Contribution of microfinance on women empowerment case study of Vision Finance company ltd Nyaruguru

2.1.4. Microfinance institution

Microfinance institution, according to Otero (1999) is «the provision of financial services to low-income poor and very poor self-employed people». These financial services according to Ledgerwood (1999) generally include savings and credit but can also include other financial services such as insurance and payment services. Schreiner and Colombet (2001) define microfinance as «the attempt to improve access to small deposits and small loans for poor households neglected by banks.» Therefore, microfinance involves the provision of financial services such as savings, loans and insurance to poor people living in both urban and rural settings who are unable to obtain such services from the formal financial sector.

CGAP Occasional paper (2004).Microfinance institution is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Microcredit is one of the aspects of microfinance and the two are often confused. Critics may attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and very few studies have tried to assess its full impact. Proponents often claim that microfinance lifts people out of poverty, but the evidence is mixed. What it does do, however, is to enhance financial inclusion

2.1.5. Concept of empowerment

What do we mean by empowerment? When does the well-being of a person improve? Sen (2001) explains that the freedom to lead different types of life is reflected in the person's capability set. The capability of a person depends on a variety of factors, including personal characteristics and social arrangements.

Malhotra (2002) constructed a list of the most commonly used dimensions of women's empowerment, drawing from the frameworks developed by various authors in different fields of social sciences. Allowing for overlap, these frameworks suggest that women's empowerment needs to occur along multiple dimensions including: economic, socio-cultural, familial/interpersonal, legal, political, and psychological.

The World Bank defines empowerment as «the process of increasing the capacity of individuals or groups to make choices and to transform those choices into desired actions and outcomes ( http://go.worldbank.org/VELLT7XGR0 visited on 04 June 2016).

According to Krishna (2003) empowerment means increasing the capacity of individuals or groups to make effective development and life choices and to transform these choices into desired actions and outcomes. It is by nature a process and outcome.

Power is often related to our ability to make others do what we want, regardless of their own wishes or interests (Weber, 1946). Traditional social science emphasizes power as influence and control, often treating power as a commodity or structure divorced from human action (Lips, 1991). Conceived in this way, power can be viewed as unchanging or unchangeable. Weber (1946) gives us a key word beyond this limitation by recognizing that power exists within the context of a relationship between people or things. Power does not exist in isolation nor is it inherent in individuals. By implication, since power is created in relationships, power and power relationships can change. Empowerment as a process of change, then, becomes a meaningful concept

According to S.Sarumathi1 and Dr.K.Mohan (2011), the main aim of microfinance is to empower women. Women make up a large proportion of microfinance beneficiaries. Traditionally, women (especially those in underdeveloped countries) have been unable to readily participate in economic activity. Microfinance provides women with the financial banking they need to start business ventures and actively participate in the economy. It gives them confidence, improves their status and makes them more active in decision-making, thus encouraging gender equality. According to CGAP, long-standing MFIs even report a decline in violence towards women since the inception of microfinance.

Empowerment is the process of enhancing the capacity of individuals or groups to make choices and to transform those choices into desired actions and outcomes. Central to this process are actions which both build individual and collective assets, and improve the efficiency and fairness of the organizational and institutional context which govern the use of these assets.