Microcredit and Women Empowerment: A Case Study of Akhuwat Beneficiaries

Abstract

Women's empowerment is one of the most debated and challenging topics in empirical research. In developing countries, women face numerous challenges related to their socio-economic conditions. Microcredit is a powerful tool to empower women. Microcredit institutions provide their services to poor women. The main objective of this study is to analyze the effectiveness of microcredit in promoting women’s empowerment among the borrowers of Akhuwat Islamic Microfinance Bank. Towards this end, we perform the non-parametric test and descriptive analysis based on the sample of 120 women who have taken loans from Akhuwat Islamic Microfinance in the city of Chakwal. Five dimensions of empowerment are used to arrive at an aggregate index of empowerment. These dimensions are economic empowerment, social empowerment, political empowerment, psychological empowerment, and technological empowerment. The study is unique in the sense that no one has used technological empowerment in a previous study. The data were collected through a structured questionnaire and conducted interviews to assess the complexity of the phenomenon of women's empowerment. The collected data were analyzed through SPSS v. 20 and STATA 14 by using the technique of non-parametric tests (Wilcoxon Signed Rank Test) and descriptive statistics. The findings of the study have shown that there are positive results of microcredit on women's empowerment. The most influential dimensions to empower women include economic, social, and technological empowerment. The findings suggest that microcredit plays a crucial role in shaping women's empowerment. The study concludes with recommendations for lenders to leverage microcredit.