by Smitha Radhakrishnan
A failed microenterprise in a Bangalore slum
In a prominent article in the Harvard Business Review, Vikram Akula (2008) made the case that microfinance—the practice of giving small loans to society’s poorest to enable their upward mobility—could and should be done on a for-profit basis. At the time, Akula was receiving wide recognition for founding and leading the rapidly growing $250 million company, SKS Microfinance, based in Andhra Pradesh, India. In the paper, Akula narrates the story of Saryamma, who joined SKS as a borrower in 2002. At that time, Saryamma and her husband were landless laborers earning about $1/day in rural Andhra Pradesh, a region plagued by droughts. Her husband had entered into a punishing form of bonded labor to make sure his family had enough grain to eat, and her son worked instead of attending school. The first loan that Saryamma took from SKS, for $200, was used to purchase a buffalo so that she could sell the milk. In line with the Grameen Bank-inspired group lending model that forms the basis for SKS lending operations, Saryamma borrowed money along with four other women from her village. The women collectively guaranteed the loans each took out. Saryamma repaid her initial loan $4.50 at a time, over the course of a year, and continued to take out loans in subsequent years, adding more buffalos, a pair of bulls, and two acres of land to her business. Now, the article says, Saryamma’s family makes $10/day, her husband is free from bonded labor, and her younger children attend school.
Around the same time Akula’s article appeared in HBR, a powerful video went viral on YouTube. “Girl Effect” marked the launch of the Nike Foundation’s worldwide “Girl Effect” campaign, aimed to build momentum behind the cause of empowering girls through education everywhere. Cutting through complex and context-specific information about gender in poor countries around the world, the video presented a singular, powerful message delivered in black, white, and orange. Beginning with the line, “The world is a mess. . .so what else is new?,” the video presents the driving idea behind the “Girl Effect,” the idea that 600 million girls in the developing world can catalyze global change, turning around the “sinking ship” that is the planet. In this launch video for the global campaign, the Girl Effect concept is conveyed through a hypothetical story—narrated in block letters of varying sizes and coordinated with a melodic piano tune—of a girl living in poverty, who, instead of succumbing to early marriage, pregnancy, flies, and HIV, manages to get an education, and eventually, obtains a loan that allows her to buy a cow. According to the narrative, the girl turns the cow into a herd and eventually, through a magical, virtuous spiral, the girl’s success with her cow business convinces the men in her village that women are worthwhile, starting an avalanche of similar “effects” worldwide that have the potential to turn humanity around. The video ends with a personal plea: “Invest in a girl and she will do the rest.”
Both Akula’s article and the Girl Effect video represent a global moment at which the hype around microfinance was at a fever pitch, following the Nobel Peace Prize being awarded to Mohammed Yunus of Bangladesh’s Grameen Bank in 2006. While Akula’s narrative appears to be context-specific and aimed at the global business elite, the Girl Effect video relinquishes context altogether in order to create an emotional resonance for a college-educated layperson, most probably in the United States or Europe. Otherwise, both accounts are identical. They both frame the moment of a poor woman obtaining a small loan as a kind of mystical turning point in her life. Readers of the article and viewers of the video are led by association to a vision of millions of women just like these individuals, each encountering a moment of individual transformation. Both Akula and the Girl Effect closely link the loan with entrepreneurial activity. And in both these examples, the combination of credit and entrepreneurship fuels a virtuous spiral that lasts forever, providing not only the woman in the story but the whole world with a secure future.
Akula’s story of Saryamma and the more popular Girl Effect video are both striking examples of a widely circulating microfinance myth that has gained broad legitimacy as a recipe for women’s empowerment, especially among the globally-oriented “millennial” generation (Roy 2010). Organizations such as kiva.org and Whole Foods leverage the microfinance myth for a dizzying array of causes, usually involving a plea to a consumer to “invest” through a cash donation or a purchase. Unlike conventional donations that rely upon a charitable impulse, these pleas rest upon an ostensibly stronger moral foundation, because they seem to promote self-reliance. The microfinance myth works by both setting up an oppressed-but-virtuous subject that can then be delivered unto the promised land of self-sufficiency through a credit transaction that pulls her into the global economy. Once the cash is in her hand, the myth goes, this subject’s latent entrepreneurial character is activated and, through micro-enterprise, she becomes her own master, caring efficiently for her family and her business. The entrepreneurial part of these stories frequently involves livestock, a move that maintains this subject’s distance from the target audience while still endearing her to it. The inevitable “happily ever after” is seldom detailed because by that point in the story, the target audience is hooked, and has already pulled out the credit card.
In India, the resonance of the microfinance myth has been tempered by a significant crisis in 2010, when Akula’s SKS almost collapsed under the weight of a crisis of non-repayment in Andhra Pradesh (Mader 2013; Wichterich 2012). Its operations were slashed significantly, and the story of SKS became a cautionary tale to other microfinance institutions (MFIs) in India and around the developing world. The crisis pushed smaller Indian organizations into complete collapse, while the larger organizations that survived the crisis made significant changes to their internal processes. The Reserve Bank of India (RBI) generated regulatory guidelines for the previously unregulated Non-Banking Financial Company (NBFC) sector, composed almost entirely of MFIs (Srinivasan 2011). These changes, along with widespread reports of suicides resulting from indebtedness to MFIs, discredited Akula and SKS Microfinance in the eyes of the media in India and even in larger social entrepreneurship circles (Wachtel 2010). But the Indian microfinance crisis did little to undermine the prevailing moral legitimacy that MFIs, be they for-profit or non-profit, continue to enjoy, especially in the West.
