A critical history of poverty finance : colonial roots and neoliberal failures

Starting from the recent rise of much-hyped ‘fintech’ (financial technologies) solutions for development finance, which have been heralded by the World Bank/IMF/G20 etc as a silver bullet in the fight against poverty, this monograph provides a critical historical context of development finance from a post-colonial perspective. Whilst engaging with the specific weaknesses of the most recent trends of mobile technologies, microinsurance etc in ‘Digital Financial Inclusion’ efforts, author Nick Bernards explains how and why these suffer from the same shortcomings as previous iterations of neoliberal ‘financial inclusion’, namely that they all rely on and ultimately reinforce existing patters of inequality and uneven development, many of which date back to the first days of colonialism; and that they rely on artificially created markets that simply aren’t there among the world’s most disadvantaged economic actors. The critical assessment of fintech is certainly one selling point of this book, though its major original contribution lies in providing the broader backdrop of why this type of quintessentially neoliberal pipe dream of poverty alleviation cannot work and never has. Bernards puts fintech in the lineage of efforts led in particular by colonial administrations in Africa and South Asia since the 1930s, and then later by the World Bank in the 1970s, whose underlying principles can be traced back to the first guiding principles of colonial rule. The book hence offers both, an astute analysis of the current fintech fad as well as a thorough and detailed colonial history of development finance. The book would be clearly an academic monograph, and I guess could conceivably be priced even higher than suggested here. Having said that, I found Nick’s writing style to be eminently readable and actually potentially capable of drawing in some of the elusive ‘interested general public’ readership. Nick’s home discipline is international politics, but his regional specialism is sub-Saharan Africa, which I think is apparent in his writing that seems just as informed by on-the-ground experiences as by theoretical analysis. He is Canadian and still has decent ties there (PhD at McMaster in 2016). Might be worth asking Fernwood/BTL if they’d be interested in a co-pub. In sum, I think this could be a low-risk, solid title that sits well at the intersections of development and postcolonial studies as well as critiques of neoliberal economics and digital capitalism. Finance, mobile and digital technologies - or 'fintech' - are being heralded in the world of development by the likes of the IMF and World Bank as a silver bullet in the fight against poverty. But should we believe the hype?A Critical History of Poverty Finance demonstrates how newfangled 'digital financial inclusion' efforts suffer from the same essential flaws as earlier iterations of neoliberal 'financial inclusion'. Relying on artificially created markets that simply aren't there among the world's most disadvantaged economic actors, they also reinforce existing patterns of inequality and uneven development, many of which date back to the colonial era.Bernards offers an astute analysis of the current fintech fad, contextualised through a detailed colonial history of development finance, that ultimately reveals the neoliberal vision of poverty alleviation for the pipe dream it is.A World Bank official interviewed by the Financial Times in early 2019 rhapsodised the virtues of emerging financial technology (fintech): It reduces costs, it’s much more efficient, it can be scaled up... It does come with risks as well because, you know, you really don’t want to hurt those that are most vulnerable, so we have to be careful. But I think it is really remarkable. (Politi 2019) Media outlets including the Guardian and The Economist have run glowing reports about the promise of fintech (e.g. Gould 2015; Noonan 2019). These have included breathless accounts of financial ‘innovations’ ranging from psychometric credit scoring methods (The Economist 2016) to MobiLife, a South African life insurer offering a (truly dystopian) product called ‘FoodSurance’ – which pays out in weekly grocery vouchers sent to beneficiaries’ mobile phones if a family breadwinner dies (Noonan 2019) – to index-based livestock insurance schemes using satellite imagery to assess the extent of drought (The Economist 2014). A comprehensive historical tracing of how the contemporary finance-poverty-development nexus emerged. 'The definitive account of the history of poverty finance' - Susanne Soederberg Finance, mobile, and digital technologies - or 'fintech' - are being heralded in the world of development by the likes of the IMF and World Bank as a silver bullet in the fight against poverty. But should we believe the hype? A Critical History of Poverty Finance demonstrates how newfangled 'digital financial inclusion' efforts suffer from the same essential flaws as earlier iterations of neoliberal 'financial inclusion.' Relying on artificially created markets that simply aren't there among the world's most disadvantaged economic actors, they also reinforce existing patterns of inequality and uneven development, many of which date back to the colonial era. Bernards offers an astute analysis of the current fintech fad, contextualized through a detailed colonial history of development finance, that ultimately reveals the neoliberal vision of poverty alleviation for the pipe dream it is.

'The definitive account of the history of poverty finance' - Susanne Soederberg

Finance, mobile and digital technologies - or 'fintech' - are being heralded in the world of development by the likes of the IMF and World Bank as a silver bullet in the fight against poverty. But should we believe the hype? 

A Critical History of Poverty Finance demonstrates how newfangled 'digital financial inclusion' efforts suffer from the same essential flaws as earlier iterations of neoliberal 'financial inclusion'. Relying on artificially created markets that simply aren’t there among the world's most disadvantaged economic actors, they also reinforce existing patterns of inequality and uneven development, many of which date back to the colonial era.

Bernards offers an astute analysis of the current fintech fad, contextualised through a detailed colonial history of development finance, that ultimately reveals the neoliberal vision of poverty alleviation for the pipe dream it is.

'The definitive account of the history of poverty finance' - Susanne Soederberg Finance, mobile and digital technologies - or 'fintech' - are being heralded in the world of development by the likes of the IMF and World Bank as a silver bullet in the fight against poverty. But should we believe the hype? A Critical History of Poverty Finance demonstrates how newfangled 'digital financial inclusion' efforts suffer from the same essential flaws as earlier iterations of neoliberal 'financial inclusion'. Relying on artificially created markets that simply aren't there among the world's most disadvantaged economic actors, they also reinforce existing patterns of inequality and uneven development, many of which date back to the colonial era. Bernards offers an astute analysis of the current fintech fad, contextualised through a detailed colonial history of development finance, that ultimately reveals the neoliberal vision of poverty alleviation for the pipe dream it is. Cover 1 Contents 8 Acknowledgements 9 Acronyms 11 Introduction 14 Part I: Poverty finance and the antinomies of colonialism 34 1. A colonial problem 36 2. Poverty finance and nascent neoliberalism 58 3. Structural adjustment, backlash, and the turn to the local: Explaining the rise of microfinance 77 Part II: Making markets for poverty finance 96 4. Commercialising community: Experiments with marketisation 98 5. From microcredit to financial inclusion 125 Part III: Innovation to the rescue? 144 6. The forever-latent demand for microinsurance 146 7. Fintech and its limits 167 Conclusion 192 Notes 200 Bibliography 202 Index 229