The Journal of Developing Areas, Volume 49, Number 1, Winter 2015, pp (Article) DOI: /jda

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1 Th p t f n nt r t d r r d t Pr r n Th p r nt f n nd nd r l t n R r l V tn th r n D n n, n V. L The Journal of Developing Areas, Volume 49, Number 1, Winter 2015, pp (Article) P bl h d b T nn t t n v r t ll f B n DOI: /jda For additional information about this article Access provided by Seattle University Library (18 Nov :15 GMT)

2 T h e J o u r n a l o f D e v e l o p i n g A r e a s Volume 49 No. 1 Winter 2015 THE IMPACT OF AN INTEGRATED MICROCREDIT PROGRAM ON THE EMPOWERMENT OF WOMEN AND GENDER EQUALITY IN RURAL VIETNAM Katherine Dineen Seattle University, USA Quan V. Le Seattle University, USA ABSTRACT In this paper we attempt to analyze the impact of an integrated microcredit program on the empowerment of women in rural Vietnam. We conduct a longitudinal study in 2008 and 2012 on a sample of 50 microcredit recipients. The finding indicates the importance of the empowerment components in the Peace Trees microcredit program, which serves as leverage for higher income generation and greater gender equality. The study emphasizes the role of the Women s Union in designing and implementing the microcredit program with the objective of empowering women. This study supports the importance of the feminist empowerment paradigm in which empowerment is a best practice when a gender equality approach is embedded in program design, rather than an add-on benefit. The microcredit program has also integrated the poverty alleviation paradigm and the financial self-sustainability paradigm. JEL Classifications: O1, O12, O53 Keywords: Women s Empowerment, Gender Equality, Microcredit Corresponding Author s Address: lequ@seattleu.edu INTRODUCTION Empowering women is one of the four themes of The Microcredit Summit Campaign. The Campaign Declaration states experience shows that women are a good credit risk, and that woman-run businesses tend to benefit family members more directly than those run by men. At the same time, through earning an income women achieve a higher status in their homes, their communities, and their nations (Microcredit Summit). The realms of empowerment through microlending are often claimed by non-governmental organizations (NGOs) and are valued by the donors. In the 1990s, microfinance programs targeting poor women in developing countries became a major agenda of the donor communities and development agencies. Within the microfinance literature, empowerment of women is one of the much explored research topics (Hunt and Kasynathan, 2001; Kabeer, 2001 and 2005; Ashe and Parrott, 2002; Pitt et. al., 2006; Basher, 2007; Garikipati, 2008; and Mahmud, 2012). The findings in the literature on the impact of microcredit on women s empowerment have been inconsistent because of different measurements and definitions

