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Credit Where Credit's Due: The Enabling Effects of Empowerment in Indian Microfinance

Saha, B.; Sangwan, N.

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Authors

N. Sangwan



Abstract

We utilise primary data collected from a North Indian village in 2015 to 2016 and examine the impact of women’s empowerment on their creditworthiness measured by the total annual loan amounts. Our key explanatory variable – an empowerment index – has been constructed using four individual-level factors -- economic, social, interpersonal and political. We find that more empowered women received greater cumulative loans. We have instrumented empowerment by the sex of the borrower’s first child being male. It seems that in the male-dominated environment of North India, the ‘luck’ of giving birth to first child as a son helps a woman seize opportunities for empowerment. The village-level finding of empowerment is consistent with the result we obtain for the whole of North India using a separate and national dataset. We also show that for the rest of India education, but not empowerment, is an important determinant of loan volumes.

Citation

Saha, B., & Sangwan, N. (2019). Credit Where Credit's Due: The Enabling Effects of Empowerment in Indian Microfinance. World Development, 122, 537-551. https://doi.org/10.1016/j.worlddev.2019.06.009

Journal Article Type Article
Acceptance Date Jun 10, 2019
Online Publication Date Jun 27, 2019
Publication Date Oct 31, 2019
Deposit Date Jun 12, 2019
Publicly Available Date Jun 27, 2021
Journal World Development
Print ISSN 0305-750X
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 122
Pages 537-551
DOI https://doi.org/10.1016/j.worlddev.2019.06.009
Public URL https://durham-repository.worktribe.com/output/1329031

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