Learning by Doing, Bargaining within Limits: Financial Literacy, Entrepreneurship, and Bounded Empowerment among Rural Women in Faisalabad, Pakistan

Abstract

There is a lack of empirical research on how rural women’s financial literacy, entrepreneurship and empowerment are interwoven in their daily life. This research aims to explore how rural women in the Faisalabad District in Punjab province developed as financially literate entrepreneurs and how this process impacted upon their empowerment. Researcher used interpretive paradigm given by Sen’s capability approach (1999) and Kabeer’s empowerment framework (2005) for phenomenological analysis to analyze in-depth interview data with 32 women. Sampled participants were involved in entrepreneurial activities. Additional data was also collected through four focus group discussions with microfinance officers, NGO staff, community members and husbands of rural women. The findings indicated that rural women developed basic money-management skills through household practice. They acquired enterprise-specific financial skills (costing, pricing, record-keeping) mainly through trial and error and by observing other entrepreneurs. However, none of the participants reported having formally trained in financial literacy. Participants identified both push (necessity) and pull (skill) factors. These factors influenced their entry into business. Access to formal credit represented a significant milestone for them. In addition, none of the participants kept savings in mobile wallets, although a few beauty entrepreneurs used Facebook to reach customers. The experiences of empowerment among participants were varied. Participants described gains in confidence and in contributions to household economies as larger than gains in decision-making authority. However, momentum of the increased empowerment was constrained within existing patriarchal family bargaining structures. In some trades, established women entrepreneurs informally trained younger women. Consequently, researchers suggest a model of bounded negotiated empowerment. Findings have implications for staged lending, credit linked training, and mobile sensitive service delivery.