saha, B., & Sangwan, N. (2019). Credit Where Credit's Due: The Enabling Effects of Empowerment in Indian Microfinance. World Development, 122, 537-551. https://doi.org/10.1016/j.worlddev.2019.06.009

• Journal Article Type: Article
• Acceptance Date: Jun 10, 2019
• Online Publication Date: Jun 27, 2019
• Publication Date: Oct 31, 2019
• Deposit Date: Jun 12, 2019
• Publicly Available Date: Jun 27, 2021
• Journal: World Development
• Print ISSN: 0305-750X
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 122
• Pages: 537-551
• DOI: https://doi.org/10.1016/j.worlddev.2019.06.009
• Public URL: https://durham-repository.worktribe.com/output/1329031