Title: Credit, capital, or coalition?
Description: Microfinance programs have become a globally accepted and acclaimed intervention against poverty. These group-based lending and savings programs are exclusively targeted at poor rural women, mostly in developing countries. This dissertation examines the puzzles surrounding why such programs succeed or fail to achieve their objective of facilitating the socio-economic empowerment of women in socially conservative contexts. In particular, this dissertation investigates the mechanism through which microfinance programs improve women's agency by asking the following questions: Does this transformation occur through the economic mechanism, i.e., through women's access to capital in the form of uncollateralized loans and the consequent increase in their economic contribution to the household? Or does it occur through the previously ignored associational mechanism, i.e., through women's access to group-based social networks and their regular participation in group activities? The findings are based on interviews with four hundred Hindu and Muslim women who are members of two separate but similar microfinance programs in rural West Bengal, India.

There are several major findings from the current study. First, the associational mechanism of the group is by far the more prevalent mechanism behind improving women's agency. Also, women benefit from the social aspects of group participation regardless of the economic outcome from loan use. Regular participation in a group's activities raises women's social awareness, increases their social interaction and physical mobility, and improves their domestic power. It also encourages their civic participation and, at times, gives them the voice to protest and the ability to participate in collective action. Second, in some instances, forming women into groups has the unintended and consequential outcome of stimulating group-based collective mobilizations to confront social problems far beyond the realm of microfinance. Overall, the nature of group life is a significant factor in increasing women's agency. However, the economic benefit of access to loans, by itself, has limited effects on women's agency. Loans increase women's agency only in the rare cases when women use these monies to launch independently-run economic enterprises through which they provide a significant portion of their household's livelihood.