3 24 of empowerment. Garikipati (2013) stated studies that view women s empowerment as outcomes of the loans find positive effects, and those studies that focus on processes of loan use find negative effects. Johnson (2005) claimed that assessments of the impact of microcredit on women s empowerment have tended to focus on evaluating whether participants have become more empowered, rather than on the dynamics of gender relations in program design. Mayoux (2005) identified three paradigms aiming at a gender approach rather than one that targets women. The feminist empowerment model defines empowerment as transformation of power relations throughout society (Mayoux, 2005, p. 4). The feminist empowerment paradigm requires fundamental change at a national development level as well as explicit support for women to challenge gender subordination at the local level. The poverty alleviation model defines empowerment as increased well-being, community development and self-sufficiency (Mayoux, 2005, p. 4). This framework focuses on poverty alleviation and community capacity building. The financial self-sustainability paradigm defines empowerment as economic empowerment, expansion of individual choice and capacities for self-reliance (Mayoux, 2005, p. 4). This framework focuses on individual expression and self-efficacy which can be obtained by economic independence. In this study, we examine the impact of an integrated microcredit program on women s empowerment in Vietnam. In particular, we attempt to address the issue of women s domestic responsibilities and public life in the rural areas. We collaborated with PeaceTrees Vietnam (hereafter PeaceTrees), an international NGO and the Vietnam Women s Union (hereafter Women s Union), a local mass organization in Quang Tri province. The PeaceTrees microcredit program is designed with clear objectives and activities to support poverty alleviation, self-financing sustainability, and women s empowerment. In this integrated approach the participants will be at the center of the gender relations in program design. Literature has shown that an integrated approach has not only provided access to credits and financial sustainability, but also enhanced women s knowledge and power to foster self-confidence and self-reliance. We used surveys and case study interviews focusing on gender dynamics and gender issues to assess the effectiveness of the PeaceTrees microcredit program on the empowerment of women. We conducted two rounds of surveys between 2008 and 2012 in Quang Tri province, central Vietnam. An initial survey on 50 microcredit participants was conducted in mid This group of women received a loan for a period of 3 years. The loan cycle was terminated at the end of We revisited the group in early 2012 to conduct a final survey. In addition, we conducted interviews of the participants and asked them how their lives have changed since receiving the microcredit loans. We were also able to interview the chairwomen of the communes as well as the provincial officers of the Women s Union. The provincial officers provided insight into the union s macro-level administrative work when assisting women in the province, while the chairwomen offered a micro viewpoint of the activities in the communes. The paper is organized as follows. Section 1 describes the objectives of the study. Section 2 examines the status of women and gender equality in Vietnam. Section 3 describes the role of the Women s Union in microfinance. Section 4 discusses the PeaceTrees microcredit program. Sections 5 and 6 analyze the surveys and provide empirical results. Section 7 offers conclusions.

4 25 STATUS OF WOMEN AND GENDER EQUALITY IN VIETNAM Vietnam has made significant progress to achieve the Millennium Development Goals (MDGs). These goals include eradicating extreme poverty and hunger, promoting gender equality, and empowering women. Gender equality has been at the forefront of developmental issues in Vietnam. According to the Gender Equity Index (GEI), Vietnam ranked 4 th behind Thailand, Brunei, and the Philippines in Southeast Asia (Social Watch Report, 2012). On women s empowerment Vietnam ranked 2 nd behind the Philippines. Vietnam was among the first countries to ratify the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) in The Law on Gender Equality 2006 provides further leverage for addressing gender disparities and calls for gender mainstreaming in public administration and decision-making. The Law on Domestic Violence 2007 has helped protect women against domestic violence. These policies have been supported by the National Committee for the Advancement of Women (NCFAW), a national agency responsible for promoting gender equality. Despite impressive progress in closing the gender gap in the past 20 years, there are still disparities in education, economic activities, and politics between men and women in Vietnam. While education indicators for boys and girls do not show major gaps at the national level in secondary school enrollment (72% for boys and 70% for girls in 2010 according to the World Development Indicators (WDI)), a gender gap in education exists for certain ethnic minorities where ethnic minority girls lag behind ethnic minority boys by 13 percentage points and behind Kinh (Vietnamese) and Chinese girls by 10 percentage points (World Bank, 2006). At a national level, adult literacy rates for men and women are 94% and 88% in 2010, respectively (WDI). In the economic sector, even though 74% of women participated in the labor force in 2010 compared to 82% of men (WDI), their participation in the formal sector has declined. Income earned by females is on average only 70% of income earned by males (United Nations Development Program (UNDP), 2006 and 2007). Women are mostly concentrated in agriculture (64% of employment) where they work more hours than men in aquaculture, artisanal fisheries, small livestock production management, and agricultural product marketing. In addition, women contribute actively to household income through petty trade, food processing, and handicrafts. In politics, despite being the third highest in Southeast Asia in terms of female representation in national parliament (24.3% compared to 25.3% in Singapore and 27.3% in the Philippines in 2014 according to Inter-Parliamentary Union), progress in increasing the number of women in the decision-making process has been slow and inconsistent. The decision-making structure of the National Assembly and the People s Committee at the provincial, district, and commune levels has limited the involvement of women. Women representation in leadership positions is almost invisible across all departments and sectors at the local level (World Bank, 2006). At the family level, women hold dual responsibility for farm and household work. Although women s participation in decision making on household income is increasing, women still complain about their lack of control over male expenditures on alcohol, tobacco, and gambling (Asian Development Bank (ADB), 2002). Women make decisions on family planning, and the burden of caring for children and elderly is placed

