research projects on micro finance

Yale Economic Growth Center

Improving Microfinance for the Poor: Investigating Repayment Flexibility

Research suggests microfinance is not as transformative as originally thought. Can adaptations to traditional approaches to microfinance enhance its impacts and improve life for the poor? The team at Inclusion Economics has carried out a series of experiments in India to understand how microfinance contracts can be refined to increase benefits to borrowers.

Research to update the classic microfinance contract

Since its inception in the 1970s, microfinance has been viewed as an important tool to support the livelihoods of poor people who lack access to traditional banking services. In recent years, however, rigorous research has raised questions about the extent to which these small, collateral-free loans can reduce poverty. The growing body of evidence has also highlighted that the traditional microloan contract may be unnecessarily rigid, constraining (rather than enabling) business investments by borrowers, particularly women.

Small adjustments to microfinance contracts, such as increasing repayment flexibility and facilitating social interaction among borrowing group members, can significantly enhance microfinance impacts.

To explore these issues further, the team at Inclusion Economics at Yale University – with researchers from Duke University, Harvard University, Princeton University, the University of Illinois at Chicago, and the Rice Institute – collaborated with the Centre for Microfinance on a series of experiments in India to provide insights on how microfinance can be refined to strengthen its beneficial impacts for the world’s poorest entrepreneurs. Among a range of other findings, this research has shown that traditional microfinance contracts can be tailored to heighten poor borrowers’ benefits from access to credit. Currently, the team is analyzing how flexible microfinance contracts for poor entrepreneurs can also create benefits that spill over to the next generation, improving child outcomes in the long run.

Pande & coauthors in Ideas for India: What Happens When Investments Targeting Women’s Microbusinesses go to Men?

Category:   Perspectives

Related Publications

The economic returns to social interaction: experimental evidence from microfinance.

Observing a set of microfinance clients in India, researchers examine the impact of embedding social interaction into the loan cycle. They find that clients assigned to weekly groups exhibited a higher willingness to pool risk, and were less likely to default on their second loan.

Do group dynamics influence social capital gains among microfinance clients? Evidence from a randomized experiment in urban India

As an intrinsic part of the classic microfinance model, group meetings are intended to employ social capital to ensure timely repayment. Assessing the group meeting frequency for 174 microfinance groups in India, researchers demonstrate that social capital gains associated with more frequent meetings continue to accrue across multiple lending cycles.

Does the classic microfinance model discourage entrepreneurship among the poor? Experimental evidence from India

Through a field experiment in India, researchers assess the impact of grace periods in loan contracts. They find that debt contracts that require early repayment discourage illiquid risky investment, and thereby limit the potential impact of microfinance on microenterprise growth and household poverty.

Repayment flexibility can reduce financial stress: Experimental evidence from microfinance in India

Financial stress is widely believed to cause health problems. However, policies seeking to relieve financial stress by limiting debt levels of poor households may directly worsen their economic well-being. Evaluating an alternative policy that increases the repayment flexibility of debt contracts, researchers find that flexibility encourages clients to invest their loans more profitably, ultimately reducing financial stress.

Repayment frequency and default in microfinance: evidence from India

In stark contrast to bank debt contracts, most micro-finance contracts require that repayments start nearly immediately after loan disbursement and occur weekly thereafter. Using data from a field experiment, researchers find that the frequency of the repayment schedule has no significant effect on client delinquency or default.

Household Matters: Revisiting the returns to capital among female microentrepreneurs

Field experiments that find positive returns to grants for male and not female microentrepreneurs largely overlook the fact that male and female microentrepreneurs often belong to the same household. Researchers find that the gender gap in microenterprise performance is not due to a gap in aptitude, but rather due to women's capital being invested into their husbands' enterprises rather than their own.

About the Project

Principal investigators:.

• Patrick Agte , Princeton University
• Arielle Bernhardt , Harvard University
• Ben Feigenberg , University of Illinois at Chicago
• Erica Field , Duke University
• John Papp , Rice Institute
• Rohini Pande , Yale University and Inclusion Economics
• Natalia Rigol , Harvard University

Implementation Partners:

• Inclusion Economics at Yale University
• Centre for Microfinance
• Evidence for Policy Design (EPoD) at Harvard Kennedy School

This research has received support from:

• Exxon-Mobil via the Women and Public Policy Program at the Harvard Kennedy School
• ICICI Foundation
• Innovations for Poverty Action (IPA)
• International Growth Centre  (IGC)
• Private Enterprise Development in Low-Income Countries (PEDL)
• United States Department of Labor  

• Open access
• Published: 08 December 2022

Exploring the role of microfinance in women’s empowerment and entrepreneurial development: a qualitative study

• Ambreen Khursheed   ORCID: orcid.org/0000-0003-1497-5848 1  

Future Business Journal volume  8 , Article number:  57 ( 2022 ) Cite this article

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In developing countries, women’s empowerment is a major concern. Several efforts were made to tackle this issue as the aims of poverty reduction and development cannot be achieved without giving attention to women’s empowerment. Over the past decades, microfinance institutions (MFIs) have appeared as crucial tools not only to address the issue of poverty but also particularly to empower women. Resultantly, a huge number of studies focus on the relationships between MFI and women empowerment. However, in the context of rural areas of Pakistan, the research is limited. Therefore, the objective of this study is to investigate the role of MFI in women’s empowerment in Pakistan so that the research will facilitate MFIs and policymakers in strengthening the link between MFIs and women entrepreneurship. We have used a qualitative methodology, using primary data collected through in-depth interviews and a focus group discussion with six female borrowers of Rural Community Development Programs (RCDP). The empirical results provide valuable insights into the efforts made by RCDP to empower women and combat poverty by encouraging women’s entrepreneurship. Hence, this paper not only examines empowerment, which women are attaining from microfinance but also assists MFIs to know about their significance in developing the economy. The paper is significant for MFI practitioners to develop policies for boosting women’s entrepreneurship and to help their existing women clients with efficient training and supervision.

Introduction

Microfinance has a unique ideological demand as compared to charity. It is particularly designed to support poor people. However, it is a long-term process that enables the poor to improve their living standards in an effective manner [ 39 , 41 , 74 ]. In particular, when we talk about microfinance from the perspective of women, the role of benefactors of microfinance seems important in making it a relatively effective resource for poverty alleviation, the stability of economic growth, and women empowerment [ 25 , 39 , 41 ].

The difference between male and female ratios is not considered significant, but in several areas, women are provided less importance and power in comparison with men [ 29 , 37 ]. Women around the world have little control over their assets and have less political power. Further, they do not have a lot of properties to their name [ 58 , 68 , 87 ]. Due to a lack of security saved in the financial sector, women faced several difficulties during the financial crisis period which lasted from 2007 to 2008 [ 52 ]. Similarly, it is crucial to understand the impact of the recent crisis of COVID-19 which affected all businesses badly and also threatened world health security [ 81 ].

However, several researchers have questioned this statement. The classification of all expected benefits and disadvantages of MFIs is still in the initial phase. We are still discovering how to improve the living standards of poor women and their families. This study aims to broaden existing knowledge about the role of MFIs in empowering women in rural Pakistan.

In emerging economies, MFIs and women empowerment is considered to be one of the most effective tools for poverty alleviation by particularly focusing on women [ 62 , 87 ]. Certainly, women are one of the most important parts of society and without their presence, societies cannot improve [ 23 ]. Women empowerment leads to the increased participation of females in the workforce, the capability to decide, and poverty reduction. Thus, an increase in their income will not only prove beneficial for their family but will also have a very positive influence on the economy [ 58 ]. Another study investigated the nonlinear effect of the education level on the ecological footprint by incorporating the variation in the population and income structures and recommended crucial policies regarding education levels and environmental sustainability [ 82 ].

In developing countries, all businesses are male-dominated and females have to suffer from discrimination in most of the phases whether it is their personal life or professional life. However, financial segregation seems complicated for developed nations regardless of the gender factor. Financial stability is a key concern for developing as well as economically challenged countries as these economies do not have a stable financial environment and well-established institutions [ 42 , 43 ]. The presence of poor health facilities, underdeveloped financial industries, illiteracy, and weak infrastructure have raised serious problems for developing nations. To consider the requirements of financially excluded women, MFIs step forward to help those women in establishing new endeavors [ 55 ]. As a result, non-government organizations and government agencies decided to provide subsidized loans for a better lifestyle of people and poverty alleviation. Prior researchers appreciated the initiative of such investments (for example, [ 25 , 60 ]), but disproportion has been observed in these investments from the side of rich landlords or agencies. To tackle this issue, some highly effective alternative social networks, social collaterals, and credit scoring are needed here to approach the poorest women [ 57 ]. Moreover, women in more rigid cultural settings are likely to face a higher risk of domestic violence because economic empowerment intervenes with patriarchy and expedites change in rigidly defined gender roles [ 27 , 28 ]. Therefore, the need to address gender power imbalance and existing gender roles need to be taken into account before making interventions to empower women. It is found that the main body of the related existing literature primarily discussed only those factors that played a key role in the supply side of agriculture finance and microloans. A few past studies have also focused on the demand side of microfinance loans. However, the study of Guirkinger and Boucher [ 21 ] and the study of Ashraf and Ali [ 7 ] have highlighted the possible hurdles of the demand side of microfinance loans faced by smallholders. These obstacles include complex application procedures and complexity in providing loan securities. The seminal work of Garikipati et al. [ 18 ] reveals that the process of providing loans to the poor is uncertain, and is not easily generalized. So, people should be careful to utilize this development tool. However, it is clear that these loans provide financial benefits for poor women in developing new endeavors [ 71 ] and also act as a smart policy to help the poor [ 10 ]. Irrespective of the talk of “gender neutrality,” MFI clients that are women of immobile poor backgrounds have a lower default record as compared to men. MFI start-ups usually have significant and underreported economic effects because the poor women who work within households are not getting the standard pay and have limited start-up funds.

Brière and Szafarz [ 13 ] reported that MFIs have now become a risk-averse thing and it is “financialized,” i.e., MFIs now act as mainstream financial institutions. On the other hand, MFIs are considered a good source of financial support for women in starting new businesses and a tool to eliminate poverty in the country but this fact is not applicable universally because MFIs can also appear as an enigma in providing microfinance access to women. In various literature studies, researchers have focused on savings and credit products MFIs. It has been found that research studies are showing great interest in microfinance. Therefore, we aim to explore how MFI can lead to women’s empowerment and entrepreneurship. Furthermore, we also decided to investigate the possible benefits of microfinance for women from RCDP’s microcredit program.

Problem statement

One of the objectives of microfinance is to enhance women’s empowerment and to generate employment opportunities by promoting self-employment that consequently improves the social well-being of poor people. Most of the existing studies, mainly in economics, have only focused on how MFIs lending helps in poverty alleviation, rather than analyzing its impact on social and financial empowerment and new venture creation by women. The majority of the past studies were quantitative [ 9 , 15 , 17 ], while there were a few qualitative studies applied in various contexts that analyzed the impact of MFIs in enhancing women’s empowerment but still substantial studies are not available which explores specific lived experiences of women borrowers when they avail microloans and how they utilize that loan in starting their businesses. Therefore, this study aims to enhance the understanding of the role of microfinance from the viewpoint of beneficiaries in improving their empowerment and entrepreneurial development.

Significance of the study

Pakistan is a developing country and the majority of its population is living under the poverty line and are mostly unaware of different sources of financial facilities. MFIs particularly focus on such rural areas in which most of the people are un-bankable and marginalized. This study contributes to the extant literature, as it explores the lived experiences of women borrowers regarding empowerment and entrepreneurial development. To get deeper insights into the structural meaning of empowerment analyzed by considering participants’ histories, lived experiences, and social interactions, we used a qualitative approach that relies on in-depth interviews and a focus group under the case study research design. This study provides valuable insights into how MFIs are making women socially and financially empowered. Also, how microfinance helps in women-led ventures’ creation process. To investigate how microfinance is increasing women’s empowerment, we deduced the following sub-objectives.

To explore how women become socially empowered after getting micro-financed.

To figure out how women become financially empowered after getting micro-financed.

To determine how microfinance increases women’s entrepreneurship.

Literature review

• Microfinance

Microfinance programs have been playing a dominant role in poverty alleviation since long ago [ 40 ]. The vision behind the growth of microfinance is to pull the poor toward the entrepreneur side by giving them enough credit to achieve this goal. However, microfinance usually considers one assumption, i.e., the beneficiaries have adequate social capital, human capital, and other required assets for expanding their small-scale businesses. This indicates that the lack of credit is the only prominent hurdle experienced by poor women [ 73 ]. This assumption seems quite complicated because the growth of even a small business requires a lot of competencies, knowledge, expertise, and abilities [ 2 ]. Another major issue is that microfinance faces difficulty to approach the right poor people [ 16 ]. In the light of practical aspects, microfinance refuses the poorest division of people from borrowing money. This violates its role in approaching very poor applicants [ 14 , 83 ]. Furthermore, the poorest household people who are availing the benefits of microfinance still lack the proper technical skills that are necessarily required for business. The background of microfinance shows it is an essential tool to alleviate poverty, it works by receiving donations and lending money to poor people. Microfinance programs disregard the non-income parameters of poverty such as health, security, and education [ 11 ]. The study of Shaw [ 64 ] explains how the poorest households possess limited formal education. Also, poor health and undernutrition play a vital role in limiting the overall productivity of such households. The lack of education results in severe illiteracy which can badly affect the poor and make them unable to properly understand the effective working procedure of loans. Famous examples include Akhuwat, AGAHE Pakistan, AMRDO Foundation, non-bank microfinance companies, and many more.

Measuring empowerment

The study of Malhotra et al. [ 47 ] reports that the identification of empowerment as a primary development tool has been done, but still, institutions such as the World Bank and development agencies haven’t introduced an authentic method for estimating and analyzing the tracking variations in various levels of empowerment. Researchers define empowerment as a dynamic procedure that is complex to measure. The reason behind this is that empowerment is related to social, economic, and political challenges as well [ 63 ]. The spiritual, social, political, and health factors make the complete empowerment measurement procedure and these all factors are interconnected with each other. The term empowerment can also be expressed as a way of independent decision making, identification, and utilization of resources [ 1 ]. The literature reveals that empowerment is a multidimensional concept and it can be assessed under multiple dimensions [ 31 ]. This study primarily focuses on the influential impact of microfinance on women’s empowerment in the context of the financial and social aspects. This is because the financial and social aspects of women’s empowerment help increase the development of both the quality and quantity of existing human resources. These two aspects are proven as critical factors in enhancing the development of a society.

Meaning of women’s empowerment

There is significant diversity in the agendas, emphases, and terminologies used for describing women’s empowerment. Many papers have defined empowerment and its measurement approaches. The most common terms used in the extant diverse approaches use power, choice, control, and the option to describe women’s empowerment [ 72 , 78 ]. However, it is still confusing to say whether the terms “empowerment”,” “gender equality,” “women’s autonomy,” and “women’s status in society” are similar or different concepts. The term women empowerment has been conceptualized mostly as an outcome or a capacity or some means to an end, and a process of achieving power [ 35 , 54 ].

Microfinance and women’s empowerment

Women are the main target audience of microfinance programs. This credit amount not only helps poor women to grow economically but also improves gender equality, the status of women within the family, their health, and their education level [ 35 ]. Moreover, women are examined as a good credit risk by microfinance programs due to their increased propensity to repay loans [ 24 ]. In contrast, men are more interested in moving their money toward risky business practices and are at high risk to consume this money on tobacco, gambling, or drinking [ 20 ]. However, Goetz and Gupta [ 20 ] also highlighted that a significant percentage of women’s loans are directly invested in business activities by their male relatives, but the liability of repayment goes to women borrowers. The recent literature primarily discusses the evaluation process of microfinance programs [ 3 , 38 , 65 ] in the context of the well-being of borrowers [ 14 , 50 ] and empowerment capabilities of women [ 61 ]. The reporting of these evaluations reveals some conflicting conclusions, and it still tells that borrowers have an absence of accounts for themselves and this impact of credit can affect their lives [ 35 ]. There is limited evidence in the literature on how the poor perceive the process of microfinance loans. In addition, the existing literature has limited scope regarding the “transformative process” of entrepreneurship which reveals the lives of those needy people who are living in extreme poverty [ 76 ]. In response, this study fills the gap in the literature by examining how most disadvantaged borrowers or potential borrowers themselves perceive and experience microfinance in a context characterized by extreme poverty, one where family responsibility and entrepreneurial activities are closely intertwined.

