Microbaiting
Via Chris Clarke I found this unsettling blogpost “Microcredit’s Newest Victims” by Rahul Mahajan about the microlending business in India. His three major points: The commercialization of microlending, the social pressure microlenders inflict, and the neglect to facilitate structural change.
The first point isn’t surprising. If there’s money to be made, people will try to make money, and if you have people trying to make money, some of them will want to make more money, regardless of the cost or effects on others. The second point, in contrast, came as a surprise but sounds frighteningly familiar. It evokes images of, like, organized crime or Sippenhaft:
Grameen Bank succeeded because of a focus on lending to women and through invocation of collective responsibility and mutual surveillance. Loans were made to women in a “circle,” all of whom were made responsible for repayment of the entire amount, and they were encouraged to pressure each other to make their payments. […] Microfinance organizations [create] this choking atmosphere of social pressure, which often seems to make default more difficult than it is for the rest of us. People go hungry to pay back the loans, their kids drop out of school to work to repay the loans and sometimes, horribly, they kill themselves.
The third point, again—“In truth, if no structural changes are made in the economy, what you’ll have is far too many vegetable vendors, bicycle repairers, etc. competing with each other until they drive profits down to zero and nobody can keep up with their 20% interest payments”—didn’t come as a surprise. Throwing money around, tweaking the rules, or even effecting laws won’t change anything, or can make a situation even worse, if it’s not accompanied by structural change. In her essay ““From Haverstock Hill Flat to U. S. Classroom, What’s Left of Theory?” (2000), Gayatri Chakravorty Spivak put it like this:
As long as we remain only focused on the visible violence of world trade, endorse the credit-baiting of the poorest rural women of the Southern hemisphere in the name of micro- enterprise without any infrastructural involvement, the subaltern remains in subalternity. And we legitimate the world trade coding of the finance capital market by reversal. (7)
Incredibly, this was ten years ago.
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Spivak, Gayatri Chakravorti. “From Haverstock Hill Flat to U. S. Classroom, What’s Left of Theory?” What’s Left of Theory? New Work on the Politics of Literary Theory. Eds. and introd. Judith Butler, John Guillory, and Thomas Kendell. New York: Routledge, 2000. 1–39.
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