New Media and International Development

Representation and affect in microfinance

Anke Schwittay

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781135076160
• Edition: 1
• Topic: Economía
• Subtopic: Economía del desarrollo

New Media and International Development is the first in-depth examination of microfinance's enduring popularity with Northern publics. Through a case study of Kiva.org, the world's first person-to-person microlending website, and other microfinance organizations, the book argues that international development efforts have an affective dimension. This is fostered through narrative and visual representations, through the performance of development rituals and through bonds of fellowship between Northern donors and Southern recipients. These practices constitute people in the global North as everyday humanitarians and mobilize their affective investments, which are financial, social and emotional investments in distant others to alleviate their poverty. This book draws on ethnographic material from the US, India and Indonesia and the anthropological and development studies literature on humanitarianism, affect and the public faces of development. It opens up novel avenues of research into the formation of new development subjects in the global North.

This book will appeal to researchers and students of international development, anthropology, media studies and related fields, as well as practitioners and professionals in the field of international development

PART IFoundations

1INTRODUCING NEW MEDIA AND INTERNATIONAL DEVELOPMENT ^*

DOI: 10.4324/9780203714188-3

New Media and International Development examines the role of affect, representation, performance and fellowship in international development. It argues, first, that global poverty-alleviation efforts have an affective dimension, which is fostered through narrative and visual representations, through the performance of development rituals and through establishing personal connections. These relations are imagined to link (affluent) people in the global North with (poor) people in the global South. Increasingly, they are forged with the help of new media technologies, although more often than not these technologies establish connections among Northern publics and continue to exclude Southern ones. Second, the book shows how affect works on everyday citizens in the global North who are supportive of poverty-alleviation efforts. It asks how Northern publics come to learn and care about geographically, culturally and materially distant others and how they share some of their money and time to improve far-away lives. I call these Northern publics everyday humanitarians and argue that they need to be studied as development subjects in their own right, much like poor aid recipients and development managers have been until now. Their subject formation is (almost) always mediated by organizations, so that the practices of development supporters cannot be separated from the institutional context in which they occur and that often enables them in the first place. In presenting these two central arguments, New Media and International Development contributes to current anthropological and development studies debates over the nature of popular interventions in global poverty alleviation.

It does so by focusing on one particularly popular development technology – microfinance, which I have situated in a larger financial inclusion assemblage (Schwittay, 2011). Over the last 40 years, various subjects, technics and rationalities have come together into an “identifiable terrain of action and debate” (Li, 2007, p. 266) to develop formal small-scale financial products and services that are seen as an essential part of helping poor people enterprise themselves out of poverty. The assemblage also includes practices that make them knowable as financial and entrepreneurial subjects, so that their financial inclusion becomes a cause worthy of popular support. This support is not distributed evenly, but, not unlike microfinance, is structured by logics of inclusion and exclusion. While the empowering, beneficial and harmonious sheen of inclusion appeals to microfinance supporters, it is also a dangerous term – similar to community (Williams, 1976) and participation (Kothari, 2001) – that can mask practices of control and coercion. Similarly, digital technologies such as those used by Kiva can connect but also distance people. By analyzing these dynamics, New Media and International Development deepens our understanding of affective engagements with poverty alleviation, their limits but also their possibilities, and thereby sheds light on a fundamental problem of our times: the persistence of global poverty.

The formation of microfinance supporters, through technological mediations, organizational strategies and representational practices, is framed by an increasing interest in poverty that has led to the proclamation of “the new millennium … as the age of poverty, one in which a concern for poverty not only shapes social life but also serves as a key part of the remaking of the global economy” (Roy, 2012a, p. 105). Microfinance is central to this constellation, constituting “the panacea of choice” situated at the emerging frontier of finance capitalism (Roy, 2010, p. 22). Its continuing popularity is grounded in the discursive and material constitution of poverty in financial terms, because only as a financial problem can poverty be alleviated by financial means (Schwittay, 2014).

The Financialization of Poverty

Poverty's financialization is visible in a number of ways. Most importantly, the World Bank's global poverty line and its translation into the first Millennium Development Goal (MDG) adhere to an “essentially mono-dimensional conception of ‘extreme poverty’ (as lack of income or consumption)” (Edward, 2006, p. 381). The global poverty line defines the extremely poor as those who live on less than $1/day and thereby firmly yokes poverty to a financial indicator. This insufficient amount of money is explained by a lack of income, whether from microentrepreneurship as advocated by microfinance supporters (Yunus, 1999) or from formal waged jobs as advocated by its opponents (Karnani, 2007). Consequently, efforts by the microfinance industry aim to create “social value [through the] maximization of the disposable income of the poor” (Chu, 2005, p. 14). This is not to deny that being poor means not having enough money to live. However, as Amartya Sen has shown, “real incomes can be rather poor indicators of important components of well-being and quality of life that people have reason to value” (1999, p. 80). Even though Sen's own work has led to the emergence of broader definitions of poverty that pay attention to what poor people themselves value, easy-to-measure, income-tied dimensions of poverty continue to be seen as fundamental to enabling poor people to make other choices, from housing to education to healthcare. This means that the multidimensional character of poverty is acknowledged, but remains represented as a financial problem (Edward, 2006).