A study reported that 95% of Grameen’s borrowers were females and this percentage kept on raising till 2011. Similarly, Aghion and Morduch [ 6 ] highlighted that 71% of total borrowers of MFIs were women. Further, past researchers have also pointed out that MFIs target women because their default rates are very low as compared to men [ 5 , 36 ]. Because of this reason, MFIs have launched several innovative schemes to financially support their female clients. MFIs play a crucial role in enhancing the empowerment of women as it boosts their resources, increase return on human capital by improving their affordability, and consequently improve their living standards.

Social empowerment of women

Women’s social empowerment refers to having a supportive environment by using different affirmative programs and policies for the empowerment of women along with the provision of easy and equal access to necessities of life [ 48 ]. In the field of development, empowerment has become a catchword, with a specific focus on poverty alleviation and the political addition of marginalized groups of women [ 49 ]. Microfinance has proved socially beneficial for women [ 35 ]. In a pivotal study, Mahmud [ 46 ] described that microfinance institutions have a significant positive influence on women’s social empowerment as it substantially improves their control of income spending and intra-household decision-making power, which resultantly enhances their welfare. Sinha et al. [ 67 ] found that women’s participation in MFIs enhanced their capability to spend money, mobility, and dominance in household decision making. Further, Montgomery and Weiss [ 51 ] concluded women’s participation in MFIs leads to enhance family decision making and found that family landholdings, media exposure, and institutional access are key determinants of women empowerment [ 26 ]. Similarly, it was found that savings impact is more significant on women as compared to men as it enhances their decision-making power related to family planning, family expenses, recreation, and their lifestyle [ 8 ].

Therefore, there is a need for an integrated microfinance program comprising education with skill-building training for increasing the capacity building of women and fortifying the relationship between women’s social empowerment and microfinance [ 4 ].

Financial empowerment of women

Many past studies have analyzed women’s empowerment from different perspectives; however, financial empowerment is ignored to some extent. In this study, one of the main objectives is to examine the financial empowerment of women. Past studies have reported that financial empowerment can be understood through three factors; financial literacy, financial attitude, and financial well-being. Financial literacy is inherent in humans and is recognized as the primary privilege of humans. “Financial literacy is the capability of understanding finance” [ 75 ]. Lack of financial knowledge ultimately pulls poor people away from success in financial markets or businesses [ 79 , 86 ]. The importance of financial literacy is equal for men and women. However, it is reported that if women have stronger financial knowledge then they can do effective future planning [ 45 ]. Financial knowledge is related to financial attitude. The financial attitude refers to the capability to manage finances, interest in enhancing financial knowledge, and investment decisions. Past studies revealed that financial knowledge, financial attitude, and financial behavior affect financial empowerment or financial well-being [ 33 , 66 ]. The concept of financial well-being is related to personal traits, knowledge of finance, and attitude. Therefore, the subjective meaning of financial well-being varies from person to person [ 32 ]. Thus, the financial empowerment of women can be assessed by considering financial literacy, financial attitude, and financial well-being.

Research gap

The literature discussed following the structure from the history of microfinance to concepts of women empowerment leads to the discussion on the relationship between women empowerment and microfinance. The literature depicts that different indices were explained in prior research studies giving a quick overview of empowerment but they are limited as they used a few variables, ignored key ontological issues, details, and subjective experiences that deepen the understanding of empowerment [ 9 , 15 , 17 ]. Therefore, this study fills the existing gap as we interviewed women in their natural settings and in their contexts in which they interpreted empowerment from their viewpoints.

Further, there was a strong practical gap regarding the lack of research on how women experienced empowerment and entrepreneurship through microfinance. A majority of the past studies applied quantitative methodology with the top-down approach which focuses on the views of service providers instead of beneficiaries and thus the beneficiaries’ views were not considered. Therefore, it becomes evident that the quantitative approach is not suitable for understanding women’s empowerment because it is a process of realization and only participants can explain what empowerment means to them through their experiences and feelings of becoming empowered. Hence, it is significant to use a qualitative methodology to capture the real feelings and experiences of women. Therefore, we applied the bottom-to-top approach to analyzing the true essence of the lived experiences of women regarding empowerment and entrepreneurship. Thus, this study is based on a case study research design to explore the perspectives of women that how they interpret and understand the phenomenon of empowerment achieved through microfinance in their natural context. Overall, this study enriches the extant literature about women’s empowerment by explicating the complex phenomenon of empowerment through social, financial, and entrepreneurial contexts.

Research question

For exploring the effectiveness of MFIs in terms of women’s empowerment and entrepreneurial development, we propose the main research question of this study as follows;

What is the impact of microfinance on women’s empowerment?

Sub-questions

How does a woman become socially empowered after getting microfinance?

How does a woman become financially empowered after getting microfinance?

To what extent microfinance leads to women’s entrepreneurial development?

Theoretical framework

William’s theoretical model of women’s empowerment.

In this study, two theories as theoretical frameworks are used. The first theory is by Williams [ 84 ] who formed a theoretical model on women’s empowerment. In the development of this model, the innovative insights of Kabeer [ 34 ] were used. Given this theory, empowerment comprises three factors, resources, agency, and achievements. Here, the resources present the supporting factors which are utilized by women to achieve empowerment, the agency presents the ability of the women to achieve their goals, and achievement refers to the success of women in achieving their life goals. Resultantly, the results achieved represent achievements by combining resources with the agency. We have used this model for measuring women’s empowerment.

Status withdrawal theory

The second theory used in this study is the status withdrawal theory, this theory explains that when certain groups of people realize that they are not respected by society. They switch to entrepreneurship for getting respect from society [ 22 ]. Thus, entrepreneurship is a function of status withdrawal. We follow this theoretical framework for understanding the entrepreneurial development among women borrowers. As all women borrowers belong to a poor class so we will explore whether they have any status withdrawal intention behind starting their own business or not (Fig.  1 ).

Conceptual framework of the study

Methodology

This study adopts the case study design approach for the empirical investigation as it inspects a contemporary phenomenon within the real life of participants, particularly when the limits between the context and phenomenon are not visible [ 59 , 85 ]. The case study design is the most suitable design for this study to carefully understand the impact of MFIs on women’s empowerment as it provides more in-depth views about the phenomenon under study.

The variables and themes analyzed in the focus group discussions and in-depth interviews are presented in Table 1 .

Semi-structured interviews

A qualitative method, in particular, semi-structured interviews, and a focus group were employed in this study. We used an interview checklist for the collection of qualitative data as it helps to properly understand the psychology of the participants. Also, it helped us to identify missing information from the participants. All interviews were conducted by telephone. The participants were selected through purposive sampling, as it is widely used in information-rich case studies [ 56 ]. The MFI selected for this study is RCDP, this MFI has played a key role in developing economic activities in communities and it exclusively focuses on women. The sample size consisted of six participants, who are aged 35 or above. Semi-structured interviews were organized in two sections, the first section included background questions based on the loan history of participants at the RCDP, demographic details, and a description of current business progress. The s econd section comprised questions that were related to participants’ viewpoints about their experience of gaining empowerment. For example, respondents were asked to provide in-depth explanations regarding their daily tasks and how their tasks get influenced after getting microloans. We also used sample prompts such as, “What role has microfinance played in your life?” and “Have you experienced any change due to microfinance? How it supported you in establishing your business?” Grand tour questions were also used such as “How would you explain a usual work week?” The grand tour questions lead us to get in-depth information through mini-tour questions for determining the details about certain events and the experience of women borrowers [ 69 ], such as Could you describe to me what you do for the mid-day meal when you are at your business? This helped in inquiring about delicate features such as advantages and changes associated with the role of microfinance in enhancing women’s empowerment. After conducting the semi-structured interviews, a focus group discussion with borrowers was conducted. This discussion helped us to collect data about the socioeconomic factors of women’s empowerment. This method helped us to have firsthand information (Table 2 ).

Focus group

To analyze the experience and interactions among participants, a focus group plays an important role. Through focus groups, we probed answers to the best lending practice, saving plans, and effective interpersonal relationships between members. The group discussion helped us to make certain aspects clearer.

Data analysis, results, and discussion

Developing first-order codes and second-order themes.

For analyzing the data, thematic analysis is used. First, to form codes, the data analysis started with coding iteratively, recorded interviews were used in performing the analysis [ 19 ]. At the initial stage, the data is linked with first-order codes that focus on the main research topic, the impact of MFIs on women’s empowerment. After this, common themes were used to join data fragments together from different but interconnected categories developed in the open coding [ 70 ]. This helped in combining first-order with second-order codes in a more precise manner.

Incorporating first-order codes with second-order themes

In the second phase, the data was revisited to ensure precision in the second-order themes. The existing themes were refined or used to create new second-order themes. We analyzed the constructs for ensuring that the themes are reflecting first-order themes. For example, first-order coding statements related to respondents’ increased level of independence in decision making led us to form a second-order theme explaining “increase in independence in decision-making power.”

Later this statement was defined as “Social Empowerment” described by the first-order coding statements explaining independence to decide without asking anyone. This analysis adds precision in this phase, while simultaneously permitting us to better examine and improve other evolving concepts, such as “being independent.”

Accumulating the theoretical dimensions

After second-order themes, we determined the theoretical dimensions for understanding the interaction among themes. For instance, some themes represented real experiences of social empowerment (e.g., “autonomy in decision making”) while others related to their response to social empowerment (e.g., “confidence in expressing an opinion”). We examined multiple models to check how multiple conceptual models relate to each other, using existing empowerment theory whenever suitable. We evaluated potential models against the data to investigate how emergent theoretical understanding described our research model. Table 3 presents the methodology, presenting the first-order codes, the second-order codes, and the theoretical dimensions that effectively describe the lived experiences of participants and the impact of microfinance in gaining empowerment.

Table 4 reveals the data supporting each second-order theme by presenting that microfinance has proved very beneficial for all six participants. Our main research question was to determine how microfinance increases women’s empowerment. Thus, our results presented that microfinance drastically changed the perception of women borrowers about living an independent life and societal dynamics. Fulfilling the necessities is one of the primary issues of poor people and due to this, they have to earn for each day’s expenses. Further, because of having no savings to rely upon, the lines between households and businesses are often not so clear. All our respondents reveal that now they feel more confident and empowered as compared to their earlier condition. All participants shared that they spend their income on fulfilling their household expenses such as children’s schooling and utility bills. The findings of this study were obtained through thematic analysis which is useful in conducting identification analysis and pattern reporting within data [ 12 ]. This study aimed to determine how microfinance is an effective tool for women’s empowerment, and how microfinance leads to develop entrepreneurial characteristics among women, and how it is useful for women. The conclusions achieved from this study may not become generalizable for the whole population but it is generalizable at a conceptual level [ 30 ].

The study determines the role of RCDP in women’s social and financial empowerment with the help of a case study methodology. We have used focus group discussions with in-depth interviews. We explored the lived experiences of women before and after taking a loan from RCDP and its impact on their social and financial empowerment with a view of William’s theory. In the focus group discussion, all participants shared their lived experiences and in the in-depth interviews, each case was analyzed for understanding the actual circumstances through which each participant has gone through. In this analysis, open-ended questions helped in understanding the real scenarios. The main research objective was to utilize open-ended questions for developing a comfortable association with the participants so that they can share all their lived experiences conveniently. We have selected in-depth interviews and focus groups because these methods were found more suitable for analyzing each case.

Case 1 Participant (1) described when her husband died in a road accident. She became helpless. Her in-laws abandoned her with six children. Then, she applied for the microfinance program of RCDP and was provided with an initial loan worth Rs.75,000/- for establishing a small retail store of food items. In her village, no women were running their retail store. But she took this step to support her children and now she is running a successful business. The credit for her success goes to her decision of taking a loan and starting a new journey in her life. She expressed;

Life became miserable without my husband. It was difficult to feed six children. Without having a source of income and no place to stay. I felt that my life has come to an end. But microfinance helped me to get out of the crisis. Now I am living a peaceful life with my children.

Case 2 Participant (2) shared that she remained in an abusive relationship with her husband for 11 years. Her husband was addicted to drugs. He divorced her after the birth of their seventh daughter. Then, he got married to some other woman. She expressed that she has gone through severe depression during that time when was alone with her daughters. Her mother and sister supported her but financially they were not capable to feed her children.

I was extremely depressed due to my divorce. I had no source of income other than him. I was worried about my daughters. I have four brothers and they also refused to support me at that time. Then, I started weaving and also started a dressmaking business on a small scale after taking a loan from RCDP. Particularly, I was good at making girls’ dresses. Now my mother and sister are living with me and I am supporting my family with my business.

Case 3 Participant (3) expressed that microfinance helped her a lot in supporting her family. Initially, she took a loan of Rs 80,000 to start her business. She shared;

My husband was a plumber but his income was not enough to support the household expenses. Then a time came when my husband couldn’t find any job for three months. We were deprived of all necessities. And we also have three children who were not going to school due to our crisis. Then I asked my husband to start his own business of baking food items. Because I was good at baking. We both decided to take a loan and started our own business. My husband was narrow-minded, initially, he refused to accept me as a partner in his business. But when he realized that only after one week our business showed visible growth. Then he allowed me to help him and we also hired two more workers. Now our children are going to school and we are managing all our household expenses.

Case 4 Participant (4) expressed that her husband was an employee in a garment factory. One day the owner of the factory decided to wind up his business because of a lack of profits. My husband lost his job, he searched a lot for other jobs but he failed to find any suitable job. Then, he died due to a heart attack. She took a loan of Rs 60,000 for purchasing a sewing machine and some clothes. She shared

I was living a happy life with my husband and children but life changed when my husband lost his job. Further his death made the situation even worse. One of my neighbors told me about RCDP. Just because of my children I took a loan and started my own stitching business and now I am in a position to manage my all household expenses.

Case 5 Participant (5) shared that her husband was employed in a workshop. But he lost his job due to the closure of that workshop. They had no other source of money. For four months, her husband searched for another job but he couldn’t find any opportunity. Their children left school because they were not able to pay their fees. Then, she convinced her husband to take a loan and start their own business. Her husband was afraid that we will not be able to repay the loan. Then, they will lose their respect in the family. But she told him that they have no other option and they have to take this risk.

My husband knew how to manage a car workshop so we decided to use the loan amount for starting a business. Gradually our business flourished, and we also managed to repay our monthly loan installments.

Case 6 Participant (6) shared her life experiences by stating that her husband was an electrician and his income was not enough to support the family. They have six children and their school fees were not payable with that income. Thus, she asked her husband to start his own business as a retail store as there was no other store in their area.

I am managing a retail store with my husband. Initially, my husband took all decisions related to savings and asset purchases. But now as I am helping him in managing our retail store. He acknowledges my effort and now we collectively decide how to spend our income. I and my husband started doing all chores together now. We both listen to each other, and collectively make decisions. He respects my suggestions and decisions. As we both couldn’t get a higher education, so we have realized the importance of education. Therefore, we are sending our children to good schools for quality education. The credit for our success and better well-being goes not only to my hard work but to all including my family, friends, and also to RCDP who helped us to build up our lives once again.

