A critical evaluation of international development and poverty: the case of microfinance and the Swedish International Development Cooperation Agency in Zambia

International development aid has been under increasing pressure and scrutiny for various reasons. Many scholars and policy makers have called into question its effectiveness to increase economic growth, alleviate poverty, or indeed promote social development in recipient countries (Crewe and Harrison, 1998; Easterly, 2002; Tsikata, 2008; Tuozzo (2009; Vetterlein, 2012; World Bank, 1998; Yusuf, 2008). Within an array of development aid, microfinance has risen to become one of the ‘most important policy and programme interventions in the international development community’ (Bateman, 2010: 1). The case in many parts of the developing world is that of microfinance being hyped and regarded as a best development strategy not only to help reduce poverty but also to empower women (Dichter, 2007; Geleta, 2013; Ito, 2003; Mayoux, 2001; Sharma and Nagarajan, 2011). Although microfinance is talked about so much, it hardly has one agreed meaning. However, it is believed in development literature that, it is aimed at helping the ‘active poor’ bring about own economic and social development-i.e ‘bottom-up’ and locally owned. It is promoted as a market based approach of giving the poor a ‘hand up’ and not a ‘hand-out’. It is also thought to make a significant contribution towards poverty reduction by enabling women become economically active through their participation in managing borrower groups and through exchange of information with each other (Dowla, 2006; Siwale and Ritchie, 2012). That microfinance gets around many of the political barriers that plagued government subsidised credit scheme and other forms of neo-liberal interventions into poverty reduction warrants critical attention. This paper examines the dominant economic discourse at different stages of global capitalism regarding poverty and ‘helping the poor help themselves’ and the narratives behind ‘making markets work for the poor’ as articulated by the World Bank and other international institutions like the Swedish International Development Cooperation Agency (Sida) and Department for International development (DFID). It uses microfinance, viewed as an effective bottom-up development strategy to highlight the language of intervention and argue that much of international development has failed the poor, especially in Africa

The work experiences of loan officers in Microfinance: Is it different for women loan officers? Evidence from Zambia

This study seeks to highlight the challenges faced by organisations whose remit it is to provide microfinance support to the poor. In doing so, it focuses on loan officers – the agents of delivery on the ground. Based on an intersectional analysis of gender, class and context, the research shows how these interact to influence loan officers’ day by day experiences and make the job unattractive to particular groups. It is set in the context of two Zambian microfinance institutions seeking to reduce poverty through sustainable lending, using a group-based methodology. The study draws out the dirty, emotional, stressful, gendered, culturally complex and relentless nature of their work on the ground, to argue for a better understanding of grassroots level work and support for loan officers. More specifically, findings show that gender appears to be important as social and cultural norms emerge as major pressure points to female loan officers than their male counterparts- making them less suitable for microfinance work, which traditionally targeted poor women

Failure by design: the rise and fall of a microfinance institution in Zambia – a case of Pride Zambia

Contemporary microfinance has been taken to task over a number of possible failings. At the same time insight into grassroots microfinance institution (MFI) failure is lacking. To that end this paper seeks to articulate and explain different stakeholder narratives about how a once promising Zambian microfinance institution actually failed while seeking to become a for-profit MFI. There are presently few in-depth studies of failed MFIs in those countries where microfinance is still emerging, just as it is in sub-Saharan Africa (SSA), and greater focus upon high profile performers in South Asia and Latin America, which leaves other developments in regions such as SSA much less represented. Using field data from Zambia this study examines the failure of Promotion of Rural Initiatives and Development Enterprises (PRIDE Zambia, hereafter PZ) initiative. It finds poorly practiced governance and accountability mechanisms, and unstable relationships between international donors and the Board, the Board and CEO and with middle management, to be central to its final failure. The study also reveals a lack of transparency and disregard for moral obligations, and poses serious questions about how it and its finances were managed and accounted for, even while this MFI still provided much needed financial services to the poor and vulnerable clients

The role of loan officers and clients in the diffusion of microfinance: A study of PRIDE Zambia and CETZAM in Zambia.

This thesis seeks to illustrate and explain the variable take-up of microfinance from the particular standpoint of the actors who actually produce and deliver microfinance. It draws attention to issues of relationships, action, tensions, and compromises in the real work of loan officers, which ultimately define how micro finance works. Few existing studies have used data outside South Asia to examine what loan officers actually do at the interface with clients and their role in the diffusion of microfinance. A central concern of this thesis is that microfinance relies heavily upon loan officers to be a critical link and facilitators of 'bottom-up' development, yet the activities of loan officers in sub-Saharan Africa and Zambia in particular, where microfinance is emerging, remain relatively under-researched. This qualitative ethnographic study was designed to examine the processes of microfinance and how it works by interviewing and observing loan officers’ interactions with clients and everyday practices. Analysis of data was conducted in accordance with grounded theory principles and organised with the assistance of the software programme, QSR NVIVO. The results reported in this thesis indicate that loan officers had multiple, ambiguous and fast changing roles, mainly driven by an institution's economic survival rather than clients' 'empowerment'. Pressure for institutional sustainability and commercialisation were also found to be changing relationships and the original character of microfinance. Furthermore, the practice of microfinance in Zambia risked transforming loan officers into 'loan repayment agents' as opposed to 'development workers' or 'enablers' of growth. The thesis concludes that loan officers are so critical that without an appropriate fieldwork-culture, microfinance cannot effectively diffuse whatever its design. The central contention of the thesis is that, sustainability and diffusion of microfinance could be flawed if it is so dependent on loan officers. Furthermore, those studies which have excluded the voice of loan officers may not be an accurate predictor of its likely performance

