Capitalizing on Women’s Social Capital?
Women-Targeted Microfinance in Bolivia
Kate Maclean
ABSTRACT
Both social capital and microfinance are central to mainstream development
interventions, and both are predicated on the need to recognize the importance of social factors in development. Microfinance institutions mobilize
social capital in the form of a group guarantee, and aim to support the development of sustainable financial institutions and income generation. Women
are targeted in part because of the effectiveness of their social capital as
collateral. However, although social capital is assumed to support development and income generation, the precise dynamics involved in this are rarely
explored. This article examines the construction of social capital and its relationship to income generation, based on a long-term ethnographic study of
village life in rural Bolivia and the microfinance institution operating there.
The author examines the complexity and gendered contradictions implied in
the way that social capital is generally viewed to support economic development. It is suggested that the way microfinance institutions use social capital
to support sustainable financial institutions and income generation does not
always reflect the way that women’s networks support access to resources
and ultimately, economic development.
INTRODUCTION
This article aims at a deeper explanation of social capital, which, it is often
assumed, holds the answer to problems of under-development. Defined as
the trust, norms and networks which allow people to co-ordinate actions
and achieve their aims (Laurie et al., 2005), social capital is seen as the
missing link in development; a corrective to the social corrosion of neoliberal
policies aimed at getting the prices right (Portes and Landholt, 2000: 529).
It is argued that social networks facilitate access to resources and protect
the commons, whilst co-operation makes markets work more efficiently
(Putnam, 1993). Microfinance interventions that use a group-based guarantee
to support the development of sustainable financial facilities and promote
income generation among members exemplify the way that social capital is
Research for this article was funded by an ESRC Studentship Award (PTA 030 2004 00186). I
would like to thank Haleh Afshar, Sylvia Chant and Kathy Baker for invaluable comments and
encouragement, and the two anonymous reviewers for very helpful feedback.
C International Institute of Social Studies
Development and Change 41(3): 495–515 (2010). 2010. Published by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK and
350 Main St., Malden, MA 02148, USA
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assumed to support development. There is, however, much complexity in
the way that social networks are constructed and the function they have in
supporting economic development. The gendered norms and dynamics that
underpin social capital and its role in development are rarely explored. The
aim of this article is to challenge received wisdom about how social capital
can be used to support development, with specific reference to a womentargeted microfinance institution in Bolivia. Drawing on both theory and
practice in Bolivia, the article returns to the literature which highlights the
complexity of social capital, arguing that the perceived link with economic
development can be over-simplistic.
Though well explored in the literature, the concept of social capital is revisited first to set the scene for the subsequent discussion which investigates
the operation of social capital in practice within communities in the Andes.
The aim in examining the literature is to illustrate the potential tensions between social capital, income generation and development, and how these are
glossed over in mainstream approaches to social capital and microfinance.
Drawing on the ‘network view’ (Moore et al., 2005; Woolcock and Narayan,
2000) which focuses on the way that social capital is constructed and situated
in cultural identity, traditions and norms, we look at the dynamics involved
in balancing social networks and individual entrepreneurial success, and the
gendered contradictions which can ensue.
The vehicles for exploring different forms of social capital are aspects of
village life in rural Bolivia and the workings of a women-targeted microfinance scheme which, it would seem, is underpinned by the assumptions
driven by the literature — that social capital supports economic development. The article examines in depth the ways in which women’s social capital
and microfinance come together to support income-generation activities and
in certain cases inhibit them. Specific attention is paid to the construction
of social capital in the rural Aymaran speaking valley of Luribay, Bolivia,
and how the recreation of norms and traditions and the formation of networks provide access to different resources. The way that social networks
and income-generating opportunities are embedded in cultural identities and
norms is found to be crucial to the successful utilization of microfinance
facilities.
MICROFINANCE AND SOCIAL CAPITAL
As microfinance adopts a dual approach of group lending and credit, it is a
‘strategic research site’ (Woolcock, 1998: 184) for observing the dynamics
between social capital and economic capital. Microfinance is the provision
of small loans collateralized by a group guarantee. The institution lends to
the group as a whole; its members are jointly liable for repayments. Trust and
relationships within the group function as collateral, as individuals would
lose their reputation if they defaulted. This technique reduces administration
Women-Targeted Microfinance in Bolivia
497
costs for the bank, as members themselves collect repayments at regular
group meetings, making the provision of small amounts of credit financially viable (Johnson and Rogaly, 1997; Ledgerwood, 1999). This use of
social capital has proved an extremely effective form of collateral and exemplifies the importance of trust and relationships in economic development
(van Bastelaer and Leathers, 2006). In turn, group membership can increase
not only women’s access to credit but also their social contacts, both of
which can support income-generation activities (Kabeer, 2001; Mayoux,
2000).
