Subverting the Microfinance Myth:

Gendered Livelihoods in Urban Indias Slums

Final Draft Oppositional Conversations, Issue 3: Reality Effects
www.oppositionalconversations.org
By Smitha Radhakrishnan
Wellesley College
In a prominent article in the Harvard Business Review, Vikram Akula (2008) made the
case that microfinancethe practice of giving small loans to societys poorest to enable their
upward mobilitycould and should be done on a for-profit basis. At the time, Akula was
receiving wide recognition for founding and leading the rapidly growing $250 million company,
SKS Microfinance, based in Andhra Pradesh, India. In the paper, Akula narrates the story of
Saryamma, who joined SKS as a borrower in 2002. At the time, Saryamma and her husband
were landless laborers earning about $1/day in rural Andhra Pradesh, a region plagued by
droughts. Her husband had entered into a punishing form of bonded labor to make sure his
family had enough grain to eat, and her son worked instead of attending school. The first loan
that Saryamma took from SKS, for $200, was used to purchase a buffalo so that she could sell
the milk. In line with the Grameen Bank-inspired group lending model that forms the basis for
SKS lending operations, Saryamma borrowed money along with four other women from her
village, who each guaranteed the loan for one another. Saryamma repaid her initial loan $4.50 at
a time, over the course of a year, and continued to take out loans in subsequent years, adding
more buffalos, a pair of bulls, and two acres of land to her business. Now, the article says,
Saryammas family makes $10/day, her husband is free from bonded labor, and her younger
children attend school.

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Around the same time Akulas article appeared in HBR, a powerful video went viral on
YouTube. The Girl Effect video, signifying the launch of the Nike Foundations worldwide
Girl Effect campaign, aimed to build momentum behind the cause of empowering girls
through education everywhere. Cutting through complex and context-specific information about
gender in poor countries around the world, the video presented a singular, powerful message
delivered in black, white, and orange. Beginning with the line, The world is a mess. . .so what
else is new? the video presents the driving idea behind the Girl Effect, the idea that 600
million girls in the developing world can catalyze global change, turning around the sinking
ship that is the planet. In this launch video for the global campaign, the Girl Effect concept is
conveyed through a hypothetical storynarrated in block letters of varying sizes and
coordinated with a melodic piano tuneof a girl living in poverty, who, instead of succumbing
to early marriage, pregnancy, flies, and HIV, manages to get an education, and eventually, obtain
a loan that allows her to buy a cow. According to the narrative, the girl turns the cow into a herd
and eventually, through a magical, virtuous spiral, the girls success with her cow business
convinces the men in her village that women are worthwhile, starting an avalanche of similar
effects worldwide that have the potential to turn humanity around. The video ends with a
personal plea: Invest in a girl and she will do the rest.
Both Akulas article and the Girl Effect video represent a global moment at which the
hype around microfinance was at a fever pitch, following the Nobel Peace Prize being awarded
to Mohammed Yunus of Bangladeshs Grameen Bank in 2006. While Akulas narrative appears
to be context-specific and aimed at the global business elite, the Girl Effect video relinquishes
context altogether in order to create an emotional resonance for a college-educated layperson,
most probably in the United States or Europe. Otherwise, both accounts are identical. They both

frame the moment of a poor woman obtaining a small loan as a kind of mystical turning point in
her life and, by association, millions just like her. Both Akula and the Girl Effect closely link the
loan with entrepreneurial activity. And in both these examples, the combination of credit and
entrepreneurship fuels a virtuous spiral that lasts forever, providing not only the woman in the
story with a secure future, but also holding out the hope that millions of other poor women and
girls are poised to undergo a similar transformation.
Akulas story of Saryamma and the more popular Girl Effect video are both striking
examples of a widely circulating microfinance myth that has gained broad legitimacy as a recipe
for womens empowerment, especially among the globally-oriented millennial generation
(Roy 2010). Organizations such as kiva.org and Whole Foods leverage the microfinance myth
for a dizzying array of causes, usually involving a plea to a consumer to invest through a cash
donation or a purchase. Unlike conventional donations that rely upon a charitable impulse, these
pleas rest upon an ostensibly stronger moral foundation, because they seem to promote selfreliance. The microfinance myth works by both setting up an oppressed-but-virtuous subject that
can then be delivered unto the promised land of self-sufficiency through a credit transaction that
pulls her into the global economy. Once the cash is in her hand, the myth goes, this subjects
latent entrepreneurial character is activated and, through micro-enterprise, she becomes her own
master, caring efficiently for her family and her business. The entrepreneurial part of these
stories frequently involves livestock, a move that maintains this subjects distance from the target
audience while still endearing her to it. The inevitable happily ever after is seldom detailed
because by that point in the story, the target audience is hooked, and has already pulled out the
credit card.

