Inviting Husbands in Women Only Solidarity Groups: Evidence From Southern Mexico

This paper sheds light on the notion of women empowerment in microfinance. Based on growing concerns by microfinance practitioners that women suffer from intrahoushold conflict as a result of their borrowing, we conduct an experiment allowing women to invite their husbands into their microfinance borrowing group. The results were surprising: only 4.4 percent of women agreed to invite their husbands into their microfinance borrowing group. In order to rationalize our results we construct a simple non-cooperative bargaining model where intrahousehold frictions from women's participation in microfinance are perceived as a tax on women income. Inviting husbands to join as borrowers entails a tradeoff between reducing household frictions on the one hand and a loss of autonomy over borrowing decisions on the other. The low take-up rate suggests that for the vast majority of women the value of autonomy outweighed any reductions in conflict with the husband. Higher take up rates in groups where women were allowed to invite their female friends and increase the size of their loan, respectively, reinforced the conclusion that including husband in microfinance borrowing groups is not perceived as an attractive option for women borrowers