In this paper, I draw from ethnographic observations and interviews with for-profit microfinance institutions and their clients in southern India to subvert the microfinance myth by addressing three constitutive parts of the myth: that microfinance borrowers are “poor,” entrepreneurial, and in need of empowerment that frees them from the grips of patriarchal cultures and relationships. In so doing, I aim to draw into question the moral high ground that microfinance institutions occupy and disrupt the particular vision of oppressed womanhood and liberatory entrepreneurship that the myth presents. My research, instead, offers more balanced, grounded, and accurate representations of working-class women who increasingly constitute the bulk of the world’s microfinance borrowers. In so doing, I aim to broaden our understanding of working-class women as potential political agents, rather than as strictly economic ones.
I undermine the first part of the myth—that microfinance borrowers are “poor”—by examining the restrictive conditions under which the for-profit microfinance industry functions. These conditions make sure that microfinance institutions (MFIs) can only serve the relatively well off who are living in slum areas of urban India, limiting or eliminating access to these institutions by the poorest. The second part of the myth I undermine—that microfinance borrowers are entrepreneurial—draws from ethnographic work observing entrepreneurial training sessions in Tamil Nadu and Karnataka, as well as interviews with clients and MFI employees. This evidence strongly argues that microfinance borrowers are rarely entrepreneurial, and may themselves desire stable jobs instead. Finally, I address the Orientalist core of the microfinance myth: that loans provide empowerment to women suffering under the weight of patriarchal cultures. I focus on the narratives of two clients I interviewed to suggest that the working-class women served by the industry often work in close financial partnership with their husbands to enrich their livelihoods. Before turning to these three parts of the myth, I offer further context for my argument and a brief overview of my methodology.
Narratives of Women’s Development from Colonialism to Neoliberalism
In their volume Gender Myths and Feminist Fables: The Struggle for Interpretive Power in Gender and Development, Andrea Cornwall, Elizabeth Harrison, and Ann Whitehead argue that development discourse is full of gendered myths that distract from the real issues of gender and power in development. Instead, they argue, development discourse creates compelling but mythical narratives about what women are naturally suited for (Cornwall, Harrison and Whitehead 2008). Here, I argue that the standard narrative surrounding MFIs constitutes one of the many gendered myths that permeate development discourse, but one that is more complicated than simple myths such as “women are closer to the earth” or “women are inherently peaceful,” which these authors address. The microfinance myth bears connections to colonialism as well as to more recent “Women in Development” (WID) philosophies.
The microfinance myth extends and modernizes colonial tropes that distance women who are geographically located in the global South from dominant subjects in the West. However, the “old” justification for colonialism—that “white men are saving brown women from brown men”—has been transmogrified in the microfinance myth by neoliberal ideology. Rather than the white man saving the woman, the woman seems to be saving herself.1 Empowerment in this myth is unfailingly supportive of global capital drawing marginalized women into the purview of capitalism. The “new” Third World Woman, the myth suggests, throws off the weight of her patriarchal culture by being an efficient allocator of scarce resources. Like other gender myths, however, the microfinance myth legitimates a particular development policy—microfinance—while short circuiting in-depth research on gendered livelihoods that might disrupt the neat parable.
The oppression of women in so-called “traditional” cultures has long provided a justification for both colonialist rule and subsequent nationalist reform. The literature on these dynamics is particularly developed in the Indian context. Subaltern studies historians have shown that the “women’s question” provided a compelling impetus for colonial, and later nationalist, intervention (Chatterjee 1990; Mani 1990). But as Edward Said’s (1978) classic work on Orientalism shows, these discourses, far from being particular to India, undergird resonant notions of cultural power between “East” and “West” that extend beyond the colonial encounter or nationalist movements. These discourses continue to structure current scholarship, debate, and political discussion. Post-colonial feminist scholars have elaborated upon the gendered aspects of Said’s argument to offer powerful critiques of a persistent narrative that justifies Western interventions on behalf of oppressed subaltern women (Abu-Lughod 2013; Mohanty 1988). Despite such critiques, the notion that women are victims of their culture and that men are perpetrators of that oppression reappears in the microfinance myth in altered form.
Rather than openly rationalizing Western cultural or economic intervention, the microfinance myth seems to propose the contrary logic: that oppressed women of the global South can save themselves. But this claim is not as sui generis or liberatory as it appears. The spread of the microfinance myth coincides with increasing pervasiveness of what Nikolas Rose has called “neoliberal rationality” in Europe and the United States, a rationality that holds individuals accountable for their own success or failure in the face of weakening state (Rose 1999). This neoliberal rationality, documented in advanced liberal democracies, has a corresponding twin in developing countries: the discourse (usually-NGO-led) of “empowerment.” Both neoliberal rationality and the “logics of empowerment” marginalize the centrality of the state as a provider of social services for the poor (Hart 2002; Rankin 2001; Sharma 2008). The notion that women can save themselves emerges not as a radical inversion of colonial discourse, but rather as an extension of prevailing global dynamics that continue to locate previously colonized countries in a subordinate economic and cultural position within the global economy.