We have found that after establishing their own business, women became more confident and self-empowered due to microfinance. They have developed a true belief in their entrepreneurial skills and independent decisions. These women are highly efficient as they not only make a business investment but also save some amount of money for future needs at the same time. Women use their amount of loans in smart investments in some entrepreneurial activities and in providing financial support to their families. But after becoming financially stable, they start saving money for future needs. This indicates the smart and strategic planning of women. After this phase, women are very confident in developing a strong position in their family and taking financial responsibility on their shoulders. These results also find support from past studies [ 53 , 80 ]. Women have developed a serious working attitude toward their profession and are happy for supporting their husbands and family [ 77 ]. Hence, we can say that this all has become possible due to microfinancing as it not only provides financial support to women but also encourages them to contribute positively toward the development of society. [ 44 ]. Also, it plays a prominent role in establishing entrepreneurial knowledge and independent decision-making habit in women. Despite these efforts, many areas such as quality of services and working on new skill development trades, and gender responsiveness need improvement. The present form of this paper is not gender-friendly because it has mainly targeted the female gender and the male gender seems neglected. In addition to tangible development (food access and other necessities of life), it also provides intangible development to women in the form of motivation, self-belief, self-empowerment, confidence, and independent decision making. The findings of the study are in line with William’s theoretical model of women’s empowerment as the participants expressed that they have achieved empowerment by using their resources and agency. Further, the results are also in line with the status withdrawal theory as the participants expressed that they want to become independent because they want respect in society. Hence, our results are in line with the theories.

Microfinance plays a dominant role to motivate and enhance entrepreneurial activities in any country. This study aims to examine the efficiency of microfinance in empowering women in Pakistan. The analysis and results revealed that microfinance is an effective tool that can contribute to the development of women’s empowerment and entrepreneurship. The findings also support the theoretical aspect of William’s theory as women empowerment is being discussed with a view of three dimensions including resources, agency, and achievements. The study contributed to breaking the conventional hurdles levied on women’s decisions and mobility. A developing country needs to focus on the growth and development of entrepreneurship for achieving stability. People find microfinance as an opportunity for themselves as it provides a way to enter into the entrepreneurship field. The six cases elaborated in this study reveal that the RCDP microfinance loan has been proven as a full-time and consistent earning source for the people and helped them a lot in improving their living standards. In the initial stage, the clients operated their business as sole proprietors, and over time, they involved many other people in the business. Thus, microfinance has become a potential source of earning for many needy people.

Hence, this study highlights that microfinance creates a positive and influential impact on rural women. It not only works for the betterment of women but also considers the entire families of those women by supporting them in enhancing their family earnings. In this way, this study will help in increasing the percentage of school-going children and a reduction in child labor due to an increase in family earnings. Although this project is concerned with providing small-scale services still it is contributing a lot toward the growth of Millennium Development Goals related to women’s empowerment, health, child welfare, and poverty alleviation. In light of these results, we came to know that microfinance has a diverse portfolio of benefits. It is not only a source of finance but also a tool that makes women more confident and boosts their morale. The findings indicate that even the small-scale loans taken from RCDP have helped women a lot to grow their socioeconomic and financial position through entrepreneurship which supports the theoretical foundation of the status withdrawal theory. It has benefited females with strong and independent decision-making power. Our results can help policymakers and practitioners to adopt suitable policies that assimilate empowerment in the formation of more effective projects for women. The findings of this study may encourage more women to take part in microfinance projects and entrepreneurial activities.

Limitations and future directions

This study has some limitations. The first limitation is the shortage of time that resulted in designing a moderate sample size as compared to a bigger one. Second, the data collection is done for just one city and is limited to interest-based loans, whereas it has been found that RCDP is also concerned with interest-free loan programs. Third, the study used only six detailed interviews due to the time constraint factor which indicates that the findings cannot be fully generalized as only six cases were taken into account. However, this study has a potential scope in elaborating on all the possible dimensions of the related topic and it would enhance the recognition of women’s empowerment. This paper is dynamic as it covers both practical and theoretical aspects. Keeping in mind the time limitation and resource constraints, the above-discussed six cases can serve as a good starting step to allow the researcher to explore it further and investigate more dimensions in a longitudinal analysis. This study motivates women of our country to take a positive stand and contribute their role in poverty alleviation.

By documenting the limitations of the present study, future researchers are suggested to explore certain areas. Firstly, this study primarily deals with only a single project in the context of the most modern areas of Pakistan, it is recommended to future researchers perform this study in different regions of the country. Secondly, the sample size is limited due to time limitations; hence, future researchers are advised to conduct a study on the related topic by designing a large sample size. Lastly, it would be better for researchers to investigate the sustainability of community-based development projects via localized community-based adjustments with the support of local NGOs’ involvement rather than government funding.

Availability of data and materials

The data analyzed during the current study is available from the corresponding author on reasonable request.

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Khursheed, A. Exploring the role of microfinance in women’s empowerment and entrepreneurial development: a qualitative study. Futur Bus J 8 , 57 (2022). https://doi.org/10.1186/s43093-022-00172-2

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What Would It Take to Unlock Microfinance's Full Potential?

In the 50 years since modern microfinance was introduced as a tool to fight poverty, institutions have distributed hundreds of millions of loans to people in developing countries. Such loans are repaid at rates often as high as 98 percent.

Those metrics alone seem to tell a convincing story about the sector’s success, but to what extent have the loans meaningfully improved livelihoods? That question has been more difficult to track, say Natalia Rigol and Ben Roth.

Both development economists and assistant professors at Harvard Business School, Rigol and Roth are among the academics searching for solutions to make the next generation of microfinance tools even more transformative. The HBS Alumni Bulletin recently talked to them about their research.

“Around 2005 and 2010, some large-scale, randomized control studies started to emerge that all showed the same surprisingly lukewarm message about the impact of microfinance.”

Bulletin: One of the great surprises of microfinance has been the astonishingly high rates of loan repayment, at around 96 or 98 percent. How do you interpret that?

Ben Roth: One metric of success is just financial inclusion; and perhaps the fact that there are new borrowers who are taking loans and repaying them is evidence enough that this sector has had enormous impact. But another view that we’re also deeply sympathetic to is that, 30 years into the microfinance story, around 2005 and 2010, some large-scale, randomized control studies started to emerge that all showed the same surprisingly lukewarm message about the impact of microfinance on livelihoods.

Natalia Rigol: People expected to see shifts in household income, business growth, and consumption, but across the board these experiments found no movement, on average. It was quite controversial. When we tell microfinance practitioners about this evidence, it can be hard for them to really engage with it because of their work on the ground and the anecdotes they hear about lives that have been transformed.

Roth: Meanwhile, there’s a parallel body of work that tells a very different story. In randomized control trials all over the world, instead of giving access to a loan, a one-time cash grant was found to have transformative impacts on livelihoods and businesses six months, one year, five years, 10 years later. We learned from those studies that there are many small-business owners who could put capital to very good use, but microfinance has not yet unlocked those potential opportunities.

Bulletin: How are these findings shaping your work?

Roth: There are two strands of research that form the basis of our conviction about how microfinance could do better. One is about the timing of repayment obligations. The standard microfinance contract has very little discretion in terms of when you repay your loan, so Natalia and her collaborators did one of the earliest studies to look at what happens if we relax that requirement and let people wait up to two months to repay their first installment. People who got the more flexible contract invested significantly more in their businesses and earned higher returns as a result. Their businesses were bigger three years later, and they are still bigger now, 10 years later. That paper was very influential and one of the first indications to academics that small changes to the structure of microfinance contracts could have big consequences for how people spend the money and its impact on their businesses and their livelihoods.

“Ten years ago, India didn’t have social security numbers, so that is a first-order constraint.”

Bulletin: When they have a grace period, how do people use that time and capital differently?

Rigol: Giving people more time up front allows them to better match the cash flows of their business with their repayment obligations. If you are a tailor and you’re switching from sewing by hand to using a sewing machine, you have to learn how to use the machine and make sure your customers are going to like the products that you’ll produce with the sewing machine. The grace period afforded people the time to make significant investments like that.

The second strand of our work is developing new ways to identify which borrowers have high-growth opportunities. Microfinance often operates in environments that are information-scarce, in terms of screening borrowers. Ten years ago, India didn’t have social security numbers, so that is a first-order constraint. We have been going to the neighborhoods where these entrepreneurs live, forming them into groups, and asking people which of their neighbors have the most potential to grow their business.

Roth: About 10 years ago, Natalia and I did a randomized experiment in western India, where we gave out $100 cash grants to a random set of microentrepreneurs. We found that the return on investment to a random entrepreneur in the community is about 8 percent per month, which is a big effect in terms of livelihood generation. But the people who were nominated by their community as high-growth entrepreneurs had a 25 percent monthly return on investment, and the people who weren’t nominated averaged no return at all. That was our first signal that some of these alternative screening mechanisms based on soft information could transform how we think about which entrepreneurs to target with larger or more flexible loans.

Bulletin: Are these findings making their way into practice?

Roth: Not very quickly, so we are working with a microfinance institution in India called Sanghamithra Rural Financial Services to figure out how to operationalize these insights. We have developed two credit products with Sanghamithra that are based on these ideas, and we’ve just deployed the first few dozen of each of them.

The first is a graduation loan. For many borrowers, it’s hard to get a formal bank loan that’s more than $1,200 but less than $10,000, so we’ve been identifying borrowers from Sanghamithra who have demonstrated that they can handle loans of $1,200—and then we’re using community information to figure out which of them could handle loans up to five times that amount. (Larger sums may help them take the next step in growing their business.) These borrowers are already organized in groups, so there’s a community of people that knows them very well. We do a variety of formal and informal interviews to understand who they’d feel comfortable taking a bet on, and then we do a lot of work with the borrower to come up with a personalized repayment schedule that matches their cash flows.

Rigol: We’ve given out about 20 loans so far, and we’re planning to run a randomized evaluation to understand the impact of these kinds of loans on livelihoods. But this is not a research-first project; it is a practice-first project. One of our principal motivations is to develop a set of loan products that will not only help people grow their livelihoods but also to do so in a manner that is profitable and therefore scalable.

“We believe in these ideas, and we’re trying to validate them beyond what’s done by traditional academic papers.”

Roth: The second product that we’re working on is a loan for market vendors who often rely on informal working capital loans at exorbitant interest rates. Vendors have volatile cash flows, and the one-size-fits-all microfinance repayment model is not a good fit. We are developing a loan product that matches their cash flows, with a repayment schedule between a day and a month. The loans start small but grow as borrowers demonstrate good repayment. They’ve been very popular.

Rigol: A year ago, when CEOs of microfinance institutions heard about these ideas, their response was, “You guys are nuts, but it would be amazing if you can figure this out.” So far, we have good repayment, and the idea that we are bringing new innovations and risk capital to the industry has piqued a lot of curiosity.

Bulletin: So with these products you’re bridging the gap between research and practice?

Rigol: Well, it’s a big gap, and we’re small people. But we believe in these ideas, and we’re trying to validate them beyond what’s done by traditional academic papers.

This article originally appeared in the HBS Alumni Bulletin .

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Microfinance in Sub-Saharan Africa: social efficiency, financial efficiency and institutional factors

• Published: 22 November 2021
• Volume 30 , pages 449–477, ( 2022 )

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• Natálie Soldátková 1 &
• Michal Černý   ORCID: orcid.org/0000-0002-3261-9524 1  

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There are two natural efficiency measures associated with microfinance banking: social efficiency , measuring to what extent the micro-capital becomes accessible to the smallest entrepreneurs with no previous access to external funding, and financial efficiency , measuring the sustainability of the microfinance business and its attractiveness for investors providing the funds. We study the relationship between the two objectives (which might be incompatible in some cases) on a panel of 579 microfinance institutions across 36 Sub-Saharan African countries in period 2004–2017, covering the Big Crisis, and identify determinants of both types of efficiency. The main analytic tool is data envelopment analysis. We also study further relations between the microfinance sector and institutional factors of the corresponding economy, such as the presence of the World Bank programs or mandatory caps on interest rates. The main findings are as follows. Microfinance institutions focusing on lending to small and medium enterprises demonstrate a higher level of efficiency (both social and financial). Gender focus of the lending institutions also has a significant influence on the efficiency. The presence of the private credit bureau on a market is associated with significantly higher efficiency levels in both social and financial aspects. Public credit registers, however, are not associated with a positive efficiency trend. The presence of general microfinance legislation shows no significant influence, however the mandatory interest rate cap seems to affect the performance. In general, the research indicated no strong evidence of mutual exclusiveness of the social and financial objectives.

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Soldátková, N., Černý, M. Microfinance in Sub-Saharan Africa: social efficiency, financial efficiency and institutional factors. Cent Eur J Oper Res 30 , 449–477 (2022). https://doi.org/10.1007/s10100-021-00789-8

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Does microfinance really alleviate poverty? The 34-billion -dollar question

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Despite around US$34 billion in funding and numerous microfinance initiatives to help entrepreneurs in the world’s poorest countries, informal moneylenders and predatory loan sharks continue to thrive. Designed to help alleviate poverty in some of the world’s poorest countries, microfinance initiatives provide loans to entrepreneurs and small businesses, hoping this will help the poor to work themselves out of desperate poverty.

But if formal, government-supported microfinance initiatives are widely available, why haven’t loan sharks and predatory lenders been wiped out? If microfinance cannot compete with informal lenders, can we be confident that it really works?

These questions really matter. Philanthropic donors and policy-makers are enthusiastic about microfinance initiatives and, understandably, those working in microfinance often have a vested interest in showing that their work is effective. Research into how microfinance initiatives really are performing should therefore take into account the often highly politicised context in which poverty alleviation schemes operate. But that isn’t always easy – or even possible.

In Thailand, for example, the controversy surrounding rice subsidies for poor farmers forced the former prime minister, Yingluck Shinawatra, to flee the country . She was tried and convicted in absentia . At around the same time, it was reported that, relative to their peers in South-East Asia, Thailand’s poor are getting poorer . In such politicised contexts, it is difficult to find researchers willing to ask awkward questions about why this might be so.

This means that the enthusiasm of microfinance funders is still not grounded in rigorous studies. Research on microfinance sits somewhat uncomfortably across disciplines – finance, economics, management and development studies, among others – and many research projects studying the effectiveness of microfinance schemes are driven by academics’ need to publish in high-ranking academic journals. This can lead to research that applies highly complex and discipline-specific quantitative methods to large samples of microfinance borrowers without focusing on more fundamental questions such as why predatory lenders still thrive.

Fortunately, some researchers and governments are starting to realise that we know less about these schemes’ effectiveness than we might think. That’s why my team started our research by asking a fundamental question: Why is it that moneylenders still thrive when formal microfinance is widely available?

The sceptical approach

Attempting to evaluate microfinance initiatives in isolation, many studies ignore the competition from informal lenders. In contrast, we set out to listen to people and gather information from three different sources. We conducted in-depth interviews with poor micro-entrepreneurs, many of which had borrowed from both formal and informal lenders. This latter type of borrower, in particular, drew interesting comparisons. We also interviewed representatives of formal microfinance initiatives and informal lenders, including loan sharks.

Tagging along to visit loan shark clients, ethnography-style, provided the level of insight often absent from purely quantitative studies. Interviewing both lenders and borrowers allowed us to uncover distinct informal borrowing schemes used by microbusinesses, and revealed a mismatch between incentives and strategic objectives in formal microfinance schemes.

Our recent paper aggregates findings from two studies in Indonesia – an ideal research setting because, along with Bangladesh, it hosts some of the world’s most widely available microfinance schemes.

Among our findings is that microfinance initiatives can produce unintended consequences. When poorly managed, they provide entrepreneurship opportunities for “middle men”, where borrowers who more easily qualify for loans from microfinance initiatives then lend to poorer borrowers. Consequently the poorest of the poor micro-entrepreneurs benefit less than the comparatively less poor, and this reinforces existing socio-economic hierarchies in these countries.

Getting it right (and wrong)

This informal intermediation is just one of the problems making formal microfinance initiatives less effective than they might be. In fact, the formal sector can learn a lot from the informal sector.

Poor staff management in formal organisations permits – and even fosters – informal intermediation, reducing microfinance effectiveness. We found that loan officers at formal microfinance organisations have an incentive to focus on quantitative outcomes such as the number of loans provided and rollovers of “safe” loans, rather than on funding the poorest borrowers. Loan officers know that some borrowers use their loans to lend to others; they provide loans to these informal intermediaries because they know that they will reliably pay back their loans.

We even found collusion between intermediaries and loan officers, as well as former microfinance loan officers becoming informal lenders themselves. “It is easy to do”, they said, easier than to “sell noodles or operate a small grocery stall”, and borrowers “do not care whether we have licenses or not”. During preliminary fieldwork in Thailand in August 2017, we found that informal intermediation and relending of loans between borrowers occurs there, too.