The dominant approach to microfinance is the Financial Systems (FS) approach, in which success is measured in institutional terms such as breadth
of outreach and repayment rate (Johnson and Rogaly, 1997; Ledgerwood,
1999). An institution is financially sustainable if the savings and interest rates
can cover the cost of loans and administration without the need for subsidy
(Yaron, 1994). Funding priorities and expectations from international financial and development institutions consider sustainability to be paramount
(Mayoux, 2000; Otero and Rhyne, 1994; Robinson, 2001). Whilst this use
of social capital valorizes its strength as collateral, the function of trust,
traditions and norms within the group, and the complexity of social capital’s
relationship to the ability to effectively invest the credit and repay, are rarely
explored.
In contrast, institutions adopting the Targeted Lending (TL) approach
use group formation as a strategy to combine microfinance’s dual aims of
poverty alleviation and the empowerment of women (Ledgerwood, 1999).
The social impacts associated with microfinance, such as women’s empowerment, children’s education and family welfare have been attributed to the
social capital formation encouraged by microfinance institutions (Kabeer,
2001; Mayoux, 2000). As well as being a source of collateral, group formation creates a space in which new contacts can be made, with a variety
of benefits for household and community development. Group meetings can
also be fora for discussion and opportunities to deliver training (Mahmud,
2003; Mayoux, 2006).
These different approaches to microfinance imply different conceptualizations of women’s social capital and its relationship to development, which
are often glossed over in the literature. Microfinance institutions from each
of these approaches target women, and the different ways in which social capital is used by microfinance institutions implies a gender analysis
that warrants clarification (Mayoux, 2006). Literature from the FS approach
stresses the effectiveness of women’s networks as collateral, whilst advocates of the TL approach stress the importance of women’s networks in
mobilizing community resources (Johnson and Rogaly, 1997; Ledgerwood,
1999; Mayoux, 2006). Both of these approaches are using the strength of
women’s social capital to support development in terms of poverty alleviation and institutional outreach, but the nature of social capital and its role in
development is neglected.
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It has been argued that social capital is ‘women’s capital’ (Molyneux,
2002; Radcliffe, 2004): whereas there are gendered barriers to accessing
economic capital, women’s role in family and community ensures that they
have strong networks. Women’s unpaid ‘community and household labour’
(Moser, 1993) has been found to be vital to survival in development circles but is overlooked by neoliberal policies which define development as
economic growth (Afshar and Dennis, 1992; Elson, 1992; Moser, 1993).
Microfinance’s ‘double bottom line’ approach of valuing women’s social
capital and promoting income generation with credit means that microfinance is well placed to recognize women’s role in development without
essentializing their household and community labour (Molyneux, 2002).
However, it is my concern that the way women’s social capital is harnessed
by microfinance does not sufficiently take into account the complexity of
the construction of social capital and its relationship to economic resources.
In particular the various ways that women’s social capital is used indicate
that there are many different and gendered relationships involved in the construction of networks and their relationship to productivity and efficiency,
which may be rendered invisible by interventions that tend to only look at
institutional level impacts.
Microfinance and Social Capital in Bolivia
Bolivia is a reference point for microfinance and has some of the most financially sustainable organizations (Hulme and Moseley, 1996; Otero and
Rhyne, 1994). Techniques to promote financial sustainability in Bolivia are
replicated worldwide (Quiros Rodriguez et al., 2003). The sector is extremely
varied in terms of modes of delivery and technique, within the overarching
framework of financial sustainability (Marconi and Mosley, 2006; Otero
and Rhyne, 1994; Velasco and Marconi, 2004). Some microfinance institutions have achieved sustainability and become formalized banks (Hulme and
Moseley, 1996). They offer a portfolio of loans that includes individual, collateralized loans as well as group loans. NGOs and Financial Development
Institutions targeting more marginalized sectors tend to use group guarantees
and embrace a double bottom line of social and financial impact.
