Accumulation by Microfinance? Explaining the Microfinance Crises in Andhra Pradesh

Sammanfattning: The world of microfinance is changing. More and more people are turning to microfinance as neoliberal reforms shape the world, diminishing welfare across the globe. Microfinance has in turn been debased by the same process driving people to seek microfinance. Through privatization, state redistribution, and financialization, (three of the processes of accumulation by dispossession) microfinance, is becoming increasingly profitable. As the poor populations of the world are coming to rely on microfinance, they are opening themselves up to exploitation by global investors and microfinance institutions alike. Twice, microfinance crises have ravaged Andhra Pradesh, bringing with them coercive loan collection, rural distress and a diminished capacity for fulfilling consumption needs. These stem from neoliberal reforms undertaken by India in the 1980s and the increased accumulation by dispossession (David Harvey’s take on Marx’s primitive accumulation) that followed. Regulation of microfinance will do little to stop another crisis if the root causes of the crisis are not addressed. This paper presents the Andhra Pradesh crises as a method where by capitalist are exploiting the people of Andhra Pradesh for profitability at the expense of the poor through accumulation by dispossession.