5 26 on the women in the family (ADB, 2002). Vietnamese culture expects women to contain themselves and to be tolerant. Family and community often advise women to exercise passive behavior and to reconcile with their spouse in order to maintain family unity. Domestic violence is prevalent, but people are not aware of it or conceal it due to social stigma (United Nations Population Fund (UNFPA), 2008). In addition, domestic violence issues that do not result in serious injury are seen as normal in families and communities in Vietnam. They are only viewed as problematic when a woman suffers serious injury or when marriages are at stake (Women s Union of Vietnam (WUV)). Activities to empower women have been implemented by the Women s Union, international institutions, bilateral organizations, and NGOs. These activities focus on policy advocacy for gender equality and women s empowerment. The implementation of national policies on women, including the Gender Equality Law and the Law on Domestic Violence, has been carried out by the Women s Union. The Women s Union is a mass organization established in 1930 to represent the rights and interests of women through an extensive network of members, from central to district and commune levels (WUV). At the central level, Government Decree No. 163 in 1988 instructed all government agencies to consult the Women s Union on issues concerning women and children (ADB, 2002). At the district and community levels, the Women s Union has taken part in implementing and enforcing national programs to support women s advancement, including cultural and educational activities, health promotion and family planning, domestic violence, and developmental projects like agriculture expansion and microcredit and microenterprise (ADB, 2002). THE ROLE OF THE WOMEN S UNION IN MICROFINANCE While the Women s Union has been around for decades, their participation in microcredit activities has only been in effect for about 15 years. The Women s Union collaborates with Vietnamese banks and international NGOs to provide microcredit services to their members. The Women s Union manages over 90,000 credit-savings groups in 8,900 communes and has become one of the most respected and sought after collaborators for international NGOs and Vietnamese banks. Access to formal credit has long been severely limited since few of poor households have collateral to offer as a guarantee. Through the collective guarantee provided by the Women s Union, poor women now can access subsidized credit from banks and international NGOs. Access to the Women s Union microcredit programs is often tied to acceptance of other social and human development programs managed by the union. Traditionally, credits for the poor from the public financial sector in Vietnam were provided by Vietnam Bank for the Poor (VBP) and Vietnam Bank for Agricultural and Rural Development (VBARD). In 1998, the government revamped the lending processes to make lending more accessible to the poor. The main changes were that capital for short-term loans was increased, policies were amended to ensure savings could be increased, and lending procedures were simplified (Swain et al., 2000). VBP was renamed in 2003 as Vietnam Bank for Social Policies (VBSP) to focus more on social policy lending than on commercial lending. The VBSP began to function at the district level. It was a consolidation of all government-provided loans to the poor, including