The neoliberal subject of the microfinance myth reproduces and elaborates the philosophy of “Women in Development” practitioners and scholars who have been working to incorporate women into the global economy from the 1970s onward. The most iconic of these scholars, Esther Boserup (1970), argued in her landmark book, Women’s Role in Economic Development, that women in the developing world had been incorporated into the global economy in a subordinate position to men, and that full incorporation of women into the global economy would facilitate broader economic development in these economies. Her data suggested that women were the most efficient allocators of scarce resources and were therefore an important, untapped resource for economic development. Boserup’s book fueled a global movement to focus on women’s economic empowerment including the United Nations Decade for Women (1975-85). This had huge effects worldwide because it meant that aid of all types was programmatically tied to the economic participation of women. Lamia Karim has argued that the Decade for Women initiative, along with the U.S. Percy Agreement, was at least partly responsible for Mohammed Yunus’s focus on women when he founded the Grameen Bank in the late 1970s (Karim 2011:71). By the 1990s, however, consensus around “Women in Development” (WID) principles had disintegrated. Critics argued that WID reinforced capitalism and enhanced the existing burdens on women while doing little to enhance their power (Kabeer 1994). Despite the pivot away from WID philosophies in academia, however, the influence of the philosophy persists in the microfinance industry, offering a rich vocabulary and dataset from which to make compelling—albeit overly general—claims about what “all” women in the developing world are capable of.
By subverting the microfinance myth, it is possible to further underscore and expose the inaccurate assumptions of universality that the myth ushers through the proverbial back door. Like its Orientalist predecessors, the microfinance myth substitutes a set of universalized values for a richer, more ambiguous economic and political reality.
Methods
The interviews and ethnographic work for this paper took place over the course of six months in 2012, and was centered on two MFIs operating in the Bangalore metropolitan area. I will briefly describe the context and content of the interactions I had with both organizations and their clients.
The first MFI, which I call Kanchan, is a relatively new player in the industry, and I approached them through contacts with a U.S.-based partner organization. This partner, whom I call Prosperity International, has been working with Kanchan to deliver entrepreneurial training to Kanchan’s clientele all over southern India since 2008. My research was initially focused on the entrepreneurial training sessions themselves and what they illuminated about the relationship between organizations like Kanchan and their borrowers. I attended training sessions, taking extensive ethnographic notes, and conducted interviews with the clients in attendance, usually a few days later. As the scope of the training program itself was much smaller than had been initially indicated to me, this initial focus ended up snowballing into a broader study of Kanchan clients.
Kanchan’s clients borrow in a large group of 15-20 women who almost always live in the same neighborhood. When I went to a particular area to follow up on a client I had made contact with at a training session, she usually referred me to other women in her neighborhood who were also Kanchan clients, most of whom had not participated in the training program. I found that most Kanchan clients had previously taken out loans from other MFIs in the area that had policies and practices that were different from Kanchan, a finding that led me to conduct research on a second organization. I interviewed Kanchan clients, mostly in one-on-one, face-to-face settings. Three were phone interviews, and seven interviews were conducted in groups of 3, immediately after a training session.
As an organization, Kanchan was suspicious of outsiders. I was unable to gain access to its everyday operations beyond the training program that I initially started to work on. I was only allowed to observe the training program, and was discouraged from interacting with loan officers or other staff who had direct contact with clients. What I was able to observe of Kanchan’s operations, I observed from the vantage point of the training program. This itself had a contested position within the organization, partly because of its ties to the U.S.-based organization.
By contrast, the second organization I observed, which I will call Sowbagya, prided itself on its transparency. It was very open to me and my research. I began by approaching the head office and conversed directly with the Managing Director and the Chief Operating Officer. I was immediately put in touch with branch managers in locations that would be convenient for me, and was encouraged to spend as much time as I wanted to at branch offices. I was invited to accompany branch managers on house visits required for loan verification, and observed the group training that Sowbagya conducts for all groups that initiate loans, be they new or old members of the organization. In contrast with Kanchan, Sowbagya lends to groups of five women, so it was relatively easy to interview all the members of a group. Like Kanchan, women living in a neighborhood tended to borrow together, and there were often many groups in the same area that would attend a common meeting for loan repayment. Through the same strategy of approaching individual borrowers in their neighborhoods, usually at group meetings, I was able to interview nineteen Sowbagya borrowers.
The clients I interviewed often did not quite understand my status as a foreign researcher, and were more likely to see me as a young urban Indian woman, perhaps working for an NGO. Sometimes, the interviewers were suspicious and wondered if I was an MFI informant, while other times, interviewees were eager to sit down and speak with me. I dressed in simple cotton salwar kameezes, an outfit that attracted little attention in the neighborhoods I visited. In all interviews, a research assistant who spoke Kannada or Tamil, as appropriate, accompanied me, as my skills in both languages are too limited to conduct interviews alone. As I was able to understand the interviews, however, I interjected questions as the interview proceeded that my research assistant would then translate to the interviewee. The interview questions asked borrowers to share, in their own words, their experience with loans, including their experiences with loaning organizations, their perception of the benefits or disadvantages of small loans, and a bit about their family members and their incomes and occupations. These topics often ended up leading to extensive discussions of their livelihoods, including relationships with husbands and children, medical problems or other financial hardships, and experience with local moneylenders.
