This thesis eschews an econometric approach to the analysis of microfinance initiatives in favour of a wider, political economy approach. It paints a picture of the
international financial and socio-economic environment in which microfinance as a
practice has developed since the mid-1970s, and the introduction outlines the political
agendas that fuel the theoretical debate over development, and the manner in which
the self-proclaimedly objective scientific rationale that underlines the dominant neoliberal hegemony is in reality no such thing.
The introduction is followed by a methodological explanation of the necessity to
examine microfinance in such a context, and then deals with the combination of
approaches included in the thesis, sources, and data-collection methods of the
fieldwork in Nicaragua. The next three chapters comprise the body of theoretical and
literary evidence in support of this methodology, from the international down to the sectoral level within Nicaragua.
Having located the Nicaraguan microfinance sector within a theoretical, international
and national context, the subsequent chapter moves to examine the local context. The
fieldwork in Nicaragua culminates in a combined map- and questionnaire-based
exercise set in Masaya, a city some 27 kilometres roughly south of Managua, the
capital. The chapter examines the structure and functions of two local microfinance
organisations, FAMA and ADIM, and conducts a close examination of the population
amongst which these microfinance organisations operate. The survey of the socioeconomy
of households within the Masaya area concludes by casting doubts on,
traditional methods of microfinance impact assessment, and suggests a different
approach to studying microfinance.
The thesis concludes by suggesting that the current vogue for envisaging
microfinance initiatives as purely financial operations to be analysed as an accounting
phenomenon is not only mistaken, but has potentially damaging consequences. The
thesis argues that microfinance must be seen within local, national and international
political contexts, and that doing so will help avoid costly errors. The thesis also
suggests that the demand for new client-orientated initiatives will be assisted by
taking the political economic reality into account, and by using methods such as those
suggested by this thesis