Women's Property Rights and Outreach of Microfinance Institutions Targeting Women

Abstract

The right to legally own and control property is vital to the ability of an individual to receive credit. Women in developing countries often lack property rights and are therefore at a disadvantage when applying for loans. In addition, even where women have been granted equal or near-equal rights as men, there is often a disconnect between what is codified as law and what occurs in practice. Therefore, I seek to examine how women’s property rights, both as codified and in enforcement, affect outreach activities of Microfinance Institutions (MFIs) serving women. I initially hypothesized that in MFIs targeting women, the breadth of outreach to women would be positively affected by both the legal strength and enforcement of women’s property rights. Results of a Heckman selection model and a Seemingly Unrelated Regression model both contradict that initial hypothesis, instead showing that MFIs give a far greater portion of their loan funds to women clients in countries with more discriminatory women’s property rights, and that enforcement of property rights does not show any significant effect on the ability of MFIs to reach women borrowers.