Purpose: Microfinance programs have been increasingly promoted in India for their positive economic impact and the belief that they empower women. Within the South Indian context, women empowerment is a process in which women challenge the existing norms and culture, to effectively improve their well-being. The article investigates the impact of microfinance on women's empowerment, using household survey data.

Approach: Against the background of an increasing feminization of poverty in the developing world, microfinance programs represent important means for promoting women's empowerment. However, most of these programs are only focused on individual and purely economic empowerment but do not involve full and equal participation of women in all spheres of society. In order to improve the effectiveness of microfinance programs for women, it is necessary to integrate a societal and political dimension which enables women to participate in decision-making processes above and beyond the family context. Microfinance programs have proven to be important instruments to fight against female poverty and vulnerability in developing countries. Yet while cash-in-hand can have several impacts, it doesn't always. Empowerment is about change, choice and power. It is a process of change by which individuals and groups with little or no power gain the power and ability to make choices that affect their lives.

 Findings: This paper presents how the social dimension of microfinance enables the emergence of female empowerment. In order to strengthen the empowerment process, microfinance programs must try to enhance their contextual adaptation and the political dimension. Therefore, the preponderance of the economic dimension of microfinance has to be reduced. Hereby, increasing women's education and wage income is an important milestone. By these means, microfinance programs can go beyond their current embryonic stage of development and promote a "mentoring" function for women with a stronger focus on long term outputs.

Limitations

A number of cases show an increase in women's workloads as they expand their businesses and participate in microfinance meetings. Some women have reported ill health and exhaustion.

We also found limitations to empowerment, including limits to the level and kinds of change in women's social status; decision-making power limited to making small purchases or other smaller decisions; clients' husbands withdrawing their support from the household, and women hiding their savings or even their businesses from their husbands because they fear that would happen. As well, we are concerned that throughout the industry the "poverty-focused" products tend to be the women's products, with women continuing to be clustered in lower return businesses.