Credit to Capabilities A Sociological Study of Microcredit Groups in India Credit to Capabilities focuses on the controversial topic of microcredit’s impact on women’s empowerment and, especially, on the neglected question of how microcredit transforms women’s agency Based on interviews with hundreds of economically and socially vulnerable women from peasant households, this book highlights the role of the associational mechanism – forming women into groups that are embedded in a vast network and providing the opportunity for face-to-face participation in group meetings – in improving women’s capabilities It also reveals the role of microcredit groups in fostering women’s social capital, particularly their capacity for organizing collective action for obtaining public goods and for protecting women’s welfare It argues that, in the Indian context, microcredit groups are becoming increasingly important in rural civil societies Throughout, the book maintains an analytical distinction between married women in male-headed households and women in female-headed households in discussing the potentials and the limitations of microcredit’s social and economic impacts Paromita Sanyal is an assistant professor of sociology at Cornell University Her research interests include development, gender, economic sociology, and participatory forms of governance like deliberative democracy (gram sabha in India) Credit to Capabilities A Sociological Study of Microcredit Groups in India PAROMITA SANYAL Cornell University 32 Avenue of the Americas, New York, ny 10013-2473, usa Cambridge University Press is part of the University of Cambridge It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning, and research at the highest international levels of excellence www.cambridge.org Information on this title: www.cambridge.org/9781107077676 © Cambridge University Press 2014 This publication is in copyright Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published 2014 Printed in the United Kingdom by Clays, St Ives plc A catalog record for this publication is available from the British Library Library of Congress Cataloging in Publication Data Sanyal, Paromita Credit to capabilities : a sociological study of microcredit groups in India / Paromita Sanyal pages cm Includes bibliographical references and index isbn 978-1-107-07767-6 (alk paper : hbk) Microfinance – Social aspects – India Entrepreneurship – India Poor women – Employment – India Self-employed women – India Businesswomen – India Women – India – Economic conditions Women – India – Social conditions I Title hg178.33.i4s366 2014 332–dc23 2014037191 isbn 978-1-107-07767-6 Hardback Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party Internet Web sites referred to in this publication and does not guarantee that any content on such Web sites is, or will remain, accurate or appropriate Contents Acknowledgments page vii Introduction The global trajectory of microcredit The savior–slayer dichotomy Deploying social relationships for financial ends Contradictions and controversies Extrapolating from the evidence from West Bengal Agency Existing approaches Social deprivation in a context of patriarchy and control An appositional approach Gender “habitus” Strategies of observing agency Pathways to agency Converting loans into leverage Wives who turned worthy Brides who bargained Mired mutinies Conclusions The power of participation Self-conscious social awareness Social interaction Physical mobility Domestic power Civic participation Conclusions 16 20 22 30 36 38 43 45 52 55 58 61 65 80 85 91 93 98 106 110 114 120 127 v vi Contents Microcredit and collective action Collective action and sanctioning Explaining the capacity for collective action 128 131 154 Culture and microcredit: why socio-religious dimensions matter “Group styles” in microcredit In search of explanations Conclusions 163 167 185 197 Loans and well-being Egalitarian Muslim