Banking on Women Development’s Neoliberal Sexism

The process of the current development agenda does little to advance real development outcomes because of its persistence in catering to economic neoliberalism, which prioritizes economic growth over addressing the structural drivers of women’s subordination and oppression.

The movement for gender equality in the development community has neoliberalism as its ideological bedrock. Neoliberal feminism validly recognizes gender inequality but falls short in highlighting the socioeconomic and cultural structures that shape our lives. For example, over the course of former US Secretary of State, Hilary Clinton’s second presidential campaign, she continuously repeated the mantra that ‘giving women the tools to fully participate in their economies, societies and governments’ is the unfinished business of the twenty-first century. Clinton’s idea of producing equality for women focuses solely on encouraging women to participate more in the formal economy, so they can pull themselves up by the bootstraps. Unfortunately, this belief falsely assumes that we can universalize women’s needs, which goes on to diminish our particularity.

Effectively, by adopting the individualism that underlies Clinton’s mantra and neoliberalism more broadly, the development sphere has successfully left out the perspectives of sub-altern women. In so doing, the development sphere has had the impact of imposing a very Eurocentric and paternalistic approach to alleviating gender inequality. Nothing about this feminist take on development will threaten the powers that be.

What has now followed from the omission of sub-altern women are a series of development approaches to empowering women, such as microfinance schemes, which have failed to guarantee gender justice. The process of the current development agenda does little to advance real development outcomes because of its persistence in catering to economic neoliberalism, which prioritizes economic growth over addressing the structural drivers of women’s subordination and oppression.

Making Money off Poor Women

Microfinance was born in the 1970s, out of a global movement to bring financial services to the poor. Pioneers, like Mohammed Yunus of global non-profit, Grameen, believed that providing small loans to the poor would help poor people, women especially, lift themselves out of poverty and towards prosperity through entrepreneurship. Since its inception, microfinance has been lauded as the silver bullet for global poverty, and one of the most progressive ways of empowering women in the Global South. Going with the grain of the neoliberal agenda, microfinance encourages the individual to focus on empowering herself using the tools the capitalist system has gracefully equipped her with.

However, evidence has shown that in practice, microfinance programmes have actually not done much to challenge or transform the structural conditions that create poverty in the first place. Instead, microfinance shifts the burden of poverty alleviation to the poor and marginalized, as participants become easily trapped in debt cycles, using one loan to pay another.

This serves to illustrate why relying on corporate-led solutions to global problems can be misguided, especially when you consider how much more capitalist agents stand to gain compared to those who are meant to be receiving their help. Today it is difficult to overstate how vast the microloan industry is: in 2017, an estimated 139 million people worldwide were receiving a total of about $114 billion in microloans from the major microfinance institutions. In South Asia alone, women account for 92 per cent of microloan borrowers. The robustness and longevity of the industry speaks for itself. And in sharp contrast, evidence shows that the incomes of the beneficiaries of the scheme rise barely, if at all.

In essence, the microfinance concept is anything but the revolutionary idea Yunus painted it out to be. Its resilience as a development strategy lies in its ‘win-win’ offer to solve global poverty. Microfinance promises to improve the lives of the poor, without any threat to existing arrangements of political and economic order. It offers, essentially, a revolution without the messiness of a class struggle, while making money off the poor.

Integrating women (particularly poor women) into the value-chain structures of corporations in the name of ‘inclusive financing’ misses the point. This argument is strengthened when we consider how microfinance has its roots in a ‘containment strategy’, where poverty has been reframed from being seen as a political problem to now being viewed as a private problem. It is now a powerful way of casting the poor as being responsible for generating their own income. ‘All you need is a bit of vim and some credit to make it in life—if you don’t, then that’s on you.’ Buying into these schemes as the sure-fire path to female liberation essentially equips the financial system with the tools needed to keep marginalized groups docile.

Financial Inclusion and Its Discontents

Despite its overstated promises, microfinance initiatives continue to remain one of the most generously funded poverty reduction solutions in the international development space.

Justification for this is intuitive. Proponents of microfinance will argue that a typical low-income household, region or country is likely to suffer from a dearth of financial services such as savings, insurance, money remittances or even just cash deposits in bank accounts. When these services are available, it is usually only at prohibitively high prices. In stark contrast, well-functioning financial systems are central to the functioning of developed economies. Therefore, if we support financial inclusion efforts, we can directly produce better developmental outcomes for those who are marginalized in society, which predominantly turns out to be women.

