From Financial Access to Capability Expansion: A Structured Systematic Literature Review on Women, Microfinance, and Poverty Reduction
DOI:
https://doi.org/10.24256/kharaj.v8i2.10106Keywords:
Capability Approach; microfinance; women’s capabilities; poverty reduction; systematic literature review.Abstract
Microfinance has long been promoted as a pathway to women’s empowerment and poverty reduction, yet the empirical literature remains fragmented across financial access, empowerment outcomes, and welfare effects. Much of the existing evidence documents changes in income, savings, household decision-making, and livelihood conditions, but fewer studies explain how access to financial resources is translated into substantive freedoms and valued ways of living. This study aims to synthesize empirical research on women, microfinance, and poverty reduction through the lens of Amartya Sen’s Capability Approach. Using a structured systematic literature review, this article reviews peer-reviewed empirical studies on women’s participation in microfinance, self-help groups, and related community-based financial mechanisms. The findings indicate that microfinance is associated with positive changes in income stability, household welfare, mobility, access to public services, social participation, and decision-making. However, these outcomes are neither automatic nor uniform. Their realization depends on a range of conversion factors, including household power relations, socio-cultural norms, institutional design, training opportunities, and infrastructural conditions. The review further shows that while the literature is rich in empowerment indicators, it remains relatively weak in explicitly capability-based analysis. This article contributes a capability-oriented synthesis that explains not only whether microfinance matters for women’s poverty reduction, but also how financial access is converted into capabilities, valued functionings, and uneven development outcomes. The study implies that microfinance policies should be assessed beyond outreach and repayment rates, with greater attention to capability expansion and the enabling conditions that allow women to transform financial access into meaningful well-being.
References
Alemu, S., Van Kempen, L., & Ruben, R. (2018). Women Empowerment Through Self-Help Groups: The Bittersweet Fruits of Collective Apple Cultivation in Highland Ethiopia. Journal of Human Development and Capabilities, 19, 308–330. https://doi.org/10.1080/19452829.2018.1454407
Anand, P., Saxena, S., Gonzalez, R., & Dang, H.-A. (2019). Can Women’s Self-help Groups Contribute to Sustainable Development? Evidence of Capability Changes from Northern India. Journal of Human Development and Capabilities, 21, 137–160. https://doi.org/10.1080/19452829.2020.1742100
Atieno, P., Mose, G., Oino, P., & Ombachi, N. (2024). Contributions of strategies to self-help groups’ participation in the sustainability of household livelihoods in Nyakach Sub-County, Kisumu County, Keny. World Journal of Advanced Research and Reviews. https://doi.org/10.30574/wjarr.2024.21.2.0508
Basak, D., & Chowdhury, I. R. (2024). Role of self-help groups on socioeconomic development and the achievement of Sustainable Development Goals (SDGs) among rural women in Cooch Behar District, India. Regional Sustainability. https://doi.org/10.1016/j.regsus.2024.100140
Gubhaju, R. (2023). Women Empowerment in Self Help Groups through Microfinance: A Case Study of Rautahat District. Apex Journal of Business and Management. https://doi.org/10.61274/apxc.2023.v01i01.004
Islam, M. A., & Brahmachary, P. (2025). Self help group is an effective microfinance model for socio-economic empowerment of women: Evaluation from Bodoland Territorial Region in Assam, India. Edelweiss Applied Science and Technology. https://doi.org/10.55214/25768484.v9i5.6953
Khan, S., Bhat, M. A., & Sangmi, M.-U.-D. (2020). Impact of Microfinance on Economic, Social, Political and Psychological Empowerment: Evidence from Women’s Self-help Groups in Kashmir Valley, India. FIIB Business Review, 12, 58–73. https://doi.org/10.1177/2319714520972905
Kumar, N., Raghunathan, K., Arrieta, A., Jilani, A., Chakrabarti, S., Menon, P., & Quisumbing, A. (2018). Social networks, mobility, and political participation: The potential for women’s self-help groups to improve access and use of public entitlement schemes in India. World Development, 114, 28–41. https://doi.org/10.1016/j.worlddev.2018.09.023
Ndilito, N. (2025). Contribution of microfinance loans to women entrepreneurs in Tanzania: Reflections from the case of the National Microfinance Bank (NMB) in Arusha City. African Scientific Annual Review. https://doi.org/10.51867/asarev.2.1.9
Were, P., & Kimaru-Muchai, S. W. (2021). Evaluation of Self-Help Groups in Promoting Women Socio-Economic Empowerment in Kibra Sub-County, Nairobi County, Kenya. The Journal of Global Awareness. https://doi.org/10.24073/jga/02/01/06
Wondimu, H., Terefe, D., & Melkamu, G. (2023). The role of microfinance service in the sustainable development goals of women’s empowerment: a glimpse from Amhara Credit and Savings Institution (ACSI). Discover Sustainability, 4. https://doi.org/10.1007/s43621-023-00161-7
Downloads
Published
How to Cite
Issue
Section
Citation Check
License
Copyright (c) 2026 Adzan Noor Bakri, Fahira herawati, aziza samsir
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. In line with the license, authors are allowed to share and adapt the material. In addition, the material must be given appropriate credit, provided with a link to the license, and indicated if changes were made. If authors remix, transform or build upon the material, authors must distribute their contributions under the same license as the original.
