Micro-credit in the Development Sector: A Gender Centered Critique
Sariththira Selvakumar
Abstract: Micro-credit is seen as a favorable way to enable development and reduce poverty. This system of lending sets out to provide small loans to help individuals start-up small business, thereby bringing them into a market economy. The practice places women as the recipients of loans, presenting itself as a development model that takes gender inequality into consideration. This article investigates microcredit to determine if it is transformative and whether it enables development. First, it defines microcredit and its objectives. Second, the article explores microcredit as a neoliberal conception and questions whether a neoliberal development model can be effective. Third, it critiques the gender assumptions microcredit lenders make. Finally, the article seeks to engage with possible ways microcredit can be modified.
Introduction
Micro-credit is a favourable way to enable development and reduce poverty. It is a progressive move and departure from Structural Adjustment Programmes (SAPs). The International Monetary Fund (IMF) imposed SAPs intending to balance a country’s budget, thereby allowing it to develop. This, in turn, increases the country’s ability to repay outstanding debts and interest payments. Horrific consequences ensued by SAPs, led to academics and activists heavily critiquing the model and its ‘one size fits all approach’. Micro-credit, on the other hand, supports the proliferation of micro-businesses and is therefore, seen as more useful. The financial support micro-credit provides enables local businesses to grow – not to restructure the economy of the state. Micro-credit also emphasises the need to situate women as the recipients of loans. This positions women as rational economic agents. By doing so, there is an element of helping, or trying to, “empower” women through these programs.
Micro-credit has improved living conditions within poorer households to a certain extent. However, by working within a neoliberal system that contributed to the formation of poverty, micro-credit is not particularly transformative. Moreover, despite recognising women as agents, it reproduces stereotypical gendered expectations and adds to the pressures experienced by women who are recipients of the loan.
The Homo Economicus Model of Agency
Micro-credit aims to reduce poverty. The program offers very small loans to the poor and helps individuals embark upon small business ventures. People in various trades, from street vendors to seamstresses, use micro-credit loans. A small group of people, usually women, receive these loans, on a short-term basis, from around six months to a year. This strategy demonstrates a move away from Homo Economicus towards the model of a rational economic woman.
Homo economicus or ‘economic man’ constructs an agent of economic life as possessing the characteristics of individualism, instrumental rationality and self-interest – gendered constructs associated with masculinity and seen as ideal. In this construction of homo economics therefore, there is no place for the feminine gendered characteristics of dependence, mothering-nature, and empathy. As such, homo economicus writes women out, renders them as less than ideal, or just sees them as useless.
Moreover, gendered segregation of labor comes into play. The household labor women complete is unpaid with no profit. Coupled with the relegation of women’s work to the private realm, the labor of women does not fit the characteristics of homo economicus. This further writes out the experiences of women, denying them agency. Thus, the move to see women as rational suggests that women too have agency in the transactions they may make (Isserles, 2003).
