1. Microfinance and intra-household management Lessons from rural South-India Isabelle Guérin Institut de recherche pour le Développement French Institute of Pondicherry March 2009

2. Guérin March 2009 Problem to be adressed Microfinance: above all a matter of women! Controversial results (Kabeer 2001)  Empowerment (Hashemi et al. 1996; Khandker et al. 1995; Holvoet 2005)  Or disempowerment (Rahman 1989; Goetz & Gupta 1989; Rao 2005; Rankin 2002; Molyneux 2002) Intra-household management: a black box!

3. Guérin March 2009 Research Objectives Opening the household black box  Analysis of gender financial responsabilities  Analysis of gender financial practices (saving, borrowing) → Better understanding of microfinance effects

4. Guérin March 2009 Literature review Intra-household management literature  Complexity and diversity of intra-household management systems  Gap between responsabilities and control History (Fontaine, 2001; Perrot 2001; Zelizer 1995) Sociology and Anthropology (Guyer & Peters, 1989; Pahl 1989, 2000; Vogler 1998; Bruce and Dwyer 1988, Burgoyne, 2008). Economics (Kabeer, 1994) Intra-household management and microfinance  Main question: who control the loans? Male appropriation → domination (Goetz & Gupta 1996; Rahman 1989) Male appropriation → Negociations and compromises (Kabeer 2001)

5. Guérin March 2009 Main results Result 1. Women in household budget management: a permanent paradox  Balancing the budget without controlling income Result 2. Women-led financial circuits  Diversity of financial practices, partly secrete Result 3. What about microfinance?  More responsabilities more pressure  Microcredit use: a bargaining process  Better management or risks of over- indebtedness?

6. Guérin March 2009 Theoretical framework Intra-household relationships  Conflicts and cooperation (Folbre 1990 ; Kabeer 1994; Sen 1990)  Patriarchal bargain (Kandioty 1988)  Compromise and resistance (Agarwal 1994) → hypothesis suggested here: financial circulation within households is at the core of this permanent process of bargaining, compromises and resistance

7. Guérin March 2009 Methodology Descriptive statistics Descriptive statistics  170 households For specific questions, women and men have been interviewed For specific questions, women and men have been interviewed  All are microfinance clients Qualitative analysis Qualitative analysis  Semi-structured interviews  Group discussion  Observation  Informal discussions

8. Guérin March 2009 The context (1) Family Size4,8 Number of Children in Charge1,8 Family Type % Nuclear Family67% % Extended Family33% Age35,4 Mean35 Below 2517,1% Between 25 and 4566,5% Above 4516,5% Marital Status Single2,4% Married95,9% DivorcedNone Separated0,6% Widow1,2% Table 1. Socioeconomic profile

9. Guérin March 2009 The context (2) Education None31,8% Primary42,9% Secondary23,5% Other1,8% Caste Low caste (Scheduled Castes)60% Middle caste (mainly BC and MBC)40% Table 1. Socioeconomic profile (continued)

10. Guérin March 2009 The context (3) Housing Mud House16,5% Semi-Concrete House42,9% Concrete House20,6% Government House19,4% Other0,6% House Ownership Owner95,0% Rental5,0% Agricultural Land Ownership Landless67,1% Below 5 acres30,6% Above 5 acres2,4% Table 1. Socioeconomic profile (continued)

11. Guérin March 2009 The context (4) N=170HusbandWifeOther member Who "work" within the household? 92,4%50%37.6% Sources of Income Daily Agricultur e Labourer Agricultur e Producer Casual Labour in the Non Farm Sector Regular Labour in the Non Farm Sector Self- Employm ent Other (cattle rearing, Husband36,9%6,4%8,3%18,5%12,7%17,2% Wife63,5%2,4%9,4%4,7%12,9%7,1% Other Earning Member22,1%5,2%22,1%20,8%2,6%14,3% Table 2. Livelihood patterns

12. Guérin March 2009 Result 1: meeting ends without controlling income N=170Daily expensesHealthCeremoniesEducation Husband19%28%18%28% Wife57%38%30%33% In-laws5% Joint18%29%46%34% Table 1. Financial responsabilities within the household

13. Guérin March 2009 Result 1: meeting ends without controlling income → huge responsabilities in terms of saving, borrowing and repayment N=170 % resp income % resp saving % resp borrowing% repayment No role19%2%1%3% Minor role (<20%)46% 51%62% Moderate role (20-60%)28%34%25%18% Major role (>60%)6%17%23%16% Table 2. Women responsabilities in terms of income, saving borrowing and repayment

14. Guérin March 2009 Result 2. Diversity of financial practices (1) N = 170% of women involved% full control% hidden practices SHGs78,80%47% 1,50% Kaimathu (gift counter gift)67,70%93,90% 52% Pawnbroker67,10%36% 0,90% Wellknown people25,90%27,90% 2,30% Thandals (door to door moneylender)31,80%46,30% 1,90% Financial Compagny24,10%24,40% 2,50% Advance from employer18,80%37,50% 3,20% Grocery Shop17,10%82,80% 3,60% Shopkeeper21,20%77,80% 16,10% Friends14,70%60% 13,60% Relatives11,80%60% 11,10% Bank8,80%20% 0,00% Other0,60%0 0,00% Table 3. Diversity of borrowing practices

15. Guérin March 2009 Result 2. Diversity of financial practices (2) N = 170% of women involved% full control% hidden practices Saving in cash at home55,90%98,90%71,60% Surruku Pai (saving in cash)20,60%97,10%82,90% Kundumani (jewels)13,50%95,70%30,40% Other jewels18,80%81,30%15,60% Asset3,50%50,00%0,00% Seetu (Roscas)51,20%50,60%2,30% Diwali Seetu3,50%83,30%33,30% Saree Seetu10,00%100,00%47,10% Money guard4,10%85,70% Kaimathu3,50%66,70%0,00% SHG91,20%92,90%1,30% Bank7,70%84,60%7,70% Table 4. Diversity of saving practices

16. Guérin March 2009 Result 2. Diversity of financial practices (3) Figure 1. Women-led financial circuits

17. Guérin March 2009 Result 2. Diversity of financial practices (4) Repayment burden

18. Guérin March 2009 Result 3. Microfinance effects on financial management More responsabilities → more pressure More involved in financial decisions40% Better cashflow management65% Better access to the financial market95% Less dependant from moneylenders25% More pressure45%

19. Guérin March 2009 Result 3. Microfinance effects on financial management (2) N=170Who controls microcredit? Husband17,1% Wife47,6% In-laws4,1% Joint31,2% Microcredit control: bargaining and compromises

20. Guérin March 2009 Figure 3. How the microcredit is used Better management or risks of over-indebtedness? Result 3. Microfinance effects on financial management (3)

21. Guérin March 2009 Future research Diversity of women behaviors Diversity of gender practices