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Politicized Microfinance: Money, Power, and Violence in the Black Americas

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Abstract

When Grameen Bank was awarded the Nobel Peace Prize in 2006, microfinance was lauded as an important contributor to the economic development of the Global South. However, political scandals, mission-drift, and excessive commercialization have tarnished this example of responsible or inclusive financial development. Politicized Microfinance insightfully discusses exclusion while providing a path towards redemption. In this work, Caroline Shenaz Hossein explores the politics, histories and social prejudices that have shaped the legacy of microbanking in Grenada, Guyana, Haiti, Jamaica and Trinidad. Writing from a feminist perspective, Hossein’s analysis is rooted in original qualitative data and offers multiple solutions that prioritize the needs of marginalized and historically oppressed people of African descent. A must read for scholars of political economy, diaspora studies, social economy, women’s studies, as well as development practitioners, Politicized Microfinance convincingly deftly argues for microfinance to return to its origins as a political tool, fighting for those living in the margins.
... Certainly not all is perfect in the SSE, and non-White racialized leaders are doing their best from within to make this sector inclusive (Agnew, 1996;Akuno & Nangwaya, 2017;Hossein, 2016). More than two decades ago, Vijay Agnew (1996), in Resisting Discrimination: Women From Asia, Africa and the Caribbean and the Women's Movements in Canada, documented the conflicts and class bias that women of color experience not only in their interactions with White feminists but among themselves in building community organizations. ...
... Non-White racialized people, and especially women, need to be ones not only making decisions in the fight for equity and social change but also in disbursing funds in the social service sector. Despite this need, however, and even though Black and racialized people are leading important work in major cities, the third sector (also called the social economy)-set up to help racially marginalized people-continues to practice cultural and gender exclusion (Hossein, 2016). ...
... Canadian academics Clifford Atleo (2015) and Wanda Wuttunee (2004) use their own positionality to study the politics of the lived experience of indigenous Canadians and they are writing their own versions of the solidarity economy, and the limits to Western (read White) writing. To understand the Black experience, we need to ensure that lived experience is integral to how we examine social economics (Hossein 2016(Hossein , 2018. This article is meant to assist primarily political economists, political scientists, and economists-faculty and students alike-to rethink what theories they use. ...
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A Black epistemology in economics is needed to bring ethics back into business. Contributions of racialized people in the economy are ignored. Black and racialized scholars also find that their work is not cited, even by the most liberal-minded social economists. In the Americas, Black and racialized citizens innovate in the social and solidarity economy; yet their work goes unnoticed in the academic literature, or scholars approach them as the “Other” without invoking theory that reflects the very people they are writing about. Although the ills of neoliberal variants of capitalism are known, the diverse economies in which Black folk engage are less understood. Forcing White and European ideas on a non-White experience is limited in what it can do effect social change. Nor can we sever the Western ideologies in the field because it is this very bias why the Black radical tradition and other Black theories come into being. There is no shortage of Black writings on solidarity economics and they can now be housed in Black social economy. A Black social economy epistemology is politicized for goodness, and it is grounded theory, inclusive of the Black radical tradition, and lived experience because of the explanatory powers of these theoretical approaches to disrupt mainstream business and society.
... The "Banker Ladies" have been around since at least the 1500s, when slaves from the Dahomey (today the Republic of Benin) were taken to Haiti; in captivity Africans organized their economic cooperatives in secret (Hossein 2016a;2013). In Collective Courage, Gordon Nembhard (2014) traced economic cooperatives by enslaved people to the seventeenth century, and argued that African-Americans created intentional communities to resist violence, yet their cooperation in business was viewed as subversive. ...
... Pooled banking systems are embedded in social relationships, and business is there to support people's social lives. Most research on ROSCAs, including my research in the Caribbean (Hossein forthcoming;2016a;2013;, has focused on the Global South (Bouman, 1977;Geertz, 1962;Rutherford, 2000). What is certain is that collective banks are not new, and this project can shed insights into ROSCAs in a developed country such as Canada. ...
