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Politics Notes Gender and Development Notes

Microfinance Empowerment Or Localized Neoliberalism Notes

Updated Microfinance Empowerment Or Localized Neoliberalism Notes

Gender and Development Notes

Gender and Development

Approximately 12 pages

Gender; Women in Development (WID) approach; social reproduction; Gender and Development (GAD) approach Waves of feminism; Liberal/Western feminism; feminist standpoint theory; Black feminism; intersectionality; Postmodern/Postcolonial feminism; Hashtag feminism; online activism Sex; gender; crisis of masculinity; performativity; Judith Butler; hegemonic masculinity; gendered vulnerability; the inclusion of men/masculinities; domestic violence; feminist masculinity; loving politics Microfinance; ...

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PO353 (2.4) – Microfinance: Empowerment or Localized Neoliberalism?

QUESTIONS

  • Debate the pros and cons of microfinance, and its effects on recipients and their families. [2018]

  • Critically assess the effectiveness of microfinance as a tool for female-focused development in the global South. [2017]

  • Critically assess the extent to which microcredit schemes empower women on a sustainable basis. [2015]

WHAT IS MICROFINANCE?

  • Microfinance – the provision of financial services to unemployed or low-income individuals who may otherwise be excluded and face exploitative options. It includes microcredit, savings, insurance, remittances, transfers, etc.

  • Whereas conventional banking requires permanent employment, a verifiable credit history and/or collateral (i.e. a formal financial identity), microcredit gives small loans to poor women via neighbourhood groups (‘solidarity circles’) for income-generating projects without collateral.

  • Modern microcredit is generally considered to have originated in the Grameen Bank, founded in Bangladesh in 1983 by local economist, Professor Mugammad Yunus.

  • Premised on the Women in Development (WID) paradigm*

Indicators of success

Microfinance has been eulogized by scholars and practitioners of development as a ‘panacea’ or ‘magic bullet’ for poverty alleviation worldwide.

  • In 1998, the UN General Assembly declared 2005 the ‘International Year of Microcredit’ in recognition of its contribution to poverty reduction, and towards achieving the MDGs.

  • Yunus and Grameen Bank jointly awarded the 2006 Nobel Peace Prize ‘for their efforts through microcredit to create economic and social development from below’.

  • As of 2009, an estimated 74 million people held microloans that totalled US$38 billion.

EVALUATION

Strengths

  • Promotes credit as a human right, granted on the basis of trust; thus challenging negative stereotypes about the poor as ‘untrustworthy’ or ‘defaulters’

  • ‘Citing the 98% rate of recovery (rivalling CitiBank), Yunas argues that the poor are good investments for large banks because they repay their debts – i.e. they are ‘bankable’ [Karim].

  • ‘Not only is capitalism good for the poor, the poor are good for capitalism’ [Yunas]

  • ‘Consumption smoothing’ – helps to regularize income flows and mitigate the immediate vulnerability of households to external shocks. Places them in a better position to secure access to healthcare and child education.

  • Nurtures (‘repressed’) entrepreneurship, self-sufficiency and autonomy

  • ‘The Grameen Bank model rests on the idea of the out-of-home entrepreneur who, with the help of microcredit, becomes self-employed, owns private property (assets she builds with the loans), and sells her labour on the market’ [Karim, 2008]

  • Social capital & female empowerment

  • Improves the organizational capacity of poor women as a basis for their social mobilization – ‘It has taught women the importance of managing money, and keeping basic account of expenditures. Additionally, it has introduced new forms of social identity among rural women, such as weekly meetings where women collect and discuss loan proposals, and the creation of a space where women can speak without men dominating the discourse.’ [Karim, 2008]

  • Enables interactions with microfinance staff, offering emotional support and role-model inspiration initiates new socialization processes within the community*.

  • Access to linked services, e.g. livelihood training, legal advice

  • Encourages women’s participation in the paid labour force, and diversifies economic options.

  • Enhanced visibility of women/women’s issues in the public sphere.

Limitations

(‘Localized Neoliberalism’)

  • Criticism of ‘repressed entrepreneur’ paradigm – Many of the poorest households tend to use credit unproductively, i.e. for consumption purposes. To the extent that microcredit is invested productively, most clients have no specialized skills, few assets and face extremely competitive markets with insufficient capital to augment low levels of productivity. [Taylor]

  • Gender bias – Essentializes all women as ‘credit worthy’, risk averse and family-oriented in their spending habits (e.g. food, school supplies, washing machines)

  • (see: 1.2 ‘POSTCOLONIAL FEMINISM’)

Problematizing ‘empowerment’

  • Extolls an oversimplified, individuating vision of the ‘empowered women’, removed from social/relational realities. Khader [2016] calls this ‘autonomy fetishism’, where the only constraints on women come from her internalization of social standards. That changing her consciousness – spurred by an injection of capital like a microloan – ensures empowerment. But what about…

  • The importance of relationships (over complete self-sufficiency), and negotiation skills to prevent their deterioration.

  • Adaptive preferences – obscures how patriarchal socialization makes it hard for women to even imagine themselves exerting greater household authority; often deploying their newfound authority to reinforce traditional wifely duties.

  • Structural conditions (e.g. price volatility) & intersecting systems of disadvantage.

  • Do the women themselves want to be entrepreneurs? To be liable to debt?

Microfinance as localized neoliberalism (‘the conduct of conduct’)

  • That recent studies reveal that the impact of microfinance on welfare variables is modest/negligible, implies that its expansion is not driven by its effectiveness, but by its ideological function within a broader scheme of neoliberal ‘governmentality’ [Foucault] or the ‘conduct of conduct’.

  • Hamann [2009]: ‘the central aim of neoliberal governmentality is the strategic creation of social conditions that encourage/necessitate the production of Homo economicus (or in this case, the ‘rational economic woman’).

  • Creation of unanticipated neoliberal subjects (e.g. female moneylender) usury

  • In the absence of a strong nation-state in Bangladesh, ‘we see the articulation of a postcolonial economic sovereignty or ‘shadow state’ in the developmental NGO’...

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