Microfinance and domestic violence

Abstract

Purpose The purpose of this paper is to document the impact of participation in microfinance programs on domestic violence against women. Design/methodology/approach This paper uses the survey data from 69 villages in Bangladesh and the instrumental variable approach to estimate the effect of participation in microcredit programs on domestic violence. Findings The results show that women’s participation in microcredit programs does not reduce domestic violence. However, this result is possible only when the authors do not distinguish between female borrowers who have control over credit and those who do not have control over credit. Classifying female borrowers into these two categories can significantly change the results. The authors report significantly lower physical violence against those female who have control over credit. In case of psychological violence, the authors report no significant impact of control over microcredit. Originality/value The novelty of the paper lies in distinguishing between physical and psychological violence.