Picture Credit: Brac
Bangladesh built a global reputation on a simple promise: lend to women and you don’t just fight poverty, you change power. It’s a compelling story. But inside many households, another story plays out. A woman signs the passbook, attends the weekly meeting, and carries the debt. Then a husband, brother, or son decides where the money goes.
A study by Anne Marie Goetz and Rina Sen Gupta followed loans past the point of disbursement to see who actually controlled them (Goetz & Gupta, 1996). Their finding was blunt: many women borrowers had limited or no say over how their loans were used, even as they remained responsible for repayment. In practice, a large share of loans financed activities managed by men. That’s inclusion on paper, not in life.
Early “women in development” thinking focused on getting women access - to training, to jobs, to credit. It was a start, and it mattered. But access isn’t the same as control. Later, “gender and development” thinking asked harder questions: inside the home, who decides? Who owns the asset you buy with the loan? Who keeps the earnings? Who bears the risk if the business fails? These are the questions that turn a passbook into power or reveal that nothing has changed at all (Rathgeber, 1990).
The microfinance model has real strengths. It reaches villages the formal banking system still struggles to serve. It creates a weekly rhythm of saving and repayment. It mobilizes social ties. But the model also runs on incentives. Field staff get praised for high repayment, not for proving that the woman borrower is the one choosing the enterprise, signing purchase orders, holding the account, and keeping the proceeds. When the scoreboard celebrates repayment and scale above all else, don’t be surprised if family power settles the rest.
The broader evidence, meanwhile, tells us to keep our claims sober. A careful analysis pooling seven randomized evaluations of microcredit expansions across several countries found small average gains in business activity and consumption useful, but not the sweeping transformation many hoped for (Meager, 2019). Microcredit works for some, under the right conditions, but it’s no magic wand. If empowerment is the goal, credit alone rarely gets you there.
Some research in Bangladesh suggests that participation in group lending can reduce intimate partner violence by widening women’s social support and public presence (Schuler et al., 1996). Other studies document mixed or adverse effects, including economic pressure, husbands taking control of loans or earnings and backlash. The lesson is not to retreat from credit; it’s to design for the reality of gendered power. Programs that celebrate outreach but ignore safety are rolling dice with women’s lives.
The bottom line is clear, In Bangladesh, credit can steady a household and help some businesses, but it is not a complete or instant solution. When credit is paired with rights, assets, safety, and voice, it can open a path to real change. If we ignore who decides inside the home, we will keep confusing a signature with agency. Empowerment isn’t paperwork. It’s control.
References:
1. Goetz, A. M., & Gupta, R. S. (1996). Who takes the credit? Gender, power, and control over loan use in rural credit programs in Bangladesh. World development, 24(1), 45-63.
2. Rathgeber, E. M. (1990). WID, WAD, GAD: Trends in research and practice. The journal of developing areas, 24(4), 489-502.
3. Schuler, S. R., Hashemi, S. M., Riley, A. P., & Akhter, S. (1996). Credit programs, patriarchy and men's violence against women in rural Bangladesh. Social science & medicine (1982), 43(12), 1729–1742. https://doi.org/10.1016/s0277-9536(96)00068-8
4. Meager, R. (2019). Understanding the average impact of microcredit expansions: A Bayesian hierarchical analysis of seven randomized experiments. American Economic Journal: Applied Economics, 11(1), 57–91.
5. https://blog.brac.net/heres-what-happens-when-microfinance-grows-up/
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