Researchers have long believed that micro-credit programmes - those in which women are granted small, collateral-free loans for the purpose of starting businesses - could increase women's empowerment and contraceptive use, and reduce fertility.  But most attempts to document such benefits have been unable to satisfactorily correct for selection bias: women who join the programs are more likely than others to start out empowered - and are therefore more likely than others to use contraception. 

Between 1993 and 1995, Council demographer Sajeda Amin - along with Ruchira T Naved of Save the Children U.S.A. and Fiona Steele of the London School of Economics - evaluated a micro-credit program in rural Bangladesh.  To control for the problem of selection bias, they used a two-stage process, surveying the women's attitudes, fertility, and level of empowerment both before and after program membership. 

Micro-credit programs allow women to invest in income-generating projects.  Only the poorest women can join.  These schemes are intended to help women and their families work their way out of poverty.  During 1995, roughly 3 million women in Bangladesh took small loans from such programs.  Similar programs for extending collateral-free credit are being replicated around the world, in both developing and industrialised countries. 

To get a loan, women join financial groups that meet weekly.  The groups guarantee the loans.  The required weekly meetings provide opportunities for socialising and sharing information.  Studies have shown that such gatherings can promote the spread of novel behaviours and attitudes, such as using modern contraceptives or wanting fewer children.  Furthermore, agencies administering the programs also provide information on and access to modern contraceptives or wanting fewer children.  Furthermore, agencies administering the programs also provide information on and access to modern contraceptives.  Finally, because the programs improve the economic status of women within their families and circulate cash into village economies, the programs might also lead to fundamental changes in the status of women. 

Amin and her colleagues used data collected from women in 15 villages in eastern Bangladesh.  A total of 4,333 poor, married women were interviewed twice.  The micro-credit program was implemented by Save the Children U.S.A. and the Association for Social Advancement, a national credit scheme. 

As they expected, the researchers saw notable evidence of self-selection.  Women who joined the groups were more likely than others to be educated, married to educated men, and to have worked for money in the past.  But, even after controlling for prior contraceptive use, the team found that after two years of membership women in the program were 1.8 times more likely to use contraception than were non members in the same village.  There was evidence of diffusion in the use of contraception.  Non-members in program villages were much more likely to use contraceptives than were poor women in villages that did not have programs. 

Somewhat surprisingly, although program members were more likely than non-members to use contraceptives, the women in the two groups had the same probability of becoming pregnant during the study.  The researchers speculated than an impact on pregnancy rates may require a longer period of time and may take effect with some lag after contraceptive behaviour changes. 

The researchers also surveyed women about their aspirations for their children's education and found that members of micro-credit programs reported the largest increase in the ideal number of years of education for their daughters.  However, "the aspirations for sons also rise.  The gender gap doesn't change" Amin commented. 

The team's research as a whole points to the conclusion that use of contraception is one of the first behaviours to change after the inception of a micro-credit program, even when there is no evidence of more fundamental change in the desire for children.  The fact that membership is associated with changed contraceptive behaviour while, as other studies have shown, the amount of credit given is not, suggests a role for the diffusion of information and behaviours through membership.  The group meetings required by the programs, rather than the amount of money provided by them, may be a significant mechanism for changes relevant to fertility behaviour. 

"Forming groups for women to meet regularly, discuss new ideas, and share information may be a potent factor in bringing about broad-based social change, especially in a setting like Bangladesh where women are otherwise isolated.  These groups are an essential part of the social transformation brought about by micro-credit initiatives, yet most studies pay scant attention to what happens in their meetings," Amin argues.  The researchers concluded that future research should focus on social interactions among group members and between members and non members, and on the role of these interactions in bringing about social change.