Micro-Credit and Emotional Well-Being: Experience of Poor Rural Women from Matlab, Bangladesh
Introduction
Bangladesh is one of the poorest and most densely populated countries in the developing world, occupying 150th position in UNDP's Human Development Index (UNDP, 1999). At least 70 million people live in absolute poverty, and of these, 35–50 million constitute the ultra poor consuming <1,805 kcal per capita per day (BIDS, 1992). One of the distinguishing features of current poverty-alleviation efforts in Bangladesh is the use of micro-credit as “a critical anti-poverty tool for the poorest, especially women” (The Micro-credit Summit, 1997). These programs extend small loans to poor people, mainly women, for income-generating self-employment, and work by lessening seasonal vulnerability through diversifying income-earning sources, building assets, and strengthening crisis-coping mechanisms, thus allowing the clients to achieve a better quality of life (Hussain, 1998; Morduch, 1998; Rahman, 1995). Such efforts enhance women's income-earning potential and their role in nontraditional activities in the informal sector (Amin, 1993). In addition, micro-credit programs are viewed as an important health intervention tool, and as an efficient and equitable tool for directing resources to women (Kabeer, 2001; Nanda, 1999) in the literature.
While advanced by its proponents as a panacea for poverty, critics of micro-credit call for caution in focusing narrowly on credit operations and draw our attention to a number of factors with implications for the program participants. One of these is the use of peer group pressure as a substitute for collateral and insurance against timely repayment. It has been argued that the micro-credit models used in Bangladesh effectively pit borrowers against one another so that they exert peer pressure to keep repayment rates high (Montgomery, 1996). In another study, the author found that
many borrowers maintain their regular repayment schedules through a process of loan recycling that considerably increases the debt-liability on the individual households, increases tension and frustration among household members, produces new forms of dominance over women and increases violence in the society (Rahman, 1999).
Still other authors point out that micro-credit programs in Bangladesh pay insufficient attention to their impact from a gender perspective and, as a consequence, may weaken rather than strengthen women's position in the family (Goetz & Gupta, 1996). According to them, since credit by itself cannot overcome patriarchal systems of control at the household and community levels, this potential is not always realized. A second group of critics acknowledge the beneficial impacts but question the assumption that micro-credit helps the poorest. They cite evidence that micro-credit benefits only the better-off poor, leading to increasing economic inequities (Mosley & Hulme, 1998). It is a fact that the extreme poor mostly do not (or cannot) join micro-credit programs because of their meager initial endowment (both material and nonmaterial, e.g., education, family size, etc.), high opportunity cost of time, and limited capacity for labor substitution (Evans, Adams, Mohammad, & Norris, 1999). From the supply side, the micro-credit organizations, under pressure from the donors to become financially self-sustaining in a short period of time, are drawn to less poor borrowers who can utilize larger loans, which, inturn, undermines the potential of micro-credit as a poverty-alleviation tool.
Income-generating opportunities for rural Bangladeshi women are largely dictated by patriarchy (Cain, Khanam, & Nahar, 1979) and the religious norms of “purdah,” a pervasive social construct that restricts them in the domestic sphere. Women borrowers have to overcome these norms in the process of being gainfully involved with micro-credit organizations. They must find time for income-generating as well as organizational activities (group meetings, skill-training, etc.), compromising household and child-care obligations. They must also move beyond the household, sometimes defying in-laws and other influential family member's purdah-related restrictions. When the project has not yet started generating income, current cash need for loan repayments and other supplies is met primarily from the husband's income or other source(s). In extreme cases, tension related to re-payment of credit in weekly or fortnightly installments results in physical violence against women (Goetz & Gupta, 1996; Schuler, Hashemi, Riley, & Akhter, 1996). Thus Khan, Ahmed, Bhuiya, and Chowdhury (1998) found that BRAC members in Matlab involved with credit-based income-generating activities are more than two times more likely to be victims of violence in the initial years, with a tendency to decrease over time compared to nonmembers.
A large body of literature has established that emotional stress resulting from poverty and related conditions can lead to the development and/or maintenance of common mental health problems such as anxiety and depression (Bruce, Takeuchi, & Leaf, 1991; Rodgers, 1991; Weich & Lewis, 1998). It is further established that physical disease may be the consequence of emotional stress, and that emotional well-being is protective against premature mortality and illness (Stewart-Brown, 1998). Because of their disadvantaged condition in society, women are more likely to experience stressful life situations, which may in turn trigger or maintain episodes of mental illness (Patel, Araya, de Lima, Ludermir, & Todd, 1999; Sherrill et al., 1997). Research findings from Brazil suggest that women's involvement in informal jobs, such as those in credit-based self-employment activities, may be a risk factor for the development of emotional stress (Santana, Loomis, Newman, & Harlow, 1997). In a multicenter study conducted by WHO on psychological problems in general health care, women were found to be 1.6 times more prone than men to suffer from depression, and anxiety disorders, e.g., agoraphobia or panic (Gater et al., 1998). This difference may not simply be due to the greater degree of help-seeking behavior reported among women. Rather it could be due to a combination of factors related to expression of (di)stress, biology and social context (Paykel, 1991).
In this study we explored the experiences of poor Bangladeshi women involved in credit-based income-generating activities with respect to the prevalence of emotional stress and response to this stress. This is accomplished by comparing a group of women who are recipients of micro-credit with a group of nonrecipients of similar socioeconomic status. Data are furnished by the BRAC–ICDDR, B Joint Research Project in Matlab, which investigates the impact of women focused development interventions on the health and well-being of the rural poor.
Section snippets
The BRAC–ICDDR, B joint research project
Founded in 1972, BRAC is a large indigenous nongovernmental organization (NGO) involved in rural poverty alleviation. BRAC's Rural Development Programme (RDP) targets the poor people with special emphasis on improving their health and socioeconomic condition through group formation (village organization, VO), skill training, and collateral-free loans for income-generating activities. Households possessing less than 0.5 acre land and having at least one member selling manual labor for survival
Results
As shown in Table 1, there was no discernable difference in reporting “emotional stress” between women of BRAC and poor non-BRAC households in the reference period. The proportion reporting “emotional stress” was much lower among the better-off non-BRAC households.
The major reason for reported emotional stress was related to poverty (chronic deficit of daily necessities) in the case of poor, especially BRAC households, but not the better-off nonmember households (Table 2). In the latter group,
Discussion
As reported elsewhere, BRAC interventions in Matlab have been associated with a significant (and positive) increase in economic well-being (Husain et al., 1996). BRAC households report greater land and livestock holdings, productive assets, savings, and monthly food-expenditure compared to their poor nonmember counterparts. It is wrong, however, to assume that emotional well-being, an indicator of quality of life, will necessarily result from improvements in socioeconomic conditions. Emotional
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