Concepts, Research, Policy
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Edited by Sylvia Chant
Chapter 87: Capitalising on Women’s Social Capital: Gender and Microfinance in Bolivia
Kate Maclean Microfinance is the provision of small loans and savings facilities to people otherwise excluded from formal financial systems. From its beginnings in the 1970s, microfinance has become one of the most lauded development interventions. In 2005 the United Nations celebrated its first International Year for Microfinance, and in 2006 the Grameen Bank and its founder, Muhammad Yunus were awarded the Nobel Peace Prize for ‘their efforts to create economic and social development from below’.1 Microfinance Institutions (MFIs) worldwide have extended their services by targeting women on the basis of their ‘social capital’, summarised by Rankin (2002: 1) as ‘local forms of association that express trust and norms of reciprocity’. Women’s social capital is harnessed by MFIs in the form of group guarantees. The value of relationships within groups functions as collateral, and peer pressure ensures repayment. This technique achieves very high repayment rates, often over 95 per cent.2 In this chapter, I first explore the use of women’s social capital by MFIs and critiques from a gender perspective. Then, on the basis of qualitative research from the valley of Luribay, Bolivia,3 I examine how women negotiate microfinance’s dual approach of group formation and credit. I specifically look at CreCER (Credit with Rural Education), a Bolivian MFI that targets women in rural areas.4 Women’s social capital and microfinance One of the main reasons that MFIs target women is the strength of their social capital. Although poor women often lack formal collateral, in part because property tends not to...
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