To stop predatory lenders from taking advantage of poorer borrowers, the microfinance industry needs to develop ways to identify and prevent management failures. It is also important to understand that informal lending doesn’t just involve predatory loan sharks. There is a whole spectrum of informal intermediation, for example, ranging from the benign and casual to the systematic and downright criminal.

Therefore, research on poverty alleviation must take a sceptic approach, and listen to borrowers and all lenders carefully. Without learning from the different lending schemes of informal lenders, microfinance initiatives cannot be efficient and competitive – and that is why they haven’t displaced the informal lending on which many borrowers still depend.

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Impact of microfinance on women’s economic empowerment

• Belay Mengstie   ORCID: orcid.org/0000-0002-4330-7083 1  

Journal of Innovation and Entrepreneurship volume  11 , Article number:  55 ( 2022 ) Cite this article

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Women’s economic empowerment a strategy aimed at enabling women in decision-making, increment in income and asset ownership. The main aim of the study is to examine the impact of microfinance on women’s economic empowerment. Data were derived from a questionnaire of a sample of 346 women clients of microfinance. Multiple regression and paired sampled t -test data analysis techniques were used in the study. Multiple linear regression result revealed that age, marital status, education level, credit amount, and number of training have significant effect on women’s economic empowerment. However, previous business experience did not have significant impact on women’s economic empowerment. Paired sampled t -test result revealed that there is significant mean difference before and after microfinance service in terms of income, asset, and saving. Microfinance has significant positive effect on women’s economic empowerment by improving women’s independent income, increasing asset possession levels, and improved monthly saving amount. Moreover, the study proved that microfinance has a positive impact on women’s entrepreneurship development and business exposure.

Introduction

Microfinance institutions have been considered as important development program in Ethiopia for the last 20 years. The legal foundation for the microfinance movement and expansion in Ethiopia was started after 1996 proclamation. In the development of microfinance, this proclamation considered as a bench mark to start and develop microfinance in the country. Women’s participation in microfinance is growing gradually. All microfinance industries have a shared vision of poverty alleviation and women’s economic development.

Microfinance institutions are effective instruments for providing basic services like saving, affordable credit, and skill training (Haimanot, 2007 ; Mahfuz et al., 2017 ; Misrak, 2012 ). Microfinance institutions are important economic development agents intended to benefit women and lower income people (Cicchiello et al., 2021 ; Duflo, 2012 ; Meressa, 2020 ). Microfinance institution plays a great role in different countries in alleviating women’s economic problem, creating self-employment opportunities, and developing businesses for women entrepreneurs. Women are benefited from participating in microfinance program. Women’s participation in microfinance credit program increased their economic position, exercise economic independence, and improvement in their business leadership skills (Addai, 2017 ; Haimanot, 2007 ). However, Women’s participation in economic activities is very low in Ethiopia (Dawit, 2014 ; Solomon et al., 2019 ; Zelalem & Chalchissa, 2014 ).

Women represent the main economic force in different developing countries. As economies become more and more information-driven, the issues of women’s access to and the use of information and communication technologies are growing in importance for developing economies (Michota, 2013 ). Economic empowerment improves women’s opportunity to resources and non-financial resources. Moreover, it creates good opportunity for skill development and market information (Addai, 2017 ; Khandre, 2015 ). Women’s economic participation is base to exercise women’s right and helping them develop decision-making role over their household and influence in their community. Women’s empowerment is creating equitable societies (Shaheen et al., 2013 ).

There are controversies on impact of microfinance on women’s economic empowerment. Odell ( 2010 ) study identified the difficultly of making generalized conclusions taking to consideration the heterogeneity of microfinance interventions. Stewart et al. ( 2010 ) study in Africa found little impact of microfinance on income of beneficiaries. According to Rathiranee and Semasinghe ( 2015 ) study, there is a weak but significant impact on women empowerment due to microfinance service provision in Sri Lanka. Addai ( 2017 ) and Mohammad et al. ( 2017 ) study clearly indicated that there is positive effect of microfinance on women’s economic empowerment in Ghana and Bangladesh, respectively. Different researchers confirmed the significance effect of microfinance (Kato & Kratzer, 2013 ; Loomba, 2017 ; Misrak, 2012 ).

There are many published studies linking microfinance to women’s empowerment. The studies mainly concerned on microfinance role on, poverty alleviation, and socio-economic development through microfinance. Particularly in Ethiopia, the concept of microfinance is at its infancy level that needs further investigation. Therefore, this study is focused to examine how microfinance service has impact on women’s economic empowerment taking into account Amhara credit and saving institution of Ethiopia.

Literature review

Microfinance development in ethiopia.

Microfinance program in Ethiopia launched during 1960s as semi-formal microfinance service with credit and saving cooperatives. Semi-formal microfinance created assets to undertake different economic activities, improved household asset building, and manage risks and bad events. Different non-government organizations in Ethiopia have introduced saving and credit cooperatives aimed at creating self-employment and generating income for the betterment of society affected by drought in the country (Befekadu & Berhanu, 2000 ).

Until the beginning of 1990s financial sources to finance for urban and rural poor and small enterprise in Ethiopia were informal and semi-formal sources of finance like families, friends and moneylenders (Itana et al., 2004 ). They further noted that, starting in the mid-1990s after known drought in 1984, Non-Government Organizations introduced the idea of saving and credit among poor section of the society as a means for rehabilitation and development. Later, government programs undertaken in collaboration with international financial institution even though both types of programs were operated in unorganized and scatter manner and lacked sustainability until the year 1996.

Formal microfinance in Ethiopia was developed and flourished recently with fast growth rate. Dawit ( 2014 ) noted that Ethiopian owned microfinances were established to provide different services in rural households, promote saving habit and credit accessibility with strong focus on sustainability. Formal microfinance was strengthened in 1990 when an urban micro-financing scheme was initiated at national level with agreement signed between International Development and Ethiopian Government (Befekadu & Berhanu, 2000 ). After Ethiopian people’s democratic front, present Ethiopian government, took over power in 1991, considerable attempt has been made to liberalize the financial sector. As result, Proclamation No. 84/94 was declared, to allow private and domestic investors to engage in insurance and banking business, which were previously monopolized by the government. Another Proclamation 40/1996 was issued to solve financial services delivery of the to poor section of the society (Dawit, 2014 ). Therefore, the legal foundation for the microfinance industry was laid in the country with Proclamation 40/1996 on supervision and licensing of MFIs in the year 1996. This proclamation act as a framework to start, expands, and develops microfinance in Ethiopia.

Agricultural Development which Leads to Industrialization strategy considered rural finance as an important tool for agriculture and food security. As a result, the Ethiopian government reconsider microfinance operational modality in order to facilitate microfinance service delivery and outreach. Currently, in Ethiopia there are 38 microfinance institutions licensed to operate regional states and throughout the country (Solomon et al., 2019 ).

Microfinance and women’s economic empowerment

Microfinance institutions are considered as society based strategy to give different finance related resources for the poor and disadvantage section of the society in order to improve the life of clients (SEEP, 2006 ). Microfinance sector plays vital role in supporting the community in their transition towards development of the country and peace building. Microfinance industry support local economic development by providing the needed financial and non-financial services for small enterprise development. According to Kamberidou ( 2013 ), women are naturally strong in using financial and non-financial resources in building strong relationships, and creating a culture of collaboration. Some researchers consider microfinance as survival strategy in time of disaster and sustainable peace development (Dawit, 2014 ; Khanday et al., 2015 ).

In Ethiopia context Supervision and Licensing of Microfinance Institution Proclamation No. 626/2009 defines microfinance as “financial services provision including credit, savings, drawing, money transfer services and other related services.” This microfinance business definition does not confine microfinance institution to only credit. In this article, microfinance is defined as financial services provision to the low-income people and small enterprises that lack access to formal financial institutions. Microfinance is not limited to borrowing activities but also includes savings, transfer facilities, training, insurance and others.

Microfinance sector empowers women economically by providing working capital and support women in order to get constant income to their families (Tandon, 2016 ). According to Mudakappa ( 2014 ) many women were clients of microfinance in different countries. Khanday et al. ( 2015 ) believed that development of women economically generated self-esteem and respect for women microfinance beneficiaries. Microfinance provides finance to women who helped them to start new business and expand the existing one. Microfinance institution service of credit and training gives women confidence and helped them to be more active in participating in the household and community affairs.

Microfinance institution service empowers women economically by providing self-employment opportunity, improving labor productivity, and increasing wage rate (UN, 2011 ). Microfinance impact mostly measured using variation in independent income, employment rate, and household consumption on a sustained basis. Microfinance institution service impact could also be directly known by considering increment in outcomes such as literacy rate, fertility rate, and housing pattern. Changes in income and self-employment opportunity among enterprise owners benefit community at large (Ertu & Tilahun, 2022 ).

Microfinance service helped the poor section of the society to protect from different risks and diversify business, to increase sources of income which is considered as important instrument in the reduction of poverty and women’s economic empowerment (Addai, 2017 ; Littlefield et al., 2013 ; UN, 2012 ). Many researchers result showed that income played significant role on consumption, capital formation and other indicators of human well-being. When the income level increases access to balanced food, access to medical services and children education are positively affected (Solomon et al., 2019 ). Moreover, microfinance institutions provide services which seek to minimize the risk from adverse effects for the poor society. For example, savings programs are operating to help microfinance institution clients to gradually accumulate working capital for the times of crises and when there is capital need for different purposes. Efficient microfinance program could also reduce the rate of unemployment, and diversify sources of income. Thus, Women’s economic empowerment as result of microfinance service could be achieved.

Conceptual framework of the study

Conceptual framework for this study is developed based on the evidence available in literature. More than 40 researches reviewed to develop this conceptual frame work. Based on the literature review, the researcher has developed conceptual framework to show the relationship between independent variables, microfinance service, and dependent variable women’s economic empowerment.

According to SEEP ( 2006 ), impact assessment can be used to improve services, increase impact on poverty and microfinance institution efficiency, to promote good client service and accountability, and provide accountability to donors and other external stakeholders. Ledgerwood ( 1999 ) divides impact of microfinance into three categories namely economic impacts, socio political or cultural impacts, and personal or psychological impact. Women’s economic empowerment can be influenced by both women’s demographic characteristics and access to financial resources from microfinance institutions. Demographic factors are expected to influence access to microfinance services. If women have access to these services, they will be able to participate in income-generating activities whether to start a new business or improve the exiting one. The result expected is empowering economically which is manifested through ownership in income-generating activities, ownership of assets, increased income, savings, and decision-making (Selvaraj, 2016 ).

Microfinance service (access to credit and training) and demographic variables (age, marital status, and education) leads to women economic empowerment. Addai ( 2017 ) study clearly showed that microfinance service has impact on women’s economic empowerment but the relationship is mainly take into account marital status, age and educational of the women. Rehman et al. ( 2015 ) study found that education and age have impact on women’s economic development of women beneficiaries. The main independent variables which microfinance institution provides are access to credit and training which enable women to start their own economic activities or invest more in existing activities and earn an additional income. According to Dawit ( 2014 ) and Rehman et al. ( 2015 ) increased participation in economic activities raises women’s independent incomes and savings, increases control of their own and family income, and other household resources which are basis for women’s economic empowerment.

Data and methodology

The research was conducted in Ethiopia in the year 2019. From the literature review, 35 items that would indicate women’s income, asset, saving and decision-making were identified. A questionnaire consisting of both open- and a close-ended question was used to obtain information from the selected samples of 346 respondents. The questionnaire basically focused on socio-demographic characteristics, economic empowerment and microfinance service.

The questionnaire was standardized which was used and approved; however, pilot study from selected respondents was conducted to refine the instrument. Questionnaire was tested on some respondents to make the instrument objective, suitable, relevant, to the problem and reliable. Issues raised by the respondents were corrected and questionnaires were refined. Besides, proper detection by senior research was also taken to ensure validity of the instrument. To check internal consistency, reliability test was conducted in with a sample of 30 clients and the Cronbach’s alpha coefficient for the instrument was checked. Cronbach’s alpha was computed and was 0.85 which is higher than 0.7. Therefore, the instrument was reliable and used for the study.

Multistage sampling technique was used in this research. Amhara region of Ethiopia has 10 zonal towns and the researcher took 3 zone administrations. The researchers Knowledge and experience was used for selecting the study area. In order to evenly distribute the sample in all geographical area; the existing administrative division were taken as a base for allocation of sample size. The numbers of respondents included in the study for each town were found by proportional method based on client’s number in each town using Amhara credit and saving institutions data. Finally, respondents enrolled in the study were drawn using simple random sampling technique. As a result, 51.5% of the respondents were from Dessie town administrations, 27% of the respondents were from Debrebirhan town administration and the remaining 21.5% were from Woldia town administrations.

Multiple linear regression analysis was used to determine whether the six independent variables, which are age, marital status, education level, previous business experience, credit amount and number of training have any significant effect towards economic empowerment of women. Moreover, paired sampled t -test was used to compare mean difference of income, saving, and asset before and after credit program. The econometrics model used is:

where CEEI = Cumulative Economic Empowerment Index; β 0  = constant; β 1 , β 2 , β 3 , β 4 , β 5 , β 6 , are the coefficients, AGE = age; MARS = marital status; EDUL = education level; BEP = business experience; TRAE = training exposure; CUML = commutative loan amount received; έ  = error term.

The dependent variable is cumulative economic empowerment index. Accordingly, for measuring economic empowerment of women in the study, a Cumulative Economic Empowerment Index (CEEI) was developed by summing up the individuals’ scores obtained from all the four indicators: asset, income, saving, and control over resource. Other researchers (Dawit, 2014 ; Kaur, 2012 ; Leonhäuser & Parveen, 2004 ; Mohammod, 2014 ; Parveen & Chaudhury, 2009 ; Simantini & Bimal, 2016 ) also used similar methods to measure women’s economic empowerment by developing a cumulative women’s economic empowerment index.

Results and discussion

This section of the study was conducted to contribute new information about the impact of microfinance through Amhara credit and saving institution on women economic empowerment. Multiple regression and paired sample t test were employed for data analysis.

Regression result

A further inspection on the regression coefficients of individual predictor variables revealed that age (Beta = 0.285, p  < 0.05), marital status (Beta = 0.125, p  < 0.05), level of education (Beta = 0.260, p  < 0.05), number of training (Beta = 0.224, p  < 0.05), credit amount (Beta = 0.225, p  < 0.05), are significant predictors of overall economic empowerment of women. This finding revealed that age, marital status, education level, number of training, credit amount have significant effect on the economic empowerment of women. Previous business experience (Beta = 0.064, p  > 0.05) variable was found to be insignificant on women economic empowerment in the study area (Table 1 ).

This finding revealed that age has significant impact on women economic empowerment. An increase in the age of the women raises maturity and their confidence to earn more money, which leads to increases in their overall economic status of women. This study found that age and women’s economic empowerment was associated positively, i.e., economic empowerment increase with the increases in age. According to Dawit ( 2014 ) explanation for the positive relationship was that women gain more experience and knowledge about different family matters, as women’s age increased to older age. This experience gives them better understanding to make decision about their life, family matters and in the community which leads them towards economic empowerment. The result of the study is consistent with previous researchers’ findings. For example, Rehman et al. ( 2015 ) study found that age has profound impact on women’s empowerment. Further, Ringkvist ( 2013 ) field study in Burma found that age seemingly has effect on the economic empowerment of women.

As indicated in above table marital status has significant positive impact on women’s economic empowerment. The married women were significantly more likely to be enjoying economic empowerment than unmarried, widowed and divorced women. The fulfillment of family requirement may be the main reason to help a married women to earn more and thereby improve the economic status. This finding is consistent with Addai ( 2017 ) finding, married women supported by her husband and her children. Conversely, Dawit ( 2014 ) study indicated that marital status has insignificant impact on women economic empowerment. His explanation of this result was that single women are the decision-maker of their household and they had more exposure to the external environments to participate in economic activities and improve their livelihood status, and have more freedom and self-esteem in controlling the resources that enhance their empowerment.

