The myth of micro -credit:the other half of the moon
by Audity Falguni
'Thanda's wife takes two or three loans at a time. But, she cannot build even the roof of her house. She has to go here and there to collect the instalments on time and consequently borrow the money from another source which gets her in a vicious circle of loans. Sometimes she has to spend all her earnings to pay her (weekly) instalments. What happened to the money?' 'I think taking loan from mahajans (local money lenders) is better than an NGO as there is no obligation to pay a weekly instalment. It is an easy system. They even excuse us in times of crisis and do not insult us. But, NGOs never excuse us in any situation. We are tortured both physically and mentally. We remain bound to pay instalments at any time at any costs.'
photo by Prito Reza
What is micro-credit? Is it the fabulous Aladin's Lamp of the Arabian Tales that can make the poor rich overnight? Or is it some vast empowering scheme to emancipate rural women in Third World countries by the thousands and millions? There are lots of arguments both on behalf of and against micro-credit. Kasia Paprocki, a young Research Affiliate of USA-based research institution Goldin Institute, however, observes, `In the contemporary debate on micro-credit, the voices of those whose lives it affects on a daily basis are conspicuously absent.'
Readers, now you might easily wonder that how an American woman can so easily make a comment on the situation of micro-credit in Bangladesh or Third World countries at large? In reply to your curiosity, Kasia is a genuine and field-bound researcher, who has worked extensively from May to August 2007, within rural poor and female micro-credit recipients at Joyrampur-Anwar village of Pairaband (from where Begum Rokeya, the first feminist writer and thinker of Bangladesh emerged) Union, Rangpur and revisited Bangladesh and the village in particular on the last week of March this year, for a further follow-up on her study. This contributor met Kasia during her revisit to Pairaband as an interpreter and had the opportunity to go through her original study findings and also interact with the female micro-credit recipients at village level, along with her. Some really interesting revelations on micro-credit came about!
'I visited and worked in Bangladesh around three years ago for the first time, as a Research Affiliate of Goldin Institute to work with our two Bangladeshi partner NGOs, namely Nijera Kori and Unnayan Onneshon. My study, titled 'Improving Microcredit Programs: Listening Recipients', was about bringing recipients' experiences and opinions into the global debates on micro credit. In doing this, we adopted a strategy known as 'oral testimony', which relies on extended semi-structured and unstructured interviews to let recipients tell their own stories in their own words,' Kasia explained.
'Often, oral testimony research is coloured by implicit power-dynamics between researchers and subjects. Within these dynamics, answers to questions are often pre-determined by what each party expects to get or hear from others. 'We decided we would address this by using a ''community-based approach'', where recipients would interview each other about their experiences. In such a context, we hoped the content of the interviews would be shaped by mutual dialogue, rather than by top-down agenda,' she elaborated.
It was learnt from Kasia that in order to do that, she, with support from the officials of two of her host and local partner NGOs in Bangladesh, trained a group of villagers of the Joyrampur-Anwar village, to interview their neighbours about their experiences with micro-credit. The result was open-ended, conversation-style interviews in which, the interviewee participated in directing the discussion by framing conversations through stories, life experiences and their own personal histories with micro-credit lending organisations.
Thus, a researcher's group was formed from within the so-called 'poor' and 'illiterate' villagers. This contributor had the opportunity to meet some of those researchers like Hosne Ara, Keshab or Kohinoor Begum, who live their lives as simple agricultural day labourers or rural housewives. Is it not really amazing that these data collectors' conducted over 150 interviews from July to August of 2007 and are now getting prepared to initiate the second phase of research on impacts of micro-credit!
In the words of Kohinoor Begum, one of the data collectors: 'Every one had so many things to tell! I loved hearing people's stories, their sorrows and their history. It is always interesting to know how people live. I wish I could do this work in my village my whole life.'
A quick glance at Kasia's report of 2007 told me that no fewer than 5,000 NGOs, in Bangladesh, recently applied to the government for approval to become micro-credit lenders. The proliferation of micro-credit in rural areas has also crowded out other services which NGOs used to provide in the past including healthcare, grants or other services.
Although one of the most consistent arguments about micro-credit is that it helps people escape cycles of debt by providing them with ways to accumulate assets that will serve as the foundation for entrepreneurial activity, the surveyed villagers described an absolute sense of dependency on micro-credit agencies. After taking loans, most are caught in a cycle of debt from which they are unable to escape, taking new loans from other agencies and village money lenders to repay the original loans.
'I don't want to take micro-credit loans any more,' one villager told, `but at times of serious food crisis, we have no other way.' A number of villagers explained that many loans are taken during the Monga season or the period of seasonal food insecurity between harvests that is particularly severe in North Bengal, where the research had been conducted.
A woman villager told, 'During the Monga, for the three months, we maintain our need for food with a loan. But, if any member of this loan programme is not able to pay an instalment in time, just after the deadline, the NGO workers come to her house and ask for the loan very inhumanly. They force us to pay at any cost.'
Another strong advocacy on part of micro-credit is that providing loans to women permit them to contribute more central roles in a range of household decisions from family budgeting to family planning. But, surveyed female villagers of the Joyrampur-Anwar village narrated their experiences of being used as conduits to credit by their husbands.
'Women take micro-credit as their husbands order them to do so. When their husbands fail to pay the instalments, then NGO workers abuse the women a lot. Women have to bear the pressure coming from both sides,' said a female villager.
One of the more alarming discoveries is that micro-credit is strengthening the dowry system in the village. Stories about women were heard, who, after spending a year or more in their in-laws' homes after marriage, were sent back to their parents' homes with demands of taking another micro-credit loan as additional dowry. Another woman, who took a loan to pay for her daughter's dowry was forced to give up her home to NGO officials, when she had no way to repay the loan.
