‘Money can’t buy me love?’: Re-evaluating the empowerment potential of loans to women in rural Bangladesh

Credit programmes have become an increasingly important intervention for addressing
poverty both in Bangladesh, and elsewhere, as a result of successive evaluations attesting to
their important developmental benefits. The success of these programmes lies largely in the
provision of subsidised access rather than of subsidised loans. Many charge the same rates of
interest as the formal banking sector and have been able to use the funds raised to build their
financial sustainability and institutional outreach. Through a strategy of direct lending or
financial intermediation combined with reliance on group liability for loans in place of
conventional collateral requirements which poor people can rarely fulfill, these programmes
have ensured a supply of credit to those normally marginalised from the formal banking
sector. They have consequently been credited with compensating for financial ‘market
failure’, with reducing the reliance of the poor on usurious moneylenders and with enhancing
the productivity of their livelihood efforts.. What has led to even greater interest in these
programs is the documentation of the positive impacts associated with lending to poor women:
both economic impacts in terms of poverty alleviation and higher repayment rates as well as
more social ones to do with improvements in women’s position within family and society.