In India, the resonance of the microfinance myth has been tempered by a significant crisis
in 2010, when Akulas SKS almost collapsed under the weight of a crisis of non-repayment in
Andhra Pradesh (Mader 2013; Wichterich 2012). Its operations were slashed significantly, and
the story of SKS became a cautionary tale to other microfinance institutions (MFIs) in India and
around the developing world. The crisis pushed smaller Indian organizations into complete
collapse, while the larger organizations that survived through the crisis made significant changes
to their internal processes. The Reserve Bank of India (RBI) generated regulatory guidelines for
the previously unregulated Non-Banking Financial Company (NBFC) sector, composed almost
entirely of MFIs (Srinivasan 2011). These changes, along with widespread reports of suicides
resulting from indebtedness to MFIs, discredited Akula and SKS Microfinance in the eyes of the
media in India and even in larger social entrepreneurship circles (Wachtel 2010). But the Indian
microfinance crisis did little to undermine the prevailing moral legitimacy that MFIs, be they forprofit or non-profit, continue to enjoy, especially in the West.
In this paper, I draw from ethnographic observations and interviews with for-profit
microfinance institutions and their clients in southern India to subvert the microfinance myth by
addressing three constitutive parts of the myth: that microfinance borrowers are poor,
entrepreneurial, and in need of empowerment that frees them from the grips of patriarchal
cultures and relationships. In so doing, I aim to draw into question the moral high ground that
microfinance institutions occupy and disrupt the particular vision of oppressed womanhood and
liberatory entrepreneurship that the myth presents. My research, instead, aims to offer more
balanced, grounded, and accurate representations of working class women who increasingly
constitute the bulk of the worlds microfinance borrowers. In so doing, I aim to broaden our

understanding of working class women as potential political agents, rather than as strictly
economic ones.
I undermine the first part of the myththat microfinance borrowers are poorby
examining the restrictive conditions under which the for-profit microfinance industry functions.
These conditions make sure that microfinance institutions (MFIs) can only serve the relatively
well-off who are living in slum areas of urban India, limiting or eliminating access for the
poorest. The second part of the myth I underminethat microfinance borrowers are
entrepreneurialdraws from ethnographic work observing entrepreneurial training sessions in
Tamil Nadu and Karnataka, as well as interviews with clients and MFI employees, to argue that
microfinance borrowers are rarely entrepreneurial, and may themselves desire stable jobs instead.
Finally, I address the Orientalist core of the microfinance myth: that loans provide empowerment
to women suffering under the weight of patriarchal cultures. I focus on the narratives of two
clients I interviewed to suggest that the working class women served by the industry often work
in close financial partnership with their husbands to enrich their livelihoods. Before turning to
these three parts of the myth, I offer further context for my argument and a brief overview of my
methodology.
Narratives of Womens Development from Colonialism to Neoliberalism
In the volume Gender Myths and Feminist Fables: The Struggle for Interpretive Power in
Gender and Development, the authors argue that development discourse is full of gendered
myths that distract from the real issues of gender and power in development, and instead create
compelling narratives about what women are naturally suited for (Cornwall, Harrison and
Whitehead 2008). Here, I argue that the standard narrative surrounding constitutes one such
gendered myth in development, but, because of its connections to colonialism, as well as more

contemporary Women in Development philosophies, is significantly more complicated than

those analyzed in the volume, which include myths such as, women are closer to the earth or
women are inherently peaceful. The microfinance myth extends and modernizes colonial
tropes that distance women geographically located in the global South from dominant subjects in
the West. However, the old justification for colonialismthat white men are saving brown
women from brown menihas been transmogrified in the microfinance myth by the context of
neoliberal ideology, such that rather than the white man, the woman seems to save herself.
Furthermore, the vehicle of empowerment in the myth is unfailingly supportive of global capital,
drawing marginalized women into the purview of capitalism. The new Third World Woman,
the myth suggests, throws off the weight of her patriarchal culture by being an efficient allocator
of scarce resources. Like other gender myths, however, the microfinance myth legitimates a
particular development policymicrofinancewhile cutting short any need for in-depth
research on gendered livelihoods liable to disrupt the neat parable.
The oppression of women in so-called traditional cultures has long provided a justification
for both colonialist rule and subsequent nationalist reform. The literature on these dynamics is
particularly developed in the Indian context, where subaltern historians have shown that the
womens question, provided a compelling impetus for colonial, and later nationalist,
intervention (Chatterjee 1990; Mani 1990). But as Edward Saids (1978) classic work on
Orientalism shows, these discourses, far from being particular to India, undergird resonant
notions of cultural power between East and West that extend beyond the colonial encounter
or nationalist movements, continuing to structure current scholarship, debate, and political
discussion. Post-colonial feminist scholars have elaborated upon the noted gendered aspects of
Saids argument to offer powerful critiques of a persistent narrative that justifies Western

interventions on behalf of oppressed subaltern women (Abu-Lughod 2013; Mohanty 1988).

