Academic journal article Journal of International Women's Studies

Microcredit Lending to Female Entrepreneurs: A Middle East Case Study

Academic journal article Journal of International Women's Studies

Microcredit Lending to Female Entrepreneurs: A Middle East Case Study

Article excerpt


There are more than 4 billion people in the world living off of less than 1500USD per year. These are the people worldwide without access to commercial banks and credit unions. These are the people that microcredit lending institutions are here to help. This paper focuses on the advantages to allocating the microcredit loans to female entrepreneurs. Highlighting women's empowerment through microcredit lending, and using the Middle East as a case study, this paper uses studies from throughout the region that show that microcredit loans are improving communication, access to information regarding rights, and improved household welfare. Through access to credit and literacy, women throughout the region are generating income, which in turn is a key bargaining chip for familiar and societal participation.

Key words: Microcredit lending, empowerment, Middle Eastern women


This paper examines the connections between microcredit lending to female entrepreneurs and women's empowerment in the Middle East. When women are given a life skill and the ability to generate their own income, they invest profits in household welfare, empowering themselves to play larger roles within their families and their community as a whole. Access to small loans allows women to work outside of the home, learn life skills, and nurture self-sufficiency. By first examining differences between male and female entrepreneurs receiving loans, this paper attempts to identify the effects of female business success on family welfare and societal norms. Also examined are correlations between female entrepreneurs receiving loans and changes in household welfare and female participation.

Recent modernization has led to rapid rates of urbanization, as men travel to the larger cities for employment. This movement has left substantial gaps in the informal sector, bringing more women into the workforce to fill the vacant positions--typically working on handicraft and productions, activities that can be done at home more easily and with an informal organization.

Study Questions

1. What are the advantages of allocating microcredit loans to female entrepreneurs?

2. What are the implications on female empowerment, household investments, loan control, and community participation?

3. What are the effects of small business success on family welfare?

In order to examine these phenomenon more thoroughly, microcredit lending must be examined beyond female entrepreneurs in the Middle East. Research was first conducted on microcredit lending worldwide, then on lending to female entrepreneurs worldwide before focusing on those within the Middle East.


There are a variety of terms used to discuss small loans to entrepreneurs in developing countries: some scholars use the term microfinance, because entrepreneurs need savings and insurance as well as loans. Others refer to it as microcredit, as lending is the core concept. Still others prefer the term microcredit plus, encompassing all services accessed in conjunction with loans. This paper will refer to the phenomenon as microcredit, except when citing others' research.

Research was conducted in order to determine what, if any, differences exist between the result of male and female entrepreneurs receiving microcredit loans. Criteria included the number of lenders, the average loan amount, and the allocation of profits. Using the Middle East as a case study, research focused on the affects of microcredit lending on family welfare as well as any applicable changes in societal and gender norms. This study attempts to identify correlations between loans to female entrepreneurs and increased levels of female participation and empowerment both within the home and in the society as a whole. Empowerment was measured through household investments, income levels, and child education levels. …

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