MICROFINANCIAL HISTORIES: FROM NONPROFIT SELF-HELP TO GLOBAL INDUSTRY

While initial experiments with microfinance were born in the context of not-for-profit NGOs oriented toward poverty alleviation and women's empowerment, shifts toward pro-market policies around the world have altered microfinance's economic and social structure in ways that call for a new conceptualization of microfinance. This historical trajectory and the current diversity of microfinance, described below, demand a set of analytical tools that foreground its global genealogy and deep imbrication in contemporary financial systems.

In microfinance's early years (from the 1970s to the early 1990s), NGOs like the Grameen Bank, Prodem, and Finca were the norm. Early programs tended to provide small loans at subsidized interest rates to undercapitalized “entrepreneurs”—mostly women working in the informal sector who might otherwise be beholden to usurious loan sharks. Depending on the program, loans may have been accompanied by group payment meetings and other services such as consciousness-raising or leadership training. The focus was on poverty alleviation for the “poorest of the poor.” MFIs maintained low interest rates for their borrowers, many of whom lived in remote areas and were seen as “high risk,” by drawing on government subsidies or international donations.

Microfinance gained popularity during the 1980s and 1990s in response to the increased priority given to women's empowerment and the concurrent shift to pro-market policies in the field of development. MFIs targeted women because women often had lower access to commercial loans due to discrimination and women's lack of literacy skills, credit histories or collateral. Women were seen as more reliable than men at repaying loans and forming groups, allowing MFIs to reduce risk and the costs of delivery. It was also thought that women would spend their increased incomes in ways that would spill over into other areas—channeling their economic gains to healthcare, nutrition, and education for their children (Mayoux and Hartl 2009). Providing loans to women, viewed as low-risk financial investments, was therefore seen as instrumentally valuable because it was assumed that women would channel the benefits of their productive labor into their reproductive labor. Microfinance thus challenged traditional gender roles by providing women access to income and paid work, but also relied on women maintaining their traditional gender roles as responsible, altruistic, nurturing caretakers.

By the 1990s, the World Bank had joined the microfinance “movement” but, alongside other “poverty experts,” pushed against models (like the original Grameen model) that were deemed financially unsustainable (Roy 2010; Wahid 1994). Instead, they encouraged MFIs to scale up and generate sufficient profits to sustain themselves, with the aim of large-scale outreach without the need for subsidies (Bateman 2010; Charitonenko, Campion, and Fernando 2004). This “new wave” model of microfinance involved new best practices that would help MFIs reduce risk and achieve financial sustainability: offering loans to those income-generating activities that yielded quick returns to reduce the risk of default; initiating regular repayments soon after loans were distributed to “instill financial discipline”; setting interest rates high enough to cover costs; mobilizing women's savings for loan programs instead of external donations; and implementing group delivery to reduce costs (CGAP 2006; Mayoux and Hartl 2009: 23). The emphasis was on offering a minimal package of financial services to the “bankable” poor, and seeking cost recovery in the process (Kabeer and United Nations 2009). This meant eliminating costly nonfinancial services (such as education, training, and health programs) and expanding MFIs’ borrower bases, often to more urban and better-off borrowers.

Private investment followed shifts toward commercialization in microfinance. For-profit investors were attracted to this $60–100 billion industry (World Bank 2015b) by impressive repayment rates, high potential profits, and the possibility of diversifying one's portfolio. Over 200 commercial banks and formal financial institutions entered the field (United Nations 2009), and corporations partnered with MFIs to sell and distribute their products, relying on the labor of borrowers, mostly women. For example, the firms Telenor, Danone, and the Veolia Corporation partnered with Grameen in arrangements in which female borrowers sold their phone lines, yogurt, and bottled water (Bateman 2013; Karim 2011). Investors put their money in “socially responsible” mutual funds at financial institutions like TIAA-CREF, which sought the “double bottom line” of contributing to poverty alleviation and empowerment while simultaneously earning a profit. Many social entrepreneurs found microfinance intuitively appealing as a form of social investing that leveraged both the market and women's innate entrepreneurial spirit. In 2010, public and private investors, including such “social investors,” committed $3.6 billion to microfinance (Roodman 2012). In the same year, however, a massive crisis (in which the state government of Andhra Pradesh halted operations of private microfinance organizations, citing MFIs’ coercive collection practices) shook the foundations of the rapidly expanding microfinance sector in India, revealing contradictions of financialized development (Mader 2013). These contradictions, while addressed in India and other countries through improved regulation, continue to pervade an industry that is increasingly structured to respond to the imperatives of profit and scale.

