Wither Participatory Banking? Experiences with Village Banks in South Africa

Abstract

Microfinance is widely advocated as a powerful tool to reduce poverty and improve social inclusion. How best to achieve these outcomes has been the focus of considerable debate, between supporters of minimalist finance-only and services-plus approaches, between the merits of client oriented models and member ownership. Many approaches to microfinance note the importance of participation within peer groups, the potential for empowerment and the support given by civil society organisations. Few studies however have analysed the nature and extent of participation, or whether this participation can be understood as democratic. In this article we examine four communities in South Africa that belong to a Village Bank, an organisation that promotes member ownership and control. The article examines members' experiences of participation, and specifically organisational transparency and conflict resolution. We argue that microfinance holds considerable normative and symbolic appeal to members but that participation in practice has been limited.

The Nexus of Female Capital and North–South Labor Migration in Ghana

“…Poverty is a measure of the economic status of people and incapacitates their ability to access capital from conventional banking services no matter what their aptitude is for entrepreneurship. Poor people can become hardworking entrepreneurs if they are not constrained from accessing capital to unlock the capacity to achieve their socioeconomic aspirations (Jones & Dallimore, 2009). Money given as a loan (in contrast to money given as a grant) can empower the poor and spur their entrepreneurial abilities to break the shackles of perennial poverty they face in their everyday life (Karlan and Goldberg, 2007;Yunus, 1999).…”