Microfinance and Empowerment: Understandings and Experiences of Rural Women in North Western Pakistan, including Situations in Natural Disaster

This research examines the relationship between microfinance, women’s empowerment and natural disasters in Khyber Pakhtunkhwa (KP), a northwestern province of Pakistan. It does so through female clients from non-disaster and post-disaster affected areas. This study’s central argument is that if, as advocates claim, microfinance enhances women’s economic and social empowerment and their well-being, then this empowerment should be visible in the social context and within the context of natural disaster. If women are assumed to be empowered through microfinance, then they should be able to address their vulnerability more effectively. This study applies a qualitative methodology that uses interviews, FGDs and oral histories as data generation tools. The study evinces a meagre increase in women’s savings and financial decision-making. However, it finds no visible change in ownership of major tangible assets. The study concludes that the effects of microfinance on women’s economic empowerment are not always positive when women transfer loans to others. It further shows an increase in women’s intangible assets such as self-confidence and knowledge, but a limited increase in women’s access and mobility to market related activities due to the prevailing patriarchal norms. This study finds no radical change neither in the gendered division of labour nor men’s abusive behaviour despite women’s economic contribution. This study highlights that women’s social capital enables them to gain recognition and acceptance from the community but also pressurise women for timely repayment. More importantly, the study’s original contribution to the existing literature lies in its findings that show that, although natural disasters may destroy women’s tangible assets, they did not completely undermine women’s intangible assets and strengths. However, despite reducing women’s post-disaster vulnerability, microfinance, in fact, exacerbated additional pressures of loan repayments and its policies hindered women from accessing new loans and savings while in possession of current loans.