Participatory entrepreneurial education may look more beneficial than it is.
The Three Parts of the Microfinance Myth
As I address each part of the microfinance myth, I will begin by outlining what is at stake in that claim, and why the claim contributes to the persistence of the myth as a whole. I will then address specific pieces of evidence that undermine these commonplace claims, using the existing literature as a starting point, with my research as a point of departure for critique.
Part 1: Microfinance Borrowers are “Poor”
The claim that microfinance borrowers are poor is the crucial starting point for the microfinance myth. The claim puts distance between the myth’s audience and the myth’s subject, and presumes a universal, rather than a relative, notion of what constitutes poverty. The claim that borrowers are poor suggests without saying so that there exists an agreed-upon notion of poverty that the myth’s audience shares, refusing to acknowledge the dramatic shifts in how poverty has been defined, interpreted, and addressed as a discourse worldwide (Misturelli and Heffernan 2008). The claim that borrowers are poor also plants a moral stake in the ground for microfinance companies, suggesting that their loans are effectively reaching the poorest in their respective societies. In Akula’s narrative of Saryamma, for example, he describes her as a landless laborer struggling to eat and feed her family. This narrative claims that for-profit microfinance reaches what Akula himself calls the “bottom of the pyramid,” the world’s poorest who live on less than $1/day. If microfinance borrowers were not uniformly poor, then not only would the moral high ground of microfinance institutions be shaken, but the easy distance between the audience and the subject of the myth would be called into question.
The for-profit MFIs I observed have stringent criteria for the borrowers they lend to, making it almost impossible to lend to “bottom of the pyramid” clients like Saryamma. Indeed, the borrowers I interviewed, although outside the financial mainstream of urban India, were not struggling for food or shelter, but were rather working-class women with substantial economic power at their disposal.
There is a fundamental tradeoff between financial sustainability and reaching the poorest in the lending business. Organizations run through donation and not-for-profit funding tend to have success in targeting the poorest, while for-profit organizations that are financially sustainable target those who are better off (Roy 2010). But even in cases like the Grameen Bank in Bangladesh that has been touted for its capability in accessing the poorest, recent research suggests that richer families benefit from microfinance much more than poorer ones (Karim 2011). The transaction Akula described took place at a time when there were no regulations on the microfinance sector, and when there was almost no due diligence the lending institution had to do on potential borrowers. MFIs like SKS were eager to disseminate loans, and rarely investigated whether a borrower had the financial wherewithal to pay a loan back. It was these practices that underestimated the cost of loaning to those outside the financial mainstream and fueled the crisis of 2010.
In my research with Kanchan and Sowbagya, I was able to gain a clear sense of how MFIs are now required to operate after the crisis and the new regulations that have come in its wake. With the new regulations, it is even less likely that MFIs can reach the poorest. Lending institutions are now required to provide documentation to the Reserve Bank of India (RBI) that borrowers meet very specific criteria for income, residence, and indebtedness levels, among other specifications. Clients must have a household income between 3000-10000 rupees a month (the nation-wide cap is 120,000 annually for urban and semi-urban families), must live in a permanent structure with concrete or brick walls at least six feet in height, and can have only one other loan taken out at the same time.
In practice, MFI staff made two house visits to potential clients to collect and verify these criteria. During the first house visit, the loan officer documented the address of the house, the major consumer items in the house—including TV, motorcycle, blender, refrigerator, and sofa set—and the household income. During the second house visit, the branch manager verified all the information. The major challenge of these visits was to ensure that the borrower actually lived in the house she had put down as her address, as fraudulent addresses have been a source of loan default in the past. Confirming that a woman actually lives in the house she claims ensures that she will continue to be beholden to the other group members as well. To verify the potential borrower’s claim of residence, during house visits, the staff member would routinely ask the borrower to show a wedding photo or a photo of their children, would ask specific questions about how long they had lived there, who else lived there, where they slept, and when they came and went. These house visits each lasted about 15 minutes, and comprised a significant amount of time in the everyday schedules of the field staff for organizations like Sowbagya.
While these internal organizational practices ensure that the women taking the loan command adequate resources to repay their loans, they do not, on the other hand, ensure that the borrower is poor enough to fall below the caps. Although the official documentation requires that women declare all their household income, the women I interviewed usually only declared their own incomes, excluding the income from husbands, sons, or other family members that would easily put them over the 10,000 rupee per month limit. I interviewed some women whose household incomes easily totaled 25 to 30,000 rupees a month when they reported that income to me in their interviews. Indeed, given the cost of living in the areas I was researching, it would be difficult to imagine a family that met the residential criteria who did not exceed the income criteria.