In the face of these general trends, however, the microfinancial sector today remains incredibly diverse and includes MFIs operating with for-profit, not-for-profit, and “mixed” aims, at different scales, in varied regulatory and institutional environments, as our case studies below demonstrate. Yet while the scholarly literature on microfinance has burgeoned at a rate that seems to mirror the industry itself, it has stopped short of providing a cohesive, empirically sound basis for understanding the complex and diverse nature of contemporary microfinance in comparative and global perspective.

THE IMPASSE OF “DEBT” AND “DEVELOPMENT” IN THE STUDY OF MICROFINANCE

Studies of microfinance have often taken one of two approaches: they have adopted either a “debt” framework, viewing microfinance as an extension of financialization and neoliberalism, or a “development” framework, focusing on microfinance's impact on the end borrowers. While both offer insights into the workings and effects of microfinance, neither is adequately equipped to explain the structure and diversity of contemporary microfinance. Instead, the conceptual bifurcation has obstructed our understanding of microfinance as a global sector of the economy imbricated simultaneously in profit and social good. However, the few exceptions to this overall trend, on which this paper builds, demonstrate the utility of moving past the binary of “debt” or “development.”

Critical “debt” scholars emphasize the unequal global political and economic context in which microfinance has emerged (e.g. Fraser 2012; Girón 2015; Pyle and Ward 2003). Local articulations, when examined, are seen as top-down manifestations of an unfair global system. To these scholars, microfinance represents accumulation through dispossession and “capital as commodity” (Marx 1981), and is constitutive of modern capitalism (Servet and Saiag 2014). Heloise Weber (2014: 545), for example, argues that microfinance “schemes” have been promoted to “entrench and manage the contradictions of neoliberal development” and reduce or contain “resistance to the adverse social implications” of neoliberal policies.

Some “debt”-oriented studies rely on discourse analysis or broad assessments of the field of microfinance to show how microfinance is a cog in an “anti-politics machine” (Ferguson 1994). In so doing, they downplay the agency of those involved in microfinance at all levels and depict microfinance as more or less authorless, blocking investigation into the multiple forms of labor and social relations that go into microfinance's production at specific sites (Brigg 2001; Keating, Rasmussen, and Rishi 2010; Lairap-Fonderson 2002; Moodie 2013). Others revive Marxist feminism, drawing attention to the presumptions about gender that drive repayment expectations and demonstrating how corporations and public-sector organizations use microfinance to relegitimize capitalism by integrating women (Eisenstein 2010; Fraser 2012; Girón 2015; Roberts 2012; Roberts and Soederberg 2014).

The “debt” tradition has also drawn on ethnography to position microfinance as a tool of neoliberal governmentality. Julia Elyachar (2005), for example, shows that state support of Egyptian microenterprise dispossesses marginal groups of their traditional identities as they are brought into a new field of power, connecting them with NGOs, states, and international actors through finance and debt. Lamia Karim's (2011) landmark ethnographic work in Bangladesh positions microfinance “as an instrument of power between a resource-rich institution (NGO) and its poor clientele” that encourages borrowers to become neoliberal subjects who “act in accordance with the ‘market principles of discipline, efficiency and competitiveness’” (xvii). Karim provides a contextually situated analysis of a global phenomenon, alongside partial views on microfinance's production and distributional consequences, demonstrating how microfinance insiders leverage impact evaluations to legitimize microfinance and benefit from an “economy of shame” that manipulates the social relations of borrowers for the sake of NGO repayment and wealth creation. But these pieces often downplay employees’ and borrowers’ agency and roles in co-constituting microfinance, suggesting that the consequences of microfinance are unmediated manifestations of neoliberal modes of development and governmentality.

