A breakthrough in women's bargaining power: the impact of microcredit

This paper attempts to test empirically whether access to micro‐credit can help poor rural women to improve their bargaining power within the household. The empirical measures of women's bargaining power, or empowerment, used in this paper are underpinned by a bargaining model of the household. By using survey data on the borrowers of the Grameen Bank of Bangladesh and by adopting a methodology that allows for the possibility of self‐selection, this study shows that targeted micro‐credit can have a significantly positive effect on women's bargaining power within the household.