Micro-Financial Institutions and Processes of Women Empowerment in Zambia

This study explores microfinancial institutions (MFIs) and processes that shape (dis)empowerment among women operating in informal business settings in Zambia, drawing from a schema that integrates multi-dimensional, multi-level, and dynamic understandings of livelihoods specifically how MFIs shape prospects of ‘stepping-up,’ ‘stepping-out,’ or ‘hanging-out.’ We used questionnaires group discussions, and multi-level interviews to draw lessons from women linked to the main branch of Vision Fund Zambia. We explored policy and institutional processes shaping micro-finance, processes of inclusion or exclusion, and implications for livelihood pathways as indicators of empowerment. Results show MFIs enhance social networks and connections between and among women beneficiaries, facilitating cooperation, access to additional finance, exchange of information, and innovation among group members (stepping up). Access to financial capital (loans) improved livelihood activities, permitting investments into immediate business activities as well as wider investments into agriculture (stepping out) but these remain minimal and unsustainable. Meanwhile, we find a general lack of business knowledge and financial management skills among beneficiaries, limiting the extent to which access to finance can lead to sustained transformative changes across beneficiary groups. Whereas coordination mechanisms and processes of inclusion and exclusion processes exist, policy and institutional processes themselves remain vague about micro-level processes for accessing finance and empowerment. As a result, most beneficiaries were merely hanging in, trapped in the financial arrangement and debt. An argument is made that rather than frame empowerment of marginalized groups as apolitical, and primarily within financial capital lens – which we acknowledge remains important – MFIs should consider multi-dimensional elements that altogether shape effective forms of livelihoods and women empowerment.