The regression results revealed that the educated clients of microfinance were better placed in terms of effective usage of credit and training service and enjoying economic empowerment. In other words, educated microfinance institution clients were found to have a positive impact on raising the economic status of women. Women’s level of education has direct relationship with control over resource. Moreover, women’s education level affect her decision on contraception, better employment opportunity and income which are the basic indicator of women economic development and empowerment. Addai ( 2017 ) study also shows that education level has significant impact on women’s economic empowerment. Parveen ( 2005 ) also argued that education improve the socio-economic condition of women, facilitates them to demand and protect their rights. Educated and literate women had greater access to information and knowledge that increased their chances for paid jobs, other benefits and resources.

Amount of credit has significant impact on women’s economic empowerment. The provision of credit service helps to improve the economic condition of women clients. As the amount loan increases, women use their credit on income-generating activities. They jointly use their income to start new business and expand the existing business. Members, who borrowed high amount of credit, secured higher economic empowerment index. Women who got more credit are more likely to achieve higher economic empowerment level than those who received low amount of credit. According to Miled et al. ( 2022 ) microfinance loans can lead to improve the relative income position of the poor in developing countries, albeit slowly. The finding of this study is similar with the research findings of Khan and Noreen ( 2012 ) study in Pakistan. They found that credit given by microfinance institution has significant impact on economic empowerment of women. This finding is consistent with Ringkvist ( 2013 ) and Loomba ( 2017 ) studies that the loan access by microfinance and its effective utilization have a positive impact on women’s economic empowerment.

As can be evidenced in the regression result number of training provided by microfinance has significant effect and leads to women economic empowerment. Women who attended training more likely grow their business skill and attitude than who did not attend training. Number of training significantly affects economic empowerment of women. Regular training is very important, especially so in the initial stage. Microfinance provides training on credit usage, how to start new business and how to expand business. This ensures that women remain committed to the their business and are able to plan in advance as regards the operation of their business. Majority of the respondents reported that all members of microfinance participated in training before they got credit (Beriso, 2021 ; Dincer, 2014 ; Leonhäuser, 2004 ; Rwanda Charles, 2016 ).

From the regression result, it can be concluded that microfinance program is helpful in empowering women economically. The education and training provided by microfinance program lead to the development of the overall personality of the program participants. The beneficiaries of the program have higher levels of employment, income and participation in household financial decision-making as compared to non-participants.

According Alene ( 2020 ) findings level of educational, entrepreneurial experience, access to training, finance, and information, government support, land ownership are significant in explaining women entrepreneurs. The results with respect to multiple regressions have presented several interesting observations. Different variables like age, education marital status, credit amount, number of training has significant relation to women’s economic empowerment. However, previous business experience has insignificant influence on the economic empowerment of women. Bera ( 2014 ) study concluded that participation in the microcredit program increases if the women are aged, educated, currently married, education levels of the heads of their families are high, and possessed more non land assets.

Paired t test result

In this study, paired t test used to compare mean difference of income, saving, and asset before and after credit program. Paired sample t test was conducted to determine the effect of microfinance on women’s asset after credit and before credit program, there was significant effect on asset, t (345) = 16.444, p  = 00. It can be observed from Table 2 that the mean asset difference after credit and before credit program is significant and microfinance program has positive impact on women asset ownership. The result of the study is similar with Temba ( 2016 ), a study conducted in Tanzania and showed that microfinance has able to managed to help women to avoid poverty and empower themselves economically by increasing their asset ownership when compared to before joining microfinance program.

As clearly shown in table above, there is significant mean difference in income after and before credit program t (345) = 23.750, p  = 00. Based on the result by pair t test statistics shown, there is significant mean difference after women get credit from microfinance and before credit program. Gangadhar and Malyadri ( 2015 ) and Wanjiku and Njiru ( 2016 ) study also supports the result of this study.

Paired sample t test was conducted to determine the effect of microfinance on women’s saving amount after credit and before credit program, there was significant effect on saving amount, t (345) = 19.532, p  = 00. Before joining microfinance most women did not save and few women save but the saving amount were small. The main reason for not saving is lack of additional income and lack of awareness about business and microfinance service. After credit program, almost all of women clients put their money in saving accounts maintained with microfinance institutions and commercial banks.

Conclusion and recommendation

Multiple regressions have presented several interesting observations. Different variables like age, education, marital status, credit amount, and number of training has significant relation to women’s economic empowerment. However, previous business experience has insignificant influence on the economic empowerment of women.

To know the use or non-use of microfinance on women’s asset, income, saving, pair t test was employed. The result of study concludes that the difference in asset, income, and saving amount were significant. Therefore, one can easily conclude that microfinance plays a great role on improving women asset, income, and saving. Different researchers also show the importance microfinance on women’s asset ownership improvement, income increment, saving amount improvement, and effective decision-making. Participation in microfinance program has led to greater level of women’s economic empowerment in terms of increase in economic status, knowledge of business activities, self-confidence on participating in income-generating activities, social and political awareness, developmental of organizational skills and mobility.

Recommendation

The findings of this study have important implications for interventions designed to enhance the economic empowerment status in Amhara region of Ethiopia. Since women’s economic empowerment depends on the level of income, saving amount, and asset ownership, attention should be given to those factors that influence women’s economic empowerment. Some factors were identified and the following recommendations are provided:

Amhara credit and saving institution services to women’s economic empowerment should be improved by working with town administration women’s affair office and other non-government organization which are working on women empowerment.

Most of the respondents considered the loan offered as very small which is not adequate to start business. In fact, the loan size increases as settled the loan in full and take another. However, the loan still falls short of the amount needed to start business. Therefore, Amhara credit and saving institution should adjust the amount of credit provided to women clients.

Majority of microfinance clients are dissatisfied with high interest rate. Therefore, Amhara credit and saving institution needs to revise its interest policy so as to attract more women clients and achieve women’s economic empowerment objective.

Availability of data and materials

All data are available on hand.

Abbreviations

Microfinance institutions

United Nations

Micro- and small enterprises

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Microfinance in Agricultural Research for Development: Unlocking Agri-Finance Opportunities

Microfinance has emerged as a key tool in addressing the financial needs of smallholder farmers, particularly in developing countries. This article explores the role of microfinance in agricultural research for development and its potential to unlock agri-finance opportunities. By providing access to credit, savings, insurance, and other financial services tailored to the specific needs of farmers, microfinance can help bridge the gap between traditional banking systems and rural populations engaged in agriculture.

One example that illustrates the importance of microfinance in agricultural research for development is a hypothetical case study involving a small-scale farmer named Maria. Maria resides in a remote village where access to formal financial institutions is limited. However, she dreams of expanding her farming operations by investing in improved seeds, fertilizers, and machinery. Through an innovative microfinance program targeted at farmers like her, Maria is able to secure a loan with favorable interest rates and flexible repayment terms. With this financial assistance, she successfully improves her productivity and income levels while contributing to local food security.

In light of such examples, it becomes evident that harnessing the power of microfinance can have transformative effects on the livelihoods of smallholder farmers. The next section will delve into the various ways through which microfinance can unlock agri-finance opportunities and contribute to sustainable agricultural development.

Access to Credit: Microfinance provides smallholder farmers with access to credit, allowing them to invest in inputs such as seeds, fertilizers, and machinery that can enhance their productivity and profitability. This access to credit can help farmers overcome financial barriers that would otherwise limit their ability to adopt modern agricultural practices and technologies.

Savings and Insurance: Microfinance institutions often offer savings accounts and insurance products tailored to the needs of farmers. By encouraging savings, microfinance helps farmers build financial resilience against unexpected shocks or expenses. Additionally, insurance products protect farmers against risks such as crop failure due to adverse weather conditions or pest infestations.

Market Linkages: Microfinance programs can facilitate market linkages for smallholder farmers by connecting them with buyers and providing support in accessing value chains. This not only improves the marketing opportunities for farmers but also enhances their bargaining power, leading to fairer prices for their produce.

Capacity Building: Many microfinance programs incorporate capacity-building components aimed at enhancing the financial literacy and business management skills of smallholder farmers. Through training sessions on topics like budgeting, record-keeping, and market analysis, microfinance institutions empower farmers to make informed decisions about their finances and improve their chances of success.

Sustainable Development Goals (SDGs): Microfinance aligns with several SDGs related to poverty reduction, gender equality, food security, and economic growth. By supporting smallholder farmers through financial inclusion, microfinance contributes directly to these goals by uplifting rural communities and promoting inclusive economic development.

In conclusion, microfinance plays a crucial role in agricultural research for development by unlocking agri-finance opportunities for smallholder farmers. It provides them with access to credit, savings options, insurance coverage, market linkages, and capacity-building support necessary for sustainable agricultural development. The integration of microfinance into agricultural systems has the potential to transform the lives of small-scale farmers while contributing to food security and poverty alleviation efforts in developing countries.

Understanding the Role of Microfinance in Agricultural Research

Microfinance has emerged as a crucial tool for promoting agricultural research and development, particularly in developing countries. By providing access to financial services such as credit, savings, insurance, and payment systems, microfinance institutions (MFIs) play a significant role in unlocking agri-finance opportunities for small-scale farmers and rural communities. To illustrate this point, consider the case study of a farmer named Maria from a remote village in Southeast Asia.

Maria is a subsistence farmer who cultivates rice on her small plot of land. Like many farmers in her community, she lacked adequate capital to invest in improved seeds, fertilizers, and other inputs that would enhance productivity. However, with the support of a local MFI offering microloans specifically tailored to agriculture, Maria was able to secure funding to purchase high-quality seeds and fertilizers. As a result, her crop yield increased significantly, leading to higher income and improved livelihoods for herself and her family.

The impact of microfinance on agricultural research goes beyond individual success stories like Maria’s. It encompasses several key dimensions:

• Financial Inclusion: MFIs bridge the gap between formal financial institutions and unbanked or underbanked individuals in rural areas. This inclusion enables small-scale farmers to overcome barriers related to lack of collateral or credit history.
• Risk Mitigation: Accessible insurance products offered by MFIs help protect farmers against risks associated with natural disasters, pests, diseases, market fluctuations, or any unforeseen circumstances that could jeopardize their farming activities.
• Knowledge Transfer: Many MFIs work closely with agricultural extension agencies or NGOs to provide training programs and technical assistance on sustainable farming practices. These initiatives facilitate knowledge transfer among farmers while fostering innovation and experimentation.
• Market Linkages: Some MFIs establish partnerships with buyers or cooperatives, allowing farmers not only access to finance but also reliable markets for their produce.

Embracing microfinance in agricultural research has the potential to revolutionize farming systems and rural development. By addressing financial constraints, mitigating risks, fostering knowledge exchange, and facilitating market access, MFIs empower small-scale farmers to adopt modern technologies, increase productivity, enhance resilience, and improve their overall well-being.

Transitioning into the subsequent section on “Exploring the Potential Benefits of Microfinance in Agricultural Development,” it becomes evident that understanding the role of microfinance is crucial for comprehending its transformative power within agricultural research and development initiatives.

Exploring the Potential Benefits of Microfinance in Agricultural Development

Unlocking Agri-Finance Opportunities through Microfinance

The potential benefits of microfinance in agricultural development are vast and varied. By providing small-scale farmers with access to financial services, such as credit, savings, and insurance, microfinance has the power to empower individuals and communities, enabling them to improve their livelihoods and contribute to agricultural research for development.

To illustrate the impact of microfinance on agricultural research, let us consider a hypothetical case study. In a rural village where most residents rely on subsistence farming, a group of farmers come together to form a cooperative. With assistance from a microfinance institution, they are able to secure a loan collectively to invest in improved seeds, fertilizers, and irrigation systems. As a result, their crop yields increase significantly, leading not only to higher incomes but also paving the way for further experimentation with innovative farming techniques. This success story exemplifies how access to finance can unlock opportunities for agricultural research and innovation.

Microfinance plays a crucial role in facilitating agricultural research for development by addressing various challenges faced by small-scale farmers. Here are some key advantages:

• Financial inclusion: By extending financial services to those who have traditionally been excluded from formal banking systems, microfinance promotes economic inclusivity.
• Risk mitigation: Through microinsurance products tailored specifically for agriculture, microfinance institutions help mitigate risks associated with natural disasters or market fluctuations that could otherwise devastate farmers’ livelihoods.
• Knowledge dissemination: Microfinance institutions often provide training programs aimed at improving financial literacy among borrowers. These initiatives equip farmers with vital knowledge about managing finances effectively and making informed decisions related to their agri-businesses.
• Investment facilitation: Accessible credit facilities enable farmers to make investments in modern technology and equipment that enhance productivity while minimizing environmental impacts.

Moving forward, we will delve into the challenges and limitations that arise when implementing microfinance in agricultural research for development. Despite its potential benefits, it is crucial to address these obstacles effectively in order to maximize the positive impact of microfinance on agricultural innovation and livelihood improvement across diverse contexts.

[Next section H2] Challenges and Limitations in Implementing Microfinance in Agricultural Research

Challenges and Limitations in Implementing Microfinance in Agricultural Research

Having discussed the potential benefits of microfinance in agricultural development, it is crucial to consider the challenges and limitations that may arise when implementing such financial mechanisms. By understanding these obstacles, policymakers and stakeholders can devise strategies to overcome them effectively.

To illustrate some of the challenges faced when integrating microfinance into agricultural research for development, let us consider a hypothetical case study. Imagine a small-scale farmer named Maria who seeks financial assistance to purchase high-quality seeds and fertilizers for her farm. Despite her efforts to access microloans through local institutions, she faces certain barriers due to limited collateral or lack of credit history. This scenario exemplifies one of the primary challenges encountered by farmers like Maria – inadequate access to formal financial services.

The following bullet points outline key challenges associated with implementing microfinance initiatives in agricultural research:

• Limited reach: Microfinance programs often struggle to extend their services to rural areas where agriculture is prevalent, mainly because establishing branches or offices in remote locations can be costly.
• Lack of trust: Some farmers may hold reservations about participating in microfinance schemes due to past negative experiences with predatory lenders or concerns about interest rates.
• Inadequate training and education: Farmers require knowledge on financial literacy and management practices to make optimal use of microloans received. However, insufficient training programs hinder their ability to utilize funds efficiently.
• Seasonality of income: The fluctuating nature of agricultural incomes poses another challenge as repayment schedules must align with seasonal cash flows.

To further explore the complexities surrounding microfinance implementation, we present a table summarizing various challenges faced by both farmers and lending institutions:

In conclusion, while microfinance presents immense potential for agricultural development, it is necessary to recognize the challenges that hinder its effective implementation. Addressing these obstacles requires comprehensive strategies at multiple levels – from improving financial literacy among farmers to enhancing risk assessment mechanisms within lending institutions.

Transition into subsequent section: Understanding the challenges involved in integrating microfinance in agricultural projects provides a foundation for exploring best practices that can optimize the impact of such initiatives. By focusing on proven strategies, stakeholders can maximize the benefits of microfinance in driving sustainable agricultural research and development efforts.

Best Practices for Integrating Microfinance in Agricultural Projects

Despite the potential benefits of integrating microfinance into agricultural research, there are several challenges and limitations that hinder its effective implementation. One key challenge is the lack of financial literacy among smallholder farmers, which often leads to a limited understanding of loan terms and repayment obligations. This can result in mismanagement of funds or default on loans, undermining the sustainability of microfinance initiatives. For instance, consider a hypothetical case where a farmer receives a microloan for purchasing seeds but fails to generate sufficient income due to poor crop management practices. As a result, they struggle to repay the loan within the agreed timeframe.

In addition to financial literacy challenges, another limitation lies in the high transaction costs associated with providing microloans to rural areas. The operational expenses incurred by microfinance institutions (MFIs) when disbursing and collecting loans from remote locations can be substantial. These costs include transportation expenses, staff salaries, and administrative overheads. To illustrate this point further, let us imagine an MFI operating in a remote village with limited infrastructure and difficult terrain. In such cases, reaching out to borrowers becomes logistically challenging and financially burdensome for MFIs.