Consider Anandi, age 50, who was a first-time Sowbagya borrower when I met her. In Anandi’s case, the staff member suspected residence fraud. She had not arrived at the address she had written down for the loan by the time the loan officer had arrived, and when she finally arrived, she explained that she had another house about a ten-minute autorikshaw2 ride away. When the loan officer asked her where the vessels for cooking were, and whether she had pictures of her family, she said they were all at her other house. The loan officer explained that if this residence was not really Anandi’s home, her group would be rejected for the loan. But in the end, the whole group was approved for the loan, supporting the idea that despite seemingly stringent criteria, organizations bend those rules, erring to benefit those who can demonstrate that they are likely to repay.
Anandi is a Tamil migrant who has lived in the Bangalore area for over two decades. She is barely literate and had trouble navigating the loan documents compared to the other women in her group. According to her interview, Anandi’s husband died when her son was three months old and, since then, she has struggled to support her family. Her struggles were heightened while her son was attending college and she had to pay for her daughters’ weddings. She said of that time:
The moneylenders would come and keep knocking on our doors. I used to cry. Then my boy said, “I am going out for work. I do not want you to struggle.” He [dropped out of college, and] went for work on Double Road for 1000 rupees [per month]. Then he came up to 7000 rupees. But he was still struggling. Then he came up to this stage [now]. He is making decent money.
At the time of our interview, Anandi was living with her unmarried son and working two cleaning jobs—one at an office and one at a residence—that bring her 4,000 rupees a month. As her account implies that her son is making more than 7,000 rupees a month now, his income combined with her income, puts them over the 10,000 rupee per month restriction. It also suggests that, despite her obvious struggles and limitations, she was able to finance both her daughters’ weddings and send her son to college, if even for a short while. These characteristics suggest that Anandi is far better off than most of India’s citizens, and that loans—be they from moneylenders or MFIs—have long formed a strategic and vital source of her livelihood.
Given my methodology and positioning, it is impossible to draw a red line between which of my informants were “poor” and which were not. Certainly, there were a few interviewees who looked thin enough to suggest that they experienced food shortages. Still, none of the women I interacted with as borrowers fit the “bottom of the pyramid” criteria that Akula indicates is a norm for the industry. I found significant evidence to suggest that MFIs targeted the better off in the slum areas of Bangalore where they did business.
Part 2: Microfinance Borrowers are Entrepreneurial
The foundational claim of microfinance is that borrowers are poor. The part of the myth that claims that borrowers are entrepreneurial makes borrowers feel similar to, rather than distant from, the myth’s audience. Even if most people who find the myth resonant are not themselves entrepreneurs, entrepreneurial activity is valued, especially in the United States. Entrepreneurship is the quintessential self-reliant economic activity, and figures prominently in national political discourse surrounding small business owners. If a poor person can be entrepreneurial, then that proves that her poverty is not due to her own personal failing. This part of the microfinance myth asserts the moral worth of the borrowers themselves.
The assertion that microfinance borrowers use their loans for entrepreneurial purposes is one that emerges from Grameen Bank rhetoric, but a significant existing literature shows that most microfinance borrowers worldwide do not use their loans for entrepreneurial activity (Collins et al. 2009; Guerin et al. 2012; Jain and Pegu 2009). In my fieldwork, I aimed to dig further, to examine how borrowers think about entrepreneurial activity in relation to the loans they receive.
Interviews with Kanchan staff who conduct entrepreneurial training suggested that the vast majority of borrowers did not have businesses at all. Rajan, a senior trainer, claimed that maybe ten percent of the clients he conducted trainings with had businesses. In the training sessions I attended, the trainers aimed to convince women that having businesses would be better for them than whatever they were currently doing, whether it was caring for the family, usually referred to as “sitting at home,” or working outside the home, usually in construction, domestic, or garment work. In the sessions I attended in and around Bangalore, and in two semi-urban contexts in Tamil Nadu, the women in attendance were not enthusiastic about initiating a business venture.
In one session in a slum neighborhood in Bangalore, the women present had little patience for the trainer’s lectures on the virtues of entrepreneurship. While the leader of the group, Amu, was showcased for her successful business of selling saris door-to-door on an installment basis, most of the women did not find small business to be profitable enough to merit their attention. In an interview after the session in her well-appointed home, Kanchan client Humaira, mother to eighteen-month-old Afrin who played as we spoke, said that although she helped her husband with his mobile phone repair and parts business, she was not interested in starting a business of her own. In any case, the loan amount was too small to start anything significant. If they were to move their mobile phone business into a storefront, they would need at least 150,000 rupees as a down payment, an amount far beyond what the group loans could offer. Humaira said that previously, she had had an embroidery and tailoring business, an occupation typical for many Muslim women in her neighborhood, but she felt that the hard work paid too little. “You work for a whole day,” she said, “ and you can only make one dress. And then the person who comes to buy it says, ‘How about 150 instead of 170?’ There’s no profit in that business and it’s not possible with a child, so I’m not interested in continuing it.” Humaira took the 10,000-rupee loan from Kanchan in the hopes that she would qualify for 15,000 for the next cycle. As I packed up to leave, Humaira asked if I could help her get a job at Kanchan. She said she had called the office and expressed interest, but no one had gotten back to her. Despite all the lessons on entrepreneurship, Humaira saw having an office job with the lending organization as providing her with the most desirable form of mobility.
