4: Petit Bourgeois Fantasies: Microcredit, Small-Is-Beautiful Solutions, and Development’s New Antipolitics
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69 Chapter Four Petit Bourgeois Fantasies Microcredit, Small-­Is-­Beautiful Solutions, and Development’s New Antipolitics Elliott Prasse-­Freeman Introduction The rise of microfinance from an obscure Bangladeshi nongovernmental organization (NGO) innovation (with an initial portfolio of, famously, US$27) to a worldwide institution moving US$90 billion in loans through virtually every pocket of the globe—and all in three decades—has been nothing short of miraculous. And perhaps even more impressive than the growth of the industry and the movement behind it has been microcredit’s ability to establish itself as a commonsense pillar, perhaps the sine qua non, of this new century’s global antipoverty development efforts. Indeed, when Mohammad Yunus (2011), awarded the 2006 Nobel Peace Prize for his role in founding and promoting microcredit, went so far as to claim that poverty would be eliminated from the earth, people listened, people believed. Set against this promise, on the surface, the microcredit industry appears to have been struggling through a number of rough years. Yunus has been accused of misappropriating donor funds in order to keep his Grameen Bank alive (Heineman 2011). For-­ profit (Thriani 2012) and not-­ for-­ profit (Sinclair 2012a; Karim 2011b) microfinance institutions (MFIs) alike have been exposed as operating no differently than the usurious predators they were meant to replace—which has correlated with increased indebtedness for millions across the globe (Bateman 2010) and a number of farmer suicides in India (Polgreen and Bajaj 2011). A massive platform for efficient peer-­ to-­ peer lending that captured the imagination of the American upper middle class, Kiva has been revealed as neither peer to peer (Roodman 2009a), nor particularly efficient (Sinclair 2014a).1 Topping it all, a comprehensive assessment of microfinance programs has cast the poverty-­ eliminating claims of the practice into serious 70 Elliott Prasse-Freeman doubt (Duvendack et al. 2011a)—a conclusion generally confirmed by a set of “highly scientific” randomized control trials (RCTs) which found that microcredit ’s assumed tertiary benefits (“empowerment” of women, for instance) have most often not materialized (Banerjee 2013; see also Karim, chapter 11, and Khandelwal and Freeman, chapter 3, this volume).2 So it would seem that the panacea has been exposed as a placebo.Then again, perhaps not. Because what has been striking is how all this bad news, or rather any effects deriving from it, has proved more apparent than real. Insiders have complained about the putative negativity buffeting the sector (Roodman 2011, 13), but microfinance seems to be rooted in the collective common sense as the development solution par excellence. While it is difficult to assess the status and contours of a symbolic order’s doxa,3 the fact that microfinance continues to grow around the world (Etzensperger 2014), the fact that donors continue to place it at the center of their aid strategies,4 the fact that platforms such as Kiva.org continue to attract those upper middle-­ class Americans (Gourevitch and Lake 2012, 199), and the fact that Yunus is still feted from one reception to the next (Dickson 2013) suggest that the conversation between the development industry and the Western donor public around microcredit is still generally a positive one. That this volume exists at all suggests that microcredit’s coupled sins (of commission—indebting vulnerable people; and omission—failing in its grandiose claims to either eliminate poverty or positively alter local social relations) have gone mostly unregistered, unconsidered, and unreflected upon as such. Which is to say, these sins may not be considered sins at all. Indeed, the responses by microfinance proponents to the challenges I have sketched can be interpreted as cynical deflecting tactics meant to protect interests vested in the microfinance project.5 I would like to accept that possibility but also look closely at the specific ways in which these responses have been formulated and received in discourse. The evidence suggests a seemingly paradoxical conclusion: that even in its failure microcredit nonetheless can remain a development success. Or, more specifically, it can fail at the level of practice while succeeding at the level of discourse. Even though it is now clear that microcredit will not deliver on its founder’s promise to make a museum out of poverty, it is still able on an affective level to act as if it will. The following will be devoted to exploring this disjunction. I first describe how microfinance became an end in itself (rather than remaining a tool for what we might describe, with appropriate caution, as “development...



Subject Headings

  • Rural development -- Developing countries.
  • Microfinance -- Developing countries.
  • Small business -- Developing countries -- Finance.
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