Despite such critiques, the notion that women are victims of their culture and that men are
perpetrators of that oppression reappears in the microfinance myth, albeit in altered form.
Rather than openly rationalizing Western cultural or economic intervention, the microfinance
myth seems to propose the contrary logic: that oppressed women of the global South can save
themselves. But this claim, is not as autonomous or liberatory as it appears. The spread of the
microfinance myth coincides with increasing pervasiveness of what Nikolas Rose has called
neoliberal rationality in Europe and the United States, a rationality that holds individuals
accountable for their own success or failure in the face of weakening state (Rose 1999). This
neoliberal rationality, documented in advanced liberal democracies, has a corresponding twin in
developing countries: the discourse of (usually-NGO-led) empowerment. Both neoliberal
rationality and the logics of empowerment marginalize the centrality of the state as a provider
of social services for the poor (Hart 2002; Rankin 2001; Sharma 2008). Thus, the notion that
women can save themselves emerges not as a radical inversion of colonial discourse, but rather
as an extension of prevailing global dynamics that continue to locate previously colonized
countries in a subordinate economic and cultural position in the global economy.
The neoliberal subject of the microfinance myth also reproduces and elaborates upon the
philosophy of Women in Development practitioners and scholars working to incorporate women
into the global economy from the 1970s onward. The most iconic of these scholars, Esther
Boserup (1970), argued in her landmark book, Womens Role in Economic Development, that
women in the developing world had been incorporated into the global economy in a subordinate
position to men, and that full incorporation of women into the global economy would facilitate
broader economic development in these economies. Her data suggested that women were the

most efficient allocators of scarce resources, and were thus an important untapped resource in
practice of economic development. Boserups book fueled a global movement to focus on
womens economic empowerment, including the United Nations Decade for Women (1975-85).
This decade was hugely influential because it made aid of all types tied to involving women;
Lamia Karim has argued that the initiative, along with the U.S. Percy Agreement, was at least
partly responsible for Mohammed Yunuss focus on women when he founded the Grameen Bank
in the late 1970s (Karim 2011:71). By the 1990s, however, the consensus around WID principles
had disintegrated. Critics argued that WID reinforced capitalism and enhanced the existing
burdens on women while doing little to enhance their power (Kabeer 1994). Despite the pivot
away from WID philosophies in academia, however, the influence of the philosophy lives on in
the microfinance industry, offering a rich vocabulary and dataset from which to make
compellingalbeit overly generalclaims about what all women in the developing world are
capable of.
By subverting the microfinance myth, it is possible to further underscore and expose the
inaccurate assumptions of universality that the myth ushers through the proverbial back door.
Like its orientalist predecessors, the microfinance myth substitutes a set of universalized values
for a richer, more ambiguous economic and political reality. My research subverts the myth by
relying upon grounded research that triangulates narrative analysis of the interview data with the
context and setting of the interviews themselves, and ethnographic observation of organizations
and clients.
Methods
The interviews and ethnographic work for this paper took place over the course of six
months in 2012, and was centered on two MFIs operating in the Bangalore metropolitan area.

Here, I briefly describe the context and content of the interactions I had with both organizations
and their clients.
The first MFI, which I call Kanchan, is a relatively new player in the industry, and I
approached them through contacts with a U.S.-based partner organization. This partner, which I
call Prosperity International, has been working with Kanchan to deliver entrepreneurial trainings
to Kanchans clientele all over southern India since 2008. My research was initially focused on
the entrepreneurial trainings themselves and what these trainings illuminated about the
relationship between organizations like Kanchan and their borrowers. I attended training
sessions, taking extensive ethnographic notes, and conducted interviews with the clients in
attendance, usually a few days later. As the scope of the training program itself was much
smaller than had been initially indicated to me, this initial focus ended up snowballing into a
broader study of Kanchan clients. Kanchans clients borrow in a large group of 15-20 women
who almost always live in the same neighborhood. Thus, when I went to a particular area to
follow up on a client I had made contact with at a training session, she usually referred me to
other women in her neighborhood who were also Kanchan clients, most of whom had not
participated in the training program. I found that most Kanchan clients had previously taken out
loans from other MFIs in the area that had policies and practices that were different from
Kanchan, leading me to pursue research with a second organization. I interviewed 36 Kanchan
clients, mostly in one-on-one face-to-face settings. Three were phone interviews, and seven
interviews were conducted in groups of 3, immediately after a training session.
As an organization, Kanchan was suspicious of outsiders, and I was unable to gain access
to its everyday operations outside of the training program that I initially started out working on.
I was only allowed to observe the training program, and was discouraged from interacting with

