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The Journal of Developing Areas, Volume 49, Number 1, Winter 2015,pp. 23-38 (Article)

P bl h d b T nn t t n v r t ll f B nDOI: 10.1353/jda.2015.0028

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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 Email 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

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-2008. This group of women received a loan for a period of 3

years. The loan cycle was terminated at the end of 2011. 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.

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 4th behind Thailand, Brunei, and the Philippines in Southeast Asia (Social Watch

Report, 2012). On women’s empowerment Vietnam ranked 2nd 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 1980. 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

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

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

2011. 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 2008. 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 12.50 USD per month), 24% earned between

201,000 –300,000 VND, 20% earned between 301,000 –500,000 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.

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 2010.

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 5 – 8.5 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

10-15 million VND over three years. For borrowers who invested in services like

tailoring, agricultural trading, microenterprises, etc., profits were between 10-16 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.

29

FIGURE 1. AN INTEGRATED MICROCREDIT PROGRAM

Table 1 shows the demographics of the group. Most of these women are

between 41-70 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 2011. One noticeable indicator is a significant increase in household

annual income from 10.75 million VND in 2007 to 20.85 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.

Poverty Alleviation

• Increased well-being

• Self-sufficiency

Feminist

Empowerment

• Transformation of

power relations

• Gender equality

Women’s Union

• Design and implement the

program

Women’s Empowerment

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

Financial

Self-Sustainability

• Expansion of

individual choice

• Self-reliance

PeaceTrees Microcredit Program

• Provide loans to

women

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

16-40 38% 26%

41-70 62% 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

0-2 20% 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)

6.16 (in 2011)

Average Household Income

(Mil. VND)

10.75

(in 2007*)

20.85

(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.

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 30-45 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 2008. 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

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 self-

esteem 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 self-

confident” and 1 being “not at all self-confident” to measure the levels of self-confidence.

33

TABLE 2. WOMEN’S EMPOWERMENT SCORES IN 2008 AND 2012 SURVEYS

No. Question Scale from 1 to 5 (1: Absolutely not agree; 5:

Absolutely agree)

2008

2012

Difference

t-Test

1 Women should be in charge of household finance

4.58 4.98 0.40 4.04***

2 Women should have their voice heard in

making household decisions

4.32 4.94 0.62 4.44***

3 Women should make their own decision on

purchasing major personal items without

consulting their spouse

3.06 2.94 -0.12 -0.40

4 Women should make their own decision on

purchasing small personal items without

consulting their spouse

4.38 4.62 0.24 1.41*

5 Women should decide on family planning

together with their spouse

4.78 5.00 0.22 2.85***

6 Husband and wife should be jointly responsible to educate and take care of their

children

4.72 5.00 0.28 3.26***

7 Women should do all household chores even if their spouse is not working

3.00 3.50 0.50 1.57**

8 Women should discuss domestic violence

issues with people who are not family members

2.96 4.70 1.74 8.30***

9 Dignity and the right to privacy are important

values to women in their family

4.88 4.88 0.00 0.00

10 Dignity and the right to privacy are important

values to women in society

4.76 5.00 0.24 3.28***

11 You are very confident to express your own personal views in a community meeting

4.24 4.86 0.62 4.26***

12 You are very confident to give advises to

others in the village to solve daily problems

4.18 4.90 0.72 5.37***

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

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 0.059 (0.481)

-0.345*** (-3.466)

-0.047 (-0.497)

-0.345*** (-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)

0.092

(0.720)

Adjusted R2 0.23 0.67 0.48 0.68 No. of Observations 50 50 50 50

Notes: The dependent variable is the change in perception of empowerment between two rounds of surveys in 2008 and 2012. 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.

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

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 1.000

TRAINING 0.446 1.000

ENCOURAGEMENT 0.451 0.678 1.000

CONFIDENCE 0.409 0.678 0.650 1.000

SECEDU 0.322 0.586 0.624 0.624 1.000

MARRIED 0.265 0.656 0.638 0.536 0.587 1.000

TABLE B. DESCRIPTIVE STATISTICS

INCOME TRAINING ENCOURAGEMENT CONFIDENCE SECEDU MARRIED

Mean 12.100 3.620 3.460 3.420 0.580 0.660

Standard Error 1.094 0.185 0.188 0.190 0.071 0.068

Minimum 0.000 1.000 1.000 1.000 0.000 0.000

Maximum 25.000 5.000 5.000 5.000 1.000 1.000

Count 50 50 50 50 50 50

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