6 27 students and the disabled (Swain et al., 2000). In 2005, VBSP provided 1,151,625 USD for 4,125,000 households (Swain et al., 2000). The Women s Union also worked with many different international NGOs on microfinance over the years. The Women s Union began their microlending with the Belgian Development Agency in 1998, and the two organizations completed their most recent loan cycle in 2011 (Belgium Technical Cooperation). There have been more than 60 international NGOs involved in microlending in Vietnam. They worked with local mass organizations, including the Women s Union, to provide loan services to the poor. Almost all of the Women s Union microcredit programs are integrated with training programs, including human and professional development, to empower women. Major stakeholders involved in the microcredit programs are the banks, the international NGOs, the Women s Union, and the women borrowers and their families. In addition to acting as a representative for the borrowers, the union officials strive to increase the women s knowledge and awareness of socio-economic and family issues through different training programs. Many of these programs have non-pecuniary effects but are important for the overall development objectives, thus women value enormously. THE PEACETREES MICROCREDIT PROGRAM We partnered with PeaceTrees to analyze the impact of its microcredit program in Quang Tri province, central Vietnam. We conducted two rounds of surveys on the women borrowers of the microcredit program implemented by the Women s Union. The first survey was conducted in August 2008 when the respondents first received the loan. At this time the women had not yet received any training from the Women s Union. The second survey was conducted in February of 2012 after the loan terminated in September During the period of the loan, the women attended regular training programs and different activities on professional and human development organized by the Women s Union. The loan cycle started in June Fifty women each received 5 million VND, equivalent to 300 USD, for a period of 3 years at 0.65% interest rate per month. The interest was paid on a quarterly basis and a one-time principal payment at the end of the loan cycle. All fifty women committed to repay the loan on time. According to a preliminary report prepared by the Women s Union in 2008, the profile of this group is classified as poor families by the national living standards. Fifteen households were considered to be living in poverty. Thirty-eight percent of the families earned less than 200,000 VND per month (equivalent to USD per month), 24% earned between 201, ,000 VND, 20% earned between 301, ,000 VND, 12% earned between 501,000 less than 1 million VND, and 6% earned over 1 million VND. Eighty-four percent were interested in receiving training on cattle breeding techniques and disease prevention methods, 16% were interested in cultivation techniques, and 10% expressed interest in learning about microenterprises. All women expressed interest in receiving training on family planning, gender issues, children nutrition, and health knowledge. After the loan disbursement, the Women s Union regularly monitored and motivated the borrowers through its regular meetings. The loans were used primarily for production activities to supplement the household income generated mainly from rice monoculture.

7 28 In order to help the women in using the loan effectively, the Women s Union organized training programs on professional development, including cattle breeding techniques, intensive rice farming techniques, and business skills training. These training programs aimed to address poverty alleviation and community capacity building. Human development and gender-related programs were embedded in the professional development to maximize the effectiveness of the program. This approach is in line with the feminist empowerment framework focusing on providing support for women to challenge gender subordination at the local level. The Women s Union also encouraged the borrowers to take part in one of the twelve credit-saving groups. The credit-saving groups consist of 540 women in the province with total capital of 450 million VND available for other poor women to have access to credit. This program supports the financial self-sustainability framework. In September 2009, Quang Tri province suffered heavily from a severe typhoon. Properties, crops, and livestock were badly affected. Among 50 beneficiaries of the microcredit program, 40 were affected severely by natural disasters and epidemic diseases after the 2009 typhoon. In order to help the families to overcome such difficulties and to resume production activities, the provincial Women s Union directed the Women s Union of the commune to visit these families to record total damages and recommended PeaceTrees to exempt the borrowers from paying interest for 6 months from September 2009 to March The final report released by the Women s Union of Quang Tri province in September 2011 indicated that the loans were effectively utilized by the borrowers to improve the standard of living of their families. Nineteen women used the loan for pig breeding, 16 used the loan for cow breeding, 10 used the loan for agricultural activities, and 5 used the loan for microenterprises. In terms of economic achievement, 98% of the borrowers (49 women) invested effectively and made a profit. Of which, 19 borrowers earned a profit over 9 million VND; 22 borrowers obtained a profit from million VND; 8 borrowers gained a profit under 5 million VND; and 1 borrower earned less than 1 million VND. For borrowers who invested in animal husbandry, profits were between million VND over three years. For borrowers who invested in services like tailoring, agricultural trading, microenterprises, etc., profits were between million VND over the same period. Before the microcredit program was implemented, 15 out of 50 women and their households were classified as living below the poverty line, representing 30% of the borrowers. By the end of 2010, 9 of these 15 households were no longer living in poverty by the same definition.