If the “debt” approach focuses on microfinance's hidden agenda, the “development” approach prioritizes MFIs’ stated objectives, such as women's empowerment, poverty alleviation, and/or financial inclusion. Those who view microfinance as a development tool generally focus on local articulations of microfinance and ask whether microfinance “works” rather than exploring “the workings of microfinance” (Taylor 2012: 602). This understanding is most apparent in recent reviews of the existing evidence on microfinance's effects (Bateman 2010; Duvendack et al. 2011; Hickel 2015; Roodman 2012)¹ and in evaluations that compare “pipeline” and existing borrowers or utilize randomized controlled trails (Angelucci, Karlan, and Zinman 2014; Banerjee et al. 2013; Bernasek 2003; Brau, Hiatt, and Woodworth 2009; Copestake 2002; Copestake, Bhalotra, and Johnson 2001; Hiatt and Woodworth 2006; Karlan and Zinman 2011; Khandker 1998; McKernan 2002; Mosley 2001; Park and Changqing 2001; Pitt and Khandker 1998). These evaluations rely on instrumental views of policy, quantitative measures, and “before-and-after” comparisons across individuals in particular places based on MFIs’ stated objectives (for more discussion of this trend see Beck 2016).

The recent special issue on microfinance in the American Economic Journal: Applied Economics is emblematic in this regard. The six empirical articles rely on a simple definition of microfinance as “development tool” or “policy tool” involving “the provision of small loans to underserved entrepreneurs” (Banerjee, Karlan, and Zinman 2015: 1). In so doing they inadvertently obscure our understanding of microfinance's complex institutional, economic, and social reality. The focus is on local “effects” rather than global networks and situated processes; gender as a variable rather than a set of social relations; and outcomes over microfinance itself as an object of study. By depicting microfinance as a free-floating treatment—like a pill in a medical study—and focusing on individual and community-level effects, scholars in this special issue ignore the “workings of microfinance,” its distributional consequences, and the cumulative effects of its circulations.

These two conceptions of microfinance have provided critical insights but have also limited the scope of our intellectual engagement. We need multidimensional conceptualizations of microfinance that are attentive to microfinance's global circulations and local imbrications, as well as the various forms of labor, relations, and value extraction that it entails. Some scholars have begun to take important steps forward in this regard. Rob Aitken (2010) examines the 2007 initial public offering of Compartamos as an example of financialization, showing that in order for this “fringe credit” to be constituted as a financial object and incorporated into globalized financial flows, MFI borrowers are charged higher interests rates even as they are incorporated into mainstream finance. Aitken's work demonstrates how certain forms of capital inputs (or their anticipation) have implications for activities and relations further along microfinancial chains, but stops short of providing a framework for analyzing how socially differentiated actors performing labor at all levels contribute to microfinance's incorporation and constitution as a financial object. Philip Mader's The Political Economy of Microfinance: Financializing Poverty (2015) interrogates how microfinance functions as a financial system by generating discipline and extracting resources from the poor, and moves beyond a conceptualization of microfinance simply as “debt.” Instead, he analyzes how this form of financialization is constituted by mobilizing narratives, hierarchical chains of governmentality, and material relations between the owners of finance, intermediaries, and borrowers that allow for surplus extraction. Mader conceptualizes financial chains across space incorporating capital providers, investment funds, MFIs, branch offices, information management specialists, loan officers, and borrower groups in a “cascade of governmentality” (101). We find that extending Mader's initial formulation by applying insights from the commodity chains literature, the feminist literature on globalization, and the anthropological literature on international aid provides a more nuanced conceptualization of microfinance, one that demonstrates that microfinance is not merely governmentality all the way down.

CONCEPTUALIZING MICROFINANCIAL CHAINS: INTEGRATING COMMODITIES, GENDERED LABOR AND THE “GIFT”

We posit that microfinance is a global industry organized, like many facets of a globalized economic and political order, as a set of “hierarchical chains that span the world” (Burawoy 2001: 156). The structures of these value chains affect how those at the bottom—in our case, borrowers—experience the products of the industry. Conceptualizing microfinance as an industry underscores its profit orientation, although we recognize that, in contrast to other industries, the microfinance industry generates both financial profit and nonfinancial/social gains, whereby “investors” are seen as “giving back.” To arrive at this conceptualization, we integrate key insights from three distinct literatures. First, we incorporate the sociological literature on commodity chains that prompts us to highlight each “link” in a globally interconnected chain, as well as the relationships between them. Next, drawing from feminist analyses of globalization, we highlight women's hidden unpaid labor—which is foundational for microfinancial chains—and the gender ideologies that legitimate them. Third, we draw upon the anthropological literature on international aid, which helps us account for the gift-like qualities of microfinance that distinguish it from other global industries. After considering these literatures, we outline the central features of microfinancial chains, before turning to real-world case studies.

