“We Sacrifice and Eat Less”: The Structural Complexities of Microfinance Participation

Comparative projects and the limits of choice: ethnography and microfinance in India and Paraguay

“…Unlike microfinance models that were emerging simultaneously in South Asia, Acción had long prioritized interconnection with the local banking sector and encouraged partner organizations to seek out larger pools of capital. By 1992, Bolivia's BancoSol became a test case for commercial banking dedicated exclusively to microenterprise (Brett 2006;Lazar 2004). In Paraguay in the 1980s social activism faced considerable constraints under the repressive Alfredo Stroessner dictatorship (cf.…”

“…They were creditors to their neighbors for purchases ranging from designer jeans to bags of pasta to cellphone minutes (cf. Brett 2006;Han 2012 In Ciudad del Este, collective debt was written into social life in ways that went well beyond the group-based loans from Fundación Paraguaya. Here, I [Author 1] tell the story of debts in one neighborhood in order to track the local practices of comparison that went to the heart of small-scale credit.…”

From a Supply Gap to a Demand Gap? The Risk and Consequences of Over-indebting the Underbanked

“…The microfinance industry will continue to develop and, with sufficient attention to the customer perspective and to over-indebtedness, will increasingly extend the right products to the right people. 5 Some of the sacrifices in Schicks (2011) refer to the non-material debt consequences discussed later in this chapter but many are the results of material pressures such as discussed by Brett (2006) and Gonzalez (2008).…”

“…With a higher burden of debt expenses in relation to income, overindebted borrowers live on a lower consumption level than their peers (Betti et al, 2007) and have lower buffers for shocks (Burton, 2008). In addition to sacrificing current income for instalments, Brett (2006) finds microborrowers in Bolivia to rely on cash support from their families and social networks, take on additional debt, sell assets, reduce the quantity and quality of their food, and to take on additional paid labour to be able to repay on time. Hardly any of his subjects were able to cover 5 instalments from the returns on their investment projects.…”

“…More recent research highlights the severe social implications debt can have for borrowers and points out that microfinance may contribute to poor 14 borrowers sliding into debt problems (Dichter, 2007;Hulme 2007). An ethnographic analysis from Bolivia in 2006, long after the market had stabilized again, exposes that most microenterprises in their local context still could not earn sufficient returns for borrowers to repay their loans (Brett, 2006).…”