8 29 FIGURE 1. AN INTEGRATED MICROCREDIT PROGRAM Women s Union Design and implement the program PeaceTrees Microcredit Program Provide loans to women Women s Empowerment Feminist Empowerment Transformation of power relations Gender equality Poverty Alleviation Increased well-being Self-sufficiency Financial Self-Sustainability Expansion of individual choice Self-reliance Professional Development Cattle breeding techniques Intensive rice farming Disease prevention methods Human Development Family planning Nutrition and health Gender issues Professional Development Business skills training Saving Microenterprise development Table 1 shows the demographics of the group. Most of these women are between years old, married, living with their spouse and children, and have more than two children. Eighty-four percent of them are farmers with some level of formal education. The average family members in the household have increased from 5.09 in 2007 to 6.16 in One noticeable indicator is a significant increase in household annual income from million VND in 2007 to million VND in 2011 in nominal terms. Despite the fact that Vietnamese currency was devaluating from 16,000 VND per USD in 2007 to over 20,000 VND per USD in 2011 and inflation was rising on average by 12% during the period, the standard of living for many of these women and their families has significantly increased due to a more efficient and effective use of the microcredit loan.

9 30 In short, the PeaceTrees microcredit program managed by the Women s Union of Quang Tri province integrated the feminist empowerment framework with the poverty alleviation and financial self-sustainability frameworks has proven to be an effective approach linking microfinance with empowerment. TABLE 1. DEMOGRAPHIC INDICATORS OF RESPONDENTS 2008 Survey 2012 Survey Age % 26% % 74% Marital Status Married 94% 94% Widowed 4% 4% Divorced 2% 2% Occupation Farmer 84% 84% Small Business 16% 16% Living Status Self 0% 0% Spouse 16% 16% Parents 8% 8% Spouse and/or Children 76% 76% No. of children % 20% >2 80% 80% Education No school 2% 0% Primary 41% 41% Vocational 2% 4% Secondary 55% 55% Average no. in Household 5.09 (in 2007) Average Household Income (Mil. VND) (in 2007*) 6.16 (in 2011) (in 2011*) Notes: * The inflation rate between 2007 and 2011 was 12%. The exchange rate in 2007 was 16,000 VND/USD and in 2011 was 20,000 VND/USD. THE SURVEY The analysis of this paper is based on longitudinal data collected from participants in the PeaceTrees microcredit program. The questionnaires were distributed to 50 respondents by program officers from PeaceTrees and the Women s Union in 2008 and 2012, respectively. There are 12 questions related to the perceptions of women s empowerment based mostly on Malhotra et al. (2002) and Santillan et al. (2004). The questions address household decision-making processes, household division of labor, dignity of women, and gender roles in society. Both surveys used Likert type 5 point scales anchored by Absolutely Agree (5) and Absolutely Disagree (1). A higher score implied women s perception of empowerment is high.

10 31 In the 2012 survey we also conducted narrative interviews with some women borrowers. The selection process of interviewees occurred randomly among the microcredit participants. We asked questions that helped the participants to tell stories about their experiences in their own way and from their own perspective. Each interview lasted approximately minutes and each participant was asked questions pertaining to her purchasing habits, knowledge acquired from Women s Union training courses, spousal relationship, and day-to-day decisions at home and in the community. These gender-responsive questions allow us to understand the dynamics of gender relations in which they are embedded. Table 2 provides the empowerment scores of the respondents. Question 1 is related to women s perception of household finance. The perception score in 2012 is higher than that of 2008 and the difference is statistically significant. One woman commented on her involvement with household finance: I feel that I am in charge. I keep the money and consider how to use it carefully. In terms of the perception that women should have their voice heard in household decision-making processes, question 2 reveals that the perception score in 2012 is also higher than that of 2008 and the difference is statistically significant. An ethnic minority woman describes the change after she participated in the microcredit program: In the past men in ethnic minority families controlled everything but now husbands and wives discuss financial decisions together. Interestingly, the perception score for question 3 is lower in 2012 compared to 2008 on purchasing major personal items; however, it is not statistically significant. On the other hand, question 4 reveals higher perception score in 2012 compared to 2008 on purchasing small personal items and the difference is statistically significant. One woman expressed, In the family the role of the woman is very important. She has to take care of everything. In financial matters she discusses [with her husband] but she keeps the money and has more control over household expenses. The difference in the perception that women should decide on family planning together with their spouse in question 5 is statistically significant. Women reported a higher perception score in 2012 compared to For question 6 relating to the equal roles of parents in educating children, the perception score is higher in 2012 compared to 2008 and the difference is statistically significant. A local officer from the Women s Union expressed, Local women have more knowledge, especially in educating children. Nowadays husband and wife pay more attention to the education of their children. An interesting finding is that women in 2012 have a higher perception score in question 7 that they should do more work at home even if their spouses are not working. The difference is statistically significant. Culturally, Vietnamese women on average work longer hours than their husbands and have less time for leisure (Santillian et al., 2004), and this habit did not seem to change over the years. However, one woman noted that she and her husband now have a mutual respect for each other: In the past I always thought that women only do housework and take care of the children. Now I can go outside and participate in social activities [in the community]. I tell my husband and day by day he understands. He now supports me participating in the Women s Union. With respect to the domestic violence issue raised in question 8, significant differences were noted in the scores implying that gender equality regularly promoted by the Women s Union has changed the traditional perception of concealing domestic

