Microfinance and intra-household management Lessons from rural South-India

1. Microfinance and intra-household managementLessons from rural South-India Isabelle Guérin Institut de recherche pour le Développement French Institute of Pondicherry March 2009

2. Problem to be adressed • Microfinance: above all a matter of women! • Controversial results (Kabeer 2001) • Empowerment (Hashemi et al. 1996; Khandker et al. 1995; Holvoet 2005) • Or disempowerment (Rahman 1989; Goetz & Gupta 1989; Rao 2005; Rankin 2002; Molyneux 2002) • Intra-household management: a black box!

3. Research Objectives • Opening the household black box • Analysis of gender financial responsabilities • Analysis of gender financial practices (saving, borrowing) → Better understanding of microfinance effects

4. Literature review • Intra-household management literature • Complexity and diversity of intra-household management systems • Gap between responsabilities and control • History (Fontaine, 2001; Perrot 2001; Zelizer 1995) • Sociology and Anthropology (Guyer & Peters, 1989; Pahl 1989, 2000; Vogler 1998; Bruce and Dwyer 1988, Burgoyne, 2008). • Economics (Kabeer, 1994) • Intra-household management and microfinance • Main question: who control the loans? • Male appropriation → domination (Goetz & Gupta 1996; Rahman 1989) • Male appropriation → Negociations and compromises (Kabeer 2001)

5. Main results • Result 1. Women in household budget management: a permanent paradox • Balancing the budget without controlling income • Result 2. Women-led financial circuits • Diversity of financial practices, partly secrete • Result 3. What about microfinance? • More responsabilities more pressure • Microcredit use: a bargaining process • Better management or risks of over-indebtedness?

6. Theoretical framework • Intra-household relationships • Conflicts and cooperation (Folbre 1990 ; Kabeer 1994; Sen 1990) • Patriarchal bargain (Kandioty 1988) • Compromise and resistance (Agarwal 1994) → hypothesis suggested here: financial circulation within households is at the core of this permanent process of bargaining, compromises and resistance

7. Methodology • Descriptive statistics • 170 households • For specific questions, women and men have been interviewed • All are microfinance clients • Qualitative analysis • Semi-structured interviews • Group discussion • Observation • Informal discussions

8. The context (1) Table 1. Socioeconomic profile

9. The context (2) Table 1. Socioeconomic profile (continued)

10. The context (3) Table 1. Socioeconomic profile (continued)

11. The context (4) Table 2. Livelihood patterns

12. Result 1: meeting ends without controlling income Table 1. Financial responsabilities within the household

13. Result 1: meeting ends without controlling income • → huge responsabilities in terms of saving, borrowing and repayment Table 2. Women responsabilities in terms of income, saving borrowing and repayment

14. Result 2. Diversity of financial practices (1) Table 3. Diversity of borrowing practices

15. Result 2. Diversity of financial practices (2) Table 4. Diversity of saving practices

16. Result 2. Diversity of financial practices (3) Figure 1. Women-led financial circuits

17. Result 2. Diversity of financial practices (4) • Repayment burden

18. Result 3. Microfinance effects on financial management • More responsabilities → more pressure

19. Result 3. Microfinance effects on financial management (2) Microcredit control: bargaining and compromises

20. Result 3. Microfinance effects on financial management (3) Better management or risks of over-indebtedness? Figure 3. How the microcredit is used

21. Future research • Diversity of women behaviors • Diversity of gender practices