households De facto female-headed Muslim households True female-headed Muslim households Egalitarian Hindu households De facto female-headed Hindu households True female-headed Hindu households Conclusions 202 204 209 212 219 223 229 234 Interpreting microcredit Looking beyond the salvation–exploitation dichotomy Epilogue: the future of microcredit Methodological debates and directions Microcredit’s place in policy Philanthropy, free market, and choices facing microcredit 235 235 252 253 261 265 Appendix Bibliography 282 311 Index 322 Acknowledgments One summer (now several years back) I arrived in Kolkata (India), with a plan of researching microcredit groups, driven by the desire to bring a sociological perspective to bear on the study of these groups The people who helped in the initial days by putting me in touch with the key NGOs were Manab Sen and Tarun Debnath Without their introduction I might not have gained as ready access to the field The two NGO leaders, who I shall not name (to preserve their organizations’ anonymity), graciously allowed me access to the microcredit groups under their implementation and allowed me the use of their organization’s residential facilities during the period of my research The group supervisors took me around to the groups, accommodating this task of showing me around in the initial days within their busy schedules And, foremost, the women whom I interviewed indulged my many questions, for the most part patiently, taking a break from their hectic daily schedules and juggling their competing demands at home and in their agricultural fields Without their willingness to talk to me, this project would not have come to fruition I am full of gratitude toward them, and I hope to return to the NGOs to share this book with the organizations In the U.S the development of this book was aided by comments from and conversations with Marty Whyte, Mary Brinton, Peggy Levitt, Patrick Heller, Raka Ray, and Vijayendra Rao My colleagues at Cornell University have been great cheerleaders I would like to particularly thank Richard Swedberg and my ex-colleague Steve Morgan I have given innumerable talks on this research in the U.S and all of those opportunities have helped me crystallize my thoughts on this topic and helped me publicize my research For this I would like to thank all the vii viii Acknowledgments people who have invited me out to present this research – Lyn Spillman at University of Notre Dame; Monica Prasad at Northwestern University; Patrick Heller at Brown University; Vijayendra Rao at The World Bank; Jeannie Annan at the International Rescue Committee; Elora Chowdhury at UMass., Boston, among others My family and friends have sustained me through this long period My parents Bikash and Jharna Sanyal 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Connie, 266 Burman, Sandra, 130 Burroughs, Valentine, 261 Butler, Judith, 36, 39, 42 Carpenter, Kenneth, 260 Cartwright, Jennifer, 23 CASHE project (Credit and Savings for Household Enterprise), 286 Cassar, Alessandra, 23 CGAP study, 275–277 Chang, Ha-Joon, 22 Coleman, James, 29–30 collective action community groups and, 150–151 domestic violence, conflict and, 132–138 expanding capacity for, 154–162 financial help to villages and, 151–154 local liquor trade and, 145–148 male figures and, 129–130 men’s sexual transgressions, 138–144 public good and, 149 sanctioning and, 131–154 types of, 128 under-age marriage and, 144–145 women’s social capital and, 129 compulsory savings, Cornwall, Andrea, 248 credit democratization, 7–8 Crowley, Lucas, 23 322 Index culture, social context See also social-religious dimensions factors shaping, 163–164 Denzin, Norman, 282 Department of Women and Children in Rural Areas (DWCRA), 293 Dobbin, Frank, 279 Duflo, Esther, 22 Duflo, Rachel, 255 Emerson, Richard, 30 Fernandez-Kelly, Maria, 284 Fernando, Jude, 23 financial self-sustainability paradigm, 11 Fraser, Nancy, 