Chapter 2 of Lamia Karim’s book, Microfinance in Bangladesh, provides an insightful overview of the research process and key concepts that guided her 18-month-long ethnographic study on microfinance NGOs, gender dynamics, and rural indebtedness in Bangladesh. While in the rural area of Pirpur Thana, Karim collaborated with a research assistant (Rina) who helped her connect to the villagers whereas in urban Dhaka, she used her family connections to access her research subjects. Towards the end, Karim has conducted a survey of 158 households.
The chapter also sheds light on two disturbing incidents – the Proshika violence case where defaulting borrowers were killed in an accident on their way to jail, and the case of Badal Shah who borrowed money from multiple NGOs and fled.
Right from the disturbing opening stories of coercion against defaulters, we get a sense of the complex power dynamics at play around microfinance loans. I am struck by Karim’s articulation of “governmentality” in analyzing how NGOs modulate the behaviors of poorer borrowers towards particular objectives. The ability to extend or withhold loans gives these NGOs tremendous influence that often translates into hierarchies of power, despite their emancipatory rhetoric. We see this in the way borrowers are infantilized and told they must repay loans even before burying their dead child. This coercive leverage is quite alarming.
Equally notable is Karim’s analysis of loans as manifesting relations of domination between creditors and debtors. Loans are not neutral financial instruments – they create states of obligation, accountability, and subordination that can deeply impact people’s lives. This becomes particularly problematic given the collective liability involved in women’s lending circles. A woman’s failure to repay does not just affect her own standing, but causes her to lose face within family and community networks.
This connects to the ideas of honor and shame. The chapter says men have “laaj” while women have “izzat”. A woman unable to repay her loan may be seen as breaking her covenant with Allah and besmirching her faith. The discourse around shame holds women to strict account for any deviations from social norms. Hence, a loan default can profoundly diminish a woman’s honor and social capital in ways less applicable to men.
Given these gender dynamics around debt obligations, it is concerning that male relatives exert control over most loans while women bear responsibility for repayment. This imbalance of accountability versus actual access to resources shapes women’s disempowering experiences of microcredit. There is clearly a need for more critical interrogation of simplistic narratives of women’s financial empowerment.