IMPACT OF MICROFINANCE ON GENDER INEQUALITY IN DEVELOPING COUNTRIES

Abstract

This thesis studies the impact of microfinance on gender inequality by using a panel data analysis of 94 developing countries over the period 2000 to 2019. Gender Inequality Index (GII) was used as a proxy for female empowerment and gender inequality measurement. At the same time, microfinance intensity (MI) was derived by dividing the number of female active borrowers by the country's female population. A country-clustered fixed-effects model was conducted using the specific-to-general method to assess the relationship between GII and lagged value of MI. This macroeconomic analysis shows that increased access to microcredit reduces gender inequality. Microfinance takes time to impact gender equality positively, as evidenced by the negative association between GII and lagged value of microfinance intensity across all the econometric models. Analysis of the GII components shows that MI positively affects females’ secondary education and political empowerment.