In another entrepreneurial training session in semi-urban Tamil Nadu, a Kanchan lending group sat diligently through a four-hour training session, and seemed to be much more engaged than the groups I observed in Bangalore. They asked questions, spoke confidently in the context of the group activities, and seemed genuinely grateful for the opportunity to receive the training. By the end, however, many women were anxious to leave. Most of the women there were daily wage earners working in construction. When asked after the training what they enjoyed about it, they all said that they enjoyed the opportunity to engage with each other and gather new ideas. But when asked whether they would pursue any business opportunities, they had lukewarm responses at best. As one woman put it, “All these things are not for me. I work in construction and will continue to, but maybe I can send my daughter for this training next time.”
In both these examples, it is clear that the women did not internalize the lessons of the entrepreneurial training that were aimed at encouraging women to think of having a small business at home as a form of self-expression and empowerment. The women’s own livelihoods, that usually included some form of waged employment or dependence on male wage earners, were seen as something very separate from what was portrayed as entrepreneurial possibility in the training. While I did meet some entrepreneurial microfinance borrowers, the vast majority of these women had these businesses prior to becoming loan recipients. The loan did not in itself activate any entrepreneurial ambition. This greater complexity regarding the connections between microfinance borrowing and entrepreneurship exposes the fundamental fallacy of assuming that entrepreneurship yields a living wage for any woman who decides to take it up. Most people in the microfinance myth’s audience too would be ill at ease with the high risk and low reward of running one’s own tiny business. These women question the inherent value of entrepreneurship as a primary livelihood strategy as much, and as sensibly, as Western consumers of the microfinance myth would question it for themselves.
Part 3: Loans Provide Empowerment to Women Suffering Under the Weight of Patriarchal Cultures
The microfinance myth centrally relies upon the assumption that loans promise economic and social empowerment for women that would be otherwise impossible in countries saddled by patriarchal cultures. Although this myth is not made explicit in Akula’s story, in the Girl Effect video, the salvation of the nameless, universalized girl-who-has-been-invested-in stems from exactly this type of empowerment. It is the virtuous spiral that emerges from the hypothetical investment. Without this part of the microfinance myth, its dramatic and widespread appeal would be lost. If microfinance borrowers are not oppressed by either their culture or by the men in their lives, then the moral legitimacy, urgency, and ideological thrust behind the myth’s global dissemination fall apart.
Context-specific research yields numerous ways to discredit this part of the myth of female empowerment. The most direct contradiction of it, in my experience, was the abundance of evidence that the women borrowers I interviewed were clearly economic and social partners with their husbands and sons. The narratives my research revealed suggest that loans brought in by women are a critical part of a household livelihood strategy in which men and women are often almost equal partners. I will highlight two examples that illustrate the give-and-take relationships between working-class women borrowers and their husbands concerning loans.
At the age of forty-three, Sarojamma is a skilled carpenter, a community organizer, and a grandmother. As she and her husband Kumaran lead my research assistant and I through the narrow lanes of her dense urban slum neighborhood to her home, it seems as if everyone knows her. This comes as no surprise. By her own account, she has formed and led twelve microfinance groups, each consisting of fifteen to thirty people in the last eight years. As we approach her modest home with a single room and an aluminum roof, Kumaran responds immediately to Sarojamma’s request to get us something to drink, over the protests of my research assistant and me. While we wait for the drinks, she points out a photograph of herself hanging on the wall above the fish tank, receiving an award from the minister of women’s rights for the state of Karnataka, for her work in organizing women in her area. In a few minutes, Kumaran returns with two cold glasses of Maaza that he places in front of us. He sits next to his grandson, a bit apart from us. He knows that we have come to speak to Sarojamma.
Sarojamma’s narrative suggests that although her husband is a skilled electrician, her work as a carpenter has made them equal partners in the household’s livelihood. She spoke at length about her own career in carpentry, which involved long stints in construction factories as well as at other sites when she takes individual orders. Sarojamma claims that she only takes orders when she wants to make money, and if she wants to, she can earn up to 100,000 rupees in a month making anything from sofa sets to beds and tables. Her husband and son both contribute to her household income. Sarojamma’s narrative of a relatively equal domestic partnership with regard to livelihood seemed to be reflected in the interpersonal relationship that she and Kumaran shared. Although in some interviews, a husband’s presence seemed to restrict what the borrower wanted to say, in this case, Sarojamma seemed to hardly notice him. Kumaran was smiling and seemed happy that we were there. During our visit, he held in his hands a tiny white kitten that he informed us had lost its mother. The kitten’s makeshift litter box of a cardboard box sprinkled with sand lay at his feet.
While Sarojamma offers an example of what a 50/50 relationship might look like among working-class microfinance borrowers, Pauline, a forty-six-year-old former cook, offers an example of a different kind of marriage that also contradicts easy stereotypes. When she and her husband migrated from a small town in Tamil Nadu to Bangalore, they had no education and few marketable skills. They opened an informal food stand that they ran out of their home in a slum for fifteen years, serving idlis, or South Indian rice cakes, to their neighbors as they went to work. Their business expanded over the years, and they ran it together. About a decade ago, however, Pauline started having health problems. Pain in her shoulder from the work was only the beginning. She was in and out of the hospital for gynecological issues for several years. At the time of our interview, she said she was willing to work, but did not wish to do anything that would further strain her abdomen or back.