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loan officers or other staff who had direct contact with clients. What I was able to observe of
Kanchans operations, then, I observed from the vantage point of the training program, which
itself had a contested position within the organization, partly because of its ties to the U.S.-based
organization.
In contrast, the second organization I observed, which I will call Sowbagya, prided itself
on its transparency, and was very open to my research. I began by approaching the head office,
and conversed directly with the Managing Director and the Chief Operating Officer. I was
immediately put in touch with branch managers in locations that would be convenient for me,
and was encouraged to spend as much time as I wanted to at branch offices. I was invited to
accompany branch managers on house visits required for loan verification, and observed the
group training that Sowbagya conducts for all groups that initiate loans, be they new or old
members of the organization. In contrast with Kanchan, Sowbagya lends to groups of five
women, so it was relatively easy to interview all the members of a group. Like Kanchan, women
living in a neighborhood tended to borrow together, and there were often many groups in the
same area who would attend a common meeting for loan repayment. Through the same strategy
of approaching individual borrowers in their neighborhoods, usually at group meetings, I was
able to interview 19 Sowbagya borrowers.
The clients I interviewed often did not quite understand my status as a foreign researcher,
and were more likely to see me as a young urban Indian woman, perhaps working for an NGO.
Sometimes, the interviewers were suspicious and wondered if I was an MFI informant, while
other times, interviewees were eager to sit down and speak with me. I dressed in simple cotton
salwar kameezes, an outfit that attracted little attention in the neighborhoods I visited. In all
interviews, a research assistant who spoke Kannada or Tamil, as appropriate, accompanied me,

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as my skills in both languages are too limited to conduct interviews alone. As I was able to
understand the interviews, however, I interjected with questions as they proceeded, which my
research assistant would then translate to the interviewee. The interview questions asked
borrowers to share, in their own words, their experience with loans, including their experiences
with loaning organizations, their perception of the benefits or disadvantages of small loans, and a
bit about their family members and their incomes and occupations. These topics often ended up
leading to extensive discussions of their livelihoods, including relationships with husbands and
children, medical problems or other financial hardships, and experience with local moneylenders.
Three Constitutive Parts of the Microfinance Myth
As I address each part of the microfinance myth in this section, I begin by outlining what
is at stake in that claim, and why the claim contributes to the persistence of the myth as a whole.
I then address specific pieces of evidence that undermine these commonplace claims, using the
existing literature as a starting point, and my research as a basis for the critique.
Part 1: Microfinance Borrowers are Poor
The claim that microfinance borrowers are poor is the crucial starting point for the
microfinance myth. The claim puts distance between the myths audience and the myths subject,
and presumes a universal, rather than a relative, notion of what constitutes poverty. The claim
that borrowers are poor suggests without saying so that there exists an agreed-upon notion of
poverty that the myths audience shares, refusing to acknowledge the dramatic shifts in how
poverty has been defined, interpreted, and addressed as a discourse worldwide (Misturelli and
Heffernan 2008). The claim that borrowers are poor also puts a moral stake in the ground for
microfinance companies, suggesting that their loans are effectively reaching the poorest in their
respective societies. In Akulas narrative of Saryamma, for example, he describes her as a

12

landless laborer struggling to eat and feed her family. This narrative claims that for-profit
microfinance reaches what Akula himself calls the bottom of the pyramid, the worlds poorest
who live on less than $1/day. If microfinance borrowers were not uniformly poor, then not only
would the moral high ground of microfinance institutions be shaken, but the easy distance
between the audience and the subject of the myth would come into question.
The for-profit MFIs I observed have stringent criteria for the borrowers they lend to,
making it almost impossible to lend to bottom of the pyramid clients like Saryamma. Indeed,
the borrowers I interviewed, although outside the financial mainstream of urban India, were not
struggling for food or shelter, but were rather working class women with substantial economic
power at their disposal.
There is a fundamental tradeoff between financial sustainability and reaching the poorest
in the lending business. Organizations run through donation and not-for-profit tend to have
success in targeting the poorest, while for-profit organizations that are financially sustainable
target those who are better off (Roy 2010). But even in cases like the Grameen Bank in
Bangladesh, which has been touted for its capability in accessing the poorest, recent research
suggests that richer families benefit from microfinance much more than poorer ones (Karim
2011). The transaction Akula described took place at a time with no regulations on the
microfinance sector, such that there was almost no due diligence the lending institution had to do
on potential borrowers. MFIs like SKS were eager to disseminate loans, and rarely investigated
whether a borrower had the financial wherewithal to pay back. It was these practices that
underestimated the cost of loaning to those outside the financial mainstream and fueled the crisis
of 2010.

