Microfinance Paths and Economic Empowerment of Women Borrowers: Evidence from Iran­

The relationship between women's empowerment and microfinance has been studied in many countries, including Iran. But, few studies have examined the impact of women's microfinance consumption path on their empowerment. Therefore, this study aims to answer the important question of what effect the path of microcredit consumption has on women's empowerment. Given the importance of the type of loan used in women’s economic empowerment, 13 ways of spending by women were identified. These routes can be divided into three general paths: (1) starting a small business, (2) indirectly investing with the possibility of return, and (3) spending the loan without the possibility of its return. The main question was how much women are empowered if they choose each of these paths. The statistical population consisted of 800 women in Nahavand Township. The sample size was determined to be 260 people according to Krejcie and Morgan’s table taken by the stratified sampling technique with the proportional assignment. The questionnaire's reliability and validity were confirmed by computing Cronbach's alpha coefficient (more than 0.7) and content validity, respectively. Data were analyzed by SPSS20 software. The results showed that women in the first path became more empowered than the other two groups. The other two paths did not make a significant difference in the empowerment level although the second path slightly outperformed the third path in empowering the women. Credit-paying institutions must exercise greater control over how women use their credit by fundamentally reviewing payment laws.