By Ashley Zhang, Dora Ye, Amy Huang, Daisy Lu

Mrs. Huang is a 50-year-old villager in Lukou, a small village near Xuzhou China, who manages a plantation business. In the beginning, her business only contained ten acres of land, and the low revenue of the business hardly allowed her to support her two daughters’ education. But when discussing Grameen Bank, her face lit up with excitement. Not only did the 10,000 RMB she borrowed from the bank help start her peach plantation business and expand it to over one hundred acres of land, but it also helped her support her daughter through higher education with the money earned from her crops. As a result, her daughter left Lukou, and is now a successful nurse in Shanghai.

Mrs. Huang is one of 321 members of Grameen Bank in Lukou that were given the opportunity to take out micro loans without any collateral. Lukou is a rural community that contains many impoverished women who have difficulties taking loans from commercial banks, as they lack sufficient qualifications, paperwork, guarantors, and education. Conversely, the Grameen Bank in LuKou, which has offered accessible micro finance since 2014, provides women with the necessary financial resources (up to 20,000 RMB) to set up, run, or expand their own businesses as vendors or farmers.

The Grameen Bank was established in Bangladesh by Professor Muhammad in 1983 to provide women in poverty with access to financial services, which as a result empowers women in various ways. “When women have the ability to make choices independently, they have the opportunity to self-actualize and better pursue happiness.” says Mr.Gao Grameen China’s CEO. Their unique approach is defined by, easily accessible loan, five-person support groups, and weekly repayment conferences.

This article offers some insight into how microfinance programs have increased financial power and social support for women within the context of rural LuKou. Despite some challenges that still exist, the Grameen Bank plays an important role in offering women in rural communities more opportunities and means to empower themselves.

Financial Power and Independence

When dealing with rural women in need of more economic opportunities, financial power and independence seems to be imperative. To begin with, direct cash assistance is an effective measure which ensures that individuals can access tangible benefits. For instance, Mrs. Shi, 66, was only able to start up her rabbit farm because of microloans of 20,000 RMB from Grameen Bank. Without the microloans, her previous job of recycling garbage would never have been able to support her to kickstart her own business. This shows how direct cash assistance allows women to self-actualize and become more ambitious, as they have less restrictions when considering their career path.

Additionally, financial independence can also increase educational opportunities. When women in Grameen Bank receive the necessary job training, they can develop more valuable skillsets. Mrs. Cao, a 75-year-old member, described how, “Most weeks, Grameen Bank would lead meetings and teach members job skills, such as babysitting or delivering take outs, which can be very beneficial for those that need new skills to make a living.” This method can increase the opportunities of which women might be able to access, which further increases their financial power.

Furthermore, when women have more financial power, they are able to provide their children with a better quality and higher education. Mrs. Bai, an elderly member, discussed how her younger son received a college level education while the older one only received high school education. Her older son, now over 35, always lamented not going to college. For this reason, Mrs. Bai decided to take a loan of 3000 RMB from Grameen Bank and provided the younger son with a college education.

Mr. Bai’s younger son were able to find a good job in the city after graduation and paid back Mrs. Bai’s loan in full with his first month’s salary. Her younger son now provides her with ample of goods for her to live more comfortably. Mrs. Bai’s case shows how the effects of micro credit programs and increased financial power can trickle down to future generations. When children have more successful careers, the increase in income circulates back to mothers and family, which further increases their financial power.

Social Support and Community Ties

Another essential and unique measure that Grameen Bank utilizes is a five-person group arrangement, that all members must form in order to ensure joint responsibility. The five-person support groups involve five close but unrelated villagers. They hold weekly central meeting where members repay their loans in small amounts, emphasize their aims, and share their experiences of doing businesses. Members within each group are not only inseparable due to obligatory peer monitoring for loan repayments, but also rely on each other when encountering obstacles within their daily and personal lives. Importantly, the formation of a support group offers women a platform to share their own experiences. During the weekly meetings, women would have important discussions about the struggles surrounding education, efficient mechanisms to minimize damage done by natural disasters, or other problems that are prominent within the community.

According to Ms. Lu, one of the oldest members in Grameen Bank China, “Members of the support group go to each other’s houses regularly for hygiene checks, and they also help take care of each other’s children.” This year, due to COVID-19, children had to take online classes. However, many children were not disciplined enough to study on their own, which created trouble for illiterate parents. As a result, there were instances where they would take their children to a literate member’s house and provide their children with a better learning environment.

Moreover, literate group members would teach illiterate members basic reading and writing skills, and they would also take care of each other whenever someone is sick. These cases show that the ties between members go beyond mandatory weekly meetings, as they offer consistent support whenever problems arise.

Furthermore, such groups are able to provide women with the necessary emotional support that they otherwise lack. It was observed in LuKou that most men are either consistently not home or are unwilling to engage in personal and intimate conversations. This means that when women encounter problems, they frequently have no one to turn to within the household. Groups help resolve this feeling of isolation and helplessness among women, as they help develop a sense of community and solidarity. Social support is crucial to achieving empowerment because it establishes a place of acceptance and tolerance. In essence, social groups play a significant role in building important emotional bonds and a platform for women to express their voice. 

Existing Obstacles and Potential Solutions

Despite the success of the Grameen Bank in uplifting the lives of women, there are still many obstacles that women face on their path towards empowerment. In particular, the culture and social expectation surrounding women’s roles in the household hinder their process of reaching their goals in life (self-actualization).

Specifically, existing narratives dictate and reinforce that women living in rural communities bare the double burden of household duties in addition to responsibilities outside of the house. Conversely, fathers often leave the village to go to other cities for better employment opportunities with no strong expectation from society to care for their children.

 Out of the 20 women interviewed, 16 women were responsible for completing most household work as well as the business outside of the house. For example, Ms. Lou, a farmer, and mother of two, is responsible for all domestic tasks as well as maintaining their crops, while her husband is away from home working in the city. This shows how the double standard inflicts disproportionate amounts of pressure on women of which men are exempt.

Furthermore, the double responsibilities for women restrict the number of opportunities that women can pursue. Given that domestic tasks are extremely time consuming, there is an opportunity cost for the time spent on housework. The burden of household duties limits the amount of time that women can contribute to other opportunities. While the alternative may simply be more time dedicated to employment outside of the house or for personal development or leisure, it is nonetheless important to provide women with the choice of deciding their own labor and time allocation.

When there are social norms surrounding the division of labor, monetary assistance is insufficient in tackling the problem. Increasing education programs and discussions regarding labor division in the household are viable solutions that can gradually tackle the underlying cause of the problem. Therefore, in addition to their main goal of providing financial services, the Grameen Bank should also utilize effective measures to reduce the expectations and pressure inflicted on women.

In summary, the Grameen Bank in Lukou has notably improved the living conditions of their clients who are usually rural women in poverty. For example, Mrs. Cao discussed how the microloans allowed her to “afford mechanized tools for production, which saved [her] a lot of time and energy.” Furthermore, Mrs. Meng noted how members in a group can, “Express their troubles and exchange business experiences.” Grameen Bank Lukou provides many women with more financial power that leads to more independence. Additionally, support groups can effectively form strong ties between women and empower them through a sense of belonging and community. However, some obstacles to increasing female empowerment still exist, and the Grameen Bank should continue to explore solutions to mitigate the effects of social norms through financial inclusion. Therefore, the Grameen Bank has improved living conditions of women in rural communities, and their unique approach directs many women down a path of empowerment.