The High Costs of Microcredit

I’m in two seminars this semester – Anthropology of Development, and Capitalism and Neoliberalism – which often overlap in, as you can imagine, some pretty depressing and enraging ways. From the complicity of NGOs in reinforcing the social networks in Rwanda that were mobilized in the genocide to the ways that U.S. bases employ migrant workers in slave-like conditions [pdf], development and neoliberalism have their share of horror stories on their own, and it’s no surprise that the neoliberal mindset makes its way into the development apparatus.

In my class on development, one of the ethnographies we read was Aminur Rahman’s Women and Microcredit in Rural Bangladesh, which outlines how microcredit programs such as the Grameen Bank actually send their clients into cycles of ever-increasing debt as interest mounts. In typical microcredit schemes, peer pressure acts as collateral as peers in microcredit groups ensure debt repayment in order to continue qualifying for loans. Other forms of pressure, from women of higher status trying to form lending circles or from husbands who want access to capital, also force women into the system and into debt in the first place. Rahman outlines how a program seeking to empower women by providing them with loans actually uses patriarchal mechanisms to enroll them and then ensure debt repayment at all costs.

One of many aspects of neoliberalism has been how people increasingly view things in neoliberal, economic terms that had previously been outside of the market. My class touched on a variety of these issues, one of which was the growing black market for kidneys, where the world’s poor are turning to sell organs in exchange for meager amounts of money and poor health while the wealthy jump over everyone waiting on a donor list, and Nancy Scheper-Hughes’ work to try to document and stop it. As this trade continues, the poor who are scammed into selling a kidney (or who do so out of desperation) wind up with poor health, little money to show for their troubles, and sometimes the stigma of having sold a kidney.

These two specific topics came together in a recent episode of Vice. Featuring anthropologists Scott Carney and Monir Monirauzzaman, the second half of the episode focuses on the kidney trade in Bangladesh, where there are many towns or even families where numerous people have sold kidneys to get by (the first segment, on LBGT rights in Uganda, is also worth watching). The segment, titled “Kidneyville,” features interviews with some the residents of the town of Kalai who have sold kidneys out of desperation. And here’s the connection:

We weren’t surprised to find out that people regretted giving up their kidneys, but we were shocked to hear many say it was to pay off serious debts from microfinance loans which were given to them by local non-profit organizations.

“I took one loan,” one man says, “but that loan wasn’t fully repaid so I took another loan. I became deep in debt.” Another man describes how a non-profit literally took the roof from over his house since he was behind on payments. He then sold his kidney and then bought his roof back from the NGO. One woman describes how the NGO came after her when her husband killed himself because of his indebtedness.

Development programs that send people into debt in the name of helping them get out of poverty, instead committing them to debt cycles that lead them into another incredibly asymmetrical exchange. And selling a kidney still doesn’t get people out of debt to the microcredit groups, but it could cause health problems, making it harder for the poor to then find work and pay off what’s left of their debts.

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