International aid and development work related to addressing poverty often focuses on the issue of empowerment with microfinance. The world Bank (2002), defines empowerment as “the expansion of assets and abilities of poor people to participate, negotiate, influence, control and hold accountable institution that affect their lives” (p. 14).
Although not explicitly listed, it is easy to see that empowerment, would necessarily have positive psychological consequences related to self-efficacy, dignity and other aspects of mental health. Interestingly, empowerment is an issue that is already talked about within the framework. The World Bank (2002) reports “there is a reciprocal relationship between individual assets and capabilities to act collectively. Poor people who are healthy, educated and secure can contribute more effectively to collective action. At the same time, collective action can improve their access to quality schools or health clinics” (p. 15). Despite the fact that empowerment programs undoubtedly have psychological benefits, they are most often framed in economic terms and presented as economic interventions. This is, perhaps, the reason that there has not been more attention to such programs within positive psychology itself.
Changes due to empowerment
Since the 1980s, the economic tool of microfinance has been used to combat poverty in the world. Micro finance programs provide poor women and men across the world with small loans for business startup or improvement, home improvements or other family matters. When implemented appropriately, micro financial programs have seen success in social and psychological aspects. In fact, some microfinance programs have helped women become more empowered in their household and community. Theoretically, empowerment has the potential to impact individuals in three ways:
- Power to
- Power over and
- Power within.
Microfinance programs have been found to impact all three of these categories for women in economically developing countries .
Understanding power to
Power to is a personal sense of efficacy or influence and can be used to understand the psychological benefits of the empowerment process including autonomy, self-confidence and self-esteem. Microfinance programs in Bangladesh, India, Nepal and South Africa have been found to increase these characteristics components of psychological empowerment. A study found that Nepalese women participating in a microfinance program reported higher levels of self-confidence. They had more progressive attitude towards gender norms and relations compared to South African women who did not participate.
Understanding power over
Microfinance programs have also been associated with increase in the power over components of empowerment. Power over is an individual’s ability to make personally or socially impactful actions. Studies have associated women’s participation in microfinance programs with women’s increased reports of decision-making, bargaining power and communication with their husbands as well as improvements in relationship and appreciation.
Understanding power within
Finally, it has been suggested that microfinance programs positively impact women’s sense of power as an ability to participate in an organisation and community. Women who participate in microfinance program have been reported to be more active in social organisations and seek community activities. Research shows that participation in microfinance programs serves to help women gain access to resources and increase mobility which provide a stepping stone for women to enter social and political arenas .
Helping women empowerment with microfinance
Microfinance programs have also been criticized for a number of failures negatively impacting women’s financial, social and psychological well-being. Many critiques recognize that micro finance opportunities does not immediately alleviate poverty or empower women simply by program implementation or participation. However, it is important to recognize that, when implemented appropriately, micro finance programs can be successfully and result in positive impacts. Taking into account women’s needs, community needs and resources, microfinance programs can be tailored to fit a specific group of women. By doing so, organizations and communities increase the chances of the program’s success and enhance the potential to help women overcome poverty and find ways to empower themselves.
- Jones S R (2004), Legal guide to microenterprise development, American Bar Association, USA
- Gelb J (2009), Women and politics around the world, ABC-CLIO Inc., USA
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