Women and Microcredit in Rural Bangladesh: Anthropological Study of the Rhetoric and Realities of Grameen Bank Lending

Women and Microcredit in Rural Bangladesh: Anthropological Study of the Rhetoric and Realities of Grameen Bank Lending

Women and Microcredit in Rural Bangladesh: Anthropological Study of the Rhetoric and Realities of Grameen Bank Lending

Women and Microcredit in Rural Bangladesh: Anthropological Study of the Rhetoric and Realities of Grameen Bank Lending

Synopsis

The Grameen Bank of Bangladesh has been extending small loans to poor borrowers (primarily women) to promote self-employment and income generation since 1976. The apparent success of the Grameen Bank (that is, recruitment of clients, investment of loans, recovery rates on invested loans and profit margins) has made microcredit a new model for poverty alleviation and sustainable development. Anthropological research results on Grameen Bank lending to women presented in this book, however, illuminates the link between the success of the bank and debt-cycling of borrowers. The priority of earning profits to insure institutional economic viability caused Bank employees at the grassroots level to emphasize increasing the number of loans disbursed and loan recovery. By using the joint liability model of lending, the Bank workers and borrowing peers impose intense pressure on clients for timely repayment. Many borrowers maintain their regular payment schedules, but do so through a process of loan recycling (that is, pay off previous loans with new ones) that considerably increases borrower debt liability. The debt burdens on individual households in turn increase tension and anxiety among household members and produce unintended consequences for many clients. This book examines women borrowers' involvement with the microcredit program of the Grameen Bank, and the grassroots lending structure of the bank; it illustrates the implications of Grameen lending for the borrowers, their household members and bank workers. The focus of the study is on the processes of village-level microcredit operation; it addresses the realities of the day-to-day lives of women borrowers and bank workers and explains informant strategies for involving themselves in this microcredit scheme. The study is on the power dynamics of everyday lives of informants as they affect women borrowers' relationships within the household and the loan centers, and bank worker relationships within the loan center and the bank.

Excerpt

Microcredit -- small amounts of collateral-free institutional loans extended to jointly liable group members for self-employment -- was first introduced by the Grameen Bank of Bangladesh in the mid-1970s. The programmatic success of the bank -- recruitment of clients, investment of loans, recovery rates on invested loans, and profit margin -- has internationalized microcredit. There is a growing sense that micro-lending projects for women have the potential to achieve the goal of equitable (women's entitlement to resources) and sustainable (independent stability and continuity) development. My study, however, which is based on thirteen months of ethnographic field research on Grameen lending to women in a rural community of Bangladesh, challenges the conventional understanding of small-scale lending and the orthodox view of its success.

This study consists of an anthropological analysis of women borrowers' involvement with the credit program and implications of the lending structure for women borrowers, their household members, and bank workers. In theoretical terms women's involvement with microcredit has been examined in the context of the normative entitlements of patriarchy. The concepts of public and hidden transcripts (Scott 1990) and practice theory (Bourdieu 1977) are used to present the discrepancies between the ideology and practices of the lending institution and the informants. Cultural hegemony (Gramsci 1971) helps to analyze the reproduction of an ideology of dominance and violence toward women in society, both unintended and organizational.

The research findings suggest that women become the primary target of the microcredit program because of their sociocultural vulnerability, that is, the requirements of regular attendance by borrowers in weekly meetings at the loan center and the rigid repayment schedule of loans. The program extends credit to women, but in the household women often pass on their loans to men, men take control over women's loans, or loans are used to meet the emergency consumption needs of the household. In this system, women borrowers often lose control over their loans but bear the consequences of the debt burden in their households and loan centers.

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