Micro-finance : sustainable development or economic band-aid? : a thesis presented in partial fulfilment of the requirements for the degree of Master of Philosophy in Development Studies, Massey University
The simple question which this thesis set out to answer is whether a Micro-Finance intervention, either in isolation or as part of a wider programme, is capable of facilitating a development process which can be truly effective in alleviating the poverty of the very poor. Essentially it seeks to clarify whether there is a place for Micro-Finance in initiating and sustaining an effective process of community development. The hypothesis has been tested through a 'Rapid Impact Assessment' carried out within two urban poor communities in Manila, Philippines. The evidence gathered is simply the actual thoughts and feelings of the 'poor' community members. I have tried to accept their responses with respect and to avoid any sort of ethnocentric second guessing as to supposed underlying cause. It is only they who can truly attest to the impact of the programmes, and it is only by accepting their spoken responses as genuine and valid that I believe that I can forge a body of analysis and discussion which may in some way genuinely add value to the community (urban poor communities surveyed) and to the academic sector of 'development'. The key lens through which the analysis of the impact of these programmes has been viewed is that of the relationship between micro-finance/ economic capital and social capital. The evidence obtained from the research, suggests that what I have termed 'higher level' indicators of social capital (generosity, self-sacrifice) can - and do - manifest when the physical, material and 'lower level' social foundations (including personal confidence, collective solidarity, household and community status) are provided by micro-finance programmes. It also appears clear from the evidence of this research that a key element of these higher level social capital indicators is the 'willingness to make sacrifices and to commit to the needs of the wider family and the wider community'. The question however still remains, however, as to whether the micro-finance programmes are in some way indirectly responsible for leading them down this path towards improved social capital. It would appear reasonable to assume from the previous discussion that certain lower level aspects of social capital (such as the focus on the values of trust and discipline) may be the glue that, to a certain extent, bonds individuals to the community, and - in turn - to higher level aspects of social capital. However, this point, given the constraints of the research, cannot be fully validated. What is clear is that the micro-finance programmes surveyed in this thesis have facilitated the economic and social platform necessary that the people are able to choose, and confidently act upon, a design for their own development.