11 32 violence to non-family members. The women have built a trusting relationship with the Women s Union that the organization would protect them. One woman confidently expressed, If a family has domestic violence issues the Women s Union would intervene and explain appropriate behavior. Questions 9 and 10 examine the respondents perception on the dignity and the rights to privacy in their family and in society. The scores for question 9 with respect to the perception on the dignity and the rights to privacy in the family in 2008 and 2012 are the same. However, the women view their perception on the dignity and the rights to privacy in society is higher in 2012 compared to 2008 and the difference is statistically significant. They generally agreed that women have increased their knowledge about gender equality and the position of women has improved in society. The women have an equal chance to contribute to the community. Questions 11 and 12 examine the respondents perceptions on expressing personal views in the community and offering advice to others. The scores for both questions are higher in 2012 compared to 2008 and the differences are statistically significant. This finding suggests the positive impact of the training activities on the scores. The training programs not only increase knowledge but also give women more confidence in speaking out and expressing themselves in the community. One woman noticed, In our commune the change in attitude of the women is clear. [In the past], most women were shy and did not know life outside their family. Now they have a chance to participate [in community activities] and they feel more confident. Microlending is not the only instrument PeaceTrees and the Women s Union employed to give women an opportunity to improve their circumstances. The combination of comprehensive training programs and the provision of the loan have proved not only to provide useful skills to women, but also to increase women s selfesteem at home and in the community. The training programs on how to grow better crops and livestock, manage household finances, and take care of the family and oneself seem to be working in Quang Tri province. In the 2012 questionnaires, we also asked the respondents about their involvement with the Women s Union activities. Thirty-one out of 50 respondents (62%) stated that they received benefits from the training programs provided by the Women s Union. We used Likert type 5-point scales: 5 being extremely important and 1 being unimportant to measure the importance of training. Thirty-nine out of 50 respondents (78%) stated that they often received encouragement from the officers of the Women s Union and their peers at the meetings. We used Likert type 5-points scales: 5 being very often and 1 being not at all to measure encouragement. Thirty-nine out of 50 respondents (78%) also revealed that they are more confident today than before joining the microcredit program. We used Likert type 5-points scales: 5 being very selfconfident and 1 being not at all self-confident to measure the levels of self-confidence.

