Gina Neff's articles on microcredit in LBO <http://www.panix.com/~dhenwood/Micro.html> attracted more nasty mail than anything LBO has published; the only thing that came close was my critique of the Melman thesis on the destructiveness of military spending. Nice to see Gina's work confirmed.
A recent anthro dissertation at the University of Manitoba by Aminur Rahman shows that over 95% of the loans he studied were actually controlled by men, not women, as the propagandists argue. From a report at the International Development Research Centre's website <http://www.idrc.ca/media/Aminur_e.htm> (the Ottawa-based IDRC funded Rahman's research):
IDRC: Institution: Winners Aminur Rahman
------------------------------------------------------------------------ The Grameen Bank is an internationally renowned credit institution that lends money to the rural poor in Bangladesh. As of 1993, it had loaned $743 million to 1.81 million members, 95% of whom were women. Hailed as Bangladesh's greatest success story, the bank has served as the model for micro-credit programs around the world.
In 1994, Aminur Rahman set out to study the Grameen Bank and its impact on women, namely how access to credit translated into more power and influence for women in the household and in the community. He discovered, however, that women were often reduced to "middle men," borrowing money from the Bank on behalf of their spouses or male relatives. Instead of empowering women, the lending programs were leading to their exploitation as a source of capital.
"The preliminary research on this micro-credit program in rural Bangladesh indicates that there is a gulf between the philosophy of the Grameen Bank and its field realities as they are put into practice by the members of the program and workers of the bank," says Rahman, a doctoral student in the University of Manitoba's anthropology department.
Rahman has returned to Bangladesh as the recipient of a Doctoral Research Award to conduct more research on this surprising finding. He is basing his study on anthropological methods - the first time such an approach has been used in research on the bank. Traditional indicators of the bank's success have been quantitative, focusing on the number of women involved in the program and the loan recovery rate. Rahman says that his study "may challenge the orthodox view of the success of micro-credit programs."
Rahman carried out his 1994 research in a village that is the site of one of the oldest Grameen programs. A women's loan centre had operated in the village since 1980. But Rahman found that more than 95% of the credit given to women is controlled by their husband or other male relative. The loans are often used for unapproved purposes, such as paying a dowry or buying medicine. Women then have to appeal to men for money to pay off the installments or sell household produce that would otherwise be consumed. This diversion of funds "has a negative impact on the well-being of household members," says Rahman.
Rahman is now visiting other regions in Bangladesh to conduct comparative research and will return to the site of his initial study. He will examine the operations of the Bank and its lending process in an attempt to analyse its true impact on poor people and gender relations. This research will give policymakers a better understanding of micro-credit programs and their role in promoting sustainable and equitable development.
Note: The role of microcredit in empowering women and supporting micro-enterprise development has come under close scrutiny, in part, because of research like Mr. Rahman's. IDRC plans to publish an article that examines some of this controversy . For those who wish to learn more now, may we suggest the Learning Circle on Micro-Enterprise Development <http://www.web.net/ccic-ccci/policy.html> on the Canadian Council for International Cooperation website.