The sociological literature on commodity chains is multi-stranded. The “global commodity chains” approach inspired a stream of scholarship that sought to trace the production cycles of commodities created in the context of a globally stretched political economy (Gereffi and Korzeniewicz 1994). The focus of this approach (and its offshoots) is to consider how each “link” in the chain adds value to the commodity and how various nations might work to “move up” the value chain in order to develop (Bair 2005). A related stream on gendered commodity chains focuses on the unequal relationships of power that make up value chains. Those at the top set the terms under which the many actors below them operate, concentrating both risk and production in households, a key site of production and reproduction in global commodity chains (Bair 2009; Dunaway 2014b).

When we begin conceptualizing microfinance as an industry, we examine the flow of power within that industry, but also the hidden actors alongside their value chains who are crucial to the functioning of the system as a whole. While many have recognized that there is a concentration of power and influence at the top of the global microfinance industry (Mader 2015; Roy 2010), a commodity chains perspective highlights power dynamics all along the chain. Up the microfinance chain, agents craft policies by drawing on existing knowledge, values, and donor/investor demands (a rough equivalent to research and development). In the middle of the chain, the everyday work of microfinance is primarily carried out by a large staff of loan officers, cashiers, trainers, bank managers, and back-office IT personnel, whose work might provide them a path to financial stability. Further down the chain, we can see how microfinance relies increasingly on subcontracting. For example, MFIs may subcontract to information services, which provide linkages along the production chain while also connecting MFIs to other industries and coordinating the globalized production of microfinance (Rabach and Mee Kim 1994). MFIs produce information on borrowers, demand, repayment rates, and returns, and evaluations that contribute to the very narratives of development, empowerment, and social investing that drive the industry forward. In so doing, they help co-produce a new vehicle of financial investment.

Identifying “links” in the chain is only a first step, however, because at each of those links lie hidden forms of gendered and class-stratified labor that have been under-studied in the prevailing “debt” and “development” framings of microfinance. The subsidy that unpaid reproductive labor provides to global capital has been well established in feminist scholarship (Dunaway 2014a; Enloe 1990; Radhakrishnan and Solari 2015). This subsidy relies upon gender ideologies that reproduce gendered divisions of labor while rendering women's underpaid productive labor and unpaid reproductive labor invisible. Feminist researchers have noted that the perception of women as housewives facilitates women's exploitation and capitalists’ surplus extraction in globalized industries. Maria Mies's analysis of Indian homeworkers in the globalized lace industry, for example, analyzed the ways that caste and gender stratification facilitated a “very particular kind of integration into a global capitalist economy” in which lace workers were “‘fully integrated into a world market-oriented production system’… but whose integration [was] premised on their social location and self-understanding as housewives” (as described in Bair 2010: 210). Early export-processing factories in the global South also encouraged and benefited from images of women as docile, disposable workers who would leave the factory and marry within two years (Wright 2006). Feminists have also identified the importance to global industries of women's unpaid labor in the recruitment, socialization, and reproduction of ideal workers taking place at home and on the factory floor through processes of nurturing, monitoring, and self-governance (Salzinger 2003). These scholars and many others took a crucial step in defetishizing value chains by highlighting the unpaid labor embodied in commodities and laborers themselves, as well as the gendered ideologies that legitimize them (Dunaway 2014a).

Microfinance similarly relies upon gendered ideologies that legitimize and perpetuate the responsibility of women as primary caregivers. Microfinance borrowers, mostly women, remain responsible for unpaid reproductive labor at home, but are additionally saddled with paid productive labor outside the home in order to repay debts. Their loan obligations require additional unpaid labor in cooperation with MFI employees—the labor of recruiting, screening, organizing, and disciplining loan group members that has been identified elsewhere as “community management work” (Moser 1993), “sociability work” Daniels 1985), or “relational work” (Fletcher 2001). This labor fuels the industry as a whole, yet has slipped under the radar in microfinance scholarship. Just as women fashion themselves into ideal workers in households and on factory floors, women participating in microfinance fashion their lending groups, locating and cultivating ideal borrowers who will comply with MFI requirements without protest or default, and excluding those who cannot meet those requirements. Just as export-processing factories in the global South encourage and benefit from ideologies of women as docile workers, hierarchical microfinance chains benefit from ideologies of women as more sensitive to social sanction and more compliant and responsible in meeting MFIs’ requirements.

