A Critical History of Poverty Finance: Colonial Roots and Neoliberal Failures

Product Information

My first book, The Global Governance of Precarity (Routledge, 2018), examines the governance of irregular forms of labour in sub-Saharan Africa through a historical study of the activities of the International Labour Organization. I draw together analyses of ILO policy towards forced labour, unemployment, and social protection for irregular workers in sub-Saharan Africa from 1919-present to make a wider argument about the political constitution of class and the contested boundaries of the working class.

Yet, without diminishing the horrific nature of these crises, they are also outliers. When we look at the longer history of poverty finance, we see a tendency for finance capital to pile into a few places (like Andhra Pradesh, or more recently Kenya), while skipping over the vast majority of people and places in the global south. This has taken place in the face of the prompting and prodding of the Bank and national governments seeking to promote wider ‘access’ to finance across the board.The simultaneous allure and anxiety that characterizes microfinance has spurred two new histories of the industry. The books—Bernards’s A Critical History of Poverty Finance: Colonial Roots and Neoliberal Failures (2022) and Joanne Meyerowitz’s A War on Global Poverty: The Lost Promise of Redistribution and the Rise of Microcredit (2021)—depart from the optimism of 1997 and 2006. They instead view microfinance as rooted in colonial and neoliberal models for the governing of workers, the extraction of value, and the maintenance of inequality. Through attention to the ideas and instruments of microfinanciers, these scholars offer important critiques. Yet in attending mostly to the archives of development practitioners, they offer fewer insights into what borrowers want and how they challenge hegemonic finance. Moreover, seeing the history of microfinance as an ongoing repetition of exploitation means the authors cannot offer a vision in which finance—whether socialized, decommodified, or democratized—might play a role in improving the lives of the global majority. The result is that millions of small businesses in the Global South are one accident away from failure. A broken piece of equipment or unexpected weather can sink many of them. The microcredit industry says ‘give them a loan’ which simply leaves such businesses as exposed as they were before, but with more debt as well.

Critics of microfinance in the Global South would do well to demand not the end of finance, but a radical transformation of credit, savings, and insurance.By the turn of the millennium, Yunus was microcredit’s most effective global salesman. The 1997 Microcredit Summit in Washington, D.C., launched a plan “to reach 100 million of the world’s poorest families, especially the women of those families, with credit for self-employment.” Influential advocates such as Nicholas Kristof and Hillary Clinton spread the gospel through emotional appeals to individuals and institutions: finally, here was something that could lift millions out of poverty. And the message resonated, not least because it aligned with the prevailing liberalism of the time. It was pro-poor and pro-woman, and it hinged on private initiative rather than state welfare or political struggle. A Critical History of Poverty Finance: Colonial Roots and Neoliberal Failures Link opens in a new window, Pluto Press -- Available open access here Link opens in a new window. A World Bank official interviewed by the Financial Times in early 2019 rhapsodised the virtues of emerging financial technology (fintech):