It is alleged by the villagers that to ensure job security, field workers of micro-credit lending NGOs often take harsh measures like unauthorised repossession of assets, destruction of property and even violence and sexual abuse.
However, villagers of Joyrampur-Anwar suggested that as long as they are dependent on micro-credit agencies, it could well serve their purpose if they could repay their loans during the harvest seasons rather than paying instalments within one week of getting the loan.
'If they (the NGOs) provide some facilities such as medical treatment, monetary help for the education of children, and become more liberal about the weekly collection of payments, I think, it would be better for us,' the villagers recommended.
Readers, now you might easily wonder that how an American woman can so easily make a comment on the situation of micro-credit in Bangladesh or Third World countries at large? In reply to your curiosity, Kasia is a genuine and field-bound researcher, who has worked extensively from May to August 2007, within rural poor and female micro-credit recipients at Joyrampur-Anwar village of Pairaband (from where Begum Rokeya, the first feminist writer and thinker of Bangladesh emerged) Union, Rangpur and revisited Bangladesh and the village in particular on the last week of March this year, for a further follow-up on her study. This contributor met Kasia during her revisit to Pairaband as an interpreter and had the opportunity to go through her original study findings and also interact with the female micro-credit recipients at village level, along with her. Some really interesting revelations on micro-credit came about!
'I visited and worked in Bangladesh around three years ago for the first time, as a Research Affiliate of Goldin Institute to work with our two Bangladeshi partner NGOs, namely Nijera Kori and Unnayan Onneshon. My study, titled 'Improving Microcredit Programs: Listening Recipients', was about bringing recipients' experiences and opinions into the global debates on micro credit. In doing this, we adopted a strategy known as 'oral testimony', which relies on extended semi-structured and unstructured interviews to let recipients tell their own stories in their own words,' Kasia explained.
'Often, oral testimony research is coloured by implicit power-dynamics between researchers and subjects. Within these dynamics, answers to questions are often pre-determined by what each party expects to get or hear from others. 'We decided we would address this by using a ''community-based approach'', where recipients would interview each other about their experiences. In such a context, we hoped the content of the interviews would be shaped by mutual dialogue, rather than by top-down agenda,' she elaborated.
It was learnt from Kasia that in order to do that, she, with support from the officials of two of her host and local partner NGOs in Bangladesh, trained a group of villagers of the Joyrampur-Anwar village, to interview their neighbours about their experiences with micro-credit. The result was open-ended, conversation-style interviews in which, the interviewee participated in directing the discussion by framing conversations through stories, life experiences and their own personal histories with micro-credit lending organisations.
Thus, a researcher's group was formed from within the so-called 'poor' and 'illiterate' villagers. This contributor had the opportunity to meet some of those researchers like Hosne Ara, Keshab or Kohinoor Begum, who live their lives as simple agricultural day labourers or rural housewives. Is it not really amazing that these data collectors' conducted over 150 interviews from July to August of 2007 and are now getting prepared to initiate the second phase of research on impacts of micro-credit!
In the words of Kohinoor Begum, one of the data collectors: 'Every one had so many things to tell! I loved hearing people's stories, their sorrows and their history. It is always interesting to know how people live. I wish I could do this work in my village my whole life.'
A quick glance at Kasia's report of 2007 told me that no fewer than 5,000 NGOs, in Bangladesh, recently applied to the government for approval to become micro-credit lenders. The proliferation of micro-credit in rural areas has also crowded out other services which NGOs used to provide in the past including healthcare, grants or other services.
Although one of the most consistent arguments about micro-credit is that it helps people escape cycles of debt by providing them with ways to accumulate assets that will serve as the foundation for entrepreneurial activity, the surveyed villagers described an absolute sense of dependency on micro-credit agencies. After taking loans, most are caught in a cycle of debt from which they are unable to escape, taking new loans from other agencies and village money lenders to repay the original loans.
'I don't want to take micro-credit loans any more,' one villager told, `but at times of serious food crisis, we have no other way.' A number of villagers explained that many loans are taken during the Monga season or the period of seasonal food insecurity between harvests that is particularly severe in North Bengal, where the research had been conducted.
A woman villager told, 'During the Monga, for the three months, we maintain our need for food with a loan. But, if any member of this loan programme is not able to pay an instalment in time, just after the deadline, the NGO workers come to her house and ask for the loan very inhumanly. They force us to pay at any cost.'
Another strong advocacy on part of micro-credit is that providing loans to women permit them to contribute more central roles in a range of household decisions from family budgeting to family planning. But, surveyed female villagers of the Joyrampur-Anwar village narrated their experiences of being used as conduits to credit by their husbands.
'Women take micro-credit as their husbands order them to do so. When their husbands fail to pay the instalments, then NGO workers abuse the women a lot. Women have to bear the pressure coming from both sides,' said a female villager.
One of the more alarming discoveries is that micro-credit is strengthening the dowry system in the village. Stories about women were heard, who, after spending a year or more in their in-laws' homes after marriage, were sent back to their parents' homes with demands of taking another micro-credit loan as additional dowry. Another woman, who took a loan to pay for her daughter's dowry was forced to give up her home to NGO officials, when she had no way to repay the loan.
It is alleged by the villagers that to ensure job security, field workers of micro-credit lending NGOs often take harsh measures like unauthorised repossession of assets, destruction of property and even violence and sexual abuse.
However, villagers of Joyrampur-Anwar suggested that as long as they are dependent on micro-credit agencies, it could well serve their purpose if they could repay their loans during the harvest seasons rather than paying instalments within one week of getting the loan.
'If they (the NGOs) provide some facilities such as medical treatment, monetary help for the education of children, and become more liberal about the weekly collection of payments, I think, it would be better for us,' the villagers recommended.
__._,_.___
