Benefits and Criticisms of Micro-Finance and Micro-Credit - Essay Example

? Benefits and criticisms of micro-finance and micro-credit Benefits There are numerous benefits attributed to the provision of micro-credit facilities to women. The most predominant claim of micro-credit advocates is the “empowerment” of women through provision of means of economic self-sufficiency. There have been success stories about availers of micro-credit financing setting up their own businesses and generating enough money to pay back their debt while sustaining their small enterprise. There are empirical studies that support the finding that women who earn their own income tend to direct this income for the expenditure of household consumption (Johnson, 2005). Additionally, the proliferation of group-based delivery schemes has supported the view that positive impacts have redounded in the lives of women individually as well as collectively, as a result of the availability of micro-credit facilities. In this regard, empowerment was more commonly measured in terms of eight indicators: women’s economic contribution to the household income; mobility, or the ability of women to travel without escort; ability to make small purchases; ability to make large purchases; ownership of productive assets; involvement in the formulation of major decisions; freedom from family domination; and political awareness (Hashemi, et al., 1996). On the matter of impacts, Chen (1997) was among the first to use this framework to arrive at three pathways to empowerment that micro-credit programmes are found to produce among its clientele. The three pathways are identified as the cognitive, the perceptual, and the relational impacts. The cognitive impact determines the distance by which the participants’ skills and knowledge have improved due to their participation in the programme. Among these are the knowledge of how to save, to plan for the future, and to take greater control of personal and household finances. Also included are learning how to bank money, learning of the virtues of industry and hard work, discipline and strong-mindedness; money management and bank rolling profits; and small business dynamics of learning how to take advantage of seasonality, of diversification, and quick inventory turnover. The second is perceptual impact, which revolves around how women see themselves. Included here are women’s self-confidence, self-reliance, and self-esteem, as well as their changing vision of their future as a result thereof. Finally, the third pathway is the relational impact, or the manner the programme has changed the participants with regard to their family relationships (Johnson, 2005). Primary among these relationships is the participants’ relationship with their husbands. There are two divergent pathways. One is the husband’s initial suspicion about the wife’s comings and goings, which is later replaced by an appreciative acknowledgement of her new abilities, a higher level of respect accorded her, and their appreciation for the woman’s contribution to the household income. There have been cases, however, depending on the culture in which the couple are embedded, of husbands expressing resentment against their wives for spending too much time away from their household duties (Johnson, 2005). Criticisms The claim that micro credit provides economic empowerment has been criticized for the narrow construction it ascribes to “empowerment.” The focus on micro credit programs tends to misleadingly circumscribe women’s empowerment to their economic adequacy; this tends to simplify the issue of transformational empowerment, and relegating women’s subordinate role to a matter of economic mainstreaming. For instance, Stephen Lewis decried the “mainstreaming” of gender issues in the UN system, because of fragmentation and dispersal of efforts among several agencies which are under funded and maligned (Goetz & Sandler, 2007). Mainstreaming indicates that integration is being intended, rather than the creation of entities specifically advocating solutions to the plight of women. It tends to “de-genderize” the problems that should properly be addressed as gender issues. Goetz and Sandler view mainstreaming as a roundabout way of achieving gender equality, in much the same way as “trickle-down” economics is supposed to alleviate poverty. It means investing more and more on those who already have these privileges at the top in the hope that they would share their benefits to those below. “Instead of systemic change, we have therefore had to rely on palliatives: normative frameworks and rights agreements rather than a massive increase in prosecutions for perpetrators of gender-based violence; micro-finance instead of employment and property rights; quotas for women candidates for public office rather than campaign finance reform and democratized political parties” (Goetz & Sandler, 2007, p. 168). Another example is the issue of AIDS/HIV. This continues to be treated merely as a health problem, but in certain areas like Darfur, DRC and Northern Uganda, AIDS/HIV is perpetrated through violence to women, and must be considered a gender issue. Saudi Arabia’s economic development and social structure, gender relations Definitions of empowerment, social capital, development, based on critical engagement with the relevant feminist literature Empowerment The concept of empowerment is rooted in its etymology to “power,” which Kabeer (2005, p. 13) conceives of as “the ability to make choices.” Corollary to this, to be disempowered is to be denied choice. Therefore, empowerment as a process is the acquisition of the ability to make choices by persons who were once denied the choice. Empowerment, therefore, is a change process. People who are used to exercising choice are not empowered because they never lost power to begin with. Another vital aspect of empowerment is the concept of choice, which presupposes two necessary conditions: (1) First, there must exist a set of alternatives from which a choice may be made. For instance, the state of poverty curtails choice, because the inability to meet one’s basic needs necessitates dependence on others for subsistence and, thus, having to be indebted to them or subjected to their power. Even in poverty, gender-related issues exist, because women are affected differently than men when in a state of poverty (2) Second, not only should the alternatives exist, but the actors (the empowered) should be aware that they exist. When power relations, particularly gender related, are unquestioningly accepted as such, then there is no true empowerment because women are not aware that they have a choice. For example, if a woman is beaten by her husband, but “chooses” not to leave him because to do so is against social norms, then such is not really choice, because the woman is not aware of the possibility of leaving her husband. She acts within the constraint of society, and therefore is not empowered. The same is true with women who view their right to property or to engage in a certain livelihood as “not proper for a woman.” (Kabeer, 2005, p. 13-14). The three important aspects of empowerment are agency, resources, and achievement. Agency is the power to act on one’s own life choices despite opposition from others, therefore challenging the status quo of existing power relations. Legitimated inequality operates via a system of beliefs and values externally enforced, for which reason agency often develops from within the individual, in how she/he views her/his own self worth. However, agency can either be passive or active (Kabeer, 2005, p. 15). Passive agency is action taken when there is little choice, while active agency refers to behaviour that is purposeful and directed towards a goal (achievement, the third aspect of empowerment, discussed later). The second aspect, resources, refers to the medium through which agency is exercised, distributed through the framework of society – the institutions and relationships. Resources would pertain to the privileges enjoyed by certain actors within these institutions, that enable these actors to exercise a level of authority in interpreting rules, norms and conventions. Persons in a position of privilege will have greater access to resources than others; in colonial America, for instance, women whether black or white were subordinated to their men, but white women were in command of a greater pool of resources than were black women, but not against their husbands. The third aspect is achievement, which refers to the outcomes of agency and resources. Agency and resources refer to the potential to make choices, while achievement is the realization of this potential, or the failure to do so. A typical example would be the empowerment of women to sustain a livelihood. If women are enabled to find wage employment or provided access to micro finance to set up a business. If the result of such “empowerment” were merely for women to meet their needs for survival, then the level of achievement is hardly a defining criterion of true empowerment. On the other hand, if such access to a means of livelihood allows women to achieve true self reliance and gain access to new opportunities other than performing as a “distress sale” of labor (Kabeer, 2005, p. 17), then it may be said that the achievement attained manifests a transformative form of agency on the part of women. The achievement gained is indicative of a higher potential to attain more and in effect to challenge the established power relations. Without the transformative nature of the resultant achievement, the measure attained cannot be characterized as true empowerment. According to Kabeer (2005), gender equality and women’s empowerment constitutes the third of the eight Millennium Development Goals (MDGs). As such, its specific indicators are identified to be: (1) to close the gender gap in education at all levels; (2) to increase women’s share of wage employment particularly in the industrial (vis-a-vis the agricultural) sector; and (3) to increase the proportion of seats occupied by women in the parliament of their respective countries. According to Goetz (2006), a women’s occupation of at least a 30% proportion of seats of any law making body is sufficient critical mass to generate the needed reforms for gender equality under the law. Social capital Social capital as a concept is taken to be a factor that determines and individual’s economic growth, as well as his potential to contribute to the welfare of the community, the nation, and humanity in general. For the popularity of social capital as an area of study, credit is extended to Bourdieu (1986), Coleman (1998), and Putnam (1995). Bourdieu conceived of social capital in terms of the resources people use in order to secure any personal advantage they may be enjoying at the time. In this context, social capital is seen as a