The Underside of Microfinance: Performance Indicators and Informal Debt in Cambodia

Microfinance is a dominant strategy used to promote rural development around the world. Rather than directly track its impact on borrowers, however, microfinance institutions rely on indicators of financial performance adopted from commercial banking as proxies for positive social impact. Yet, as critical research has shown, the industry depends on coercive peer pressure, social shaming and various forms of gendered exploitation to achieve its high rates of loan repayment. This article maintains that there is a need to investigate how the microfinance industry's own indicators of impact contribute to the ways microfinance can harm borrowers. Based on qualitative research in Cambodia during 2021 and 2022, the article demonstrates how financial performance indicators, most notably portfolio quality, both hide and exacerbate the ways that borrowers juggle debt between formal and informal lenders. In making this argument, the article advances critical scholarship on microfinance by showing how microfinance repayment structures debt-juggling practices in ways that put borrowers at greater risk of over-indebtedness. As a result, the microfinance industry is able to claim that it successfully helps to alleviate poverty, even as it accumulates profits by appropriating wealth from poor and low-income households across the global South.     

‘Milking The Elephant’: Financial Markets as Real Markets in Kenya

Financial liberalization policies in the 1990s were intended to raise formal sector interest rates, enhance competition and expand access for users. This article investigates patterns of provision and use in a local financial market in Karatina, Kenya, at the end of the 1990s after a period of financial and economic liberalization. It takes a holistic approach, examining both formal and informal financial arrangements and microfinance interventions. This is because the role of the informal financial sector is particularly important for poor people and has received relatively little attention in the discussion of the consequences of reform. The author does this using a ‘real’ markets approach that sees markets as socially regulated and structured. Significant provision by the mutual sector (formal and informal), and poor lending performance by the banking sector is explained through an examination of the characteristics of the services on offer and their embeddedness in social relations, culture and politics.     

The Informal Economy as a Site of Liquidity: Pakistan's Land Market

Based on extensive fieldwork, this article examines new informality in Pakistan's land market by which vacant plots of land are transacted informally between market actors in rapidly reversed short‐term holdings. The analysis pivots around the changing economic environment in Pakistan with the shift from heavy regulation of money and controlled pricing, to the liberalization of money and markets. The author explores how liquidity is taken up as a microeconomic strategy to protect against new financial risk in this environment, and how this is played out as a preference for informal transactions. These practices inform a case study that contributes to the established literature on the links between globalization and the informal economy by articulating a driver of growing informal transactions that is novel to the literature.     

The effects of microfinance programs on women members in traditional societies

One of the stated goals of microfinance programs is to increase the bargaining power of women within the household. However, little is known about other ways women in patriarchal communities may be affected by these programs. This study assessed the effects of the membership in a microfinance joint liability group (MJLG) on the lives and social networks of its women members by focusing on the interplay of MJLG practices and gendered cultural practices such as ‘purdah’ (veiling of the face). Using in-depth interviews of 35 women in Lucknow, a city in northern India, the study found that, overall, respondents who were members of an MJLG reported developing new and stronger relationships with other members of the group. These social interactions were found to be deeper among women who were using the microloans for self-employment than among women who were redirecting their loan funds to other family members. The study also found that the adaptability of microfinance organizations to the local culture appeared to enable women to join MJLGs with ease and to contribute economically to their families.     

Representing financial inclusion: The CGAP microfinance photo contest (Respond to this article at http://www.therai.org.uk/at/debate)

This article examines representations of financial inclusion through the lens of the CGAP microfinance photo contest. It situates the contest's winning images within current contestations surrounding global financial inclusion strategies, to show how these photos construct particular representations of microfinance that legitimize CGAP's minimalist, commercially‐driven model. The production of the need for large‐scale financial inclusion is key to this model, which is depicted through gendered representations of microfinance beneficiaries. On the one hand, the CGAP photos present a shift from stereotypical images of female micro‐entrepreneurs in traditional contexts to more complex images that disrupt such stereotypes while at the same time reinforcing other assumptions about microfinance. On the other, they bring men back into the picture as worthy microfinance recipients. While contributing to pluralist representations that valorize photography in developing countries, the CGAP microfinance photo contest is ultimately unable to portray the complexities and contradictions of financial inclusion interventions.     

‘If You Fall,Stand Up Again’: The Moral Nature of Financial Literacy in the Global South

Over the past decade a range of development actors have begun to implement financial literacy training in low‐income countries. These programmes have become a key pillar of financial inclusion projects targeting the rural poor but, to date, they have received little scholarly attention. This article draws on ethnographic observation of two financial literacy programmes implemented by microfinance institutions in Cambodia to examine the current practices of financial education in the global South. The findings highlight that while financial literacy training purports to be a technical, skill‐building intervention aimed at enabling knowledge, its practices work primarily to impress upon borrowers moral lessons associated with creditworthiness, while also stressing individual responsibility for debt stress. In this way, it furthers the goals of financial providers, but fails to address the complex and real problems of debt stress. The authors suggest that financial literacy, at least where it is enacted by microfinance providers, is unlikely to moderate the problems of over‐indebtedness faced by rural borrowers.     

