This paper examines the impact of women’s empowerment on their creditworthiness measured in terms of cumulative loan amount taken over time. It utilises primary data collected from a village in North India through household surveys over two years. An empowerment index was constructed using four components: economic, social, interpersonal and political factors. The study finds that women who are more empowered are able to sustain a greater volume of loans. However, empowerment is likely to suffer from endogeneity, which was addressed by adopting the Instrumental Variable (IV) approach and using the sex of the borrower’s first child as an instrument for empowerment. The IV estimates show a larger and positively significant effect of empowerment on loans. This finding is consistent with results obtained for North India from a separate and large dataset that is nationally representative.

A PhD (award pending) in Economics working on how to improve the delivery of credit to the poor in India by studying caste discrimination, women’s empowerment, the impact of business training and flexibility in repayment schedules. I designed the studies and collected both qualitative and quantitative data using household surveys and in-depth interviews between 2015 to 2017 over three field visits to North India. I have consulted microfinance institutions and NGOs, and written on a range of cultural and social issues for leading publishers including a recent article on the lack of flexibility in microfinance lending contracts for The Guardian.

Dr Bibhas Saha,
Associate Professor (Reader) in Economics
Durham University Business School,
b.saha@durham.ac.uk.