... What is certain is that collective banks are not new, and this project can shed insights into ROSCAs in a developed country such as Canada. This research is an outgrowth of the Caribbean-based research I did examining professionalized microfinance institutions (Hossein 2016a). In my prior research, the women I interviewed in Jamaica, Guyana, Grenada, and Haiti revealed that they organize self-help groups to spur on local economic development (Hossein 2016a;2014b;2013). ...
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Rotating savings and credit associations (ROSCAs) are regarded as a time-honoured tradition practiced by many people around the world. African Canadians value ROSCAs because of how they have helped people adjust to Canadian life. This study examines ROSCAs and the role that African Canadians have played in Canada’s social economy. It includes interviews with 77 people, 46 of whom are “Banker Ladies”—African Canadian women who create community-driven financial cooperatives in Canada’s largest financial centre, Toronto. ROSCAs have been incubating within the Canadian diaspora for the past 70 years as a way to counteract the business exclusion. For the social economy in Canada to be reflective of society, the research and theories that drive the sector must reflect a cultural awareness of the various cooperative forms led by racialized Canadians. Plusieurs personnes dans le monde suivent la tradition vénérable des associations rotatives d’épargne et de crédit (AREC). Les Afro-Canadiens valorisent les AREC pour la manière dont celles-ci ont aidé les gens à s’adapter à la vie canadienne. Cette étude examine les AREC et le rôle joué par les Afro-Canadiens dans l’économie sociale du pays. Elle inclut des entretiens avec 77 personnes, y compris 46 femmes banquières—des Afro-Canadiennes créant des coopératives financières communautaires dans le plus grand centre financier du Canada, Toronto. Depuis 70 ans, les AREC persistent au sein de la diaspora canadienne afin de contrer les défaillances du système bancaire classique. Pour que l’économie sociale au Canada puisse refléter la société telle qu’elle est, la recherche et la théorie relatives au secteur doivent tenir compte des divers formats de coopératives menées par des Canadiens et Canadiennes racialisés.
... Given these case studies think about social exclusion of groups of people, intersectionality should have been part of its conceptual framework because people's identities do affect the funding of social-purpose enterprises (Hossein 2016). This book revealed that only non-profits which are able to access grants can be in a position to pilot for-profit businesses within their institutions. ...
... We take inspiration from this literature to analyse the gendered and to some extent intersectional assumptions underlying the FOR in Mexico. 4 While various feminist analyses highlight the gendered and intersectional characteristics of economic subjectivity creation (Allon, 2014;Hossein, 2016;Maclean, 2013;Meltzer, 2013;Pollard, 2013;Rankin, 2001;Roberts and Mir Zulfiqar, 2019), the most telling example is Lazzarato's 'indebted man,' who has been 're-gendered' by Jepson (2019). Allon (2014: 12) examines the constitution of 'women' as a target group for financial services as part of FI. ...
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In the wake of the global financial crisis and a context of stagnating development aid, the international community now promotes linking remittances to finance as a development strategy, in what has been termed the 'financialisation of remittances' (FOR). This article analyses the ways in which the financialisation of remittance manifests in Mexico in gendered ways, and what this tells us about financialisation and financial subjectivation processes beyond the global North. We find that the financialisation of remittance represents a shift from earlier remittance-based development models whereby remittances become linked to financial inclusion and social welfare agendas and the focus is broadened beyond migrant income to diaspora wealth. Focusing on the governing arrangements of the financialisation of remittance, we propose the concept of 'constellation of subjectivities' in order to analyse the interrelated and interacting programmatic subjectivities through which the financialisation of remittance manifests in Mexico. Combining this conceptualisation with interdisciplinary feminist insights on financialisation, we analyse the various intersecting social dynamics that weave through such constellations. The analysis - based on document, interview and observation material - finds that the financialisation of remittance in Mexico creates and governs a gendered constellation of financial subjectivities with three dimensions: migrant men, remittance-receiving women and the constitutive outside of the non-transnational family. While most studies tend to focus on transnational families, we demonstrate that non-transnational families are an integral part of the financialisation of remittance. Our analysis destabilises the notion of the universal financial subject and highlights the importance of broadening our analysis of financialisation to constitutive outsides that often fall off the radar.
