Road to hunger paved with good intentions
It seems like a good idea: extend credit to impoverished women in Bolivia to enable them to purchase materials needed to start or expand their street business and earn enough to feed their families. There are hundreds of success stories floating around about micro-financed business; about women who are now able to buy simple things such as shoes for their children, where previously they could afford little beyond the barest essentials. The problem is, explains John Brett, professor of anthropology, there are thousands upon thousands of women caught in the web of micro-finance who could tell a much different, more complex story.
At the February session of the Provost’s Lectures Series, sponsored by the Center for Faculty Development the campus LETTS Committee and the Office of the Provost, Brett spoke to an audience of about 30 on the good intentioned, yet potentially vicious cycle of micro-credit. "Micro-finance emerged to fill a void," Brett explained. "If I’ve got a business, I have something to guarantee the loan. The conundrum in developing countries is: What happens if I own nothing of value with which to guarantee the loan?" The loans are extended to small groups of women using the social group as collateral and, because of demands of sustainability, charge interest at high rates. Using social support and social pressure through mutual liability, the microcredit organizations are nearly always assured good repayment–even though women may reduce food expenditures for their children to make their payments.
Microfinance programs started as a means to provide opportunity as opposed to charity, Brett explained. However, when microfinance interest rates run from 30 percent to 50 percent per year in a market saturated by blankets, baby clothes, fry bread, and where women sit nearly shoulder to shoulder selling essentially the same things, making the payments can be difficult if not impossible.
The third session in the Provost’s Lecture Series, Brett’s talk "We Sacrifice and Eat Less," raised questions on the potential pitfalls of microcredit schemes, whether well intentioned or otherwise. This avenue of research, he explained, was a side to his studies on diet and dietary change among rural to urban migrants. "Just sitting and talking to some of these women on diet and nutrition, micro-credit consistently emerged as a factor in their dietary decision-making," he said. He conducted a focused study on the microfinance and its results in 2002 and 2003, and the research is ongoing. The research has been published in the spring 2006 edition of Human Organization.
The Provost’s Lecture Series focuses on economic and social issues that impact or can be likened to those in the metro area. Previous lectures were history professor Tom Noel’s talk on “Denver’s Booms and Busts” and assistant professor Tony Robinson’s “The Los Angelisation of Denver.” The April 6 will feature Heidi VanGenderen, of the Wirth Chair in the Graduate School of Public Affairs, discussing systemic approaches to forging a sustainable 21st century city with a specific focus on Denver. She will describe initiatives underway in Denver and elsewhere that include policies and economic development strategies affecting a broad range of natural resources. The luncheon lecture is noon-1 p.m. April 6 in Conference Room 360 of the Lawrence Street Center. Register at: http://www.surveymonkey.com/s.asp?u=920001725270.