The Micro-politics of Microcredit

Gender and Neoliberal Development in Bangladesh

Mohammad Jasim Uddin

• Publisher: Routledge
• Year: 2015
• Print ISBN: 9780815364283
• eBook ISBN: 9781317430858
• Edition: 1
• Topic: Economics
• Subtopic: Microeconomics
• Index: Economics

Microcredit has been seen in recent decades as having great potential for aiding development in poor developing countries, with Bangladesh being one of the countries which has pioneered microcredit and implemented it most widely. This book, based on extensive original research, explores how microcredit works in practice, and assesses its effectiveness. It discusses how microcredit, usually channelled through women, is often passed to the men of the family, a practice disapproved of by some, but regarded as acceptable by borrowers who have a communal approach to debt, rather than viewing debt as something held by single individuals. The book demonstrates how the rules around microcredit are often seem as irksome by the borrowers, how lenders often charge high rates of interest and work primarily to preserve their institutions, thereby going against the spirit of the microcredit movement, and how borrowers often end up on a downward spiral, deeper and deeper in debt. Overall, the book argues that although microcredit does much good, it also has many drawbacks.

1 Methodological choice

DOI: 10.4324/9781315691688-2

This chapter presents the methodological considerations of the study. It begins by describing the problems encountered by the researcher in obtaining the relevant and necessary permissions from the microcredit organizations in the project areas in Bangladesh. I describe in detail the process through which I selected the research locations, made contact with the field level microcredit officials and entered into the field study areas. The chapter describes the methods and techniques employed – including surveys, didactic themed and in-depth interviews, case studies and personal observations – and discusses the ethical issues and gendered choices. I also provide an overview of the locations where the fieldwork was carried out.

Encountering the field study areas

Grameen Bank's almost mythical reputation and acceptance within and beyond Bangladesh has always fascinated me. I was enthralled by the story of how Muhammad Yunus had spread a small idea all over the world and launched a new wave of development paradigms. That the international organizations and development practitioners of the north often talked about a ‘southern idea’ of development and took the initiative to implement it in many parts of the world amazed me. As a citizen of Bangladesh, I also observed the revolution of the microcredit industry in the country. Owing to my position as a PhD researcher at Helsinki University, Finland, and a public university teacher in Bangladesh I was readily given permission by GB to conduct fieldwork and collect information from GB microcredit borrowers in Sylhet, Bangladesh. However, I was to discover that the reality was very different from my initial perceptions of microcredit in Bangladesh.

I visited a branch of GB in Sylhet upazila (sub-district), Bangladesh in early June 2010 and met a bank official to whom I explained the purpose of my visit. The official listened and then stated that he was unable to give me permission to carry out my research, but suggested that I go to the regional administration office and submit an application to explain the purpose of my research. That same day, I visited the regional office, met with one of the office assistants and again explained my position. A letter from the postgraduate coordinator of the Department of Sociology at the University of Helsinki was also shown. The official told me to submit my application, which would then be passed to the regional manager who might give permission when he was available. I asked him whether it is possible to meet with the regional manager that day and he nodded his head and advised me to wait. However, despite waiting for some time, I was unable to meet the manager that day as he was occupied elsewhere. The assistant suggested that I could return to the office the following morning to meet the manager. This I did, and was given the opportunity to meet the manager. The manager read my application and I tried to explain the purpose of my research to him. During my conversation with the manager, an audit officer from the bank's head office in Dhaka was also present. The officials were interested to know more about my political ideology, so I sought to explain to them that my research was purely academic and that I had no particular political affiliations. The officials explained that because GB is a Nobel Peace Prize winner the bank must give careful consideration before giving permission for academic research to be carried out. They repeatedly expressed their powerlessness regarding any decision to grant me permission to conduct my research. ‘According to the rules of the organization we have no authority to give you permission. If anybody wants to conduct research among GB borrowers, GB handles it from its head office. The head office decides the time and place of research, and the place of residence of the researcher’, said the audit officer.

As a researcher in sociology and development studies, I am familiar with the centralization of power and the bureaucratic administrative structure of Bangladesh, but I was confounded when I found out that an NGO such as GB adheres to the same strictures. Nevertheless, the area manager could see that I had no political agenda against GB and its unique mission. He disregarded the audit officer's argument and initially gave me permission to start my work, but told me that he would discuss the permit further with the bank's head office. The area manger suggested that I meet the branch officer of Fullbazar (pseudonym) and selected the centre. Accordingly, I visited the branch office, explained to the branch manager and a number of loan collectors that I wanted to participate in the weekly credit instalment meetings since the initial aim of my research was to find out whether female borrowers’ participation in the group meetings facilitates social capital among the borrowers within and beyond the group. Therefore, I felt that it was necessary for me to participate in the group meetings so that I could observe the activities of the borrowers and how they spent their time during the payment period. However, I learnt that as the borrowers carry out a variety of jobs they do not spend much time at the group meeting places. The borrowers or their relatives visit the group meeting places, pay their weekly instalment and depart immediately. Thus, I began to realize how lax the rules of the GB credit programme are. Neither the group meeting nor the presence of all the borrowers of a centre at the same time is a requirement for getting a loan, which I will elaborate on later.