... In fact, the rhythms and pace shaping these forces are always co-constituted by the compulsions and contradictions of social reproduction, showing its interconnections with both the 'productive' (read paid) and 'virtual' (read finance) economy (see Peterson, 2004), a point also recently stressed by a rising literature on the financialisation of life and debt and its gendered and racialised features (e.g. Hossein, 2016;Taylor, 2019;Natile, 2020;Cavallero & Gago, 2021). A lens framed on social reproduction can shift the attention from the macro-processes of global capitalism to the power relations and people both shaping and experiencing those processes (Steans & Tepe, 2010) within the complex and chaotic dynamics of their daily practices and experiences. ...
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The COVID-19 pandemic has confirmed the relevance of social reproduction as a key analytical lens to interrogate contemporary capitalist processes. Building on insights from distinct theoretical traditions, in this introductory contribution to the special issue in Feminist Global Political Economies of Work we propose social reproduction as a prism to examine labour and work in the Global South from a feminist standpoint. We develop a social reproduction-centred methodology to the study of labour processes and relations, based on combined insights from Feminist IPE (FIPE), Feminist Economics (FE), and Feminist Political Economy of Development (FPED). Insights from these three disciplinary frontiers of feminist work are well-equipped to analyse the complexities of labouring in the Global South and how reproductive dynamics co-constitute the 'everyday’ in the global economy in manifold ways. These include relations with the state and (‘crisis’ of) care provisions; the blending of productive and reproductive temporalities of work across labour processes; the continuum of paid/unpaid work within and beyond the household; and novel global processes of commodification of life and the everyday. In setting the contours of this ambitious agenda, we reflects on the complexity of feminist research methods; on positionality and ethics.
... With two billion people without access to formal financial services (Demirguc-Kunt et al. 2015), microfinance -the provision of a range of financial services, including business loans denominated in small amounts to segments of the population that formerly had no access to formal financial services (Bruton et al. 2015;Chen, Chang, and Bruton 2017;Servet 2015) -has generated substantial interest in a number of academic disciplines (Armendariz and Morduch 2010; Beisland, D'Espallier, and Mersland 2017;David and Sanyal 2017;Haldar and Stiglitz 2016;Hossein 2016;Servet 2006;Siwale 2016;Taylor 2012), including entrepreneurship (Bruton, Khavul, and Chavez 2011;Chen, Chang, and Bruton 2017;Chliova, Brinckmann, and Rosenbusch 2015;Kar 2013;Khavul 2010;Kent and Dacin 2013;Milanov, Justo, and Bradley 2015;Moss, Neubaum, and Meyskens 2015;Newman, Schwarz, and Borgia 2014;Shahriar, Schwarz, and Newman 2016). ...
Article
This paper uses a multi-dimensional perspective on social capital to investigate how a microfinance institution can enhance the social capital of poor entrepreneurs. Findings show that by creating an environment that encourages frequent meetings and interactions between borrowers, group-based microfinance facilitates the development of relational trust and expansion of the network size of micro-entrepreneurs. An increase in levels of structural and relational social capital, in turn, leads to numerous advantages in terms of the flow of a diversity of resources. Ensuring access to financial capital, creating an enabling environment that fosters structural and relational social capital, and providing
... The concept of the social economy has been used since the 19th century in France, but it became widely used in Europe and other regions during the 20th century (Zhao, 2013). The practice of collectively providing for community to achieve social objectives, however, is quite old and existed in ancient African civilizations (Hossein, 2016). In the United States, there has been less focus on the social economy and more attention devoted to the "solidarity economy." ...
