ABSTRACT. This paper adds a game theoretic bargaining model of gender relations within the household to understand the effects of microfinance. It uses propensity score matching to analyze these outcomes. It argues that for assessing microfinance outcomes beyond access to loanable funds. By looking at what factors affect bargaining power, including the role of social norms and social perceptions in the bargaining process I am able to look at the links between extra-household and intra-household bargaining power. Propensity score matching with randomly selected participant and non-participant eligible rural households deals with the problem of self-selection. This study confirms that the linkage between microfinance intervention and women empowerment through intra-household bargaining power is weak and resides on some spheres of economic empowerment dimension within a household. Impact indicators that ensure household capital formation and, hence, empowerment are not statistically elastic to microfinance participation to the participant when compared to non-participants, given other socioeconomic factors. Moreover, the impact is insufficient on non-economic empowerment dimensions that institutionally determine intra-household gender inequality. Development interventions like rural microfinance service should question a program actual achievements, impact, in terms of capital formation beyond access and use right of an intervention by a client. pp. 8–35


Keywords: Poor rural women, Empowerment, Microfinance, and Propensity score matching
Micro Finance Institution Lending and Female Entrepreneurs 

Samuel Urkato
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Wolaita Sodo University

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