Thus far, we have argued that microfinance must be examined like other global industries that commodity chains theorists and feminists have illuminated. But there is an important difference: microfinancial commodities often double as gifts, entailing implicit, delayed, and ambiguous duties to reciprocate, as well as expressions of power-laden relationships (Mauss 2011; Sahlins 1974).² Thus, to describe the gift-like qualities of microfinance, we draw from anthropological work on international aid that applies gift theory to other forms of international development aid (Kowalski 2011; Mawdsley 2012; McGoey 2012; Shutt 2012; Silk 2004). Some have highlighted how private donations and transfers of aid come with “the same kinds of expectations in terms of ritual performances of appreciation by beneficiaries that reinforce inequality between givers and receivers” (Korf et al. 2010, S61). Others have argued that development donors and practitioners may draw on discourses of entitlements or market exchanges, but act according to principles of “negative reciprocity” gift-giving in ways that reinforce material and political dominance while positioning themselves as generous (Eyben 2006; Hattori 2001; Kowalski 2011). Even donations that start out as “pure gifts”—material expressions of solidarity without expectations of reciprocation—are transformed as they travel through aid chains in ways that make them conditional and reinforce differences between donors and recipients (Stirrat and Henkel 1997). Applying these insights pushes scholars to explicitly address the hidden relationships and operations of material and symbolic power along microfinancial chains (Eyben 2006).

Microfinance is often marketed using discourses, practices, and images of philanthropy. Websites like kiva.org allow faraway donors to shop in a “marketplace for philanthropic capital … a place for browsing, choice, and ‘addictive user-experiences’” (Bajde 2013: 217). Actors along microfinance chains co-constitute gift narratives and draw on implicit moral/symbolic obligations. Borrowers display gratitude, loan officers cultivate emotional ties with borrowers, and investors and donors can not only earn a financial return on their investments, but also transform their position from “dominant” to “generous” (Bourdieu 1990; Hattori 2003), allowing them to capture the best of both worlds of commodities and gifts.

In order to depict typical microfinancial chains, we combine the insights of the literatures described above in order to modify Michael Porter's (1985) classic value chain (Figure 1), which was originally modeled for the purpose of improving efficiency and increasing profit. To accomplish this (Figure 2), we shift away from an emphasis on disembodied labor processes to embodied, situated people, with specific interests, laboring in relation to others, and focus on both material and non-material capital. Thus, we adjust Porter's model such that our diagram: (1) situates the chain vertically in order to draw attention to the hierarchical character of this value chain and the ways that microfinancial chains simultaneously incorporate and differentiate actors according to a variety of social categories; (2) includes reference to the social actors who perform labor at the various links in the chain; (3) includes reproduction,³ in parallel with consumption, as a major activity at the bottom of the chain; and (4) adds a reverse-flow arrow, recognizing that alongside repayment, individual stories and gift narratives and images circulate back up the chain, thus allowing the reproduction and strengthening of microfinancial chains themselves by satisfying past investors and enrolling future investors.

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FIGURE 1. A Standard Value Chain, Adapted from Porter (1985)

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FIGURE 2. A Microfinancial Value Chain

As depicted in Figure 2, the “raw (financial) materials” come from those at the top, who often decide things like the expected rate of return on the loan, ideal clients, banking policies, and audit methodologies (Bugg-Levine and Emerson 2011). As diverse forms of global capital travel to targets in the global South, they pass through many hands. Further down the line, partner institutions may influence interest rates and the packaging of loan products, and conduct market research on competitors as well as the types of value-added services that can give them an edge with potential clients (Sievers and Vandenberg 2007). Loan officers target ideal borrowers for loans, and must undertake affective and relational labor to cultivate relationships with them to succeed at their jobs (Kar 2013). Finally, borrowers (mostly women) organize themselves into groups, and through relational labor fulfill or adjust top-down pressures to comply with loan terms (Brett 2006; Karim 2011). With repayment, value is extracted back up the chain in the form of success stories, replete with images and biographies collected and crafted by fieldworkers in relation to borrowers, profit where possible, and the conviction that this process has produced a positive impact, contributing to the (re)production of a new vehicle of financial investment. Members of the educated public in wealthy countries, who may or may not directly contribute to microfinance, help circulate these images and stories through their own networks, providing a positive public image for microfinance in wealthy countries. The lenders and investors at the top then consume these stories and financial profits, experience satisfaction, and continue to fuel the chain.