In post-neoliberal, multicultural Bolivia microfinance potentially includes
citizens previously marginalized by development policies focused on economic growth. The importance of social networks, norms and traditions to
the economy, society and politics of the indigenous people in Bolivia has
a long history in Andean scholarship (Larson and Harris, 1995; Zoomers,
2006). The Andes is known for its co-operative labour practices and the
importance of ‘reciprocity networks’ (Hamilton, 1998) rooted in indigenous
agricultural traditions (Guillet, 1980; Isbell, 1978). These traditions support
economic production and community participation, constituting a strong
source of social capital (Bebbington, 2000; Grootaert, 2001; Grootaert and
Women-Targeted Microfinance in Bolivia
499
Narayan, 2001). In this setting, social capital could valorize the importance
of these traditions and offer a more inclusive development paradigm, exemplified by the use of the social capital guarantee in microfinance.
However, the way that social capital is harnessed may overlook the potential tensions involved and essentialize indigenous identity and tradition
(Lagos, 1994; Larson and Harris, 1995; Zoomers, 2006).1 Whilst reciprocal norms and traditions are characteristic of life throughout the Andes,
different kinds of networks are formed, underpinned by the recreation of
these traditions, and the access to resources facilitated by these networks
also varies. Dynamics of gender, ethnicity and rurality influence the resources sought and facilitated via these networks. Crucially for womentargeted microfinance interventions, the assumption that traditions in the
Andes are inherently beneficial overlooks the gendered burden of labour
involved in maintaining tradition and social networks (Choque Quispe,
1988).
In order to analyse the construction of social capital and the potential
tensions involved in its use in women-targeted microfinance institutions, the
following section will revisit the literature on social capital to explore some
of the ways that its role in development has been conceptualized. The FS
approach to microfinance is based on communitarian assumptions about the
beneficial role of traditions and norms to development. In contrast, insights
from theorists who postulate social capital to be an individual asset can be
used to clarify potential tensions between group membership and individual
success. This will provide the theoretical framework to analyse women’s
use of the group and credit facilities provided by microfinance in a rural area
of Bolivia.
COMMUNITARIAN AND NETWORK THEORIES OF SOCIAL CAPITAL
Both microfinance and social capital rose to prominence in the 1990s when
the World Bank took them up as ways to show the more human side of
development within a market-led development paradigm which emphasizes
economic growth (van Bastelaer and Leathers, 2006). The literature on social capital is vast and debates its conceptualization and influence on various
aspects of development. Starting with Putnam’s (1993) definition of the concept and its relationship to civic participation and market efficiency, social
capital has continued to be a prominent discourse (Portes and Landholt,
2000; Woolcock, 1998). Critics of Putnam’s approach have focused on assumptions made about the inherent benevolence of traditions and norms
(for example, Mayoux, 2001; Molyneux, 2002) and the postulation of social
1. See Larson and Harris (1995) on the development of markets in the Andes, and Lagos (1993,
1994) on the complex negotiation of tradition, colonial power and indigenous autonomy as
capital markets develop.
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capital as a property of communities or even nations (Portes, 1998). In contrast the network view of social capital, drawing on the analysis of the concept
by Bourdieu, looks at how individuals create networks via which they can
access resources (Bebbington, 2007; Bourdieu, 1985; Rankin, 2002). Taking these ‘communitarian’ and ‘network’ theories, I will argue that the latter
allows a clearer analysis of the gendered construction of social capital and
how it relates to development.
The Communitarian View of Social Capital
The way social capital is used in the FS approach to microfinance exemplifies
the mainstream approach, inspired by Putnam’s work. The ‘communitarian
approach’ postulates social capital to be an inherently beneficial property of
communities. As Putnam summarizes: ‘social capital . . . refers to features
of social organisation, such as trust, norms, and networks, that can improve
the efficiency of society by facilitating co-ordinated actions’ (Putnam, 1993:
167). Reliable norms and traditions can allow people to participate in civil
society or the market knowing that the investment in time and resources that
this implies will be repaid.
Both the communitarian approach to social capital and group-based microfinance schemes potentially ascribe value to social networks within a
market-led approach. Putnam illustrates his claims about the importance of
trust and social standing with reference to group-based credit schemes.2 Peer
pressure within the group works because people do not want to lose their
standing within the community: their social capital. Harnessing the strength
of this social capital as collateral ‘expand[s] the credit facilities available
in these communities and [improves] the efficiency with which markets
operate there’ (ibid.: 169). In using social capital as collateral the FS approach recognizes the importance to development of social relationships
underpinned by norms and traditions and builds on their strength in multiple
ways.
