Breaking the Vicious Circle of Poverty

Sammanfattning: During the last decade microfinance has become the latest trend in the development discourse, celebrated for empowering poor women to work their way out of poverty. Self-Employed Women’s Associations, SEWA, was alongside Grameen Bank one of the pioneers in the microfinance sector and has developed an integrated approach based on the life cycle needs of the members that is assumed to help them break the vicious circle of poverty. The aim of this study is to analyse the material and symbolic outcomes of microfinance. At a theoretical level this study draws on insights from Marxist, feminist and postcolonial scholars, and analyses the ideological construction of ‘the poor’ in the western development discourse. In a field study of SEWA Bank in Ahmedabad I seek to illuminate lived experiences of microfinance in an attempt to capture the complexity of poor women’s daily struggle to make ends meet. The findings of this study raise a serious doubt if microfinance serves as an adequate strategy for poverty alleviation. In terms of development microfinance fit well into the Western development ‘model’ – i.e. promotes market solutions and integration of local markets into national and global markets – and aims to fill the gaps between state and market politics in a globalised economy serving as a survival strategy in the process of economic globalisation. Showing only marginal improvements in terms of poverty reduction and women empowerment I suggest that microfinance should not be dismissed, but has to be understood in a new light. Microfinance, I have argued, is not to be considered as an anti-poverty strategy, but should rather be seen as a pro-poor policy that provides the poor with financial services.