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In my research with Kanchan and Sowbagya, I was able to gain a clear sense of how
MFIs are required to operate since the crisis and the new regulations that came in its wake. With
the new regulations, it is even less likely that MFIs can reach the poorest. Lending institutions
are now required to provide documentation to the Reserve Bank of India (RBI) that borrowers
meet very specific criteria for income, residence, and indebtedness levels, among other
specifications. Clients must to have a household income between 3000-10000 rupees a month
(the nation-wide cap is 120,000 annually for urban and semi-urban families), must live in a
permanent structure with concrete or brick walls of at least six feet in height, and can only have
one other loan taken out at the same time.
In practice, MFI staff made two house visits to potential clients to collect and verify these
criteria. During the first house visit, the loan officer documents the address of the house, the
major consumer items in the houseincluding TV, motorcycle, blender, refrigerator, and sofa
setand the household income. During the second house visit, the branch manager verifies all
that information. The major challenge of these visits was to ensure that the borrower actually
lived in the house she had put down as her address, as fraudulent addresses have been a source of
loan default in the past. Confirming that a woman actually lives in the house she claims ensures
that she will continue to be beholden to the other group members as well. To verify the potential
borrowers claim of residence, during house visits, the staff member would routinely ask the
borrower to show a wedding photo or a photo of their children, would ask specific questions
about how long they have lived there, who else lives there, where they sleep, and when they
come and go. These house visits each last about 15 minutes, and comprise a significant amount
of time in the everyday schedules of the field staff for organizations like Sowbagya.

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While these internal organizational practices ensure that the women taking the loan
command adequate resources to repay their loans, they do not, on the other hand, ensure that the
borrower is poor enough to fall below the caps. Although the official documentation requires
that women declare all their household income, the women I interviewed usually only declared
their own incomes, excluding the income from husbands, sons, or other family members that
would easily put them over the 10,000 rupee/month limit. I interviewed some women whose
household incomes easily totaled 25 to 30,000 rupees a month when they reported that income to
me in their interviews. Indeed, given the cost of living in the areas I was researching, it would be
difficult to imagine a family that met the residential criteria who did not exceed the income
criteria. Consider the example of Anandi, age 50, who was a first-time Sowbagya borrower
when I met her. In Anandis case, the staff member suspected residence fraud. She had not
arrived at the address she had written down for the loan by the time the loan officer had arrived,
and when she finally arrived, she explained that she had another house about a ten-minute
autorikshawii ride away. When the loan officer asked her where the vessels for cooking were,
and whether she had pictures of her family, she said they were all at her other house. The loan
officer explained that if this residence was not really Anandis home, her group would be
rejected for the loan. But in the end, the whole group was approved for the loan, supporting the
idea that despite seemingly stringent criteria, organizations bend those rules, erring to benefit
those who can demonstrate that they are likely to repay.
Anandi is a Tamil migrant who has lived in the Bangalore area for over two decades. She
is barely literate, as she had trouble navigating the loan documents compared to the other women
in her group. According to her interview, Anandis husband died when her son was three months
old and since then, she struggled to support her family thereafter. Her struggles were heightened

15

while her son was attending college and she had to pay for her daughters weddings. She said of
that time,
The money lenders would come and keep knocking on our doors. I used to cry. Then my
boy said, I am going out for work. I do not want you to struggle. He [dropped out of
college, and] went for work on Double Road for 1000 rupees [per month]. Then he came
up to 7000 rupees. But he was still struggling. Then he came up to this stage [now]. He
is making decent money.
At the time of our interview, Anandi was living with her unmarried son and working two
cleaning jobsone at an office and one at a residencethat bring her 4,000 rupees a month. As
her account implies that her son is making more than 7,000 rupees a month now, his income
combined with her income, puts them over the 10,000 rupee per month restriction. It also
suggests that, despite her obvious struggles and limitations, she was able to finance both her
daughters weddings and send her son to college, if even for a short while. These characteristics
suggest that Anandi is far better off than most of Indias citizens, and that loansbe they from
moneylenders or MFIshave long formed a strategic and vital source of her livelihood.
Given my methodology and positioning, it is impossible to draw a red line between
which of my informants were poor and which were not. Certainly, there were a few
interviewees who looked thin enough to suggest that they experienced food shortages. Still,
none of the women I interacted with as borrowers fit the bottom of the pyramid criteria that
Akula indicates is a norm for the industry. In contrast, I found significant evidence to suggest
that MFIs targeted the better off in the slum areas of Bangalore where they did business.
Part 2: Microfinance borrowers are entrepreneurial