248–249 GDI See gender-related development index gender empowerment measure (GEP), 37 gender habitus, 52–54 gender norms, Hindu vs Muslim, 187–191 gender-related development index (GDI), 37 GEP See gender empowerment measure Giddens, Anthony, 38 Glennerster, Rachel, 22 Goetz, Anne, 22, 24 Goffman, Erving, 96, 170 Gonzalez, Andrian, 275 Google.org, 271 Grameen Bank, 10–11, 13–14 Grameen Foundation, 267 Granovetter, 29, 131 habitus See gender habitus Half the Sky (Kristoff, Wu Dunn), 16 Hasan, Zoya, 34 Hashemi, Syed, 23, 25 Hindu Marriage Act, 193–194 Horne, Christine, 23, 29, 160 Huberman, A Michael, 58, 285–286 Hulme, David, 22 human, gender development indices (West Bengal), 33–34 India, microcredit SHGs in, 12 Integrated Rural Development Program (IRDP), 22 323 International Finance Corporation (World Bank Group), 13 IRDP (Integrated Rural Development Programme), 292–293 Kabeer, Naila, 23, 25, 36, 40, 41–42 Karim, Lamia, 24, 192 Karlan, Dan, 23 Khandker, Shahidur, 23, 253–254 Khosla, Vinod, 19 Kinnan, Cynthia, 22 Krishna, Anirudh, 29, 261–264 Kristoff, Nicholas, 16 Lamont, Michele, 283 Lee, Ching-Kwan, 284 Lichterman, Paul, 170 Lin, Nan, 200 Lincoln, Yvonna, 282 Lind, James, 254–255, 259–260 marriage laws, informal arbitration, 193–195 Massengill, Rebecca, 284 Menon, Nidhiya, 22, 34 Michael and Susan Dell Foundation (MSDF), 271–272 microcredit academic inquiry, 22–26 capital-raising model, 19 CGAP study, 275–277 civil society and, 243–247 commercial banks, financial institutions and, 13 cost-recovery model, 19 criticism of, 5, 129–130 democratization and, 248–251 effectiveness of, 236–237 enlisting respondents, interview procedures (author study), 300–310 fieldwork sampling (author study), 294–300 for-profit lending model, 19–20 as freedom vs exploitation, 20 future of, 252 group styles in, 167–184 heterogeneous impacts of, 260–261 interest rates, 9, 274–276 joint-liability lending models, 20, 21 marital bargaining and, 241–243 324 Index microcredit (cont.) memberships, popularity of, 10–11 methodological debates, directions, 253–261 philanthropy, free market commercialization and, 265–281 poverty policy and, 261–264 profit-sharing model, 20 public repudiation of, 13–14 site selections, 286–294 special economic zones (SEZs) and, 264–265 microcredit groups associational mechanism and, 95, 164–165, 239–240 civic participation and, 120–127 Hindu vs Muslim, 165–167, 185–187 impact, participative associationism and, 5–6 leaders, 94–95 meetings, events impact on lives of women, 95–97 meetings, group participation, 93–94 NGO-managed, 12 rotating credit and savings associations (RoSCAs), 130 self-conscious social awareness and, 98–106 social interaction and, 106–110 women’s domestic power and, 114–120 women’s perception of, “Micro-Credit Pioneer Wins Peace Prize; Economist, Bank Brought New Opportunity to Poor” (The Washington Post), 10–11 Micro-Credit Summit, 11 microfinance institutions (MFIs) growth rate, risk levels, 14 microfinance programs, West Bengal summary data, 30 recent statistic trends, 15 summary sector statistics, India, 15 West Bengal study, sample details, 30 “Microfinance Unlocks Potential of the Poor” (Financial Times), 12–13 MicroSave, 270 Microsoft, 271 Miles, Mathew, 58, 285–286 “Millions for Millions” (Bruck), 266 Montgomery, Richard, 22 Morduch, Jonathan, 22 MSDF See Michael and Susan Dell Foundation Naila, Kabeer, 284 Narain, Sushma, 275 National Rural Livelihood Missions (NRLM), 279–280 Newman, Katherine, 284 Oliver, Pamela, 300 Omidyar Network (ON), 269–270 Omidyar-Tufts Microfinance Fund, 268 Ostrom, Elinor, 29 patriarchal control, 5, 78–79, 236 peer-group lending, social relationships for financial ends, 20–21 agency transformations, financial mechanisms, 26–27 associational mechanisms, 27–28 embeddedness concept and, 28–29 focus on women, 22 joint-liability lending, 20, 21 neighborhood-based peer-groups and, 21 social capital, collective action by women