Duplicitous debtscapes: Unveiling social impact investment for microfinance (original) (raw)

The Exclusionary Power of Microfinance: Over-indebtedness and Land Dispossession in Cambodia

Sociology of Development, 2021

In recent years, international banks, investment agencies, and development institutions have created new markets for capital accumulation by rapidly expanding the commercial microfinance industry in the global South. In Cambodia, which has one of the largest microfinance industries in the world, the typical loan amount now exceeds the average annual household income and requires land-based collateral. Cambodian borrowers are increasingly over-indebted, compelling families to reduce their food consumption, take out new loans to service prior debts, migrate, and/or sell their land in distress. In this paper, we investigate this last effect of over-indebtedness, distress land sales. We argue that the exclusionary power of microfinance debt—constituted by collateralized legal contracts, discourses of moral responsibility, and public shame—is driving land dispossession among the country’s most vulnerable people. To make our argument, we draw on ethnographic fieldwork, supplemented by quantitative data from the Cambodia Socio-Economic Survey, MIX Market, and two industry-sponsored large-scale quantitative surveys of over-indebtedness. We trace the rise of the commercial microfinance industry, show how it has contributed to over-indebtedness, and consider how household debts can lead to distress land sales. These land sales have largely gone unacknowledged in the industry because they take place through informal channels rather than the court system. We conclude that microfinance-debt induced land dispossession in Cambodia is a product of an overly commercialized international microfinance industry that now values profits over people.

From rice fields to financial assets: Valuing land for microfinance in Cambodia

Transactions of the Institute of British Geographers, 2019

This paper explores how rural land in Cambodia has been incorporated into global networks of finance capital through the technical and political processes of turning land into a financial asset. Since the 1990s, the Cambodian government and international development institutions have issued land titles to people to formalise land ownership and increase people's access to formal credit. At the same time, Cambodia's commercial microfinance industry has rapidly grown to become one of the largest markets in the world per capita. The industry has expanded in part because microfinance institutions use land title for collateral on household loans as a method to manage the financial risk of their foreign investors and shareholders. In this paper, I draw on ethnographic research conducted with ACLEDA Bank, Cambodia's largest provider of microfinance loans, to examine how the rural land market and microfinance sector are assembled together. I argue that microfinance markets in Cambodia depend on credit officers establishing a capitalist regime of land value. To do so, credit officers engage in daily bricolage, using technologies of representation and data inscription, to create new grids of land evaluation that allow people to treat their land as a financial asset. I also argue that collateral is a kind of technology of control that reworks and respa-tialises household social reproduction for the benefit of financial accumulation. This paper thus contributes to our theoretical understanding of how land, labour, and finance capital are assembled together, and the political economic ramifications of such an assemblage.

Microfinance and Third World Development: A Critical Analysis

Microfinance is emerging as an integral part of the new development paradigm, described by the phrase "participation and development. "Although the idea has become quite popular among donor agencies, development practitioners, and academicians, theoretical premises on which this idea is founded seem entirely unexamined. Accordingly, this article investigates the academic merits, as well as potential consequences, ofthis popular poverty alleviating model from the supplyside perspective and asks a provocative question: Do the microfinance ventures have features which suggest that the establishment ofthis new finance industry in the Third World countries might further complicate their pervasive poverty problems? The answer to this question appears affirmative to be affirmative. First, the microfinance idea is founded on two theoretical premises, both ofwhich are very controversial. Second, the lack ofmicrocredit is not the cause ofthe Third World's deplorable poverty situation--a fact that suggests that the supply of microcredit cannot alleviate poverty in these countries. Finally, the promotion of the microfinance ventures in the Third World has potentials to create private groups, which have vested interests in perpetuating their prevailing poverty situation.

Precarious Debt: Microfinance Subjects and Intergenerational Dependency in Cambodia

Antipode, 2019

This paper tells a story of debt within a rural Cambodian family in order to understand how microfinance produces more-than-individual financial subjects that are entangled in changing social relations of dependency. We draw upon 20 months of joint ethnographic research in Cambodia, where the microfinance industry is one of the largest per capita in the world. Informed by Judith Butler's notions of precariousness and precarity, we argue that even in the context of deepening financialisation, people's lives remain dependent upon others, especially within families. We analyse how these family relations of dependency are reworked along generational lines and spatially stretched due to precarious economic conditions of indebtedness, household migration, and distant labour markets. We conclude that reframing financial subjectivity in terms of precariousness helps us to analyse the relationship between households and financial markets, as well as inform a critical politics of finance.