Borrower protests and the failures of microfinance in Nicaragua
MetadataShow full item record
For over two decades, development practitioners, scholars, and institutions have celebrated microfinance—broadly defined as the provision of small-scale financial services to the world’s poor—as an effective tool for poverty alleviation and local economic development. Critics of microfinance, however, suggest that there is little clear evidence to support the claims that microfinance lifts the poor out of poverty and fosters local economic development. In this thesis, I explore some of the challenges to microfinance in northern Nicaragua by exploring a case study of a group of borrowers who have confronted microfinance and exposed some serious problems. Since 2008, thousands of microcredit clients in Nicaragua have expressed their extreme frustration with microfinance and its detrimental effects in their lives. In this case, Nicaraguans caught up in the microfinance scheme risk losing their homes and livelihoods and falling into greater poverty. These borrowers, organized as El Movimiento de Pequeños Productores, Comerciantes y Microempresarios del Norte (the Movement of Producers, Merchants and Small Business Owners of the North), demand new terms on their microcredit debts and new client protections. I explore the reaction and the demands of these borrowers and their direct and indirect critiques of the microcredit sector, its practices and its alleged goals. I argue that the resistance of the MPCN reveals the political and economic rationale and neoliberal ideology behind microcredit as a poverty alleviation intervention, and their contestation challenges its underlying logic. These critiques and demands provide us with a foundation for rethinking the prevailing market-oriented approaches to development.