Pauline’s ability to refrain from working at this stage in her life was made possible by the job her husband Ramani was able to access after many years in business. At the time of our interview, Ramani worked as a tandoori cook at a five-star-restaurant, where he earned 20,000 rupees a month. During most of our interview, Ramani remained quiet, encouraging her to speak when she felt shy, and helping with translation when she could not quite understand the question posed in Kannada, the local language of Karnataka that remained foreign to Tamil-speaking Pauline even after two decades in Bangalore. When we asked her about working, Ramani jumped in:
I say, if you [Pauline] are interested in cooking, if you get that job, you can do [it]. Right now, any other work is not okay, as the doctor has advised against any [physically] tough job. She should not do those. . . .If she was healthy, I am okay [with her working]. But she is not.
As an interviewer, I initially interpreted Ramani’s comment as potentially controlling, as if he were trying to underscore the fact that Pauline should only do work that he approves of. But I quickly realized the error of my own presumptions as the conversation moved onto their dreams for the future.
While discussing their shared dream of owning a home in Bangalore, both Pauline and Ramani began discussing interest rates with my research assistant, and began comparing the prevailing rates at different organizations. Ramani said that homeownership is very much within reach for them for the first time with the income from his job and his daughter’s job. It was clear from this conversation that Ramani and Pauline had worked in partnership for many years, planning the family’s finances alongside their day-to-day livelihoods. At the end of the interview, after we turned off the recorder, Ramani said to me in Tamil, “Madam, if I can just say one more thing? More than anything, I want to make sure she [Pauline] is okay. She is as precious to me as own eyes (kannu-pol).”
Interviews with Sarojamma and Pauline should disrupt any blanket presumption that microfinance borrowers are subject to male domination or oppressive cultural norms. My research revealed many portraits of working-class women involved in loving partnerships with economically productive men. Rather than relief from oppression and emancipation through entrepreneurship, the stories they told brought to light the complexities of regional migration, upward mobility, and of moving between the formal and informal economies in ways that benefitted the family as a whole.
Conclusion
In April of 2012, PBS aired the two-part, four-hour documentary, Half the Sky: Turning Oppression into Opportunity for Women Worldwide, based on the bestselling book by New York Times columnist Nicholas Kristof and Sheryl WuDunn. Each part of the film addressed a pressing issue of violence against women in a particular part of the world by inviting a famous American actress to accompany Kristof to a specific location where a gender-related atrocity takes place. The worldwide tour of gender violence covered female genital cutting, intergenerational prostitution, rape, and spousal abuse, among other issues, and was meant to raise awareness about women’s issues and mobilize a movement for improving women’s lives everywhere. One of the last stories in the documentary offered up the microfinance myth through the story of a young mother and former prostitute who, with the help of a local microfinance organization, started a tailoring business. The film presents the young woman, Jane Ngoiri, pulling herself out of grinding poverty through her tailoring business, and offers shots of Kristof offering her encouragement. In the overall narrative of the film, it is this sequence that is meant to offer hope to the audience, a salvation that seems impossible in the face of overwhelming odds. Over the course of the segment, we come to admire Ngoiri’s determination and artistic ability with tailoring. But her existence remains fragile. Never does the film address what the conditions of the loan are, how much interest she pays, or whether she might be able to garner a better livelihood by some other means. Indeed, it is by selectively representing the life stories of women like Ngoiri that Kristof is able to make the point that economic empowerment through small loans fuels a virtuous and never ending upward spiral. The location of Ngoiri’s story in this documentary confirms the general positioning of the microfinance myth as the presumed panacea for gender issues worldwide at the expense of any real knowledge of, or engagement with, the complexities of Ngoiri’s or other individual women’s real existences.
I have suggested that selective representations that facilitate the perpetuation of the microfinance myth serve to misrepresent gender and poverty in the global South while legitimizing a morally ambiguous global microfinance industry. It is time to offer counter-narratives of gendered livelihood strategies that illuminate how women’s economic activity is situated within household and neighborhood economies. It is not only exposing what the microfinance myth misrepresents about gendered livelihoods that matters. It is also what the myth is used to leave out. Never does the myth allow for women to be political subjects and citizens who can collectively hold their governments accountable to their demands.
This is one way in which the “reality effects” of the microfinance myth may become truly dangerous for the women it is being promulgated to supposedly benefit. More accurate representations of women in the global South are clearly needed as we become attentive to how misrepresentations, channeled through institutions and individuals, produce corresponding misperceptions of lived experience that make women’s real empowerment that much harder to achieve.
----------
Smitha Radhakrishnan is Associate Professor of Sociology at Wellesley College. Her research has primarily examined the multifaceted effects of globalization on gender and class in India. Her current research examines the booming for-profit microfinance industry in India, with specific focus on the interconnections between global capital, philanthropic institutions, and the production of entrepreneurial subjectivities. Her previous work explored the transnational culture of Indian information technology professionals in urban India, South Africa, and Silicon Valley. Her articles have appeared Gender and Society, Theory and Society, and Qualitative Sociology, and she is author of Appropriately Indian: Gender and Culture in a New Transnational Class (Duke University Press, 2011). Her teaching at Wellesley, and most recently on the edX platform, seeks to bring a horizontal, global approach to the study of basic sociological questions of inequality. She received her PhD from UC Berkeley’s Department of Sociology in 2006.
