A whopping 90 to 99 percent of these loans are paid back with interest, another shining indicator of microcredit’s success. But there is an ugly side to ensuring repayment, where poor women are made to police one another and punish defaulters with collective acts of aggression… Microcredit beneficiaries are grouped into cohorts of five to fifteen members. They are given clear instructions: “You are all responsible for the loan and have to make sure that no one defaults.” This lays the foundation of a very effective surveillance system, wherein poor women monitor other poor women. And the poorest women, the ones who need loans the most, are evicted from the group to minimize the risk of default.
Apparently, women involved in microlending go to great lengths to repay their loans, cutting back on family expenses, like food, and children's school items. Still, writes Sarah Bosely in the Guardian, "Women could change the face of Africa." Bosely reports from Uganda, where women hold families together, despite being victims of sexual extortion and violence. She notes that the UN finds that 60% of the billion poorest people on the planet are women; 70% of the 130 million children who are not in school are girls. Wouldn't it make sense that any assistance would be a good thing?
Not according to Tanglad, who argues:
The supposed success of “compassionate capitalism” strategies obscures the enormous social costs behind statistics such as amazing loan repayment rates. Social costs that are ultimately borne by women who are already marginalized by their socioeconomic and indigenous status.
Microcredit: “A Political Economy Of Shame” [Racialicious]
Hope Rests With Africa's Women [Guardian]
Related: Do Hopes For Development In Africa Really Only Lie With Women?