One effect of the financialization of poverty is poverty's universalizing definition as a common condition shared by poor people the world over. This not only neglects the heterogeneity and diversity of poor people's lives, but also enables the global poverty-alleviation interventions of which microfinance is exemplary (Ilcan & Lacey, 2011).¹ These are, by necessity, of a financio-technical nature, calling for the better design of poor-appropriate financial services, often through the use of mobile technologies (Maurer, 2012) or the creation of new asset classes to tap into commercial capital (Matthäus-Maier & von Pischke, 2009). All of these strategies focus on the expansion of formal financial services to the poor, in an attempt to ameliorate what is perceived to be the major cause of their impoverishment, namely their lack of capital. In the process, the poor are reconceptualized as financial subjects, who can escape the “tyranny of emergency” (Appadurai, 2001, p. 31) that rules their lives through gaining access to microfinance. These lives are made knowable as financial lives through financial diaries (Collins, Morduch, Rutherford & Ruthven, 2009), producing the knowledge on which financial inclusion interventions are built. Such interventions aim to instill fiscal prudence and foresight through financial literacy education, often delivered through microfinance lending groups, and the increasing emphasis on savings, insurance and pension as forms of asset-building. This in turn inculcates practices of planning for the future, rather than succumbing to day-to-day struggle. The director of the Consultative Group for the Advancement of the Poor (CGAP), a microfinance think tank housed at the World Bank, concurs: “Microfinance allows poor households to move from everyday survival to planning for the future, investing in better nutrition, improved living conditions and children's health and education” (Littlefield, Morduch & Hashemi, 2003, p. 1). Even though research has shown that poor people do not usually live from hand to mouth, such arguments against mere survival strategies and for forward-looking planning are central to the constitution of poor people as financial subjects. They also say more about how Northern publics imagine people below the poverty line live than how they actually do.

Affective Investments

To focus only on the politics of numbers, however, is to miss a crucial aspect of financial inclusion, because it is microfinance's affective dimension, constituted through myriad acts of representations, performance and fellowship, that contributes to its current popularity. The question I ask in this book is how the participation of microfinance supporters in global poverty-alleviation efforts is shaped by affective sentiments, relationships and collectivities. These materialize in feelings of caring for strangers who are geographically and materially distant, and in practices of sharing through financial and labor contributions. Departing from the observation that “people care if they are invested” (Harding & Pribram, 2004, p. 879), I argue that the mobilization of affective investments is at the heart of the constitution of microfinance supporters. Such investments are emotional, social and financial commitments to distant others to alleviate their poverty. While financial contributions are the most visible of the three, they are embedded in a moral grammar of affective sentiments and relationships, which sometimes spurs financial donations in the first place. In fact, it is precisely the articulation of the different dimensions of affective investments that makes them so powerful.

Kiva is one of the most visible, and by now most studied, examples of the mobilization of affective investments in the financial inclusion assemblage (Black, 2009, 2013; Gajjala, 2012; Moodie, 2013). Established in 2005 in California's Silicon Valley by a husband-and-wife team, it is the world's first person-to-person microlending website and one of the fastest-growing non-profits in US history (Coates & Saloner, 2009). As of February 2014, more than 1 million lenders from dozens of countries, but predominantly from the United States and Northern Europe, have lent over US$500 million to over 1 million borrowers in 73 countries, including the United States itself. Lenders come from all walks of life, ages and political persuasions, and assort themselves into lending teams based on self-selected affiliations such as geography, religion, professions and interests. Kiva's success shows that, on the one hand, the small scale of affective investments, manifesting in millions of US$25 transactions and one-paragraph stories, makes them easily manageable and consumable (Black, 2009). Taken together, they constitute a noteworthy public engagement with global poverty alleviation.

On the other hand, affective investments are imagined to empower not only their poor beneficiaries in the global South, but also donors in the global North. As Kiva's President states, on Kiva, “the average person can be like a Bill Gates or a Rockefeller” (cited in Heim, 2006). Such feelings drive Kiva's growth, together with the personal relationships between lenders and borrowers that are imagined to be established through the website. However, its call to emulate mega-capitalists-cum-philanthropists forces us to question the very nature of Kiva's project: is it really a tool that allows everyday people in the global North to reinvent themselves, making poor borrowers instruments in others’ search for meaningful identities? This shift is in line with an ever-growing emphasis in international development on Northern publics and the corresponding disappearance of the global South from popular development representations (Cameron & Haanstra, 2008). While my book contributes to this move, the latter is too important to go without critical analysis. What is called for is an awareness of the consequences of each scholarly project, on those who are its subjects and on those who are by necessity excluded.

Kiva is also a good example of how the financialization of poverty mobilizes affective investments by framing poverty in a way that is accessible to Northern publics. As levels of income and access to financial resources open up or foreclose choices in their lives as well, Northern supporters can comprehend, or at least try to, what it would be like to live on $1 a day. Initiatives like Live Below the Line, which challenges people in the United States, United Kingdom, Australia and New Zealand to survive on between US$1.25 and NZD2.25 for 5 days each year, aim to raise awareness and donations. They make the struggles of distant others less different and more real, at the same time as they are reinforcing the financialization of poverty. This in turn gives development supporters the sense that they can take actions that will make an impact. For example, donating money through sites like Kiva promises visible improvements in the lives of its borrowers, as communicated in regular email updates. Whereas focusing on the structural complexit...