Empowerment is a word that is often used, but it is trickier than it seems to actually understand. What do we mean when we say a woman is empowered? How does that power actually manifest itself?
For the majority of financial institutions who serve un- and under-banked women, it is easy to proclaim women’s empowerment as a focus: 50 percent of microfinance institutions say women’s empowerment or gender equality is one of their objectives. But measuring progress toward empowerment is much more challenging.
At Women’s World Banking, we have recently been focused on quantifying the results of our efforts to increase financial inclusion for women worldwide. Alongside our work with financial institutions to provide credit, savings, insurance and other products to low-income women, we have made it a priority to evaluate the ways in which those products are making a tangible difference in women’s lives.
We need an effective definition of empowerment and a reliable tool for measuring its progress. We started with Naila Kabeer’s definition of empowerment: the process by which women take control and ownership of their lives through expansion of their choices. We at Women’s World Banking have always believed that access to financial services would contribute to women’s empowerment in this sense, but we didn’t have a structured way to talk about or measure it. To do so, we have adapted the framework of gender empowerment first articulated by Martha Chen and Simeen Mahmud into a method that helps us evaluate the outcomes from our financial inclusion efforts worldwide.
Chen and Mahmud’s framework breaks down empowerment into four main components:
- Material change: This is the most straightforward shift to measure. We look at whether a woman has access to credit, and whether her business is growing. Can she now afford to make household improvements? Are her children more likely to be in school? We see all of these factors as evidence that she has improved her financial means.
- Cognitive change: This is more intangible, since it’s based on increased knowledge and skills. When we introduce women to a new financial product, we educate them about the product. Beyond the classroom, we also train all the financial officers who are going to interact with them. Some ways to measure cognitive change include analyzing how well they understand product features. Is she taking full advantage of these features to her own benefit?
- Perceptual change: This is another intangible shift, as it pertains to how a woman sees herself, her self-esteem and how she deals with her day-to-day needs. Once she feels more financially secure, for example, she gains confidence and can begin to plan for her future. She can plan to put her children through secondary or even tertiary school, or aim for even bigger dreams.
- Relational change: A woman may become more confident and more secure, but how does that affect her relationships with her family and community members? Her newfound confidence might change the dynamic with her husband, her children, or maybe her mother-in-law. When she’s out in the community, she may gain a certain status, or at least she could perceive herself that way in relation to others.
To measure these changes, we broke each of these areas into more specific questions we can ask women through a variety of tools (surveys, focus groups, and interviews, as well as account data collected by the institution). For example, to assess material change, we look at the change in women’s business or household income, assets and expenditures. To assess cognitive change, we look at the percentage of women who are attending financial education programs, or who demonstrate understanding of new financial concepts. In Jordan, for instance, we did a recent study to look at the outcomes of the Caregiver insurance product we introduced there five years ago with Microfund for Women. Insurance can be a difficult concept to explain to someone who has never had to deal with it before: the notion that you must pay for a benefit that you may never actually use. But in Jordan, we held focus groups with around 80 women, and it turned out that nearly everyone now understood the nuances and the benefits of the insurance product, alongside strong numeracy skills. This is what we would consider a cognitive change.
Perceptual and relational changes are the most difficult to measure. One way to assess perceptual change is to look at the percentage of women with a savings goal. As far as relational change: In our studies, we talk a lot about who makes household decisions. We might ask a woman: Was it you only, or your husband, or the two of you together making the decision? While these types of questions can give enormous insight into progress towards empowerment, it is important to remember that the answer might be more complex than it seems. It might be easy to assume that it’s a sign of progress when the woman is making a decision herself, but that may not be an ideal scenario for all households. Maybe the woman doesn’t want to be the only one making the decision, since that might mean her husband isn’t helping her. Measuring progress along these lines can be tricky and highly contextual.
As we continue to use this new tool, we plan to keep refining and customizing it so we can more accurately evaluate the impact of financial products. A recent study in Nigeria was the first time we have had the chance to apply the tool on a large scale. There, we were able to survey women who had recently accessed a new product, the BETA Savings accounts created with Diamond Bank. In mid-2015 we conducted the baseline survey, in which we took a sample of 1,100 clients and looked at such factors as their previous use of financial services, the number of children they have in school, their household decision-making progress, and their savings. We’ll go back in two years and look at the same group of clients to see what has changed.
Looking ahead, we plan to expand our research around women’s empowerment, including looking at the intersection of women’s financial inclusion and areas such as land rights and intimate partner violence. If a woman has her name on a title, for example, does that give her more access to credit as well as make her more empowered? There is a tremendous amount to be learned from these types of evaluations. Women’s World Banking is committed to working through these complexities, quantifying our progress and building on it, so we can offer ever more innovative financial products and understand to what extent these efforts are transforming women’s lives for the better.