component of the wider system comprised of structural relations and subjective beliefs dwelling upon the asymmetries of power and resources. Bourdieu’s idea is seen by several as vague and inadequate and lacking in a definitive conceptualization of social capital, and was further criticized for attributing social capital only to those who already fall within the privileged and endowed. Coleman (1998) viewed social capital in terms of research on educational attainment by young children. He argued that social capital is more evidently vested among students in settings where there exists a stronger community spirit and a more thorough embodiment of norms which role models (parents, teachers, and other students) subscribe to. For Coleman, social capital is in the nature of a resource that may be reciprocated among individuals in a network, where relationships are qualified by a close affinity in terms of trust and values shared (Alfred, 2009). Coleman’s conceptualization of social capital was drawn upon by Putnam (2000) insofar as it described social capital in terms of bonding and building functions through the reinforcement of shared values and the development of a sense of trust. Social capital is a bridging function in so far as it builds networks and linkages among elements external to the individual or group of individuals. This is the political interpretation of social capital, with the essential view of fostering solidarity and integration among diverse interests through the formation of institutional networks (Alfred, 2007). In the gender relations discourse, the assets which produce social capital – namely interpersonal networks, contacts, knowledge, and related human resources – are all assets which women are considered rich in. These assets are seen in the form of group solidarity and shared identity, a form of social integration that results from the shared experience involving exploitation, discrimination, and exclusion from certain leading social roles and positions of power (Alfred, 2007). Development An institution is different from an organization. Institutions are defined as “formal and informal rules which shape social perceptions of people’s needs and roles” (Goetz, 2006, p. 71). The organizations are the agents that implement the rules and address the needs of the people, as embodied in the institution. Institutions likewise provide avenues of change, by encouraging the routine observance of certain gender-equalising social behaviour, or as powerful actors to challenge elements – social practices, norms, or organizations – that are discriminatory against women (Goetz, 2006, p. 72). Goetz maintains that the components by which institutions can reform the gender order includes: Structures, that involve the formal and informal rules that shape experience and create patterns of social boundaries; Practice, which are comprised of the daily processes and actions that provide substance and reinforce structure, and which, together with structure, provides the incentive systems that shape human behaviour in society; and Agents, who are those persons that create variations of practices operating within the structures. The problem with mainstreaming gender development is that a commitment to human development in general does not automatically lead to a commitment to develop gender equity or to address gender-specific needs (Goetz, 2006, p. 76). Nussbaum (2009) likewise views human development as more than mere economic growth, though this remains an important consideration. States and international institutions equate development with economic progress; the individuals that comprise such states, however, require that human development be based on how meaningful their lives have become to them and to society in general. “The purpose of development is to create an enabling environment for people to enjoy long, healthy and creative lives” (Mahbub Ul Haq, 1990 in Nussbaum, 2009), rather than merely confine itself to the pursuit of financial and economic wealth. The increase in Gross National Product (GNP) is not indicative of the essential human development that engenders independent and self-fulfilling productive lives. Indicators of economic growth could not likewise automatically and conclusively redound to higher level of education, better health conditions, greater participation in government, mutual respect in the workplace, and so forth. Economic indicators speak nothing of the quality of human life, which is the crux of human development (Nussbaum, 2009). Other relevant feminist literature Gender equality According to Sen (2000), “[W]ithin every community, nationality and class, the burden of hardship often falls disproportionately on women” (p. 35). Gender inequality has several manifestations, distinguished by Sen as including: mortality inequality, or that type of inequality between the genders that involve matters of life and death, taking the form of extraordinarily elevated mortality rates for women, consequently leaving a disproportionate number of men in the overall population. This phenomenon occurs as a result of gender bias in health care and nutrition. In some parts of South Asia, for instance, girls are intentionally deprived nutritionally in favor of their brothers being better fed, particularly in areas where poverty exists and food resources are low; natality inequality, wherein boys are preferred over girls even at the time of conception and