Microcredit and Lamia Karim’s ’Women in Debt in Bangladesh’
Monday, September 12, 2011
Taj Hashmi in the first part of his two-part review
A report by the Government of Bengal in the 1930s revealed that a poor peasant from Mymensingh district in eastern Bengal (Bangladesh since 1971) had told a land revenue official in 1929: “My father, Sir, was born in debt, grew in debt and died in debt. I have inherited my father’s debt and my son will inherit mine.” Following the introduction of microcredit, glorified as microfinance by its local and international promoters, if the situation has improved with regard to the lot of the rural masses in Bangladesh, especially poor women, is an important question today. Professor Lamia Karim in her Microfinance and its Discontents: Women in Debt in Bangladesh (University of Minnesota Press, Minneapolis and London, 2011) has raised and answered the question with absolute honesty and objectivity.
I have personally come across historical and contemporary data buttressing the hypothesis that although things have improved with regard to the state of perpetual indebtedness and disempowerment of rural masses in Bangladesh in the past seventy years, microcredit has not been a miracle, let alone the only factor, in improving the lot of the rural poor in the country. Microcredit, along with unaccountable NGO operation, has mostly been detrimental to the best interests of Bangladesh both at micro and macro levels. The preponderance of NGOs in the development and governance sectors and their unaccountability to governments and people in countries like Bangladesh have weakened governments, bred corruption and disempowered people. In view of this, I find the author’s hypotheses, findings and thread of arguments in convergence with those of scholars having strong reservations about NGO operation and microcredit-business in the Third World.
Now to turn to the brief history of microcredit and moneylending business in Bangladesh, we know several legislative measures during the 1930s and 1940s proved to be somewhat effective in curtailing the power and privileges of the traditional moneylenders – mahajans (literally, the big men) in local parlance – in Bangladesh. Since most mahajans in the subregion belonged to various Bengali Hindu trading castes, such as Saha, Banikya and Tele; and Hindu landlords, traders and even lawyers; and Jaina (Marwari or Mero) traders from Rajasthan, the communal partition of India in 1947 further disempowered these classes.
Various historical documents corroborate the state of rural indebtedness of Bengali lower classes under the British rule. The rate of interest on small loans or microcredit during the early 20th century sometimes exceeded 100 or even 150 per cent.