Credit or Constraint: Postcolonial Feminist Ethics of Empowerment in Microfinance

The microfinance industry has long been promoted as a “win-win” intervention in the Global South, producing both economic returns and social benefits. The industry disproportionately targets women as borrowers. In this paper, we argue that the ethical narrative of microfinance can fail to deliver—or actively obstruct—social gains for women by conflating the provision of credit with empowerment. Empowerment, we explain, cannot be reliably proxied via financialized metrics such as loan disbursement or repayment. Instead, it requires a connection between capital and agency that depends on women’s legitimacy as economic agents—a legitimacy shaped by cultural gender norms and, in postcolonial economies, by colonial legacies. By using a postcolonial feminist lens to critically analyze the contexts in which microfinance initiatives are enacted, scholars and practitioners can make visible the structural barriers which constrain women’s empowerment. We present a case study set in Ghana to demonstrate how capital, agency, and legitimacy can decouple. This project contributes to feminist business ethics by theorizing how structural and historical conditions mediate the relationship between credit and empowerment.