birth, as a result of social advantages in having boys. With the availability of modern techniques in determining the gender of a baby in utero, it is now the custom in some of these countries to engage in sex-selective abortion. Prevalent in parts of East Asia, in particular China, South Korea, Singapore and Taiwan, and recently in India, this is a form of “high-tech sexism” (Sen, 2000, p. 35). basic-facility inequality, which involves the denial of certain basic facilities, such as schooling, to girls. The most blatant example is Afghanistan’s policy of outrightly excluding girls even from elementary schooling. The inequality exists in more subtle forms even in countries not openly biased against females, such as social pressure for women not to participate in certain social functions. special opportunity inequality, manifested as denial of more advanced opportunities for women, such as higher education and professional training. This sometimes occurs even in the richest and most developed countries in the world (Sen, 2000). The areas women were (and may still be) traditionally excluded are commerce, politics, extreme sports requiring unusual display of strength, abstract philosophy and the sciences. professional inequality, which is evident in employment as well as promotion in work position, where men wield an advantage over women. Even in the more advanced societies, the proverbial “glass ceiling” for women is still an acknowledged reality facing female professionals in almost every field of endeavour, even in those occupations that are attributed customarily to women (e.g. women are usually relegated the job of “cook” rather than “chef” which is dominated in by men). ownership inequality, referring to the asymmetrical sharing of property between men and women, with men being attributed a larger share. This has repercussions in women’s ability to excel in commerce, economic, and certain social activities (e.g. in India, traditional inheritance laws were patrilineal, that is, they weighed heavily in favor of the male heirs); and household inequality, involving basic inequalities between the genders in relation to family and the household, existing in many cases even without overt signs of gender discrimination such as mortality or natality inequalities. In sharing household chores or duties and in child care, women are accorded more responsibilities than men; this is most common seen in the fact that men are naturally inclined to work outside the home, while women may work outside the home only if she may balance household responsibilities with her career. The world over, inequality on the basis of sex, as well as sex-related violence, is a reality for countless women. This was the observation publicized by a 1989 United Nations report that states, “The risk of violence and violation within the household is one thing women, irrespective of their social position, creed, colour or culture, share in common.” (Nussbaum, 2006, p. 31 - emphasis supplied). There are similar statistics on rates of domestic violence cases in the United States, Japan and India, indicating that the problem is experienced in both developed and developing countries, across both the cultural and geographic divide, in peacetime or in war (referring to the countless incidences of reported rape by invading forces in war torn localities). Despite the prevalence of the problem, there has been no instrument or measure created in international human rights law that addresses the problem. It must be evident that the general proclamations of the equality of human rights as to creed, race, nationality or gender is not sufficient to address this problem, because more than mere discrimination as to one’s gender, only women are made to suffer the physical and psychological oppression inflicted upon them because of their biological constitution. The issue is not mere discrimination of an individual for work or the availment of social services, but the protection of women against rape, sexual torture and harassment as a particular form of human rights abuse. “What this lack of recognition has meant is that women have not yet become fully human in the legal and political sense, bearers of equal, enforceable human rights” (Nussbaum, 2006, p. 31). In comparison, the attack on the World Trade Center and the Pentagon in 9/11 was immediately addressed by conceptualizing a new form of organized violence that could not be labelled under the generic term of “terrorism”. There is no reason then, Nussbaum posits, why the widescale violence against women could not be defined as a special source of international legal protection in its own right. According to MacKinnon (2006), similarity of treatment is not sufficient to qualify for the “equal protection” under the law. This is mere formal equality, which hides and even reinforces the underlying inequalities. True gender equality, rather, should encompass freedom from domination and subordination from the hierarchy of gender imposed by social norms. References Bourdieu, P 1986 “The Forms of Capital.” In J. G. Richardson (ed.), The Handbook of Theory and Research for Sociology of Education. Greenwood, New York Chen, M 1997 “A Guide for Assessing the Impact of Microenterprise Services at the Individual Level,” USAID AIMS Management Systems International Coleman, J S 1998 Foundations of Social Theory. Belknap Press, Cambridge, Mass. 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