School of Politics and International Studies

Microfinance Effect on the Empowerment of Rural Women in North Western Pakistan: A Case Study of Khyber PakhtunKhwa

This research proposes to examine the relation between microfinance, empowerment and vulnerability in North West of Pakistan. Like microfinance elsewhere, ‘reaching and empowering women’ is now one of the core objectives of microfinance programmes in Pakistan. Such a gender perspective aims to contribute to the Millennium Development Goals (MDGs) and was the second core theme of the Microcredit Summit Campaign since 1997. While this focus on women’s access to microfinance as a tool for their empowerment and poverty alleviation is widely seen as positive, the overall impact of the microfinance services on women’s lives is unclear and questions remain. For example, how many loans are actually utilized by women? What are the impacts of microfinance services on women’s lives? Do women experience any change in their lives after availing microfinance services? Do women reduce their vulnerabilities to risks, economic shocks, and natural disasters by using microfinance services?

As compared to other parts of Pakistan, provision of microfinance services targeting rural women in Khyber Pakhtunkhwa (KPK) Province is difficult due to Pukhtun culture, tradition and conservatism, and currently due to extremism and security issues. Women in KPK suffer mainly because of their disadvantaged position in a patriarchal society and rights violation though not equally spread. The new economic, social, religious and political realities have created new vulnerabilities for rural as well as urban women. In addition to the prevailing social vulnerabilities, women have faced devastating effects of floods in July 2010, which has further increased women’s vulnerability to natural disasters. Women clients of the microfinance programme also lost their livelihood assets and enterprises in disaster affected areas.

A small number of studies explore the impact of microfinance programmes on women’s empowerment in Pakistan, which show both positive and negative or no significant impacts. None of these have specifically addressed the issues of women’s empowerment and women’s vulnerability reduction in KPK. The purpose of this study is to assess the processes through which microfinance programmes can contribute to the empowerment of rural women and reduce women client’s vulnerabilities. I will do so by comparing a non-disaster with a disaster area in KPK. This study will examine the extent to which microfinance programmes bring changes in rural women’s lives. As such, the analysis of the study has intentions to look at the ‘changes’ at individual, relational and collective level from women clients’ perspective.

The objectives of the research are:

• To identify and examine  the nature of women’s vulnerabilities in non-disaster and disaster areas in KPK
• To find out strategies women use against risks, shocks and disaster ahead of time and after their occurrence
• To analyse the processes through which microfinance programmes address women clients’ vulnerabilities
• To understand the potential of microfinance services on empowerment of rural women clients 
• To examine factors that contribute or inhibit women’s empowerment through microfinance
• To assess the contribution of microfinance programmes in bringing changes in women clients’ lives