Intergenerational Inequality? Labour,Capital, and Housing Through the Ages

This article examines the relevance of generational relations to emerging patterns of inequality in advanced capitalist societies, with a particular focus on inequalities related to housing wealth. At its heart is a critique of the increasingly prevalent argument that generational difference is a crucial axis of inequality today. It argues that while contemporary capitalist societies are certainly characterized by marked inequalities between generations and that the latter are manifested inter alia in housing ownership, understanding such inequalities principally in generational terms is problematic because they reflect deeper, more fundamental, structural inequalities and should therefore be conceptualized as such. The article suggests that the principal significance of generational relations to contemporary inequality dynamics actually concerns economic transfers rather than differences between generations. Within‐family transfers of wealth, especially housing‐related wealth, from older generations to younger ones tend to reproduce pronounced, structurally generated existing patterns of intra‐generational inequality.     

Precarious Debt: Microfinance Subjects and Intergenerational Dependency in Cambodia

This paper tells a story of debt within a rural Cambodian family in order to understand how microfinance produces more‐than‐individual financial subjects that are entangled in changing social relations of dependency. We draw upon 20 months of joint ethnographic research in Cambodia, where the microfinance industry is one of the largest per capita in the world. Informed by Judith Butler's notions of precariousness and precarity, we argue that even in the context of deepening financialisation, people's lives remain dependent upon others, especially within families. We analyse how these family relations of dependency are reworked along generational lines and spatially stretched due to precarious economic conditions of indebtedness, household migration, and distant labour markets. We conclude that reframing financial subjectivity in terms of precariousness helps us to analyse the relationship between households and financial markets, as well as inform a critical politics of finance.     

Capitalizing on Women's Social Capital? Women‐Targeted Microfinance in Bolivia

Both social capital and microfinance are central to mainstream development interventions, and both are predicated on the need to recognize the importance of social factors in development. Microfinance institutions mobilize social capital in the form of a group guarantee, and aim to support the development of sustainable financial institutions and income generation. Women are targeted in part because of the effectiveness of their social capital as collateral. However, although social capital is assumed to support development and income generation, the precise dynamics involved in this are rarely explored. This article examines the construction of social capital and its relationship to income generation, based on a long‐term ethnographic study of village life in rural Bolivia and the microfinance institution operating there. The author examines the complexity and gendered contradictions implied in the way that social capital is generally viewed to support economic development. It is suggested that the way microfinance institutions use social capital to support sustainable financial institutions and income generation does not always reflect the way that women's networks support access to resources and ultimately, economic development.     

Understanding Social Performance: A ‘Practice Drift’ at the Frontline of Microfinance Institutions in Bangladesh

This article examines the role of microfinance staff and procedures in enabling microfinance's social mission. It does so primarily through studying institutional ruling relations and practices in rural Bangladesh. Attempting to move away from the linear and deterministic approaches of impact studies, it ethnographically scrutinizes the everyday practices of implementers. Findings point to the emergence of systemic practices that jeopardize microfinance institutions’ potential to perform their social mission. These include low client‐selection standards, hard selling of loans and forceful loan renewal, little follow‐up on loan use, and abusive and violent client‐retention and repayment‐collection strategies. This is conceptualized as a ‘practice drift’ as distinct from the commonly reported ‘mission drift’. Rather than stemming from planned, top‐down changes in institutional mission and strategy, practice drift emerges from a displacement of decision‐making processes to the branches. The article argues that observed changes in microfinance practice are enabled by decentralized structures and management systems that leave the choice of tactics used to achieve targets to the discretion of field staff.     

The Measurement of Socio‐economic Gender Inequality Revisited

The measurement of socio‐economic gender inequality has not received much attention from the development literature despite its great relevance and important policy implications. In this article we present two new indices to measure gender inequalities that overcome some of the limitations inherent in the UNDP gender‐related indices and other indices presented in the literature. The proposed new indices are conducive to exploring the extent to which gender gaps favour women and/or men, and to showing the contribution of the different subcomponents to the overall levels of gender inequality. Using UNDP data, our calculations suggest that the levels of gender inequality are mostly explained by differences in the earned‐income subcomponent and that the average difference between women's and men's achievement levels has been reduced by 12 per cent during the period 1995–2005.     

