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Paper short abstract:

Micro-finance empower women, encourage financial inclusion, job creation and thereby eradicates poverty. This article highlights improper practices of micro-finance functions and how woman borrowers affected economically and socially.

Paper long abstract:

Woman at the bottom of the pyramid are the important strata of every society who needs to be empowered, specially in the developing country. Micro-finance is the provision of providing affordable financial services to low-income households with the primary objective to fight against poverty and empower woman. However, past research studies have reported that there is lack of robust evidence to prove the strong impact of micro-finance on poverty alleviation and women empowerment.

Qualitative focus group discussions conducted in Sri Lanka among woman micro-loan borrowers reveals that they are charged higher interest, around 72% per annum. Impoverished woman from low-income households are charged higher interests as they belong to a lower socioeconomic class/strata. The women borrowers taken advantage of in the name of woman empowerment. In the event of a delay of loan repayments, the women borrowers are subjected to insults and public humiliation by the agents/loan officers. Women are being pressurized by a male family member, i.e. by husband or sons to borrow money to finance their consumption such as alcohol, smoking etc. Exploitation of woman in the form of improper micro-finance practise not only harming them economically by burdening their saving and creating inequality . It is also damaging their social values. Policy maker in developing countries must ensure regulation such as tight interest rate and impose measures on attitude and ethical behaviour of micro-finance agent.