Global Resources

Who Takes the Credit? Gender, Power and Control Over Loan Use in Rural Bangladesh

Author: A. Goetz, R. Gupta
Publisher: Elsevier
Publication Date: Jan 1996
Special credit institutions in Bangladesh have dramatically increased the credit available to poor rural women since the mid-1980s. Though this is intended to contribute to women's empowerment, few evaluations of loan use investigate whether women actually control this credit. Most often, women's continued high demand for loans and high rates of loan repayment are taken as signs of women's empowerment. This paper challenges this assumption by exploring variations in the degree to which women borrowers control their loans directly. A significant proportion of women's loans are controlled and invested by male relatives, while women borrowers bear the liability for repayment. Where men invest loans badly this can undermine household survival strategies, forcing women to mobilise repayment funds from resources which would otherwise be used for consumption or saving purposes. International aid donors bear some responsibility for this process. Donors' interest in seeing the development of financially self-sustaining rural development institutions has resulted in a preoccupation with cost recovery, to the degree that loan repayment rates have become the primary index of success. A new focus is required, which prioritises the important issue of the quality of loan use.