----------
Notes:
1 See Spivak, G. C. 1985. "Can the subaltern speak?" Pp. 66-111 in Colonial Discourse and Postcolonial Theory, edited by P. Williams and L. Chrisman. New York: Columbia University Press.
2 Anandi rarely took autorikshaws, however. They are prohibitively expensive. She had been forced to take an autorikshaw, she explained to her group, because she had been summoned to her other residence to meet the loan officer on very short notice.
References
Abu-Lughod, Lila. 2013. Do Muslim Women Need Saving? Cambridge: Harvard University Press.
Akula, Vikram. 2008. "Business Basics at the Base of the Pyramid." Harvard Business Review (June):53-58.
Boserup, Ester. 1970. Women's Role in Economic Development. London: Allen & Unwin.
Chatterjee, Partha. 1990. "The Nationalist Resolution of the Women's Question." Pp. 233-53 in Recasting Women: Essays in Indian Colonial History, edited by Kumkum Sangari and Sudesh Vaid. New Brunswick: Rutgers University Press.
Collins, Daryl, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven. 2009. Portfolios of the Poor : How the World's Poor Live on $2 a Day. Princeton: Princeton University Press.
Cornwall, Andrea, Elizabeth Harrison, and Ann Whitehead. 2008. Gender Myths and Feminist Fables: The Struggle for Interpretive Power in Gender and Development. Malden, MA: Blackwell Publishing.
Guerin, Isabelle, Marc Roesch, Govindan Venkatasubramanian, and Bert D'Espallier. 2012. "Credit from Whom and for What? The Diversity of Borrowing Sources and Uses in Rural Southern India." Journal of International Development 24(Issue Supplement):S122-S37.
Hart, Gillian Patricia. 2002. Disabling Globalization : Places of Power in Post-Apartheid South Africa. Pietermaritzburg: University of Natal Press.
Jain, Rishabh, and Nilutpal Pegu. 2009. "Narrowing Benefits: Multiple Borrowings." in Microfinance Focus: A global Magazine on Microfinance and Sustainable Development. http://www.microfinancefocus.com: Accessed Jun 25, 2010.
Kabeer, Naila. 1994. "Treating Cancer with Bandaid: The Theoretical Underpinnings of WID." in Reversed Realities: Gender Hierarchies in Development Thought, edited by Naila Kabeer. London: Verso.
Karim, Lamia. 2011. Microfinance and its Discontents: Women in Debt in Bangladesh. Minneapolis, MN: University of Minnesota Press.
Mader, Philip. 2013. "Rise and Fall of Microfinance in India: The Andhra Pradesh Crisis in Perspective." Strategic Change 22(1-2):47-66.
Mani, Lata. 1990. "Contentious Traditions: The Debate on Sati in Colonial India." Pp. 88-126 in Recasting Women: Essays in Indian Colonial History, edited by Kumkum Sangari and Sudesh Vaid. New Brunswick: Rutgers University Press.
Misturelli, Federica, and Claire Heffernan. 2008. "What is poverty? A diachronic Exploration of the 'discourse of Poverty from the 1970s to the 2000s." European Journal of Development Research 20(4):666-84.
Mohanty, Chandra Talpade. 1988. "Under Western Eyes: Feminist Scholarship and Colonial Discourses." Feminist Review 30:61-88.
Rankin, Katherine. 2001. "Governing Development: Neoliberalism, Microcredit, and the Politics of Development." Feminist Economics 8(1):18-37.
Rose, Nikolas. 1999. Powers of Freedom: Reframing Political Thought. Cambridge: Cambridge University Press.
Roy, Ananya. 2002. City Requiem, Calcutta: Gender and the Politics of Poverty. Minneapolis: University of Minnesota Press.
—. 2010. Poverty Capital: Microfinance and the Making of Development. New York: Routledge.
Said, Edward. 1978. Orientalism: Vintage Books.
Sanyal, Paromita. 2009. "From Credit to Collective Action: The Role of Microfinance in Promoting Women's Social Capital and Normative Influence." American Sociological Review 74(August):529-50.
Sharma, Aradhana. 2008. Logics of Empowerment: Development, Gender, and Governance in Neoliberal India. Durham: Duke University Press.
Spivak, G. C. 1985. "Can the Subaltern Speak?" Pp. 66-111 in Colonial Discourse and Postcolonial Theory, edited by P. Williams and L. Chrisman. New York: Columbia University Press.
Srinivasan, N. 2011. Microfinance India: State of the Sector Report 2011. New Delhi: Sage Publications.
Wachtel, Katya. 2010. "30 Suicides in India Linked to Uber-Aggressive Microfinance Organizations." in Business Insider. http://www.businessinsider.com/microfinance-suicides-2010-10. Published October 19. Accessed May 12, 2014.
Wichterich, Christa. 2012. "The Other Financial Crisis: Growth and Crash of the Microfinance Sector in India." Development 55(3):406-12.