Moreover, collateral requirements pose yet another obstacle to implementing microfinance in agricultural research projects. Traditional lending institutions typically demand collateral as security against loans; however, many smallholder farmers lack tangible assets that meet these criteria. Consequently, they may be excluded from accessing formal credit facilities through traditional channels like banks or cooperatives. This exclusion perpetuates financial inequality within rural communities and limits opportunities for agricultural development.

To better understand these challenges and limitations visually, we present below a table summarizing their impact:

This table provides a snapshot of the challenges and limitations faced when integrating microfinance into agricultural research. It demonstrates how these factors can hinder progress in achieving sustainable development goals within rural communities.

Moving forward, it is crucial to explore best practices that have successfully addressed these challenges and limitations. The subsequent section will delve into case studies showcasing successful applications of microfinance in agricultural research, shedding light on innovative approaches that have overcome these hurdles.

Case Studies: Successful Applications of Microfinance in Agricultural Research

Unlocking Agri-Finance Opportunities Through Microfinance

In recent years, the integration of microfinance into agricultural projects has emerged as a promising approach to address the financial barriers faced by smallholder farmers. By providing access to affordable and tailored financial services, microfinance can empower farmers to invest in their agricultural activities, improve productivity, and enhance their overall livelihoods. This section explores best practices for integrating microfinance in agricultural projects through successful case studies and highlights key strategies that have unlocked agri-finance opportunities.

One striking example is the implementation of a microfinance program in rural India aimed at supporting women engaged in vegetable farming. The program provided loans specifically designed for purchasing seeds, fertilizers, and modern irrigation technologies. As a result, participating female farmers experienced significant improvements in crop yields and income levels. Moreover, they were able to expand their businesses and actively contribute to local markets.

To ensure effective integration of microfinance within agricultural projects, several best practices have been identified:

• Collaboration between microfinance institutions (MFIs) and agricultural research organizations: Close collaboration allows MFIs to gain insights into the specific needs and challenges faced by farmers while enabling researchers to better understand the financial constraints limiting technological adoption.
• Tailored loan products: Designing loan products that are flexible and aligned with the cash flow patterns of farmers is crucial. For instance, offering repayment options based on seasonal harvests or taking into account market fluctuations can greatly enhance borrower’s ability to repay loans.
• Financial literacy training: Providing basic financial education to borrowers helps them develop essential skills such as budgeting, record keeping, and managing risks associated with agriculture. It empowers farmers to make informed decisions about borrowing money wisely.
• Monitoring and evaluation systems: Implementing robust monitoring mechanisms ensures transparency, accountability, and efficient use of resources. Regular assessments help identify challenges early on and enable course corrections when needed.

The table below illustrates some potential benefits resulting from the integration of microfinance in agricultural projects:

These best practices, combined with the potential benefits mentioned above, highlight the transformative power of integrating microfinance into agricultural research for development. By unlocking agri-finance opportunities, this approach can contribute significantly to poverty reduction, rural development, and sustainable agricultural practices.

Transitioning to Future Prospects and Innovations in Microfinance for Agricultural Development, it is evident that the successful application of microfinance in agricultural projects has paved the way for further advancements. The next section will explore future prospects and innovative approaches within this field that hold great promise for addressing emerging challenges faced by smallholder farmers around the world.

Future Prospects and Innovations in Microfinance for Agricultural Development

Drawing inspiration from successful case studies, this section delves into the future prospects and innovations in microfinance for agricultural development. By exploring potential avenues to unlock agri-finance opportunities, we can pave the way for sustainable growth and poverty alleviation in rural communities.

• Innovations in Digital Financial Services: The advent of digital technology has revolutionized various sectors, including agriculture and finance. Leveraging mobile banking platforms and other digital financial services holds immense promise for improving access to credit and savings for smallholder farmers. For instance, imagine a hypothetical scenario where a farmer in a remote village receives instant payment on their mobile phone after selling their produce at a local market. This not only eliminates intermediaries but also facilitates timely cash flows that can be used for further investments or emergencies.

Bullet Point List (markdown format):

• Increased transparency in financial transactions
• Reduced operational costs associated with physical branches
• Enhanced convenience and accessibility for farmers
• Potential to scale up rapidly due to widespread adoption of mobile phones
• Strengthening Credit Risk Assessment: One significant challenge faced by microfinance institutions is assessing the creditworthiness of borrowers who lack traditional collateral or formal credit histories. To address this issue, innovative approaches such as utilizing alternative data sources are being explored. For example, satellite imagery combined with machine learning algorithms can provide valuable insights into crop health and productivity levels, thereby enabling more accurate risk assessment models.

Three Column Table (markdown format):

• Partnerships with Agricultural Research Institutions: Collaborations between microfinance institutions and agricultural research organizations can lead to mutually beneficial outcomes. By combining their expertise, these partnerships can design tailored financial products that address the specific needs of smallholder farmers. For instance, a real case study shows how a microfinance institution collaborated with an agricultural research institute to develop a loan product specifically aimed at financing the adoption of improved seed varieties among farmers.

Incorporating such innovations and forging strategic collaborations have the potential to unlock agri-finance opportunities on a larger scale. These approaches enable increased access to finance for smallholder farmers, empowering them to invest in modern farming techniques, purchase quality inputs, and mitigate risks associated with climate change and market fluctuations. Ultimately, this facilitates sustainable agricultural development, poverty reduction, and food security within rural communities.

Related posts:

• Access to Credit in Agricultural Research for Development: Agri-finance Opportunities
• Agri-Finance: Revitalizing Agricultural Research for Development

Crowdfunding for Agri-Finance: Boosting Agricultural Research in Development

• Farm Subsidies in the Context of Agricultural Research for Development: An Overview of Agri-Finance

Irrigation Techniques in Agricultural Research for Development: Water Management

Pest and Disease Control: Agricultural Research for Development

Risk Management in Agricultural Research for Development: An Introduction to…

Insurance for Agricultural Research: A Guide to Agri-Finance

Farm Subsidies in the Context of Agricultural Research for Development: An Overview…

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Microfinance and women entrepreneurship development: evidence from Tunisia

Kamel bel hadj miled.

1 College of Sciences and Arts Sajir, Shaqra University, Riyadh, Saudi Arabia

2 Laboratory of Management of Innovation and Sustainable Development (LAMIDED), University of Sousse, Sousse, Tunisia

Associated Data

The data that support the findings of this study are available from the corresponding author upon reasonable request.

The main objective of this paper is to investigate the effects of microfinance on women’s entrepreneurship and empowerment, using national household data from Tunisia. We have employed Logistic Regressions and Fuzzy-set qualitative comparative analysis (fsQCA) to study the consequences of microfinance use.We find positive and significant effects of access to credit on women’s work, attitudes toward income increase, execution of the micro-projects, and schooling attendance. The results confirm the potential of micro-finance in women’s empowerment and Entrepreneurship Development in Tunisia, especially during COVID-19 pandemic.

Introduction

The coronavirus pandemic imposes not only a global health threat but also an economic shutdown in many countries especially in developing countries like Tunisia.Microfinance has since a long time ago assumed a basic part in destitution easing. It surrenders individuals a hand, engaging them to assist themselves for the way out of poverty. However, the role of microfinance within COVID-19 recovery efforts is even more prominent (Onwuka 2021 ). The award in 2006 of the Nobel Peace Prize to Muhammad Yunus has made it possible to widely publicize micro-credit as one of the effective tools for the fight against poverty, and even the empowerment of the poor and especially of poor women (Elizabeth 2007 ). Financing of women’s micro-enterprises is a priority of the microfinance financial system, simply because it is reported that women are the priority target of micro-credit institutions (Guérin and Servet 2003 ). Women entrepreneurs in developing countries, however, face several additional barriers to enterprise such as lack of access to capital, land, and business premises because asset ownership is male-dominated (Roomi 2005 ), and they usually require small loans for business start-ups (S. Mahmood 2011 ).

The basic measures of women’s empowerment are constructed mainly to capture the multidimensional nature of the situation of women (Mason 1986 ) concerning the main indicators, such as mobility, decision-making, and independence. It is part of the “gender and development” approach, which has taken over from the “integration of women in development.” Hashemi et al. ( 1996 ) argue that the most challenging task in conducting female empowerment assessments is to develop a valid and reliable measurement index, as accountability can be viewed from different angles.

Microfinance is a sector which concerns the arrangements for allocating small amounts of credit to low-income people, who are excluded from the banking system, and to positively influence their living conditions through the granting of loans that boost the activity of economic units. Women, who belong to a vulnerable social category, are the most affected by this phenomenon. They were often excluded from development programs. International circles then became aware of the need to reduce inequalities between men and women while considering their role in development plans and projects. This awareness will also promote a series of measures to improve their status in society. It was then that the concept of “integrating women into development” was launched (Hoffmann and Marius-Gnanou 2002 ).

During the 1970s, it was recognized that most development programs tended to ignore women’s specific problems. The concept of “women’s inclusion in development” gained recognition as the international community became more aware of the need to reduce gender inequalities and the importance of women in reproductive function and agricultural production. Empowerment may seem like an obvious solution. Microfinance institutions encourage women in developing countries to start micro-enterprises to overcome economic and social barriers. To integrate with development and combat poverty and exclusion, poor women have used the informal sector to create a source of income. In Tunisia, as in developing countries, tackling poverty, exclusion and inequality are critical objectives, and the informal sector plays a significant role in achieving these goals. However, this sector has grown with the emergence of microfinance or micro-credit. However, micro-finance appears to be a tool for emancipation and promotion of the status of women, with multiple objectives:

- Create a source of income for women and facilitate their financial independence.

- stabilize and professionalize their entrepreneurial activities.

- improve their status within the family.

- Increase self-esteem.

The impact of microfinance on women entrepreneurs and their micro-enterprises remains under-explored; however, the focus of the larger ongoing research project from which these initial findings are reported.

Very few studies have justified the relation between microfinance and entrepreneurship development in developing countries. Therefore, the question of whether microfinance improves or worsens entrepreneurship still merits further research. In short, there are significant gaps in the relevant literature on developing countries, including Tunisia, remains to be studied further.

A study by Chowdhury and Jahangir ( 2008 ) found that the microfinance program does not promote women’s entrepreneurship at the household level in Bangladesh, but it helps to increase the capital of already established businesses. However, Neeti et al. ( 2021 ) found that microfinance implementation tools— micro-credit, micro-savings, skill development, business assistance have the significant relationship with entrepreneurship development.

This study makes two main contributions in the existing literature. First, it extends previous studies by providing new empirical evidence of the effect of microfinance on Women Entrepreneurship development in Tunisia during COVID-19 pandemic. Second, to better understand this relationship, this study builds on complexity theory based on fsQCA. This approach has been widely used in recent years in various domains, because fsQCA controls correctly for endogeneity, noisy data and collinearity between independent variables (Ragin 2008 ; Woodside 2014). Using this approach, researchers have the opportunity to gain a deeper and richer perspective on the data.

The micro-finance or micro-credit system has emerged as the most appropriate instrument for financing the needs of low-income populations, particularly women. Since the Washington summit in 1997, micro-credit has had two main objectives: to reduce poverty or exclusion and contribute to promoting women's entrepreneurship. And this dual objective gives a new approach to microfinance institutions.

In Tunisia, the micro-credit system was implemented in March 1999 to promote national solidarity. Similarly, these micro-credit programs aim at the economic and social integration of the poor, creating sources of income, and improving the living conditions of the poorest.

The participation of Tunisian women in these programs is remarkable, and the rate of her participation rises from one year to another from 38% in 2005 to 57% in 2019 (African Development Bank 2019). 1  This shows the Tunisian woman's awareness of creating financial autonomy to improve her living conditions and integrate economically and socially through the creation of productive projects.

Context of micro-credit in Tunisia

Despite the diversity of funding programs, a segment of the population remains away from the various funding instruments. This population could not turn to commercial banks because of the lack of guarantees and qualifications. In addition, it was necessary to create a financing instrument that would allow the poorest to take charge of themselves and have a source of income while settling on the land of their ancestors. This is how the micro-credit system was born in Tunisia, which enabled the poorest social stratum to fight against poverty and banish the assisted mentality.

Inter-Arab Enda

Founded in 1990, the NGO Enda Inter-arabe began its activity by supporting ecological and development projects. It introduced micro-credit in 1995 to reach people excluded from adequate financing. In 2015, after serving 500,000 clients, Enda evolved and decided to transfer its micro-credit activities to Enda Tamweel, the NGO focusing on supporting entrepreneurship. Over the years, it has become a reference institution in Tunisia and the Arab world in microfinance. Today, the two structures combine a tailor-made offer to contribute to the financial empowerment of marginalized populations, including women and youth and farmers and ranchers.

The non-governmental organization (NGO) Enda Inter-Arabe, has been awarded the rating «Alpha» by the rating agency "Micro Rate" for its financial performance and «Excellent» for its social performance. With the awarding of the "alpha" rating ("alpha + " being the maximum rating), Enda progressed and obtained one of the best ratings issued by the agency, among more than 450 ratings made on MFIs from Latin America Eastern Europe and Africa. The result of the study, dating from May 2010, confirms a continuous annual increase since the first rating in 2005.

It should be noted that, in the interest of transparency and improvement of its services, Enda has used rating agencies to evaluate its social and financial activities since 2005. With 130,000 active customers, a total of 358 million Tunisian dinars granted, and 630,000 loans awarded since 1995 (figures for May 2010), Enda called on the credit risk rating agency MicroRate, to perform the MFI's fourth rating to assess and optimize activities.

Thus, the rating obtained by Enda, qualified as excellent by the rating agency, is explained by the work undertaken on three axes: the diversification of the proposed products, the consolidation of the structure of Enda Inter-Arabe, and the reorganization of its portfolio. The rating agency explained that this result was justified by the particular effort made on sound management, securing diversified funds, and maintaining a relatively low-interest rate (compared to others rated by the agency).

Micro-rate also described Enda Inter-Arabe’s social outcomes as excellent. The agency based its assessment on the efforts made to protect clients and improve their services. Other factors were taken into account: sound financial management, which helped to support social activities in favor of clients but also of staff, the decentralization project, the development of new products that have effectively affected the target populations of micro-credit, and a strong culture of social engagement.

Tunisian solidarity bank (BTS)

The Tunisian Solidarity Bank (BTS) was created in 1997 on the initiative of the Tunisian State to finance young graduates of higher education and vocational training. She specializes in microfinance for the promotion of tiny enterprises (TPE). It has a capital of 60 million dinars (54% public and 46% private) with a shareholder base (more than 220,000 shareholders).

The BTS thus appears as a microfinance institution but borrows several characteristics of solidarity finance. Moreover, it is an independent institution. In fact, there is no intermediary between the bank and the entrepreneur. The BTS is an institution inspired by the Grameen Bank. This is one of the first experiences of implementing micro-credit practices (Manaï 2005). For this, BTS is the crucial experiment that can be studied. It finances projects not eligible for credit under the traditional banking system. The major innovation is its most extensive geographical and sectoral intervention. The target population is most widespread, with a particular interest for higher education graduates. The BTS is the first experiment that allows the poor to obtain small loans (without guarantees) that facilitates the exercise of an independent and income-generating activity (Benarous 2004 ). The question remains whether this institution respects the missions assigned to it to meet the objectives of its creation. To answer this question, we can rely on the analysis of the creative texts and internal documents of the BTS.

Moreover, the population sought by the BTS is mainly made up of young graduates and qualified professionals, inhabited by the idea of a profitable project and wishing to establish themselves for their own account but who have neither the means nor sufficient collateral to request credit from another bank.

Micro-credits granted by associations

Micro-credit is any credit aimed at helping economic and social integration. These micro-credits are granted to finance the acquisition of small inputs necessary for production or in the form of working capital. These credits may also be given to financing needs to improve living conditions." The associations do not have the right to distribute profits, and the reimbursement by the beneficiaries is made to the associations which keep the proceeds of interest and return the principal to the BTS. However, these associations are under the control of the Department of Finance and must maintain regular accounting. They shall also be subject to external audit if deemed necessary. If an association fails to fulfill its obligations, it may be subject to the withdrawal of its authorization to register loan contracts and value-added tax.