The following week, I met the branch manager of Pujabazar (pseudonym) and travelled to the countryside to select the present study's research villages. With the consent of the branch manager, I selected the Shantigaon (pseudonym) GB centre in Sylhet district as one of my research villages. The officer assured me that he could at least arrange an official meeting for me; introduce me to his 40 borrowers of the centre and give me any help if needed it. I selected this particular village because it is located some 16 kilometres from a suburban area.

The branch manager kept his promise and on the day that weekly instalments were made he arranged a meeting in Shantigaon. The area manager, branch manager and the loan collectors were present at the meeting. Normally, the GB clients of Shantigaon centre would begin to arrive at the centre to pay their weekly instalments at 9.30 a.m. but due to heavy rain I was late and the GB officials persuaded the borrowers to wait for me. I reached the meeting place at around 10.00 a.m. The area manager introduced me to the borrowers and all the members who followed the officials’ instructions and introduced themselves to me one by one. Next, the officer told the borrowers to describe the improvement that the loans had made to their socio-economic situation. I observed a new kind of ‘patron-client relationship’¹ between the officials (patron) and the borrowers (client), who appeared submissive and obedient before the officials. The officials were authoritarian towards their clients; they seemed to know the borrowers’ economic situations better than the borrowers did themselves.

The officers introduced a number of borrowers telling them to describe how well they had done as a result of participating in the programme. The borrowers obediently demonstrated their allegiance to their patrons, perhaps to increase their access to more credit services. When the GB officials requested Aritri (the leader of the centre) to talk she instantly stood up and enthused about the number of microcredit NGOs now operating in Shantigaon village, including GB, ASA, BRAC, FIVDB (Friends in Village Development Bangladesh). All except GB are newcomers. She stated that the villagers do not take credit from the other programmes as they are are not good nor helpful for them. She told me that the bank has been operating a microcredit programme in the village for about 18 years and that she has been taking microloans from the bank since it began its activities in a nearby village. She informed me that at present 95 per cent of the occupants of Shantigaon take out loans. I asked her who does not take part in the credit programme, and she replied that as almost everybody in the area takes out loans, it is very difficult to say who chooses not to.

I learned from her that some clients have let their memberships lapse for a certain period of time due to their inability to pay their instalments, but most of them try to maintain their savings accounts so that they can meet future loans. She said that a few households who have no business, male provider or a steady source of income do not take credit for the fear of not being able to pay it back.

Like the group leader, Raduni (45 years old) has been taking credit from GB for the past 18 years. She claimed that now everybody, rich and poor alike (dhani-gorib), take out loans, because many organizations offer credit in Shantigaon. She also claimed that many other banks (microcredit NGOs) now work in Shantigaon but they never approach them. They like GB because it stays with them ‘through thick and thin’ (shuk-dhukhe ache). While listening to the two women I observed that some of the other borrowers who were sitting at the back smiled at one another, but I failed to understand the significance of this at the time. Later, I was to learn that despite Aritri's and Raduni's claims that GB borrowers do not take credit from other organizations, some do indeed take loans from BRAC in the same way that they do from GB. As the meeting came to a close, the officials indicated that I should ask the borrowers about the improvements to their socio-economic circumstances, but I told them I would talk to them tomorrow.

The next day, I visited the village alone and spent all day with the villagers talking and gossiping and explaining to them that I intended to write a book about their village. I found a tea-cum-grocery shop owned by Mehedi, whose brother works as an official at my university. This man is also a BRAC microcredit borrower who promised to help me at any time and told me that if I visited his shop over the course of some days he could introduce me to many of the microcredit borrowers’ husbands and I would be able to chat to them. My visits to the shop helped me to socialize with the locals. The microcredit borrowers often had tea in this shop, or came to top up their mobile phones, or just to chat. As I had come to the village through the auspices of GB, the locals initially thought that I was an NGO agent. I repeatedly had to clarify my purpose for visiting the village and to state my position as a university teacher at the public university in Sylhet. During the initial stage of my research I spent much time chatting and drinking tea with the villagers. It fascinated me that these very poor rural people soon forgot all about their bodily ills and economic difficulties when they started to gossip. They expressed their opinions about religion, local as well as national politics, NGOs, the environment, and so on. Through my conversations with the rural people in this shop I became part of the local society. The shopkeeper, Mehedi, is a knowledgeable person with closely knit networks in the Shantigaon area. He knew who was involved in the microcredit programme, which microcredit NGOs operate in this area and who does what with microcredit. Thus, I spent the whole week developing closer ties with the microcredit borrowers’ households and local people in Shantigaon.

During this time I became acquainted with an older female microcredit borrower, Alapi (a Hindu housewife) who had a good relationship with most of the female microcredit borrowers. She had once worked as a group leader for GB in Shantigaon. I talked to Alapi and her husband many times and discovered her to be a knowledgeable woman. Alapi left school after the fifth grade but despite this she was articulate and capable. She told me that she could help me to visit the homes of all of the microcredit borrowers. She became my assistant and subsequently helped me to complete my data collection from the microcredit borrowers of Shantigaon.

