Abstract:-

In this study, we examine whether long-term access to microcredit leads to improvements in women’s empowerment and explore intra-household bargaining power (IHBP) as a key underlying mechanism for the same. We use administrative data from a microfinance institution and adopt a quasi-experimental methodology by statistically matching their comparable long-term and new female microfinance clients using coarsened exact matching. We also conduct incentivized lab-in-the-field experiments with client couples to measure IHBP of women as a potential mechanism for women empowerment. We find that long-term access to microcredit has no significant impact on women’s empowerment across key dimensions – decision-making, control over resources, and gender attitudes. Benchmarking our effect sizes against prior studies, we demonstrate that the null is both precise and credible. We attribute this result to a lack of improvement in our potential mechanism of IHBP among long-term female clients and show that our experimentally elicited IHBP measures are strongly predictive of women empowerment outcomes in the expected direction, affirming their construct validity. These findings suggest that long-term access to microcredit, even when sustained for over a decade, does not by itself transform women’s status within the household, highlighting the need for credit-plus approaches that address social norms and strengthen women’s bargaining position directly. Our findings are thus relevant for over 140 million women microfinance clients across developing countries, where entrenched gender norms still shape how financial access translates, or fails to translate, into women’s empowerment.