Informality Materialised: Long‐term Temporariness as a Mode of Informal Urbanism

This paper establishes an important link between the architectural strategies and long‐term sustenance of “ordinary” informal spaces in the planned modernist city of Islamabad. By focusing on the modalities of street hawking in Islamabad, this paper demonstrates that the architecture of ordinary informality follows an aesthetic and materiality of temporariness, and invokes design criteria based on the rituals of daily assembly and disassembly, and shared customs involving “temporary” claims to immediate public space. The paper uses the concept of “long‐term temporariness” to argue that the sustained existence of street hawking depends upon the routine maintenance of the relationship between its temporality and materiality, evident in both the everyday spatial practices and official procedures concerning informal street commerce. The paper thus situates street hawking within the realms of both formal and informal processes, and highlights the role of provisionality in urban transformations in the global South.     

The Impact of Microfinance on Decision‐Making Agency: Evidence from South India

Evaluations of the effects of microfinance programmes on women's empowerment generate mixed results. While some are supportive of microfinance's ability to induce a process of economic, social and political empowerment, others are more sceptical and even point to a deterioration of women's overall well‐being. Against this background, development scholars and practitioners have sought to distil some of the ingredients that might increase the likelihood of empowerment or at least reduce adverse effects. This article formally tests the impact of some of the suggested changes in programme features on one particular dimension of empowerment: decision‐making agency. Using household survey data from South India, the author explores the importance of the borrower's gender and the lending technology for intra‐household decision‐making processes. It is shown that direct bank–borrower credit delivery does not challenge the existing decision‐making patterns, regardless of whether men or women receive the credit. These findings change when credit is combined with financial and social group intermediation. Women's group membership seriously shifts overall decision‐making patterns from norm‐guided behaviour and male decision‐making to more joint and female decision‐making. Longer‐term group membership and more intensive training and group meetings strengthen these patterns.     

Historical and Dialectical Perspectives on the Archaeology of Complexity in the Siin-Saalum (Senegal): Back to the Future?

Drawing on recent critiques of evolutionism, this article reviews the history of Iron Age studies in Siin-Saalum (Senegal) to examine the construction of African archaeological knowledge. From the 19th century to the 1980’s, analyses of complexity in Senegal have been animated by developmentalist views that have portrayed the regional past as a stagnant backwater. In the past 25 years, however, archaeological research has sought to redress these inaccuracies by exploring the diversity and idiosyncracy of African histories, and the processes behind sociopolitical change. These critical agendas can help us exploit the analytic potential of material culture to reincorporate African societies into the stream of world history, and to use the African past to reevaluate current scenarios of complexity and their applicability to various regions of the globe. To achieve these goals, however, and develop a fully self-reflexive archaeology in Senegal, researchers must eschew moral celebrations of African distinctness and strive instead to document how local pasts owe their particular qualities to complex political-economic articulations with other world societies. Concurrently, we must also attend to the dynamics of historical production in and out of guild circles, and consider our entanglement in the making of contemporary ‘culture wars.’ Because it is ideally suited to probe the historical and material depth of cultural differences and inequalities, archaeology must take a leading role in dispelling essentialist readings of Africa and promoting democratic knowledges about the continent.     

The Burden of Microfinance Debt: Lessons from the Ramanagaram Financial Diaries

The Indian microfinance institutes (MFI) crisis has spawned several debates on the MFI movement. What is sorely missing are the perspectives of the clients. Using the financial diary methodology in a study of 90 poor households in Ramanagaram town, in the district of Ramanagaram, Karnataka, India, this article analyses how household cash flows are impacted by the presence or absence of MFI loans. During the study period (September 2008–July 2009), an informal ban on MFI repayments was called which offered a rare opportunity to collect data from the same households in the presence and absence of MFI loan repayments. An analysis of their expenditures points to the genesis of the crisis, namely that MFI loan repayments led to impoverishment since these were made at the cost of basic household consumption, like food staples. The authors use the Ramanagaram financial diaries to provide a counter narrative to the dominant Yunusian Grameen narratives on microfinance and poverty alleviation by not looking at microfinance loans in isolation but by situating them in the context of the totality of consumption, cash inflows and debt that govern the lives of the poor.     