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In contrast with the foundational claim that microfinance borrowers are poor, the part of
the myth that asserts that borrowers are entrepreneurial makes borrowers feel similar to, rather
than distant from, the myths audience. Even if most people who find the myth resonant are not
themselves entrepreneurs, entrepreneurial activity is valued, especially in the United States, as
the quintessential self-reliant economic activity, figuring prominently into national political
discourse around small business owners. If a poor person can be entrepreneurial, then that
proves that her poverty is not due to her own personal failing. Thus, this part of the microfinance
myth asserts the moral worth of the borrowers themselves.
The assertion that microfinance borrowers use their loans for entrepreneurial purposes is
one that emerges from Grameen Bank rhetoric, but a significant existing literature shows that
most microfinance borrowers worldwide do not use their loans for entrepreneurial activity
(Collins et al. 2009; Guerin et al. 2012; Jain and Pegu 2009). In my fieldwork, I aimed to dig
further, to examine how borrowers think about entrepreneurial activity in relation to the loans
they receive.
Interviews with Kanchan staff who conduct entrepreneurial training suggested that the
vast majority of borrowers did not have businesses at all. Rajan, a senior trainer, claimed that
maybe ten percent of the clients he conducted trainings with had businesses. In the training
sessions I attended, the trainers aimed to convince women that having businesses would be better
for them than whatever they were currently doing, whether it was caring for the family, usually
referred to as, sitting at home, or working outside the home, usually in either construction,
domestic, or garment work. In the sessions I attended in and around Bangalore, and in two semiurban contexts in Tamil Nadu, the women in attendance were not often enthusiastic about taking
up a business venture.

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In one session in a slum neighborhood in Bangalore, the women present had little
patience for the trainers lectures on the virtues of entrepreneurship. While the leader of the
group, Amu, was showcased for her successful business of selling saris door-to-door on an
installment basis, most of the women did not find small business to be profitable enough for their
attention. In an interview after the session in her well-appointed home, Kanchan client Humaira,
mother to 18-month-old Afrin who played as we spoke, said that although she helped her
husband with his mobile phone repair and parts business, she was not interested in starting a
business of her own. In any case, the loan amount was too small to start anything significant. If
they were to move their mobile phone business into a storefront, they would need at least
150,000 rupees as a down payment, an amount far beyond what the group loans could offer.
Humaira said that previously, she had an embroidery and tailoring business, an occupation
typical for many Muslim women in her neighborhood, but she felt that the hard work paid too
little. You work for a whole day, she said, and you can only make one dress. And then the
person who comes to buy it says, how about 150 instead of 170? Theres no profit in that
business and its not possible with a child, so Im not interested in continuing it. Humaira took
the 10,000 rupee loan from Kanchan in the hopes that she would qualify for 15,000 for the next
cycle. As I packed up to leave, Humaira asked if I could help her get a job at Kanchan. She said
she had called the office and expressed interest, but no one had gotten back to her. Despite all the
lessons on entrepreneurship, Humaira saw having an office job with the lending organization as
providing her with the most desirable form of mobility.
In another entrepreneurial training session in semi-urban Tamil Nadu, a Kanchan lending
group sat diligently through a four-hour training session, and seemed to be much more engaged
than the groups I observed in Bangalore. They asked questions, spoke confidently in the context

18

of the group activities, and seemed genuinely grateful for the opportunity to receive the training.
By the end, however, many women were anxious to leave. Most of the women there were daily
wage earners working in construction. When asked after the training what they enjoyed about it,
they all said that they enjoyed the opportunity to engage with each other and gather new ideas,
but when asked whether they would pursue any business opportunities, they had lukewarm
answers at best. As one woman put it, All these things are not for me. I work in construction
and will continue to, but maybe I can send my daughter for this training next time.
In both these examples, it is clear that the women in attendance did not internalize the
lessons of the entrepreneurial training, which were aimed at encouraging women to think of
having a small business at home as a form of self-expression and empowerment. Their own
livelihoods, which usually included some form of waged employment or dependence on a male
wage earner, were seen as something very separate from what was portrayed as entrepreneurial
possibility in the training. While I did meet some entrepreneurial microfinance borrowers, the
vast majority of these women had these businesses prior to becoming loan recipients, so the loan
did not in itself activate any entrepreneurial ambition. This more complex and diverse set of
relationships between microfinance borrowers and entrepreneurship sheds light on the
fundamental problem of assuming that entrepreneurship yields a living wage for any woman who
decides to take it up. Just as most in the microfinance myths audience would be ill at ease with
the high risk and low reward of running ones own tiny business, so too do microfinance
borrowers question the inherent value of entrepreneurship as a primary livelihood strategy.
Part 3: Loans provide empowerment to women suffering under the weight of patriarchal
cultures