However, I should mention here that after spending two weeks in Shantigaon I observed that the GB branch manager was always behind me observing where I went and what I talked about. The borrowers felt uneasy in his presence and were reluctant to talk frankly with me. Similarly to Scott's (1990) study of everyday forms of protest and boycott of subordinate groups in a Malaysian village, I observed that the microcredit borrowers talked one way in front of the official but differently when he was not present. This posed a considerable constraint on my data collection. So I changed the technique of collecting data. I told the branch manager that he need not spend his valuable time with me because I knew the villagers and could collect the data myself. Initially, he turned down my proposal but eventually I managed to persuade him. Owing to this experience, I did not go to the other GB microcredit village, Zelegaon (pseudonym), via GB or in the company of one of the bank's officials. Instead, I went to the village and became acquainted with the microcredit borrowers and local people with the help of a local man, Azad, who works as an assistant at a university where I was as a faculty member. As Azad's family had been involved previously in the microcredit programme, he had good networks with other borrowers. Azad and one of his female neighbours, who had been involved in a microcredit programme for the past 18 years, worked as my assistants. They introduced me to all the microcredit borrowers and we visited the borrowers’ homes together.

It was comparatively easier to obtain permission and to collect data from the BRAC microcredit borrowers than from GB. In mid-June 2010 I visited the regional office of BRAC in Sylhet to request a permit to carry out my field research on two BRAC microcredit centres in Sylhet district, Bangladesh. I met one of the officials to whom I explained the purpose of my visit. The official without any circumlocution informed me that BRAC operated a micro-lending programme in every part of Sylhet district. Therefore, I could select any centre according to my convenience. The officer did not try to influence my selection but suggested that I select areas near the roads because during the rainy season it would be very difficult to work in villages located in the interior. I understood his point but explained that I wished to carry out my research both in an interior centre and in a centre near to the suburban area. The officer gave me a phone number suggesting that I talk to the branch manager of Nodigaon (pseudonym) village to select research sites. In my presence the officer also called the branch manager to inform him that a university teacher wanted to meet him about doing research with the borrowers at his centres. I called the manager and said that I would come to his office soon. Later that day, in spite of heavy rain, I visited the office at Nodigaon and met the branch manager there. After discussing my research proposal with him, in the evening I travelled to the village with the official and selected Nodigaon village as one of my research areas. I chose this village because it was situated within two kilometres of my place of residence and had good road connections. I would be able to visit this village easily and the manager promised me that he could introduce to the microcredit borrowers of the Nodigaon centre.

Later that morning, I visited the loan administration centre again with the branch manager to participate in the repayment instalment meeting. The officer introduced me to the loan collection official who was cordial. She tried to introduce me to the borrowers or their representatives who came to pay their weekly instalments. However, like the GB centre in Shantigaon, I found it difficult to organize all the members in the weekly instalment place at one time. The field officer told me that during the morning the women were busy doing housework because their husbands were leaving for work outside of the home, therefore they or their representatives came to pay their instalments and departed soon afterwards. She introduced me to a borrower and asked her to help me. Later, I found another woman to join me on door-to-door visits during my fieldwork in Nodigaon village.

During the first week of my fieldwork at Nodigaon, I was introduced by phone to the BRAC branch manager of Pujabazar (pseudonym), which is situated about nine kilometres from the Sylhet-Sunamganj highway. After several postponements, I was able to meet the branch manager of Pujabazar to select another research site. Since the official had been informed of my arrival, he accompanied me to a BRAC centre in Shivpur (pseudonym). The village was about two kilometres from the BRAC branch office at Pujabazar but it took about one and half hours to reach it because the road was muddy and partly flooded. I understood that it was not possible for me to collect data from this interior village centre but I spent all day with the officer in order to record his views and the microcredit operations in the area. As a result of spending time with the micro-lending official I could only admire the official's motivation, skill and patience and appreciate the scale of the intensive networks that NGO personnel must build and maintain in rural areas. For example, I saw him speak persuasively to a grocery shopkeeper, saying ‘I have observed that you run your shop nicely but why don't you invest more capital and keep more goods in the shop? How long will you run your business in this way? You are young and this is the time to do something with your life. I have already advised you to collect your mother's signature so that I can arrange a loan for you. If I can do something for you I will be very happy.’

When the official talked to the group leader at Shivpur he called her two sons and gave them...

Table of contents

• Cover
• Half Title Page
• Series Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of illustrations
• Preface
• Introduction: development paradigms – old and new
• 1 Methodological choice
• 2 Microcredit and social capital: dynamics of conflict and cooperation
• 3 Credit, dowry practices and social capital
• 4 Intra-household decision making and conflict negotiation
• 5 Gender relations and hidden regulatory practice
• 6 Competition and the new reality of microcredit
• 7 Market rationality, power relationships and resistance
• 8 Credit relations, vulnerability and empowering debt
• 9 Summary and conclusion
• Appendix
• References
• Index