Microfinance, the idea of giving small loans to those without access to formalised financial services, has been a widely adopted intervention since the 1990s. However, debates about the impacts of microfinance are ongoing and arguably intensifying. Critics argue that many of the mechanisms through which microfinance is delivered can lead to higher levels of poverty. Additionally, the fact that microfinance predominantly focuses on women has led to widespread feminist critiques that it does not consider wider structural constraints facing women. Increasingly, there have been calls to better understand the mechanisms through which microfinance organisations operate. This research explores Rojiroti microfinance, a grassroots and community-led organisation, designed by and for its members to support women from the most socio-economically marginalised groups in rural Bihar, India. This has led to a number of distinct operating mechanisms which differentiate it from the microfinance organisations subject to mainstream critique. This study seeks to assess whether Rojiroti’s distinct mechanisms have enabled positive changes for its women members. It aims to do this through looking at girls’ education, recognising that changes in girls’ education could be indicative of more widespread and longer-term shifts in gender equality. Theories of empowerment, with a foundation in the capability approach, are used to conceptualise pathways through which change may have occurred for Rojiroti members in relation to being able to support girls’ education. These pathways are firstly that, through membership, women may experience a change in their financial, social and cultural resources. They may then experience shifts in individual and collective agency which could influence their ability to support girls’ education.

Secondary panel data were analysed and found that Rojiroti members experienced significant positive impacts on their spending on children’s education. Choosing to spend on education indicates a shift in women’s financial position, as well as a commitment to support children’s education. Subsequently, to understand in more depth the impact on girls’ education in particular, whether Rojiroti’s operating mechanisms had facilitated this change, and the pathways through which this change had occurred, twenty one-on-one interviews with Rojiroti staff and thirty focus group discussions with Rojiroti self-help group members were conducted. Findings demonstrate that Rojiroti’s low interest rates and flexible repayment mechanisms had particularly supported women to build up financial resources, which they then used to support girls’ education. Rojiroti’s focus on group cohesion and solidarity, and the fact it was predominantly women-led, led to increased social resources, and individual and collective agency that contributed to women’s increased ability to take decisions to support girls’ education and to challenge inequality in their homes and communities. Significant for those involved in microfinance, it appears that Rojiroti’s deep understanding of the context, and flexibility to adapt to the needs of its members, enabled positive change. In terms of longer-term gender transformative changes, the study cautions against interventions that focus purely on building up women’s financial resources. Social resources were essential for building skills which enabled women to advocate for, and challenge barriers inhibiting, girls’ education.