Microcredit and empowering women in Bangladesh : stunning promises without substance

Microcredit, a Bangladeshi development model, has become a mantra and a magic potion for all illness of the poor including poverty, malnutrition, illiteracy, and powerlessness. Many of the powerful, rich and famous - liberals like Hillary Clinton, neoconservatives like Paul Wolfowitz (now president of the World Bank), commercial banking institutions like the Chase Manhattan and American Express - actively promote this panacea. Several UN agencies and European development aid agencies far beyond the Bangladeshi border are also involved in implementing microcredit. Muhammad Yunus, the founder ofthe Grameen Bank, was awarded the Nobel Peace Prize for developing, practicing and promoting microcredit. There is no doubt that microcredit has 'indeed allowed many poor women to roll back pervasive poverty', but at the same time it can be said confidently that many of the poor within the microcredit program are left with extended threat of poverty. Critical scholarship on the microcredit model is limited, but emerging steadily. Among critical scholars are postdevelopmentalists, who examine the transformation occurring within the 'self' of the microcredit recipients, and Marxists, who examine gradual expansion of the free market economy in Third World societies within the context of global capitalism. The postdevelopmentalists argue that the surveillance strategies that are placed to monitor the working of micro credit surely transform the subjectivity ofthe microcredit recipients and this transformation is somewhat similar to the process that occurred in Western societies at the start of the Industrial Revolution. Marxists scholars generally examine the contemporary gradual expansion of private investment in the welfare sector, which was traditionally a state monopoly. They argue that the private interventionist approach enables the state to avoid its responsibility to provide welfare for the poor. This thesis investigates the claims of success of microcredit as a panacea, as well as the critical views expressed by focusing on the experiences o fmicrocredit recipients in two villages in Bangladesh. Based on a long term participatory observation method, the thesis argues that the success stories of the microcredit program are blown out of proportion. The dynamics of collective responsibility for repayment of loans by a group of women borrowers, which is seen as a tool for success of microcredit, is in fact no less repressive than the traditional debt collectors. This thesis considered both of the theoretical perspectives mentioned above, and finds that microcredit does produce a kind ofdisciplined self but the microcredit recipients also employ their own agency in resistance towards the disciplinary power. It also finds that the neoliberal policy of privatisation of welfare enables capitalism to extend its control to the poorest, most deprived of the world.