A maximum of 4000 dinars characterizes the micro-credit system in Tunisia for productive activities and 700 dinars for improving living conditions, a maximum interest rate of 5% per annum, and a maximum repayment period of 3 years with the possibility of deductibility. In addition, the amounts used for each association for granting micro-credit must be at least 95% of the resources allocated to the micro-credit credit, and the total amount of credit granted by each association for the financing of needs for the improvement of living conditions must not exceed 20% of the resources. Also, micro-credits are eligible for the FNG National Guarantee Fund (90% taken over by the FNG and 10% by the association).

Finally, the association receives an installation fee of 15,000 Dinars and an operating fee of 20 Dinars per file with a ceiling of 10,000 Dinars per year.

On this basis, we propose in the framework of this paper to identify the contribution of micro-credit to the capacity building of women in Tunisia. The literature review on the various works established on the relationship between microfinance and female entrepreneurship will be examined in the second section. The third section will report the empirical methodology adopted (sample presentation, test and comments). The conclusion, which is the subject of the fourth section, will take up the main lessons learned from the empirical study carried out in this paper.

Objectives of the study

The objective of this study is to examine the impact of microfinance on women's entrepreneurship and empowerment in Tunisia.

• i. To examine the role of microfinance on women's entrepreneurship development and empowerment in Tunisia.
• ii. To examine the relationship between micro-credit, micro-savings, Payment deadline, Business sector, skills development programs, age and women entrepreneurship using microfinance services in Tunisia.

The following null hypotheses were constructed and tested.

Hypothesis 01: There is a significant relationship between micro-credit and women entrepreneurial development in using microfinance services in Tunisia.

Hypothesis 02: There is a significant relationship between micro-savings and women entrepreneurial development using microfinance services in Tunisia.

Hypothesis 03: There is a significant relationship between age and women entrepreneurship using microfinance services in Tunisia.

Hypothesis 04: There is a significant relationship between skills development and entrepreneurship using microfinance services in Tunisia.

Hypothesis 05: There is a significant relationship between Business sector and entrepreneurship using microfinance services in Tunisia.

Literature review

Studies of Women's entrepreneurship and empowerment have been the subject of several studies. These studies were done either at the request of funding agencies or as academic work or to better target the use of funds to achieve specific social and economic objectives. Chatterjee et al. ( 2018 ) show that group-based financial services to micro-enterprises empower women borrowers and translate into economic upliftment. Neeti Mathur et al. (2021) found that microfinance implementation tools— micro-credit, micro-savings, skill development, business assistance have the significant link with entrepreneurship development. Attention has been paid to microfinance as one of the contributors to poverty reduction, women's empowerment, health, education, democratization, and environmental improvement (Mayoux 2001a; Chandrasekar and Prakash, 2010).

Existing studies on the impact of micro-finance on women's empowerment vary considerably in terms of the findings of these studies and the measures and indicators of women's empowerment used. In the existing literature, it is clear that there is no consistent measure of female empowerment; however, some indicators have always been seen as the most critical determinants of empowerment in most studies.

Some of these critical indicators used include mobility, political and legal awareness, economic security (Hashemi et al. 1996 , Steele et al. 1998), decision-making capacity (Mizan 1993 ; Pitt et al. 2006 , Steele et al. 1998), and increasing assets and controlling those assets (Goetz and Gupta 1996; Montgomery 2005). It is intended that targeting micro-finance programs toward women can empower them in various aspects of their lives. In addition, women are considered reasonable credit risks (Garikipati 2008 ) and are therefore less likely to abuse the credit they receive. While some studies show that micro-finance has developed at the confidence level of women by helping them increase their income opportunities (Hashemi et al. 1996 ; Pitt et al. 2006 ), others suggest that loans given to women in most cases end up with their husbands or under their control, which in the long run makes women even more vulnerable (Garikipati 2012 ; Rahman et al. 2009 ).

Women's empowerment was also associated with the length of time. Women were considered clients of MFIs. Above all, women's solidarity groups confirm that women's participation in micro-credit programs helps develop social networks while improving levels of access to the economy and financial resources. The establishment of these social networks allows women to know each other. It also increases the level of awareness and political and social inclusion among women (Bali et al. 2014).

In addition, with the support of IMFs (which includes micro-credit and training), women can gain better control over their financial assets, including their savings and income (Li et al. 2011a). This, in the long term, affects their participation in household decision-making (Hashemi et al. 1996 ; Pitt et al. 2006 ). Most MFIs aim to help women achieve financial independence. For example, it is said that women can become economically self-sufficient when they begin to take control of their financial assets (Li et al. 2011a). Anderson and Eswaran ( 2009 ) point out that with economic emancipation, there is an increase in female empowerment, usually highlighted in purchasing decision-making. In addition, Armendariz de Aghion and Morduch ( 2005 ) argue that micro-finance affects women's bargaining power and the level of resources available. Steele et al. (1998) often find that micro-finance has not significantly impacted women's decision-making capacity. Rahman et al. ( 2009 ) also found no significant impact of micro-finance on women's empowerment.

In this respect, although micro-finance positively affects women's empowerment and the accumulation of resources, existence, however, various dimensions of empowerment, some of which are hampered by the presence of social and cultural constraints. For example, Montgomery et al. ( 1996 ) argue that micro-credit programs exacerbate discrimination against women and reinforce gender inequality. In some cases, men are excluded from micro-credit programs, which reinforces inequalities, generating friction between men and women in the family. This is because men feel threatened. After all, they are convinced that they may be less favorable to women (see, for example, Mayoux 1999 ; Armendariz de Aghion and Morduch 2005 ).

Most studies are either examining the context of the environment in which microfinance operates or investigating the potential effect on macroeconomic variables, such as gross domestic product or inequality. There is some evidence to suggest that microfinance is indeed effective and beneficial to clients (Imai et al. 2010 ; Imai and Azam 2012), while other wide-ranging literatures suggest the opposite (Hulme and Mosley 1996 ; Hulme 2000 ; Copestake 2002; Hoque 2005; Shaw 2004; Nghiem et al. 2012). This study's interest is to clarify a theme that has not been much discussed, namely the direct link between microfinance and women's entrepreneurship and empowerment.

Research methodology

The data source.

The population studied is the total number of women receiving micro-credit during 2021, 450 women from development associations in the Monastir and Sousse regions. It was based on the records of the requests for micro-credits made by these women to associations belonging to the Governorate of Monastir and Sousse.

For the research study, 450 respondents were selected. These respondents were beneficiaries of micro-credit associations and engaged in their own business, such as artisans, retailers, small-scale manufacturers, producers of agricultural products. The data used are based on 450 loan application files issued within these associations.

These data are qualitative and quantitative concerning socio-demographic characteristics and the borrowing of women.

Data processing is on the basis of basic statistics (number and percentage), logistic regression and Qualitative comparative analysis (QCA).

Our objective is to study the role of micro-credit granted by development associations of women entrepreneurship development in Tunisia.

Modeling methods

Binary logit model.

The logistic function used is defined as:

where " p " is the probability of entrepreneurship development, from the previous relation, we can have the probability p , that is:

where Z i is the dependent variable. It represents the Development (or not) of the Entrepreneurship.

Entrepreneurship Development: Judged on the basis of the questions like increase in assets of business, family income, turnover of the business, number of buyers, and loan repayment capacity (Neeti Mathur et al. 2021). Table ​ Table1 1 presents all the independent variables of the model.

Independent variables

TND is the currency of Tunisia

Qualitative comparative analysis (QCA) is a technique that is capable of bridging the gap between qualitative and quantitative analyses (Rihoux and Ragin 2009 ). This method has attracted significant attention on various domains, such as marking (Capatina et al. 2017 ; Meneses et al. 2016 ); tourism (Olya and Mehran 2017; Olya and Al-ansi 2018 ), finance (Isaksson and Woodside 2016 ; Vizcaíno and Chousa 2016 ) and economics (Arts and Koning 2017 ; Aloysius and Zhang 2019 ). The fsQCA (fuzzy-set Qualitative Comparative Analysis, or AQC) method, developed in political science by Ragin (1987) then democratized in management by Fiss ( 2009 ) and (2011). It allows both to take into account the specificities of the cases while adopting a holistic and rigorous approach, thus combining the advantages of qualitative and quantitative methods. The fsQCA method thus makes it possible to highlight the causal complexity underlying many phenomena in social sciences, i.e., phenomena subject to three sources of complexity (Vergne and Depeyre 2016; Ragin 2008 ). In our study, we used the fsQCA method to examine the robustness of the results found previously.

The fsQCA technique requires that all the variables be calibrated in fuzzy logic with values ranging from 0 to 1. Thus, all the variables will be transformed into continuous variables from 0 to 1, which define their membership level.

The formula for calculation of consistency and coverage can be calculated as follows:

Consistency ( X j ≤ Y j ) = ∑ min X j , Y j / ∑ X j

Coverage X j ≤ Y j = ∑ min X j , Y j / ∑ Y j

X j is the membership score in the set of causal conditions, and Y j is the membership score in the outcome condition.

Results and discussion

Results of binomial logit model.

As we specified previously, the use of a logistic regression for the modeling of a binary variable is the most appropriate because of the nature of the studied endogenous variable. This technique makes it possible to predict the values taken by a discrete variable from a series of continuous or binary explanatory variables (Trabelsi M and Chichti J 2011).

This paper aims to study the induced effects of the participation of women entrepreneurs in micro-loan programs and test the impact of these micro-credits on entrepreneurship development. Table ​ Table2 2 summarizes the model estimation results using the STATA 14 software.

Results of binomial Logit model

Entrepreneurship development

*Significant at 10% level

**Significant at 5% level

***Significant at 1% level

This result indicates that the variables Amount of Micro-credit (AMOUNT) and "Skill development" are positive and statistically significant. This result is evident since the more significant the benefit, the better the situation. On the other hand, we find that the age variable is negative and statistically significant, indicating that micro-credit has a better effect for young women entrepreneurs for creators in the realization of their projects.

The second variable, "DURATION," is significant at the 5% threshold, but its coefficient is negative, implying that the higher the monthly payment, the more the tendency toward the probability of project defeat. So, to ensure that the situation of an entrepreneur (woman), who has just applied for a micro-credit, will be improved after indebtedness, we must think about reducing the monthly payments or tolerating more in the amounts granted. Based on the data collected, it was noted that there is a difference between the amount requested and the amount awarded in most cases. So, if the concern of those in charge is to improve the situation of a person living in precarious situations, we must tolerate the amounts granted, and why not consider going further to the ceiling. At the 10% threshold, the only family status variable determines the characteristics of women and, more particularly, the variable "MARITAL." The single woman does not have much charge by comparing her with a married woman who has children. So the credit obtained improves the situation of a single. The reason for indebtedness variable for « MSAVING» is also significant at the 10% threshold, which implies that the micro-credit obtained improves the beneficiary's standard of living.

For the department, variable for "Education" is not significant. This comes back, perhaps, to the follow-up carried out with the women beneficiaries. The amount obtained may not result in a period of one year. Therefore, it is not possible to know if the women beneficiaries, for reasons of education, are satisfied. Moreover, and for greater relevance, follow-up should normally be done after loan payment and not within one year. This represents a limit to our empirical study. Another limitation in our research is that observing situations after indebtedness is not a direct observation on the ground. It was a telephone report in which the women concerned could hide the truth and may not give accurate information.

In conclusion, and from what we have obtained from the results, it must be deduced that the micro-credit policy has given the funded women an opportunity to get out of precarity and enable them to improve their business.

Results of fsQCA

Table ​ Table3 3 presents the causal configuration in predicting low and high scores of women entrepreneurship development in Tunisia.

Causal recipes of entrepreneurship development

Complex solution, * represents “and”, and ~ represents “negation”

The main objective of this estimate is to examine the relationship between micro-credit, Micro-saving, skills development programs, micro-credit payment deadline, Business sector and age of beneficiaries of micro-credit allocated by MFIs (microfinance institutions) in Tunisia.

One consistent and sufficient causal recipe explained the Entrepreneurship Development (coverage: 0.131, consistency: 0.773). The model (M1) suggests that females with high amounts of micro-credit, low repayment period (DURATION), and working in service sector have a high score of Entrepreneurship Development. These factors have a positive effect on opportunity for entrepreneurial activity. These results are in line with Karlan and Valdivia ( 2011 ) and Neeti Mathur et al. (2021), who concluded that microfinance has had a positive impact on entrepreneurship development.

The second model (M2) suggests that young married female working in service activity which low amount of micro-credit and high micro-savings, lead to have a high score of Entrepreneurship Development.

The third model indicates that older, less-educated female working in service sector, who benefited from low amount of micro-credit and useful in improving the earning capacity, results in increase in assets of business and loan repayment capacity.

Model 4 advises that female working in service benefited from low amount of micro-credit and less deadline of repayment lead to the improvement of the assets of business which confirms the significant relationship between micro-credit and entrepreneurial development in using microfinance services in Tunisia.

Conclusion and policy implications

Throughout this chapter, an attempt was made to provide an overview of the Tunisian experience with micro-credit. The evolution of microfinance and Women’s entrepreneurship in Tunisia was the subject of two first sections.The last section relates to an empirical investigation: the study of the results of a small survey carried out among certain women receiving micro-credit from these development associations. The main objective of this study is to investigate the effects of microfinance on women's entrepreneurship and empowerment in Tunisia It has been found that microfinance implementation tools— micro-credit, micro-savings, skill development, Business sector have the significant relationship with entrepreneurship development. Micro-finance has spread remarkably, thanks to the proliferation of agencies that help and finance people with low income. Its emergence has been fostered by information from informal finance and the desire to institutionalize everyday practices, by the need to integrate the financial excluded, and by broadening the concepts of sustainable development relating to decent living conditions and the participation of women. Tunisia's microfinance experience is rich and has benefited from the arrival of new players in the 1990s. Micro-credit policy is the main step in this development process. In collaboration with other organizations, such as NGOs and specialized financing funds, the Tunisian Solidarity Bank plays a crucial role in applying for micro-finance projects, entrepreneurship development and improve the living conditions of households. The credits are effectively accessible to the people or the gatherings to begin the business, which prompts new employment opportunities, which address the joblessness issue. Microfinance works at a fundamental level by providing support, it works without loan collateral and provides skills development assistance to marginalized rural people.

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Data availability

Declarations.

On behalf of all authors, the corresponding author states that there is no conflict of interest.

Ethics approval was not required for such study.

Informed consent was obtained from all individual participants included in the study.

1 AFRICAN DEVELOPMENT BANK, 2021. FINANCIAL SECTOR MODERNISATION SUPPORT PROGRAMME II—(PAMSFI II). TUNISIA.

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Microloans and Their Social Impact

Microfinance isn't humanitarian aid. Microfinancing promotes self-sufficiency and economic growth by encouraging the proliferation of micro entrepreneurs like farmers and small business owners in impoverished communities.

As of 2008, microfinance institutions had granted more than $100 million in microloans. Microloans allow poverty stricken farmers, businessmen, and families an opportunity to borrow funds for enterprises which may allow them to become financially stable - and it's working.

The Growing Microfinance Industry

As of 2007, there were 33 million approved microborrowers. By 2020, growth is projected to more than 200 million borrowers. This industry's rapid increase has been steady over 20 years and is forecast to have an even brighter future.

There are thousands of microfinancing institutions like Association for Social Advancement (ASA) in Bangladesh, Annapurna Microfinance in India, and Banco do Nordeste in Brazil with years of experience and knowledge.

Microfinance: Investment Process

Microcredit or microlending is the popular idea of offering financial services to the poor while offering lenders a high return, low cost investment. Even foreign lenders, private and commercial, have begun to provide microfinance services.

In 2006, around $6 billion of foreign investment had been funneled into microfinance institutions. In 2008, that number jumped to nearly $15 billion. Proving reasonable returns at low costs, microlenders can receive just as many rewards as the borrowers themselves.

What is Microfinance?

Microfinancing is a financial service made available to impoverished individuals who do not meet typical banking qualifications. Microfinance institutions create a rare opportunity for borrowers to access the financial system. For example, with farm financing, an impoverished farmer may access capital that he can then use to scale his business to provide food to his community and income for his family.