TRACING MICROFINANCIAL CHAINS IN GUATEMALA AND INDIA

By tracing two microfinancial chains, one that connects with borrowers in Guatemala, and another that connects with borrowers in India, we render visible the labor, relationships, and narratives that constitute present-day microfinance. These chains differ in terms of scale, goals, length, and regulatory and institutional environments. The MFI in Guatemala, Fundación Namaste Guatemaya (Namaste), serves between 400 and 500 clients a year and was founded to serve social good. In contrast, the Indian MFI, Sowbagya, serves over two million clients spread across 20 Indian states. While Namaste is a nonprofit organization reliant mainly on funding from charitable grants and donations, Sowbagya is a for-profit institution that relies on multiple changing sources of domestic and foreign funding. Research on Namaste was conducted over many years in constant communication with the founder and other major stakeholders, while Sowbagya's operations were studied primarily during six months of intensive fieldwork in 2012, and interviews with the founder and many other key stakeholders.⁴ Despite their differences, similar processes unfold at parallel links in the two chains, demonstrating how a chain analysis can be sensitive to diversity and local imbrications, while identifying global patterns.

ABSTRACTING THE DIVERSITY OF MICROFINANCE

The two case studies above paint vivid portraits of institutional and organizational diversity in the microfinance sector, highlighting stratified structures, strategic actions on the part of employees and clients, and the contested goals of founders. In an effort to move from the complexity that emerges from chain-oriented case studies toward a more generalizable framework for understanding how commercial and social processes intertwine in the global microfinance industry, Table 1 focuses on contrasting ideal typical cases of commercially oriented and development-oriented microfinance.

The table identifies the actors involved in each link in ideal typical microfinancial chains and the various forms of labor they are likely to perform. While in reality MFIs are affected by diverse institutional and regulatory environments, and do not typically restrict their activities strictly along lines of commercial or developmental goals (as can be seen in our case studies),⁵ tracing these ideal typical chains is useful because it demonstrates that chain analyses are well suited to even dramatically different forms of microfinance and can handle various forms of inputs, labor, and value. Ideal typical chains identify clearly how guiding logics at the top of microfinancial chains are likely to impact relations, labor, and experiences further down the chain. As seen in the table, an orientation toward social good leads to a focus on charitable capital, while orientation toward profitability leads to a focus on commercial capital, which affects the relations and labor undertaken in the processes of program design, distribution, and repayment, as well as the nature and distribution of the value extracted up the chain. This type of analysis also allows examination of the agency and social locations of those along the chain (including loan officers and borrowers), and views these actors as constitutive of microfinancial chains. Thus, it stands to provide a more accurate account of microfinancial chains than does Mader's (2015: 101) “cascade of governmentality” by allowing researchers to see a wider variety of microfinancial chains and calling attention to various forms of labor, value, and relations, rather than assuming governmentality all the way down. By mapping out in the abstract the ideal typical chains oriented more toward profit or more toward social good, we acquire a conceptual structure within which we can identify patterns, even in the context of organizational and contextual diversity.

CONCLUSION AND IMPLICATIONS

In this paper, we have argued against prevailing paradigms for studying microfinance in favor of a “chains” perspective that allows us to better construct microfinance as an object of sociological inquiry. To make this case, we have highlighted microfinance's production and distributional consequences, and particularly its imbrication in competing systems of profit and social good. We have emphasized the utility of comparison in highlighting precisely how variously situated institutions navigate the economic, organizational, and discursive terrain between profitability and social good. Ultimately, we aim for this study to promote richer ethnographies of global development (Burawoy 2001; Long 2001). Here, we highlight three ways to do just that, both in the study of microfinance and in the sociology of development more broadly: (1) by encouraging the use of comparison in the analysis of ethnographic work; (2) by identifying exactly how a particular case is situated within hierarchical global and local social and economic structures; and (3) by drawing out the situated perspectives of social agents who constitute complex development processes.