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This analysis discusses the lived experiences of Black American women as the basis for a new theoretical framework for understanding women’s unpaid work. Feminist economists have called attention to the invisibility of women’s unpaid work within the private household but have not adequately considered the unpaid, nonmarket work that women perform collectively to address urgent community needs that arise out of racial and ethnic group disparities. As such, racialized women’s unpaid, nonmarket work continues to be subject to invisibility. This analysis reconceptualizes Black women’s community activism as unpaid, nonmarket “work” and illustrates that the community is a primary site of nonmarket production by Black women and other racialized women. The community is an important site where racialized women perform unpaid, nonmarket collective work to improve the welfare of community members and address community needs not met by the public and private sectors. The analysis elevates the community to a site of production on par with the household, thereby calling for a paradigm shift in feminist economic conceptualizations of unpaid work. This new framework enables us to examine intersectional linkages across different sites of production—firms, households, and communities—where multiple forms of oppression operate in structuring peoples’ lives. Compared with additive models of gender and race, this intersectional approach more fully captures the magnitude of racialized women’s oppression.
Article
While many Black Canadian women are innovators in the third sector, the contributions of Black people to the social economy go largely unnoticed in the academic literature. The social economy is not only a place of refuge for African-Canadians; it also provides a way for racially marginalized communities to co-opt resources. In fact, racialized Canadians are driven to be active in the third sector by the systemic bias and racism in the Canadian economy and society. To understand the place of the social economy among racialized people, we must recognize that Black and racialized people are not merely on the receiving end of aid and support, but that they lead and work within the social services sector. This paper utilizes Black liberation theory - specifically the concepts of self-help and co-operation - to analyze the work of five Black women leaders in non-profit organizations that reach thousands of people in Toronto. This study confronts the erasure of Black women in the third sector, and argues for the need to link liberation theory with the field of social economics in order to fully understand the significance of the social economy for Black and racialized people.
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Cet article s'appuie sur une perspective multidimensionnelle sur le capital social pour examiner comment une institution de microfinance peut optimiser le capital social des entrepreneurs pauvres. Les resultats montrent qu'en creant un environnement qui encourage une plus grande frequence de reunions et d'interactions entre emprunteurs, les groupes solidaires facilite le developpement de la confiance relationnelle et la croissance du reseau des micro-entrepreneurs. L'augmentation des niveaux de capital social structurel et relationnel entraîne à son tour de nombreux avantages en termes de flux d'une diversité de ressources. Par ailleurs, nous démontrons que le succès en entrepreneuriat dans des contextes appauvris implique la combinaison de plusieurs facteurs: capital financier, capital social structurel et capital social relationnel, formation et soutien.
Article
The definition of philanthropy is contested with variations across time and global context. The article will centre on the Caribbean with its numerous identities to highlight inclusive philanthropic practices. Through an analysis of Caribbean history, theoretical foundations, and contemporary analysis, three social classes or ideal types are identified. These include 1) the colonial dominant, 2) the Black or creole middle class and 3) the resisters or grassroots/marginalized populations. Drawing on these ideal types, the analyzes three categories of philanthropic practice developing within and through the Caribbean, including 1) the philanthropy of colonial dominance, 2) philanthropy of cultural mediation and 3) philanthropy of anticolonial resistance. The Caribbean offers an ideal context for understanding traditional forms of philanthropic action and 'philanthropy from below,' highlighting issues of power, oppression, and social transformation that impact the region's ongoing development.