12 33 TABLE 2. WOMEN S EMPOWERMENT SCORES IN 2008 AND 2012 SURVEYS No. Question Scale from 1 to 5 (1: Absolutely not agree; 5: Difference t-test Absolutely agree) 1 Women should be in charge of household *** finance 2 Women should have their voice heard in *** making household decisions 3 Women should make their own decision on purchasing major personal items without consulting their spouse 4 Women should make their own decision on * purchasing small personal items without consulting their spouse 5 Women should decide on family planning together with their spouse *** 6 Husband and wife should be jointly *** responsible to educate and take care of their children 7 Women should do all household chores even if ** their spouse is not working 8 Women should discuss domestic violence *** issues with people who are not family members 9 Dignity and the right to privacy are important values to women in their family 10 Dignity and the right to privacy are important *** values to women in society 11 You are very confident to express your own *** personal views in a community meeting 12 You are very confident to give advises to others in the village to solve daily problems *** Note: N = 50. *** significant at 1% level, ** significant at 5% level, * significant at 10% level. EMPIRICAL ANALYSIS The empirical analysis in this section utilizes the questionnaires described above. We calculated the empowerment score by computing the mean of questions 1-12 in Table 2. The dependent variable, EMPOWERMENT, is the difference in perceptions of empowerment between the two surveys in 2008 and in 2012, respectively. The ordinary least squares (OLS) regression results are reported in Table 3. The t-statistics in the regressions are calculated using White's (1980) heteroskedasticity consistent method. Tables A and B in the Appendix provide correlation matrix and descriptive statistics of the independent variables. In regression model (1) we only use the change in income, INCOME, reported by the respondents in 2008 and 2012 as independent variable. The result reveals that higher change in income implies the respondents reported higher levels of perceived empowerment per expectation. In regression model (2) we include three impact indicators, TRAINING, ENCOURAGEMENT, and CONFIDENCE as independent variables. Both TRAINING and ENCOURAGEMENT have a positive and statistically significant impact on the empowerment of women at the 1% level. When the women received professional and

13 34 human development training programs provided by the Women s Union, their perceptions on women s empowerment increased. In addition, when they received encouragement from the officers of the Women s Union and fellow members, their perceptions on women s empowerment also increased. The variable CONFIDENCE has a positive impact on women s empowerment, and it is statistically significant at the 5% level. In regression model (3), we examine the role of marriage and education on women s empowerment. The variable MARRIED, is a dummy variable that takes the value 1 if the woman is married, 0 otherwise. The result shows married women have higher perceptions of empowerment, and it is statistically significant at the 10% level. Secondary education, SECEDU, has a positive and statistically significant impact on the empowerment of women at the 1% level. In the final regression model (4), we include all independent variables in the equation. This model explains 68% of the variation on the perceptions of women s empowerment. In this model, change in income remains statistically significant. Training, encouragement, confidence, and education also remain positive and statistically significant. The variable married is not statistically significant in the final model. TABLE 3. MICROCREDIT AND WOMEN S EMPOWERMENT (1) (2) (3) (4) INTERCEPT (0.481) *** (-3.466) (-0.497) *** (-3.329) INCOME 0.033*** (3.847) 0.010* (2.025) TRAINING 0.377*** (2.857) 0.349*** (2.495) ENCOURAGEMENT 0.433*** (2.891) 0.347** (2.165) CONFIDENCE 0.294** (1.963) 0.192** (2.258) SECEDU 0.570*** (4.296) 0.252** (2.105) MARRIED 0.259* (1.874) (0.720) Adjusted R No. of Observations Notes: The dependent variable is the change in perception of empowerment between two rounds of surveys in 2008 and T-statistics, computed using White s adjustment, are in parentheses, *** significant at 1% level, ** significant at 5% level, * significant at 10% level. The results reported in Table 3 show a positive relationship between empowerment and an integrated approach to provide loan services to women. Women in Quang Tri province who received a loan from the microcredit program managed by PeaceTrees and the Women s Union reported higher empowerment scores at the end of the loan cycle. The finding indicates the importance of the women s empowerment components in the PeaceTrees microcredit program, which serves as the leverage for higher income generation and greater gender equality.