Remaking the architecture: the emerging powers,self‐insuring and regional insulation

This article examines the interaction between the emerging and traditional powers in global governance reform, and asks whether we are heading towards an international financial system that is more fragmented, where power is more diffused and national and regional arrangements play a more prominent role, at the expense of global multilateral institutions. It begins with a brief discussion of the global systemic and country‐specific factors that motivate Brazil, China and other emerging countries to accumulate large currency reserves. We find that national arrangements for managing financial and currency crises will continue to hold sway for emerging countries in the wake of the global crisis. However, the actual capacity of regional arrangements in managing future financial crises is uncertain, and the significance of regional alternatives in the emerging architecture should not be overstated. The real capacity of East Asian regional arrangements to manage financial crises, payments problems or currency attacks is still untested, and key thresholds in multilateralization still lie ahead. In South America, multilateral lender‐of‐last‐resort support inside the region is largely confined to the sub‐regional level and is limited by Brazil's reticence. Enduring reliance on bilateral measures for financial crisis management is noted. Where there has been progress in regional solutions, since the global crisis, has been in the role of regional development banks in providing financing for developing countries to enact counter‐cyclical policies. Such support also provides insulation for states in the region against the contagion effects of international financial crisis. We are in the midst of transitioning to a more diverse and multi‐tiered global financial and monetary system. A reformed IMF could have a role to play in addressing global imbalances and encouraging a shift from national reserves to collective insurance, however, it would be preconditioned by significant shifts in the policy, lending operations, and internal governance of the Fund, and willingness among the G20 to strike a new consensus on how to deal with imbalances, and new accommodation on acceptable reserve levels.     

Tackling the Down Side: Social Capital,Women’s Empowerment and Micro‐Finance in Cameroon

Micro‐finance programmes are currently dominated by the ‘financial self‐sustainability paradigm’ where women’s participation in groups is promoted as a key means of increasing financial sustainability while at the same time assumed to automatically empower them. This article examines the experience of seven micro‐finance programmes in Cameroon. The evidence indicates that micro‐finance programmes which build social capital can indeed make a significant contribution to women’s empowerment. However, serious questions need to be asked about what sorts of norms, networks and associations are to be promoted, in whose interests, and how they can best contribute to empowerment, particularly for the poorest women. Where the complexities of power relations and inequality are ignored, reliance on social capital as a mechanism for reducing programme costs may undermine programme aims not only of empowerment but also of financial sustainability and poverty targeting.     

Environmental Justice Meets Risk‐Class: The Relational Distribution of Environmental Bads

Recent treatments of environmental justice have highlighted the need to move beyond focusing upon inequalities in the distribution of environmental risks to address other aspects of environmental injustice, including unequal participation and recognition. While acknowledging the importance of extending environmental justice to include these other dimensions of justice, this paper argues that more, not less, analytical attention needs to be devoted to the diverse logics of distribution of environmental risks. In light of continuing dilemmas associated with whether environmental inequalities can be just or, alternatively, that environmental inequality and injustice are co‐extensive, this paper proposes to untangle some key connections between environmental inequalities and injustice through a critical confrontation of environmental justice with risk‐class analysis. Focusing on the positional or relational distribution of environmental bads as analysed in risk‐class analysis, this paper argues that bringing these two bodies of knowledge together can illuminate how relational inequalities have characteristics that make them particularly illegitimate from a justice perspective, thus making an advance in identifying key connections between environmental inequality and injustice.     

Beyond Naivety: Women,Gender Inequality and Participatory Development

In recent years, participatory development has become an established orthodoxy among development agencies across the political spectrum; at the same time, the importance of consulting with and recruiting women has been highlighted in most discussions of participatory strategies. Drawing on the author's own research and a range of secondary sources, this article focuses on gender aspects of participatory projects. The evidence suggests that gender inequalities in resources, time availability and power, influence the activities, priorities and framework of participatory projects just as much as ‘top-down’ development and market activities. Contrary to the view of a number of writers and activists on participatory development, increasing the numbers of women involved in participatory projects cannot, therefore, be seen as a soft alternative to specific attention to change in gender inequality. Meeting the demands of poor women in the South will require not only local participatory projects, but a linking with wider movements for change in the national and international development agenda.     

Causes and Consequences of Inequality in Egypt

This study presents an analysis of various facets of inequality in Egypt using a political economy approach to understand how inequalities are reproduced in the Egyptian economy. It examines the drivers of income and wealth inequality, and the impact of uneven taxation. The paper highlights how the mismeasurement of top incomes can skew the measurement of inequality, and shows how Egypt has one of the biggest wealth gaps in the world. It investigates educational, gender, and healthcare inequalities and how they are reproduced across generations. The paper also highlights the disparity between urban and rural areas, which further contributes to inequality. It assesses why economic growth in Egypt has had limited success in reducing poverty and inequality, and analyzes how state and military interference in markets hampers the growth of the private sector. The paper concludes by examining how inequality, combined with a number of challenges that Egypt is facing, including increased authoritarianism, climate change, demographic pressures, and water security will likely exacerbate many of the country’s socioeconomic and political problems. Overall, the study argues that inequality remains a key concern that, if left unaddressed, may lead to social unrest and instability in the long term.