Global Politics of Microfinancing Poverty in Asia: The Case of Bangladesh Unpacked

Abstract

This article offers a critical and systematic political analysis of microfinance schemes linking international, national and local development policy. It substantiates the argument that microfinance schemes are a neoliberal development strategy, primarily advanced to realise a dual purpose: (1) financial sector liberalisation and commercialisation, while extending microfinance as a means to “poverty reduction”, and (2) the dampening and undermining of resistance to neoliberal development policies, by relying on the disciplinary potential of these schemes. I illustrate this argument through an examination of the politics of microfinance and development in Bangladesh, which includes analyses of policies prescribed by the World Bank (and also the CGAP). The analysis also draws out the implications (legal and institutional) for many NGOs who have been required to change their status to Microfinance Institutions (MFIs). Microfinance schemes are exemplary of (new) efforts to build markets in Asia in accordance with neoliberal visions of development, and in ways that advance and capitalise on the contradictions of neoliberal development. But they also challenge us to reflect more deeply on the limits of “market society”.     

Financialisation through Microfinance: Civil Society and Market-Building in India

Abstract

Microfinance does not reduce poverty, but it does successfully construct economic relations between owners of capital and borrowers of capital, allowing surpluses to accumulate through finance. It does so by drawing on the agency of financialised civil society actors who facilitate financialisation by working around the state to build new markets in finance and other goods. This article understands financialisation as the expansion of the frontier of financial accumulation. Microfinance is shown to achieve this expansion by establishing credit-based linkages between owners and borrowers of capital, allowing surplus accumulation to take place via the credit relation. Underlying this material relationship, there is also a level at which financialisation motivates and pressures civil society actors to bring microfinance to the poor. By becoming financialised agents themselves, civil society organisations act as conduits for an expansion of financial markets and the construction of new market relations for other goods. A case study of microfinance for water and sanitation in India shows in detail how this construction of markets via civil society works in practice, highlighting the pressures and opportunities presented by microfinance as a vehicle for building markets.     

Gender,Risk and Micro‐financial Subjectivities

Abstract: This article analyses the gendered contradictions of microfinance's celebrated “double bottom line” of social and financial impact. The example of microfinance is used to illustrate the gendered and colonial constructions of “risk” and “responsibility” that underpin neoliberalism and its gendered paradoxes. After revisiting the discursive critique of these terms, I draw on how indigenous women participating in a microfinance institution in Bolivia describe their experience to suggest how gendered ideas of risk and responsibility are framing their negotiation of and resistance to the market. While the gendered and colonial construction of risk creates dynamics that perpetuate indigenous women's exclusion from the market, the terms of the resistance and use of the intervention also challenge feminist critiques of neoliberal governmentality developed mostly with reference to advanced modernity and welfare regimes.     

The "Moral Hazards" of Microfinance: Restructuring Rural Credit in India

Abstract:  This paper explores how economic ideas are produced, how they travel, and how they are contested, in complex and contingent ways, in particular places. It stems from events that took place in coastal Andhra Pradesh, India, where I conducted fieldwork on microfinance programs during 2007. I begin by tracing how the practices of microfinance—and the ideas and rationalities underpinning them—have been increasingly globalized as a development tool since the 1970s. I then move on to describe the proliferation of various microfinance programs across Andhra Pradesh over the last decade. In the closing section, I consider the implications of a recent protest that took place against commercial microfinance institutions in the region.     

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.     

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.