What is IFMR?

The Institute for Microfinance Research provides financial resources to microborrowers and investors. Have you taken an interest in this fairly new financial industry? You're not alone. Offering an approximate 98% repayment rate for investors and providing a small cash loan for those battling poverty, the microfinance market gives both parties incentive to participate.

How does microfinance help low income communities?

There are thousands of microfinancing institutions catering to eligible borrowers and investors. If you are a borrower, chances are you have these financial institutions available near you. A microloan can finance agricultural expenses and farm land leases, pay for materials used to start a small business, cover essential medical expenses, and more.

Impoverished individuals who are generally excluded from traditional financial services can apply for microfinancing to pay for farm and agricultural expenses, healthcare, small business expenses, and more .

For those looking to expand their financial portfolio, investors should remember to notice how the market is evolving. Microcredit first began with an idea from Muhammad Yunus in 1976. The microfinance system has proven beneficial to the investor - not just the borrower. These loans provide low income families a chance to lift themselves out of poverty. Microfinance provides small amounts of cash with affordable interest rates. Since low income borrowers are usually denied by commercial banking institutions, those who are granted a microloan tend to be loyal when given access to credit. Often, these individuals return to secure a second microloan, start a savings account, or begin investing in a microfinance insurance plan. This investment opportunity shows no signs of slowing down. The Institute for Microfinance Research explores microfinancing in depth, the newest peer to peer investment opportunity.

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U.S. centenarian population is projected to quadruple over the next 30 years

The number of Americans ages 100 and older is projected to more than quadruple over the next three decades, from an estimated 101,000 in 2024 to about 422,000 in 2054, according to projections from the U.S. Census Bureau. Centenarians currently make up just 0.03% of the overall U.S. population, and they are expected to reach 0.1% in 2054.

The number of centenarians in the United States has steadily ticked up since 1950, when the Census Bureau estimates there were just 2,300 Americans ages 100 and older. (The Census Bureau uses calculated estimates for years prior to the 1990 census because it has identified large errors in the census counts of centenarians for those years.)

In the last three decades alone, the U.S. centenarian population has nearly tripled. The 1990 census counted around 37,000 centenarians in the country.

Pew Research Center conducted this analysis to understand how the population of Americans ages 100 and older looks today, and how it is expected to change in the next 30 years. U.S. population estimates come from the U.S. Census Bureau , and global projections are drawn from the United Nations’ population projections under its medium variant scenario .

All racial groups are single-race and non-Hispanic. Hispanics are of any race.

Today, women and White adults make up the vast majority of Americans in their 100s. This trend is largely projected to continue, though their shares will decrease:

• In 2024, 78% of centenarians are women, and 22% are men. In 30 years, women are expected to make up 68% of those ages 100 and older, while 32% will be men.
• 77% of today’s centenarians are White. Far fewer are Black (8%), Asian (7%) or Hispanic (6%). And 1% or fewer are multiracial; American Indian or Alaska Native; or Native Hawaiian or other Pacific Islander. By 2054, White and Asian adults are projected to make up smaller shares of centenarians (72% and 5%, respectively), while the shares who are Hispanic (11%) or Black (10%) will be larger. (All racial categories here are single-race and non-Hispanic. Hispanics are of any race.)

The U.S. population overall is expected to trend older in the coming decades as life expectancies increase and the birth rate declines. There are currently roughly 62 million adults ages 65 and older living in the U.S., accounting for 18% of the population. By 2054, 84 million adults ages 65 and older will make up an estimated 23% of the population.

Even as the 65-and-older population continues to grow over the next 30 years, those in their 100s are projected to roughly double as a percentage of that age group, increasing from 0.2% of all older Americans in 2024 to 0.5% in 2054.

Centenarians around the world

The world is home to an estimated 722,000 centenarians, according to the United Nations’ population projections for 2024. The U.S. centenarian population is the world’s second largest – the UN estimates it at 108,000, slightly larger than the Census Bureau’s estimate.

Japan is the country with the greatest number of people in their 100s, at 146,000. China (60,000), India (48,000) and Thailand (38,000) round out the top five.

In each of these countries, centenarians make up less than 1% of the overall population, but combined, they account for more than half (55%) of the world’s population ages 100 and older.

Looked at another way, centenarians make up a bigger proportion of the total population in Japan, Thailand and the U.S., and smaller shares in China and India, which have large but relatively young populations. There are about 12 centenarians for every 10,000 people in Japan, five for every 10,000 in Thailand and three for every 10,000 in the U.S. That compares with fewer than one centenarian for every 10,000 people in China and India.

By 2054, the global centenarian population is projected to grow to nearly 4 million. China is expected to have the largest number of centenarians, with 767,000, followed by the U.S., India, Japan and Thailand. As a proportion, centenarians are projected to account for about 49 out of every 10,000 people in Thailand, 40 of every 10,000 in Japan and 14 of every 10,000 in the U.S. Six out of every 10,000 people in China will be centenarians, as will about two of every 10,000 in India.

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How Teens and Parents Approach Screen Time

Older workers are growing in number and earning higher wages, teens, social media and technology 2023, dating at 50 and up: older americans’ experiences with online dating, about half of americans say the best age for a u.s. president is in their 50s, most popular.

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Google fires 28 workers for protesting $1.2 billion Israel contract

Google has fired more than two dozen employees for protesting its $1.2 billion contract to provide the Israeli government and military with cloud and artificial intelligence services.

Twenty-eight people were fired after nine employees were arrested Tuesday night following a sit-in at the company’s offices in Seattle, New York and Sunnyvale, California — including one at Google Cloud CEO Thomas Kurian’s office, according to the group that organized the demonstration, No Tech for Apartheid.

Protesters sat in his office for more than nine hours, wearing shirts and raising banners that read “No more genocide for profit,” until they were eventually arrested.

It is the latest high-profile clash in the U .S. stoked by tensions over the Israel-Hamas war .

“These protests were part of a longstanding campaign by a group of organizations and people who largely don’t work at Google," a Google spokesperson said in a statement Wednesday.

"A small number of employee protesters entered and disrupted a few of our locations. Physically impeding other employees’ work and preventing them from accessing our facilities is a clear violation of our policies, and completely unacceptable behavior. After refusing multiple requests to leave the premises, law enforcement was engaged to remove them to ensure office safety," the statement said.

"We have so far concluded individual investigations that resulted in the termination of employment for 28 employees, and will continue to investigate and take action as needed," it added.

The protests were led by No Tech for Apartheid, a group of tech workers who have been demanding Amazon and Google drop their Project Nimbus, which is a joint $1.2 billion contract providing the Israeli government and military with cloud infrastructure, artificial intelligence services and data centers.

No Tech for Apartheid said that the workers had engaged in a “peaceful sit-in and refusing to leave did not damage property or threaten other workers” and that Google had fired them “indiscriminately.”

“This excuse to avoid confronting us and our concerns directly, and attempt to justify its illegal, retaliatory firings, is a lie,” it said in a statement late Wednesday, accusing the company of valuing its contract with the Israeli government more than its employees.

Google issued a stern warning to its employees, with the company’s vice president of global security, Chris Rackow, saying, “If you’re one of the few who are tempted to think we’re going to overlook conduct that violates our policies, think again,” according to an internal memo obtained by CNBC.

The company also said its work "is not directed at highly sensitive, classified, or military workloads relevant to weapons or intelligence services.”

“Google Cloud supports numerous governments around the world in countries where we operate, including the Israeli government, with our generally available cloud computing services,” a Google spokesperson told CNBC on Wednesday evening.

The Israeli prime minister's office and the Israel Defense Forces did not immediately respond to requests for comment from NBC News.

The workers were also protesting labor conditions at the company — saying the contract was affecting “health and safety on the job” — and what they said was Google’s disregard “for the well-being of our Palestinian, Arab, and Muslim colleagues  facing  Google-enabled racism, discrimination, harassment, and censorship.”

The project has become a “major health & safety workplace conditions issue,” with many employees quitting after having cited “mental health consequences of working at a company that is using their labor to enable a genocide,” the group said in a statement posted Wednesday on Medium .

“On a personal level, I am opposed to Google taking any military contracts — no matter which government they’re with or what exactly the contract is about,” Cheyne Anderson, a Google Cloud software engineer based in Washington, told CNBC on Wednesday.

Anderson was one of the nine workers arrested across the country Tuesday, with some of the arrests streamed live on Twitch.

Four people were arrested for “trespassing” inside Google’s New York office, a New York police spokesperson told NBC News on Wednesday. Almost 50 protesters had taken part in the demonstration, the spokesperson said.

Mithil Aggarwal is a Hong Kong-based reporter/producer for NBC News.

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CURO ignites passion for research with student symposium

University of Georgia undergraduate students came together to showcase their individual research projects and achievements on April 8-9 at the Center for Undergraduate Research Opportunities (CURO) Symposium.

For 25 years, the CURO Symposium has served as an opportunity to highlight the breadth and depth of undergraduate research across multiple disciplines. CURO enables undergraduates to engage in faculty-mentored research as early as their first year, regardless of discipline, major, or GPA. The program supports students in discovering and seizing opportunities, selecting mentors, and showcasing and disseminating research.

“Students benefit in so many ways, including hands-on experience that goes beyond what they learn in the classroom,” CURO Program Coordinator Andrea Silletti said. “They have the ability to contribute to the body of knowledge in their chosen fields, and mentors get support for their own research endeavors while also training the next generation of scholars.”

The two-day event took place at the Classic Center and included a keynote address by Ron Walcott, vice provost for graduate education and dean of the Graduate School. Walcott also serves as a professor in the College of Agricultural and Environmental Sciences Department of Plant Pathology .

“The CURO Symposium is a lot like a seed,” Walcott said in his keynote address. “It’s like a seed that was planted 25 years ago and has positively impacted the lives of many students, whose careers have blossomed and are now producing seeds of their own.”

The 2024 Symposium featured 623 undergraduates pursuing 188 different majors from 16 schools and colleges. Almost 280 faculty members from 75 departments served as mentors. This year’s symposium featured new components, such as Cafe CURO, an opportunity for students and mentors to network over coffee, and a training session for graduate student mentors.

“This year’s symposium turned out even better than we could have imagined,” Silleti said. “We had a significant increase in the number of student presentations this year and the feedback we’ve gotten so far from participants and audience members has been fantastic.”

Cecilia Rhine is a third-year exercise and sports science student in the Mary Frances Early College of Education. Rhine’s project studied the effects of daily step counting on the strain of tibial cartilage. With a step intervention that aimed to increase participants’ daily step counts, she hypothesized that there would be a smaller decrease in cartilage thickness with greater daily steps.

“This is because I thought ‘conditioning’ of the knee would mean that the cartilage wouldn’t compress as much with more load presented on the knee,” Rhine said. “After all, it’s gotten used to having that much weight on the knee.”

After seeing her friend participate in CURO during her freshman year, Rhine wanted to do the same before she graduated.

“This journey not only provided me with valuable research experience but also fostered meaningful connections with scholars in the same field as me and supported my academic pursuits,” she said. “I know that research is an important part of kinesiology and science, which is why I wanted to be a part of it during my undergraduate studies.”

After she finishes her degree, Rhine plans to go to physical therapy school to eventually earn a Doctor of Physical Therapy license.

For Riley Forrestall, a third-year student double majoring in plant biology and ecology, this is his second time presenting at CURO. His project, titled “Comparison of Forested and Edge Communities of Flower Flies (Syrphidae),” is part of a larger study headed by CAES Department of Entomology Graduate Research Assistant Miriam Edelkind-Vealey that focuses on pollinator communities in the forest. Forrestall specifically focused on hover fly (Syrphidae) communities and how they might change between forest interior and edge communities.

“I grew up appreciating flowers and making sense of how nature is connected, so that’s why this research means so much to me,” Forrestall said.

After he graduates next year, Forrestall plans to pursue a master’s degree in evolutionary botany and entomology. Eventually, Forrestall hopes to become a professor of ecology or evolutionary biology and botany and continue his research on the origins of different species.

Thinking about the future of CURO, Silletti hopes to see an increase in presentations from non-STEM fields, such as the arts and humanities, and creating a better sense of community among UGA’s undergraduate research scholars.

“Overall,” she said, “I hope we continue to engage students across campus in projects that excite, educate, and prepare them to be successful, whatever their goals.”

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PROJECT SELECTIONS FOR DE-FOA-0002796: WATER RESEARCH AND DEVELOPMENT FOR OIL AND GAS PRODUCED WATER AND COAL COMBUSTION RESIDUALS WASTEWATER ASSOCIATED WITH COAL POWER PLANTS (ROUND 2)

Characterization and Recovery of Rare Earth Elements/Elements of Interest in Coal Combustion Residual Wastewater and Solid Wastes Associated with Coal Power Generation  —  Lehigh University  (Bethlehem, Pennsylvania) intends to characterize rare earth elements and other elements of interest in coal combustion residuals wastewater and solid wastes associated with coal power generation as a function of coal type, coal combustion technologies, and air pollution control devices configurations. The project team will revise and streamline conventional procedures used to analyze rare earth elements and other elements of interest from power plant target sources. The secondary objective is to demonstrate one electrodialytic technology for potential recovery of rare earth elements and other elements of interest, thus helping enable beneficial use of coal combustion residuals wastewater and solid waste.

DOE Funding: $2,000,000 Non-DOE Funding: $500,000 Total Value: $2,500,000  

Scalable and Efficient Membrane Distillation and Adsorption Process for High-Purity Water and Lithium Recovery from Produced Water in New Mexico  —  New Mexico Institute of Mining and Technology  (Socorro, New Mexico) plans to comprehensively characterize produced water from the Permian and San Juan Basins in New Mexico and develop a scalable and highly efficient membrane distillation-crystallization and adsorption process for simultaneous water and critical elements recovery from produced water. Both bench- and pilot-scale membrane distillation-crystallization and adsorption units (1,000 gallons per day) will be developed and validated for produced water treatment.

DOE Funding: $1,499,951 Non-DOE Funding: $375,025 Total Value: $1,874,976  

Strategic Management and Resource Recovery Transformation (SMAR2T): Recovery of Water and Elements of Interest from Produced Water Using Intensified Membrane Distillation and Metal Extraction  —  Texas Tech University  (Lubbock, Texas) intends to develop a system engineering approach for produced water resource extraction and management in oil and gas operations. The team intends to (1) test a cascade treatment approach involving vacuum membrane distillation integrated with vapor compression to extract water, (2) selectively recover elements (metals) of interest using staged precipitation, (3) develop an optimization framework for managing produced water and identifying infrastructure needs using software and a techno-economic approach and (4) engage with stakeholders, members and students of under-represented groups, state agencies and members of the oil and gas sector to promote workforce development and community involvement as the project tackles produced water challenges.

DOE Funding: $1,499,993 Non-DOE Funding: $696,848 Total Value: $2,196,841  

Characterizing and Recovering Valuable Elements and Minerals from Produced Water in Oklahoma (OK-CARVER)  — University of Oklahoma  (Norman, Oklahoma) intends to sample produced waters; determine their chemistry; determine their concentrations in terms of rare earth elements, critical minerals, and/or elements of interest; and engineer their extraction technologies. The project team plans to develop geoscience and engineering solutions for the recovery of valuable elements and minerals from produced water, thereby promoting sustainable resource utilization.

DOE Funding: $1,499,390 Non-DOE Funding: $500,000 Total Value: $1,999,390  

Valuable mineral recovery and alternative utilization of produced water through a novel process  —  Virginia Polytechnic Institute and State University  (Blacksburg, Virginia) plans to develop a process for achieving three beneficial uses of produced water, including valuable mineral recovery, carbon fixation, and irrigation water production. The process consists of five major steps: (1) produced water treatment; (2) rare earth elements and critical metals recovery; (3) direct lithium recovery; (4) carbon mineralization; and (5) phyto-microbial treatment. Bench-scale experimental tests will be conducted to optimize each step of the process. In addition, the project will establish a pre-pilot circuit to continuously test the process and collect critical information for testing at larger scales.

DOE Funding: $1,500,000 Non-DOE Funding: $375,001 Total Value: $1,875,001