Microfinance for Wives: Fresh Insights Obtained from a Study of Poor Rural Women in Pakistan

Abstract

This article identifies why some poor rural women do or do not obtain micro-loans and considers the economic effectiveness of these loans. It draws on primary data collected through interviews and women focus group discussions from four villages of Sindh province in Pakistan. A qualitative approach is adopted to analyze the factors affecting women’s access to micro-loans and their successful use of these loans. It shows that women’s engagement in social networking helps them obtain micro-loans and assists them in using these loans wisely. Furthermore, success in using micro-loans encourages further business entrepreneurship and continuing evolution in social networks. Poor women need to be made aware of the important role that social networking plays in accessing microfinance. Nevertheless, some rural women (and households) are unable to rely on micro-loans to alleviate their poverty. This article highlights demand-side credit issues faced by poor women and the implications of credit supply for their ability to engage in entrepreneurial activity and wealth creation. It emphasizes the need for a holistic approach to the assessment of microfinance taking into account its economic, social and psychological impacts within families, paying particular attention to gender relationships.