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The microfinance myth centrally relies upon the assumption that loans promise economic
and social empowerment for women that would be otherwise impossible in countries saddled by
patriarchal cultures. Although this myth is not made explicit in Akulas story, in the Girl Effect
video, the salvation of the nameless, universalized girl-who-has-been-invested-in stems from
exactly this type of empowerment; it is the virtuous spiral that emerges from the hypothetical
investment. Without this part of the microfinance myth, its dramatic and widespread appeal
would be lost. If microfinance borrowers are not oppressed by either their culture nor by the
men in their lives, then the legitimacy of the myth itself falls apart.
Although context-specific research yields numerous ways to undermine this part of the
myth of female empowerment, I found the most direct contradiction in my many interactions
with women borrowers who are clearly economic and social partners with their husbands and
sons. These narratives suggest that loans brought in by women are a critical part of a household
livelihood strategy in which men and women are often almost equal partners. Here, I highlight
two distinct examples that illuminate the give-and-take relationships between working class
women borrowers and their husbands with regard to loans.
At the age of 43, Sarojamma is a skilled carpenter, a community organizer, and a
grandmother. As she and her husband Kumaran lead my research assistant and I through the
narrow lanes of her dense urban slum neighborhood to her home, it seems as if everyone knows
her. And it is no surprise. By her own account, she has formed and led twelve microfinance
groups, each consisting of 15-30 people, in the last eight years. As we approach in her modest
home with a single room and an aluminum roof, Kumaran responds immediately to Sarojammas
request to get us something to drink, over the protests of my research assistant and me. While
we wait for the drinks, she points out a photograph of herself hanging on the wall above the fish

20

tank, receiving an award from the minister of womens rights for the state of Karnataka, for her
work in organizing women in her area. In a few minutes, Kumaran returns with two cold glasses
of Maaza, which he places in front of us. He sits next to his grandson, a bit apart from us. He
knows that we have come to speak to Sarojamma.
Sarojammas narrative suggests that although her husband is a skilled electrician, her
work as a carpenter has made them equal partners in the households livelihood. She spoke at
length about her own career in carpentry, which involved long stints in construction factories as
well as other stints when she takes individual orders. Sarojamma claims that she only takes
orders when she wants to make money, and if she wants to, she can earn up to 100,000 rupees in
a month making anything from sofa sets to beds and tables. Her husband and son both contribute
to her household income. Sarojammas narrative of a relatively equal domestic partnership with
regard to livelihood seemed to correspond in the interpersonal relationship that she and Kumaran
shared. Although in some interviews, a husbands presence seemed to restrict what the borrower
wanted to say, in this case, Sarojamma seemed to hardly notice him. Kumaran was smiling and
seemed happy that we were there. He held in his hands a tiny white kitten that he informed us
has lost its mother. The kittens makeshift litter box of a cardboard box sprinkled with sand, lay
at his feet.
While Sarojamma offers an example of what a 50/50 relationship might look like among
working class microfinance borrowers, Pauline, a 46-year-old former cook, offers an example of
a different kind of marriage that also bucks easy stereotypes. When she and her husband
migrated from a small town in Tamil Nadu to Bangalore, they had no education and few
marketable skills. They opened an informal food stand that they ran out of their home in a slum
for fifteen years, serving idlis, or South Indian rice cakes, to their neighbors as they went to work.

21

Their business expanded over the years, and they ran it together. About a decade ago, however,
Pauline started having health problems. Pain in her shoulder from the labor of her work was
only the beginning. She was in and out of the hospital for gynecological issues for several years.
At the time of our interview, she said she was willing to work, but did not wish to do anything
that would further strain her abdomen or back.
Paulines ability to refrain from working at this stage in her life was made possible by the
job her husband Ramani was able to access after many years in business. At the time of our
interview, Ramani worked as a tandoori cook at a five-star-restaurant, where he earned 20,000
rupees a month. During most of our interview, her husband Ramani remained quiet, encouraging
her to speak when she felt shy, and helping with translation when she could not quite understand
the question posed in Kannada, the local language of Karnataka that remained foreign to Tamilspeaking Pauline, even after two decades in Bangalore. When we asked her about working,
Ramani jumped in.
I say, if you [Pauline] are interesting in cooking, if you get that job, you can do [it].
Right now, any other work is not okay, as the doctor has advised against any [physically]
tough job. She should not do those. . .If she was healthy, I am okay [with her working].
But she is not.
As an interviewer, I initially interpreted Ramanis comment as potentially controlling, as if he
were trying to underscore the fact that Pauline should only do work that he approves of. But I
quickly realized the error of my own presumptions as the conversation moved onto their dreams
for the future. While discussing their shared dream of owning a home in Bangalore, both Pauline
and Ramani began discussing interest rates with my research assistant, and began comparing the
prevailing rates at different organizations. Ramani said that homeownership is very much within