and, 28–29 social collateral and, 21 social norms and, 29–30 Pike, Edgar, 49 Pitt, Mark, 23, 25, 253–254 Portes, 130 predatory lending, 13 Qayum, Seemin, 79 qualitative causal analysis, 282–286 Ragin, Charles, 285 Rahman, Aminur, 22, 24 Ray, Raka, 31, 35, 79 religious institutions, clergy, 191–192 Rhyne, Elizabeth, 276, 281 Riley, 23 Robinson, Marguerite, 11 Rosenberg, Richard, 275 rotating credit and savings associations (RoSCAs), 130 rural employment statistics (West Bengal), 33–34 Index Sachar Committee, 186–187, 198–199 Salisbury experiments, 254–255, 259–260 Salzinger, Leslie, 284 Sanyal, Paromita, 300 savior-slayer dichotomy, 16–20 Schuler, Sidney, 23, 25 self-help group (SHG), 11 See also microcredit groups Self-Reliance, 106, 107–108, 110, 113, 287, 293–294 Sen, Amartya, 36, 40–41, 50 Sengupta, Rina, 22, 24 Sensenbrenner, Julia, 130 Sewell, William, 38–39, 40 SGSY See Swarnajayanti Gram Swarozgar Yojana Shariff, Abusaleh, 261–264 SHG See self-help group Shyamsukha, Rahul, 14 Simmel, Georg, 16, 48 Sisterhood, 120, 287, 292–293 SKS Microfinance, 19 social deprivation, patriarchy, control, 43–45, 236 social norms, 29–30 social-religious dimensions associational mechanism and, 165–167 Hindu vs Muslim, 165–167, 185–187, 187–191 religious institutions, clergy, 191–192 social hierarchy position and, 195–197 special economic zones (SEZs), 264–265 Sun Microsystems, 19 Swarnajayanti Gram Swarozgar Yojana (SGSY), 118 Swidler, Ann, 284 Tavory, Iddo, 284 Thapa, Ganesh, 11 The Philosophy of Money (Simmel), 16 “Third World Bank That Lends a Hand” (The Washington Post), 10–11 Uphoff, Norman, 29 Vasant Kumar, V., 18 325 Weber, Max, 48 West Bengal study, 30–35 White, Patricia, 283 Wijayaratna, C M., 29 Wolf, Margery, 284 women agency transformations, financial mechanisms, 26–27 associational mechanisms, 27–28, 235, 239–240 economic roles of, entrepreneurship of, 61–66, 236–238 financially independent, independent loan-users, agency and, 65–66 literacy rates, 34 modesty of, political representation, participation, 34–35 social capital, collective action, 28–29 social norms and, 29–30 who bargained, 80–85 against will, 1–2 without children, women, empowered de facto female-headed Hindu households, 223–229 de facto female-headed Muslim households, 209–212 egalitarian Hindu households, 219–223 egalitarian Muslim households, 204–209 female-headed households, 202–203 husbandless, 203 poverty and, 202–203 true female-headed Muslim households, 212–219 truly-independent female-headed Hindu households, 229–233 women’s agency access to loans and, 238 appositional, compound vision approach to, 45–52 collective agency, group solidarity and, 165 freedom and, 36 loan transfers and, 85 masculine attitudes towards, 79–80 normative limits, 37 object conditions for economic mechanism to improve, 62 observation strategies, 55–58 pathways to, 58–59 326 Index women’s agency (cont.) poverty and, 235–236 quality of life scenarios and, 50–51 social deprivation, patriarchy, control and, 43–45, 236 sociological theorizing, social structure and, 38–42 themes covered under dimensions of, 55 theory of, 37 well-being vs., 47–52 Women’s World Banking (WWB), 274 Woolcock, Michael, 23, 130 World Bank, 13 Wu Dunn, Cheryl, 16 Wydick, Bruce, 23 Yunus, Muhammad, 10–11, 13–14, 266, 267 Zelizer, Viviana, 23 Zorn, Dirk, 279 ... (gram sabha in India) Credit to Capabilities A Sociological Study of Microcredit Groups in India PAROMITA SANYAL Cornell University 32 Avenue of the Americas, New York, ny 10013-2473, usa Cambridge... India and Burma on the Indian Ocean In 10 years of running the bank, Yunus has loaned $ 40 million, all of it to Bangladesh peasants whose average per-capita income is less than $140 a year... microfinance lending in sub-Saharan Africa and south Asia [By Sarah Murray] The entry of big financial institutions and commercial banks into microfinance and speculation about microcredit becoming investmentworthy