14 35 CONCLUSIONS This study supports the importance of the feminist empowerment paradigm in which empowerment is a best practice when a gender equality approach is embedded in program design, rather than an add-on benefit (Mayoux, 2002 and 2005). The PeaceTrees microcredit program has also addressed the poverty alleviation paradigm and the financial self-sustainability paradigm. For the Women s Union, microfinance is not just about providing loans to the poor, it is a means to an end rather than an end in itself. The ultimate objective is to empower and to integrate marginalized women into society. The stakeholders, being female borrowers, are working towards the empowerment of women in every aspect of their lives. Therefore, the success of the microcredit programs is not that the borrowers repay the loan, but that the loan acts as one method of empowering the borrowers. Giving women loans is not the only thing that has helped them better their circumstances. A lack of money is a large part of the poverty problem, but money is not the only solution. Women who borrow money need a support system, they need training, and they need encouragement. The Women s Union has developed a network for these women to learn and share their experiences. The women have been given the tools to change their lives, but they have also been given the assistance to see that change through. The support for these women is a significant factor in explaining why they are able to do so well for themselves and their families. A major insight we gained from the interviews was the role of women in Vietnamese culture. Vietnamese socio-cultural norms hold women to a very high standard as they are expected to work to better themselves and their families, and to always put the interest of the family, and often the nation ahead of their own. While we observed how the Women s Union promotes empowerment and gender equity through various programs, we also noticed how the training courses reinforced many of the expectations of women. To a certain extent, the women learn it is their primary responsibility to care for the family and encourage good behavior among family members. However, as Vietnamese women are becoming more empowered and involved outside the home, in many respects this engagement is creating less leisure time for women and more social, economic, and family responsibilities. Increased gender equality will come when women are able to share domestic responsibilities and experience less pressure from the socio-cultural norms placed on them. The study emphasizes the role of the Women s Union in designing and implementing the microcredit program with the objective of empowering women and promoting gender equality. The Women s Union has the potential to mobilize and create momentum to close the gender gap. Through the network of a strong mass organization such as the Women s Union, the microcredit program has the potential to create momentum for empowering women and supporting the national gender equality agenda. Despite Vietnam s successes in its efforts to achieve the MDGs, gender equality remains a forefront issue to be addressed. A significant challenge Vietnamese women face is domestic responsibilities and inequitable roles in society. These socio-cultural norms prevent women from becoming fully empowered. During the interviews, we came to know how hard the women work in their everyday lives. In addition to their role as the primary caretaker of the children and housework, Vietnamese women are expected to contribute to their household income. However, lives of these women are changing for

15 36 the better since they participated in the microcredit program. In many cases husbands are becoming equal partners at home while women are becoming more active in the community. APPENDIX TABLE A. CORRELATION MATRIX INCOME TRAINING ENCOURAGEMENT CONFIDENCE SECEDU MARRIED INCOME TRAINING ENCOURAGEMENT CONFIDENCE SECEDU MARRIED TABLE B. DESCRIPTIVE STATISTICS INCOME TRAINING ENCOURAGEMENT CONFIDENCE SECEDU MARRIED Mean Standard Error Minimum Maximum Count REFERENCES Ashe, Jeffrey and Parrott, Lisa, PACT s Women s Empowerment Program in Nepal, Journal of Microfinance, 2002, Vol. 4, No. 2, pp Asia Development Bank (ADB), Women in Vietnam, Country Briefing Paper, Regional and Sustainable Development and Mekong Department, 2002, Manila: Asian Development Bank. Basher, Md. Abul, Empowerment of Microcredit Participants and Its Spillover Effects: Evidence from the Grameen Bank of Bangladesh, Journal of Developing Areas, 2007, Vol. 40, No. 2, pp Belgian Technical Cooperation, Vietnam: Access to Credit, Retrieved on November 20, 2013 from website: Garikipati, Supriya, The Impact of Lending to Women on Household Vulnerability and Women s Empowerment: Evidence from India, World Development, 2008, Vol. 36, No. 12, pp Garikipati, Supriya, Microcredit and Women's Empowerment: Have We Been Looking at the Wrong Indicators? Oxford Development Studies, 2013, Vol. 41, No.1, pages S53-S75. Hunt, Juliet and Kasynathan, Nalini Pathways to Empowerment? Reflections on Microfinance and Transformation in Gender Relations in South Asia, Gender and Development, 2001, Vol. 9, No. 1, pp Inter-Parliamentary Union, Women in National Parliaments, Retrieved on January 10, 2014 from website:

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