Solidarity Economy Versus Neoliberalism? Microcredit in Rural Bangladesh

Abstract

Solidarity economy theory has challenged the ideology and agenda of neoliberalism since the 1980s. However, are the two theories always opposed? For example, microcredit is often assessed positively as a practice of solidarity economy because it targets beneficiaries who are generally excluded or marginalised from a traditional financial infrastructure and enhances solidarity and reciprocity between people. However, other researchers have criticised it as an instrument for promoting and sustaining neoliberal politico-economic restructuring. This paper examines whether microcredit is part of solidarity economy or neoliberalism, using concrete examples of microcredit operations in rural Bangladesh. The following two questions will be addressed, as the tenets and effects of microcredit are judged, as supporting solidarity economy or neoliberalism. (i) Are microcredit services largely provided to economically or/and socially disadvantaged people? (ii) What relationships are built in local society, including microfinance institutions, through microcredit? This paper addresses these questions in field-based micro-level case studies and field data. In this examination, the paper will demonstrate and discuss articulation of the solidarity economy and neoliberalism, as well as how the effects of microcredit can be enhanced as a part of the solidarity economy instead of being an item on the neoliberal agenda.