While ethnographic work is by nature intensive and usually devoted to no more than a few sites, bringing ethnographic work into comparative conversation serves to illuminate patterns and anomalies that deepen our sociological understanding of development. In our comparison of two diverse geographical and organizational contexts, we come to a greater understanding of how the context of commercialization shapes the everyday workings of microfinance, regardless of the intent of the specific organization. For example, we found that although Namaste is a nonprofit organization and Sowbayga is a for-profit organization, customers interact with the organizations on similar terms. Namaste's context in Guatemala, as well as its interest in teaching clients how to be responsible borrowers, ensures that the organization behaves in some ways like a for-profit organization. Sowbagya, on the other hand, provides various social benefits to its clients to legitimate itself as a company oriented toward social good, which may be possible in part because the clients they serve are better-off than those of the MFI's peers. Ironically, Sowbagya, a profitable organization charging market interest rates, is able to elicit loyalty and enthusiasm from its clients, while Namaste, an organization supposedly oriented to “helping” the poor, receives little loyalty. Despite the differences in context and organizational scale, we also found that both Sowbagya and Namaste seem to recruit members of the better educated working class to serve as their direct links to their clients. This suggests that perhaps there is an under-studied class of intermediaries produced by microfinance organizations in many contexts, and that this class and their perspectives on their jobs may be critical to our understanding of microfinance as a whole (Radhakrishnan 2015). While it might be possible to draw that implication from a single ethnographic study, the comparative angle makes it all the more compelling, deepening the claims that ethnographic research can make.

We have emphasized throughout this paper that microfinance, like any global development intervention, is situated in hierarchical social and economic structures. Even though this fundamental insight structures understandings of development sociology, in practice, a consideration of local and global structures often remains on the sidelines of both empirical work and analyses. We aim for this study to help forge an intersectional global political economy perspective, which, despite its deep histories in studies of the world-system, gender, and commodity chains, remains a nascent perspective in the subfield. An intersectional global political economy perspective emphasizes how structures of the global political economy articulate in the context of race, class, caste, gender, and geographical difference. In other words, we must actively connect an intersectional understanding of power, which is attentive to complex forms of difference, to the broader inequities that structure our global political economy. We argue that modifying a chains perspective allows us to do just that. Here, we have highlighted hidden forms of especially gendered labor, including the intensive labor required to reproduce microfinancial chains themselves. Exploitation of clients, we show, occurs not just in the context of high interest rates or default. Rather, the everyday functioning of all microfinance products takes for granted women's reproductive labor at home and in their communities, and requires them to labor in small businesses to repay loans and undertake unpaid labor to ensure the smooth functioning of their loan groups. We have also stressed the extent to which class differences, the regulatory environments in different countries, and the power relations between countries strongly impact how capital flows in and through microfinancial chains. Together, these dynamics serve to reinforce domestic hierarchies in the context of an unequal global system. Further work in this vein can explore exactly how different types of capital may affect how MFIs interact with borrowers, including the level of control borrowers exercise over the size and terms of their loans, and the various requirements that accompany loans, be they training, slogans, or other add-ons. An intersectional global political economy perspective can also be generative of new methodologies sensitive to geography. It requires our attention to the relations of power and authority within any system of production and distribution, and raises questions regarding governance. When we examine these issues in particular contexts, we begin to flesh out an intersectional global political economy perspective.

Finally, we aim to bring back actor-oriented perspectives on development (Long 1990), which highlight the agency of those designing, implementing, and reacting to development policies, while nonetheless taking into account the structural understandings we have just outlined. This work can occur in cooperation with the points made above. For example, we learned from both Namaste and Sowbagya that the everyday lives of those at the top, whether in a for-profit or nonprofit context, are often so disconnected from the everyday lives of borrowers that they develop unrealistic expectations and unfounded assumptions that in turn put pressure on those further down microfinancial chains to reconcile the differences between policymakers’ expectations and on-the-ground realities. In both cases, we showed that field staff members are often squeezed in this industry: sandwiched between the demands of the corporate office and clients, while still trying to remain competitive in their local industries and hang on to their jobs. This squeeze is accompanied by many ethical dilemmas and significant amounts of unpaid labor. Finally, we come to understand repayment and marketing in tandem with one another, where the production and circulation of stories requires labor extraction, and the stories circulate up the chain to affirm the feelings of donors and investors who wish to contribute to social good. These actors, their positions, and the relationships between them constitute contemporary microfinance, and any understanding of microfinance in any specific context is impoverished without them.

Tracing microfinancial chains is ultimately both a theoretical and empirical set of recommendations with implications for methodology. We call for multi-sited research along microfinance chains, breaking down the division between first and third worlds, and situating particular MFIs and particular locations in relation to a dynamic global system made up of contingent social actors, laboring and creating value in relation to one another.