Both social capital and microfinance are central to mainstream development interventions, and both are predicated on the need to recognize the importance of social factors in development. Microfinance institutions mobilize social capital in the form of a group guarantee, and aim to support the development of sustainable financial institutions and income generation. Women are targeted in part because of the effectiveness of their social capital as collateral. However, although social capital is assumed to support development and income generation, the precise dynamics involved in this are rarely explored. This article examines the construction of social capital and its relationship to income generation, based on a long-term ethnographic study of village life in rural Bolivia and the microfinance institution operating there. The author examines the complexity and gendered contradictions implied in the way that social capital is generally viewed to support economic development. It is suggested that the way microfinance institutions use social capital to support sustainable financial institutions and income generation does not always reflect the way that women's networks support access to resources and ultimately, economic development.Research for this article was funded by an ESRC Studentship Award (PTA 030 2004 00186). I would like to thank Haleh Afshar, Sylvia Chant and Kathy Baker for invaluable comments and encouragement, and the two anonymous reviewers for very helpful feedback. Development and Change 41(3): 495-515 (2010).

This article analyses the gendered contradictions of microfinance's celebrated “double bottom line” of social and financial impact. The example of microfinance is used to illustrate the gendered and colonial constructions of “risk” and “responsibility” that underpin neoliberalism and its gendered paradoxes. After revisiting the discursive critique of these terms, I draw on how indigenous women participating in a microfinance institution in Bolivia describe their experience to suggest how gendered ideas of risk and responsibility are framing their negotiation of and resistance to the market. While the gendered and colonial construction of risk creates dynamics that perpetuate indigenous women's exclusion from the market, the terms of the resistance and use of the intervention also challenge feminist critiques of neoliberal governmentality developed mostly with reference to advanced modernity and welfare regimes.

Abstract:The village banking approach to microfinance aims to empower women by giving them responsibility for and control over certain aspects of the intervention. This paper explores how women members negotiate participation in the bank and analyses the relationship between responsibility, risk and empowerment. It is based on an ethnographic study in Luribay, Bolivia where the microfinance institution Credit with Rural Education has been operating since 2000. The village bank is placed in the context of gender relations in Luribay and ideas of risk, responsibility and empowerment explored in that context.

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