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This paper focuses on inter-district inequality in financial attainment by normalizing with a reference district. It suggests that the financial achievement of households is more of exclusion, and geographic discrimination. The exclusion of rural hamlets from the main- stream is a socio-economic reality that has worsened with geography, socio-demographic or economic barriers. The most banked district of Kangra in Himachal Pradesh is compared against all the 30 districts of Odisha. The tests of dimension wise correlation with components of HDI shows significant relations. The FEI (exclusion index) strongly correlates with HDI than the traditional CRISILX-2013. It confirms the test of discrimination. The degree of exclusivity could be lowered with higher branch network capacity. Keywords: Exclusion, attainment, BFSI, discrimination
Article
Historical analysis of philanthropy and civil society is a valuable research method that provides useful assessments of the sector’s development and its evolving strengths and challenges. However, the historical philanthropic experiences and contributions of underrepresented populations are oftentimes neglected due to their marginalized status in historical archives and records. To correct this, we propose philanthropic archival layering as a historical methodology for recovering and investigating diverse forms of voluntary action in marginalized communities. In this paper, we focus on the philanthropic experiences of Afro-Caribbean civil society in the early twentieth century and African American women during Jim Crow. We review scholarship on the African Diaspora and historical research methodologies for analyzing the archives of marginalized peoples. We demonstrate this methodology through two case applications before outlining steps for conducting philanthropic archival layering as an innovative methodological framework that broadens the field’s knowledge about what constitutes philanthropy and who contributes to it.
Chapter
This chapter traces the historical and political developments of women’s economic empowerment, its origins as a feminist praxis in the global South and its globalisation as facilitated by international financial and political institutions. It examines the resulting transformations in the meanings and practices of empowerment, against the backdrop of global and local expansion of neoliberalism.
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This chapter introduces women’s economic empowerment as an empirical window to some of the key sociological questions of our times: local and global economic inequalities, intersection of gender, race and class, the relation of civil society to the state and the market. The intersection of feminism and neoliberalism is examined through different aspects of women’s economic empowerment, such as microfinance and entrepreneurship training.
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This chapter reveals that even for the feminist organisations in the field of economic empowerment, the premises of neoclassical economics and financial capitalism remain largely unquestioned, in discourse and in practice. Why is the discipline of feminist economics, a feminist way of understanding economic and social life, almost entirely absent from women’s economic empowerment? Taking the exceptionally high interest rates of microfinance (often much higher than the average bank loan!), this chapter unravels the logic and political assumptions behind some of the financial taken-for-granted of the field and examines how the hegemony of neoclassical economics is maintained.
Article
Cooperatives produce commons, but how they do so—and what kinds of commons they produce—cannot be known in advance. Two cooperatives in Ciudad Sandino, Nicaragua illustrate how distinct cooperative assemblages actually take shape through particular patterns of commoning. First, members of a women’s sewing cooperative called the Fair Trade Zone refuse open-membership. Claiming kinship as the logic of their membership, they describe the cooperative as “like their child”. Second, members of Ciudad Sandino’s Recycling Cooperative defy cooperative principles for rules-in-use, maintain a flexible and fluid membership, and refer to their collective organization as their “ant-hill” (hormiguero), reflecting its adaptability to changing conditions. These two case studies highlight the diverse subjects, practices, socioecological relations, political-ethical reasonings, and other resources from which cooperatives and commons are assembled. They also illustrate the multiplicity of organizational forms that communing can produce. Ultimately, the two case studies show that cooperative models are not recipes but historically generated and immanent projects that shape particular cooperativisms. Institutional approaches to commons and cooperatives fail when they impose a single form. We do not know what commoning and cooperating will become. In order to develop a language for expressing diverse modes of cooperating, then, we must start not with the recipe but with the concerns that particular cooperators find relevant.
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Microfinance is commonly known as banking upside down because micro-lending institutions make very small loans available to businesspeople excluded from conventional banks. Microfinance has piqued the interest of political elites in many Global South countries because of its support by the poor masses. The case of the Trinidadian microfinance sector shows that the state dominates the micro-lending sector through its agency, the National Entrepreneurship Development Company (NEDCO). The main argument for this paper is that government-owned microfinance is in fact “political microfinance” because of its exclusionary tendency of the small businesspeople in the slums of east Port of Spain. On the ground, the current party politics have fuelled the perception that persons of African descent are the most excluded from accessing a small loan. However, this paper finds that no matter which party is in power, the state has co-opted NEDCO to make loans available to its own party supporters, and this practice goes against the microfinance sector’s goal of inclusive finance.