Microfinance and loan officers' work experiences: perspectives from Zambia

This article studies the challenges faced by microfinance institutions in Zambia, whose remit it is to provide financial services to the poor. It focuses on loan officers – the agents of delivery on the ground. With reference to loan officers’ experiences and words, the paper examines how gender and education shape and structure their day-to-day encounters. The study finds that different social spaces – ’the office’ and ‘the field’ – and wider context explains the gendered, culturally complex and multidimensional nature of developmental work at grassroots level. Social expectations emerge as major pressure points more for female loan officers than their male counterparts, making them less suitable for microfinance work, which has traditionally targeted poor women

Microfinance regulation and effective corporate governance in Nigeria and Zambia

Purpose: There have been various forms of regulatory intervention by the central banks of countries in order to streamline microfinance activities and ensure effective corporate governance of microfinance institutions. Considering the limited amount of research in this area and the need to ensure regulatory effectiveness, the purpose of this paper is to evaluate the impact of regulatory provisions on the attainment of effective corporate governance in microfinance institutions in Nigeria and Zambia. Methodology: Interviews were conducted with regulators at the Central Bank of Nigeria and the Bank of Zambia, directors and executive management officers of microfinance institutions, and executives of apex associations of microfinance institutions in both countries. Findings: The paper presents 5 significant findings which are that the regulations have enabled negative outcomes in areas such as board composition, the ownership requirements in the regulations have resulted in differing governance implications, the certification requirements for board members are problematic in practice, supervision by regulators is ineffective and impacts on risk management, and the principle of consultation with stakeholders is inadequate in both countries. Practical Implications: Regulatory provisions must be robust and fit for purpose in order to ensure the microfinance initiative in emerging economies achieves the objectives of enhancing financial inclusion and economic development of the society. Originality/Value: The paper addresses an area of limited research and provides empirical findings in relation to regulation and corporate governance in developing economies, which would help to ensure regulatory effectiveness

Challenging western perceptions: a case study of rural Zambia

This chapter attempts to add an international perspective on understanding rurality, and the challenges of living in an African countryside compared to that of the Western countryside. The discussion acknowledges that there are large differences between the experiences of rural life in Africa compared to that of the more developed world, making the two rurals almost incomparable. The chapter should not be seen as a representation of Africa as a whole, but focuses on Sub-Saharan Africa, with specific reference to Zambia as a case study. In doing so, it explores the rural idyllic representations of the West with those of Africa and argues that, much of the Zambian countryside, commands very negative representations, making the rural idyll more of a western construct. Drawing upon a historical and political economy perspective, the chapter seeks to reveal the lack of structured coherence in Zambian rural areas and highlights the factors that have (re) shaped perceptions and development of the rural over time and the implications that this can have for the rural together with its inhabitants

The discourse of institutional change in the Zambian microfinance sector

This paper investigates the discourse of key actors instigating institutional change in the Zambian microfinance sector. It draws from the institutional story of Zambia, which has experienced regulatory and legislative flux since drafting its first microfinance act in 2006. Building on the ideas of discursive institutionalism and interviews with key stakeholders, it identifies three levels of discourse (ideas) that explain institutional change: policy, programmatic and philosophical. It highlights how ill-conceived discourse at a policy level shapes practices of Microfinance Institutions (MFIs) and ultimately challenge their worldviews; offering a cautious tale of institutional change in Zambia. More broadly, it discusses the implications of using discourse to understand institutional change in Sub-Saharan Africa and offers an opposing cautious narrative to many of the successful microfinance stories in the continent which tend to dominate the literature

Accounting for microfinance failure: insights from Zambia

The global trials of mainstream finance have brought calls for the development of human scale alternatives such as microfinance. However, developing country microfinance has itself been taken to task over its collective failings without much evidence about individual grassroots microfinance institution (MFI) failure. So, using an extended case study of PRIDE Zambia (PZ), this paper examines different stakeholder and other accounts about how this once promising frontier MFI failed. It finds that fast track founding and premature expansion based upon indifferent governance, hierarchical mismanagement, and unrecognised frontline problems further compounded by malpractice and corruption were central to PZ’s final failure. Zambia is a difficult frontier for donor-funded MFIs and, when PZ first sought to change its original grassroots character, its survival was so jeopardised that it failed as a result