Economic Empowerment of Rural Women: Case Study of Microfinance Institution (MFIs) in Tangerang, Indonesia

Abstract

The aim of this research is to extract information from married female clients who utilize financing, empowering, and other facilities provided by Microfinance Institutions (MFIs). Quantitative descriptive approach is used in order to describe MFIs. Specifically, the difference between MFIs in each area will be overviewed by using statistical instruments of testing for a difference between means and independent F-test. On the other hand, descriptive qualitative approach is used to review the social interactions of female clients. The results of this research have uncovered some facts. First, however, Difference-Between-Two-Means Test has revealed that no significant difference is found. This shows that the empowering aspect that has been done by MFIs conforms with the standard. Second, the fact that no significant difference is found in the empowering process has been backed by data that reveals relatively small loans scale, similarity in business models, unvaried necessity, relatively small expenditure and living cost, low access to education, and good accessibility to MFIs. Third, business models that are desirable by female clients have these characteristics: only requiring a minimum amount of capital; durable; fast-moving; focusing more on costumers; adaptable; contributing to the society's economy; flexible; having a set amount of freedom. KeywordsWomen empowering, Microfinance Institutions (MFIs), fishermen society, agricultural society, industrial area Many evidences have shown that Microfinance Institutions (MFIs) are capable to reduce poverty in rural areas (Aruna and Jyothirmayi 2011). Leikem (2012) has conducted a study based on Gonzalez's (2008) data of 2,420 MFIs, representing 99 millions clients over 117 counries. The rate of loan repayments from those clients, who in fact do not hand over collaterals, exceeds 95%. MFIs can also access hard-to-reach areas, something which formal finance institutions cannot do. Moreover, Velasco and Marconi (2004) explained that MFIs have more flexibility to keep in touch with their clients than common finance institutions. One method that MFIs do to gain that advantage is by utilizing social capital based on social groups approach as a replacement for collaterals (Mosley and Rock 2004;Chowdhury, Mosley, and Simanowitz 2004) .The same condition applies in Indonesia. Many