The post-colonial feminist response to this argument problematizes the way in which poverty reduction schemes—particularly those aimed at women—are at their core, products of Eurocentric knowledge. Development practices are continuously influenced by Western notions of modernization and these practices tend to not pay attention to or even engage with the very individuals they seek to empower. To elaborate, the microfinance strategy is based on the narrow assumption that financial development will always make positive contributions to economic growth and will do so in every context it is applied to. Accepting this view erases the realities of low-income communities, where the root causes of low prosperity levels goes beyond access to finance. In these communities, there are systemic obstacles that limit the production of transformative economic development, which means microfinance may not be the appropriate solution.

Take for example, the Nigerian government’s 2016 initiative to partner with the World Bank to create a National Women Empowerment Fund (NAWEF) and a Government Enterprise and Empowerment Programme (GEEP). According to the Nigerian Minister of Women Affairs and Social Development, Aisha Alhassan, the aim of the empowerment fund and programme is ‘to provide micro-credit facilities; reduce poverty among rural dwellers and provide skills development, training and business support, especially for women’. Essentially, these initiatives would provide women in rural areas loans to start businesses, and they would have to repay these loans within six months. The eligibility criteria attached to participation on this scheme gives some insight into why microfinance schemes structured in this manner will do little to generate income on a sufficient scale. For instance, each beneficiary can apply for loans between N10,000 and N100,000, and failure to repay these loans within six months would be met with sanctions. Paying these loans, of course, significantly constrains living standards for beneficiaries. In addition, the programme is to be implemented by the Bank of Industry and, in order to apply, the women must belong to a registered association or a co-operative society of 10 to 20 members.

Adopting a postcolonial feminist lens reveals microfinance as a form of structured oppression masked as a poverty alleviation tool. In contrast to neoliberal feminism, postcolonial feminism recognizes that gender inequality is embedded in power inequalities and discriminatory norms. To see how, consider how microfinance indicates a relationship between borrower and lender that is characterized by power and inequality. Consequently, individual women of little means become vulnerable to market pressures and end up facing severe losses and, in some cases, mental stress.

To confound this issue, the neoliberal rhetoric of microfinance undermines demands for social welfare programmes and better and more accessible public services which would actually improve living standards. This is certainly true for Nigeria. Capital expenditure in the health sector, for example, accounts for an abysmally low proportion of the national budget. In fact, as Nigeria joins the race to combat the COVID-19 problem, it has become increasingly glaring that policymakers face an uphill battle in supporting the most vulnerable in society in the face of the new lockdown measures. Here, we see that years of adopting a nonchalant attitude towards supporting the Nigerian citizen that lived on less than a dollar a day pre-coronavirus has made the task of mitigating the economic and social crisis faced today even more daunting.

Therefore, it is impractical to expect models that are profit-driven to derive any real change in these communities. In essence, financial inclusion initiatives borne out of an already extractive capitalist system will mostly focus either on financing the same type of low-value-added, labour-intensive undertakings that are already prevalent in these communities, or on various forms of consumption lending. Neither of these activities is likely to improve developmental outcomes; and, in the case of consumption lending, these initiatives can actually worsen the lives of borrowers and their communities.

Sisterhood, Interrupted

In development, the approach to gender issues is usually a universalist one that seeks to prioritize catering to an established patriarchal order. A universal idea of gender equality is not only misconceived in a world with cultural structures, but also colonial and imperialist. More realistic feminist approaches to development need to be about much more than gender. They must embrace the multi-pronged and complex dimensions of gender by considering age, class, sexual identity and so on.

For development, inspiration for an alternative ideological bedrock to neoliberalism, and one that is truly revolutionary can come from examining pre-colonial history. Ubuntu philosophy, for example, is an African humanistic philosophy that derives from the Zulu maxim, Umuntu ngumuntu ngabantu: a person is a person through other persons. The African proverb reveals a world view that highlights that we are first and foremost social beings, so that no woman or man is an island. A reimagined version of development can have ubuntu philosophy underpinning it, which will encourage a shift towards a collectivist and inclusive approach to development.

Development can no longer be satisfied with limited ideas of women empowerment and prosperity, as these ideas actually create more problems for the people development initiatives are expected to protect. But for development to be truly revolutionary, practitioners must accept that neoliberal solutions to gender inequality just won’t do

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