Market, Freedom and the Illusions of Microcredit. Patronage, Caste, Class and Patriarchy in Rural South India

Abstract

As a market tool, microcredit is expected to promote individual freedom, for women in particular. By drawing on a southern Indian case, this paper argues that microcredit is in fact shaped by the power structures it is supposed to eradicate. Even if they are partly reshaped, local structures of power remain unavoidable to protect populations (something that microcredit fails to do) but also to build the microcredit market and ensure its legitimacy, for donors, local political arenas and local populations. Far beyond microcredit, our findings question the uneasy relationships between markets and individual freedoms.

Acknowledgements

This paper draws on a research programme located at the French Institute of Pondicherry (Labour, finance and social dynamics) and ANR funding (ANR-07- SUDS-011-RUME). We sincerely thank Supriya Garikipati, Susan Johnson, David Picherit and Ariane Szafarz for their comments on an earlier draft.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. See for instance Yunus (2003, pp. 107, 138; 2008, pp. 6, 211–212).

2. See for instance Littlefield and Rosenberg (2004, pp. 38–39), often considered a founding document in the market shift of microcredit: ‘Only financially sound, professional organisations have a chance to compete effectively, access commercial loans, become licensed to collect deposits, and grow to reach significant scale and impact’ (p. 38). Both authors belong to the Consultative Group to Assist the Poor (CGAP), which is playing a leading role in shaping the ‘best practices’ of the microcredit industry. See also Yunus (2008, pp. 8–12, 23).

3. More details about the number and type of data collection are given in the Online Appendix (given that they covered a broader research agenda than what is presented here) and are summarised here.

4. Village typology is explained in details in another publication (Guérin, Michiels, & Venkatasubramanian, 2014).

5. See Table A.3 in the Online Appendix for further details.

6. Both terms – patronage and clientelism – will be used as synonyms in the remaining part of the paper.

7. According to the last census, at the district level.

8. Data come from Sa-Dhan estimations (http://www.sa-dhan.net/, last access 12 August 2014.

9. Most interviews have been translated from Tamil.

10. DMK and AIADMK (All India Anna Dravida Munnetra Kazhagam) and DMK (Dravida Munnetra Kazhagam).

11. According to our 2010 survey, among ‘household heads’ (only male), half have no education at all.

12. As a consequence, the fact that Dalit women usually have more freedom does not translate into a better representation among the staff. There are Dalit loan officers, but they can deal only with Dalit clients.

13. Dalit Panther or Ambedkar people’s movement for Dalits; PMK (Paattali Makkal Katchi) for Vanniyars.

14. They are often approached before elections but we didn’t encounter any cases of ongoing relations, which may reflect the low feminisation of local politics.

15. Only for women in the cases we came across, which may reflect the growing feminisation of Christian institutions in Tamil Nadu (Mosse, 2012).

16. See for instance Marx and Engels (1848/1948, p. 11) on the role of ‘cash payment’ on feudalism and patriarchy.

Additional information

Funding

This work was supported by the Agence Nationale de la Recherche [ANR-07- SUDS-011-RUME].