Evaluating the Role of Microfinance in Women’s Economic Empowerment and Social Mobility in Rural India

Abstract

Microfinance has emerged as a vital instrument for promoting financial inclusion and women’s empowerment in developing economies. This study evaluates the role of microfinance in advancing women’s economic empowerment and social mobility in rural India. Employing a mixed-methods approach, the research integrates quantitative analysis of household survey data with qualitative insights from interviews and focus-group discussions conducted in three districts of Gujarat. Propensity score matching (PSM) and multivariate regression are used to estimate the causal impact of microfinance participation on indicators such as income, asset ownership, decision-making power, and social participation. Results reveal that access to microfinance significantly enhances women’s income-generating capacity and household decision-making power, though improvements in social mobility are more gradual. The findings underscore the importance of complementary interventions—such as financial literacy, entrepreneurship training, and market linkages—to maximize empowerment outcomes. The study concludes that microfinance is a powerful enabler of women’s agency and economic participation when embedded in supportive social and institutional contexts.