Seduced and Betrayed: Exposing the Contemporary Microfinance Phenomenon (School for Advanced Research Advanced Seminar Series)

Microfinance began as the disbursement of tiny loans to the poor, which they could use to undertake informal income-generating activities. It went on to become one of the most popular international development policies of all time and a mainstay of local development and antipoverty programs across the Global South. The contributors to this multidisciplinary volume consider the origins, evolution, and outcomes of microfinance from a variety of perspectives and contend that it has been an unsuccessful approach to development. The contributors contend that over the last twenty years, microfinance policies have exacerbated poverty and exclusion, undermined gender empowerment, underpinned a massive growth in inequality, destroyed solidarity and trust in the community, and, overall, manifestly weakened those local economies of the Global South where it reached critical mass. They use qualitative anthropological, economic, and political-economic research to unpack the ideas and values that have allowed microfinance to “seduce” the world and blind so many to its corrosive effects. Front Cover Title Page Copyright Contents Foreword / James K. Galbraith Introduction: Setting the Scene / Milford Bateman and Kate Maclean Part One: Background 1: The Political Economy of Microfinance / Milford Bateman 2: Poverty Reduction or the Financialization of Poverty? / Maren Duvendack and Philip Mader Part Two: Seduction 3: Pop Development and the Uses of Feminism / Meena Khandelwal and Carla Freeman 4: Petit Bourgeois Fantasies: Microcredit, Small-Is-Beautiful Solutions, and Development’s New Antipolitics / Elliott Prasse-Freeman 5: Kiva’s Staging of “Peer-to-Peer” Charitable Lending: Innovative Marketing or Egregious Deception? / Domen Bajde 6: Muhammad Yunus’s Model of Social Business: A New, More Humane Form of Capitalism or a Failed “Next Big Idea”? / Milford Bateman and Sonja Novković Part Three: Betrayal 7: Bosnia’s Postconflict Microfinance Experiment: A New Balkan Tragedy / Milford Bateman and Dean Sinković 8: From Tigers to Cats?: The Rise and Crisis of Microfinance in Rural India / Marcus Taylor 9: The Destructive Role of Microcredit in Post-apartheid South Africa / Milford Bateman and Khadija Sharife 10: Public Goods Provision Aided by Microfinance: Groupthink, Ideological Blinkers, and Stories of Success / Philip Mader 11: The “Scandal” of Grameen: The Nobel Prize, the Bank, and the State in Bangladesh / Lamia Karim 12: Agricultural Microfinance and Risk Saturation / Charlotte Heales Part Four: Alternatives 13: Banking on the Difference: Credit Unions as Superior Local Financial Institutions for the Poor / Jessica Gordon Nembhard 14: Microfinance and the “Woman” Question / Kate Maclean 15: Moral and Other Economies: Nijera Kori and Its Alternatives to Microcredit / Kasia Paprocki 16: The “Solidarity Economy” Model and Local Finance: Lessons from New Left Experiments in Latin America? / Milford Bateman and Kate Maclean Conclusion: It’s the Politics, Stupid / Milford Bateman and Kate Maclean References Contributors Index Back Cover Foreword / James K. Galbraith -- Introduction: setting the scene / Milford Bateman and Kate Maclean -- Background -- The political economy of microfinance / Milford Bateman -- Poverty reduction or the financialization of poverty? / Maren Duvendack and Philip Mader -- Seduction -- Pop development and the uses of feminism / Meena Khandelwal and Carla Freeman -- Petit bourgeois fantasies : microcredit, small-is-beautiful solutions, and development's new anti-politics / Elliott Prasse-Freeman -- Kiva's staging of "peer-to-peer" charitable lending : innovating marketing or egregious deception? / Domen Bajde -- Muhammad Yunus's model of social business : a new, more humane form of capitalism or a failed "next big idea" / Milford Bateman and Sonja Novkovic -- Betrayal -- Bosnia's post-conflict microfinance experiment : a new Balkan tragedy / Milford Bateman and Dean Sinkovic -- From tigers to cats? : the rise and crisis of microfinance in rural India / Marcus Taylor -- The destructive role of microcredit in post-apartheid South Africa / Milford Bateman and Khadija Sharife -- Public goods provision aided by microfinance : an innovative or a flawed idea? / Philip Mader -- The "scandal" of Grameen : the Nobel prize, the bank, and the state in Bangladesh / Lamia Karim -- Agricultural microfinance and risk saturation / Charlotte Heales -- Alternatives -- Banking on the difference : credit unions as superior local financial institutions for the poor / Jessica Gordon-Nembhard -- Microfinance and the "woman" question / Kate Maclean -- Moral and other economies : Nijera Kori and its alternatives to microcredit / Kasia Paprocki -- The "solidarity economy" model and local finance : lessons from new left experiments in Latin America? / Milford Bateman and Kate Maclean -- Conclusion: it's the politics, stupid / Milford Bateman and Kate Maclean -- References -- Contributors -- Index Microfinance, the disbursement of tiny loans to the poor so that they can undertake income-generating activities, is the most popular international development policy of recent years. The contributors to this multidisciplinary volume consider the origins and outcomes of microfinance from a variety of perspectives and contend that it has not been a successful approach to development. Over the last twenty years, the contributors note, microfinance policies have exacerbated poverty and exclusion, undermined gender empowerment, underpinned a massive growth in inequality, destroyed solidarity and trust, and, overall, manifestly weakened those local economies of the global South in which it has reached critical mass. By exploring historically successful alternatives that deploy "collective capabilities"-including cooperatives, credit unions, and state-led development strategies-the book brings the politicized nature of microfinance into sharp relief. The authors expose the intimate relationship between neoliberalism and microfinance as the overarching rationale that keeps the microfinance model alive in spite of all the evidence of its failure. This timely and comprehensive analysis, founded on qualitative anthropological research, unpacks the ideas and values that have allowed microfinance to "seduce" the world and blind so many to its corrosive effects. Book jacket