22

reach for them for the first time, with the income from his job and his daughters job. It was
clear from this conversation that Ramani and Pauline had worked in partnership for many years,
planning the familys finances alongside their day-to-day livelihoods. At the end of the
interview, after we turned off the recorder, Ramani said to me in Tamil, Madam, if I can just
say one more thing? More than anything, I want to make sure she [Pauline] is okay. She is as
precious to me as own eyes (kannu-pol).
Interviews with Sarojamma and Pauline disrupt any presumption that microfinance
borrowers are subject to male domination or oppressive cultural norms, instead offering
snapshots of working class women involved in loving partnerships with economically productive
men. Their stories bring to light the complexities of regional migration, upward mobility, and
the complexities of moving between the formal and informal economy in ways that are strategic
and beneficial to the family as a whole.
Conclusion
In April of 2012, PBS aired the two-part, four-hour documentary, Half the Sky: Turning
Oppression into Opportunity for Women Worldwide, based on the bestselling book by New York
Times columnist Nicholas Kristof and Sheryl WuDunn. Each part of the film addressed a
pressing issue of violence against women in a particular part of the world by inviting a famous
American actress to accompany Kristof to a specific location where a gendered atrocity takes
place. The worldwide tour of gender violence covered female genital cutting, intergenerational
prostitution, rape, and spousal abuse, among other issues, and was meant to raise awareness
about womens issues and mobilize a movement for improving womens lives everywhere. One
of the last stories in the documentary offered up the microfinance myth through the story of a
young mother and former prostitute who, with the help of a local microfinance organization,

23

started a tailoring business. The film presents the young woman, Jane Ngoiri, as pulling herself
out of grinding poverty through her tailoring business, and offers shots of Kristof offering her
encouragement. In the overall narrative of the film, it is this sequence that is meant to offer hope
to the audience, a salvation that seems impossible in the face of overwhelming odds. Over the
course of the segment, we come to admire Ngoiris determination and artistic ability with
tailoring. But her existence remains fragile. Never does the film address what the conditions of
the loan are, how much interest she pays, or whether she might be able to garner a better
livelihood by some other means. Indeed, it is by selectively representing the life stories of
women like Ngoiri, that Kristof is able to make the point that economic empowerment through
small loans fuels a virtuous and neverending upward spiral. The location of Ngoiris story in this
documentary attests to the positioning of the microfinance myth as the presumed panacea for
gender issues worldwide, while the complexities of Ngoiris own existence are glossed over in
favor of a good story for American audiences.
In this paper, I have suggested that such selective representations, which facilitate the
perpetuation of the microfinance myth, serve to misrepresent gender and poverty in the global
South while legitimizing a morally ambiguous global microfinance industry. By examining
three central claims that together make the microfinance myth resonant to a broad audience and
highlighting evidence from grounded research that contradicts those claims, I aimed to offer a
counter-narrative of gendered livelihood strategies, situated in the slums of urban India. But at
least as important as what the microfinance myth misrepresents about gendered livelihoods is
what it leaves out. Never does the myth allow for women to be political subjects who can
collectively hold their governments accountable to their demands.

24

It is in this regard that the reality effects of the microfinance myth may become
altogether dangerous for the women it supposedly benefits, and further research is required to
understand how microfinance has impacted womens political involvement. Paromita Sanyals
(2009) study suggests that women involved in the self-help group form of microfinance were
more likely to participate in collective actions than those who did not, but further work is
required to understand whether these findings appear in other institutional forms of microfinance.
Other evidence on gendered livelihoods among the urban poor in India suggests that women are
increasingly becoming solely economic providers, while men maintain political control (Roy
2002). Continued sensitivity to material and symbolic context at multiple scales can allow for
more accurate representations of women in the global South, while also being attentive to how
misrepresentations, channeled through institutions and individuals, may produce corresponding
lived experiences.
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i
See Spivak, G. C. 1985. "Can the subaltern speak?" Pp. 66-111 in Colonial Discourse and
Postcolonial Theory, edited by P. Williams and L. Chrisman. New York: Columbia University
Press.
ii

Anandi rarely took autorikshaws, however, which are prohibitively expensive. She had been

forced to take an autorikshaw, she explained to her group, because she had been forced to come
to her other residence to meet the loan officer on very short notice.