Whilst this represents a broader definition of development than the economic reductionism of the 1980s, the assumption that norms and traditions
are inherently beneficial has been critiqued. Understanding social capital as
a public good overlooks the downside of relationships, traditions and norms
and the restrictions that they impose (Mayoux, 2001; Portes, 1998). Intracommunity relationships can involve downward levelling norms as well as
mutual support. For example, jealousy and sanctioning of individual achievement can help maintain group cohesion, but are not necessarily beneficial for
development at either the social or individual level. The strength of social
2. Putnam specifically refers to Rotating Savings and Credit Schemes (ROSCAs), traditional
forms of saving and lending which predate microfinance schemes (Putnam, 1993: 167).
Women-Targeted Microfinance in Bolivia
501
capital can itself be a burden and restrict individual success (Granovetter,
1983; Portes, 1998).3
Critiques of microfinance interventions have demonstrated that a failure
to examine the norms and traditions constructing social capital can result
in contradictory outcomes for women (Mayoux, 2001; Rankin, 2002). Hierarchies within groups can be exacerbated by using group relationships
as a whole as collateral. Intra-family and generational hierarchies result
in exploitation of younger members of the group (Mayoux, 2001). Sexist
norms and traditions are compounded by harnessing social capital without
also providing a space to critique its gendered construction from women’s
point of view (Rankin, 2002). Whilst the outcomes of using social capital in
microfinance are positive at an institutional level, claims about women’s empowerment and improving community cohesion are less consistent (Bhatt,
1995; Goetz and Sen Gupta, 1996; Kabeer, 2001; Mayoux, 2006; Rankin,
2001, 2002). These critiques indicate that the construction of social capital and its relationship to development, both in terms of the development
of financially sustainable institutions and income generation, needs to be
interrogated.
The Network View of Social Capital
Drawing on the work of Bourdieu (1985) and Coleman (1998), the ‘network
view’ of social capital (Moore et al., 2005; Portes, 1998; Woolcock and
Narayan, 2000) can offer an analytical framework to analyse in more detail
the potential contradictions of using social capital to promote institutional
sustainability and support women’s entrepreneurial activity. Here, social
capital is seen to be an individual or family asset. People establish networks
in order to access resources, drawing on traditions and norms and recreating
material and symbolic exchanges situated in a cultural ‘habitus’ (Bebbington, 2007: 156). Social capital is defined as the ‘aggregate of the actual or
potential resources which are linked to possession of a durable network’
(Bourdieu, 1986: 248–9; cited in Bebbington, 2007: 156). This definition
allows the relationship between social networks and economic resources to
be examined. This is crucial to exploring social capital in women-targeted
microfinance schemes as it makes clear how the servicing of networks and
relationships — women’s household and community labour — relates to
economic development.
This framework also allows an exploration of the complexities involved in
balancing social relationships and economic gain, which may be overlooked
by microfinance institutions. Income exchanges can disrupt the dynamics of
3. Putnam himself illustrates the strength of social capital by the lengths to which people will
go to maintain their position within the credit group: ‘so strong can be the norm against
defection [from the ROSCA] that members on the verge of default are reported to have
sold daughters into prostitution or committed suicide’ (Putnam, 1993: 168).
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social capital, underpinned by gift exchange, reciprocity and co-operation.
The expectation of reciprocity in gift exchanges is implicit, but ‘the gift
requires the counter-gift, and the inappropriate return constitutes a challenge’
(Bailey, 1971: 23). The exchange of gifts might well be accompanied with a
denial of the time, effort and often most importantly money which has gone
into acquiring the gift. The conversion of social capital into capital is hence
‘refused in the very intention that produces [social capital], which is nothing
other than the denial (verneinung) of the economy’ (Bourdieu, 1985: 242).
The use of social capital to support financially sustainable microfinance
institutions may overlook these complexities.
There is hence the possibility of tension between the use of women’s social
capital as collateral upon which to build sustainable institutions, and the entrepreneurial income-generation activity which the microfinance institutions
seek to promote, which highlights the need for a more nuanced examination of social capital and its relationship to development. The distinction
between ‘bonding’ and ‘bridging’ ties can clarify the potential tensions between group membership and individual success. Bonding capital refers
to intra-community and familial ties and the overlapping, ‘multiplex’ relationships between kin, and people of the same community.4 A high level
of interdependency, reciprocity and co-operation, as opposed to capital exchange, is associated with poor or rural communities, and this is in part what
constructs them as underdeveloped. Although bonding social capital is a crucial way to access resources in such communities, it is generally accepted
that ‘for development to proceed in poor communities, the initial benefits
of intensive intra-community integration, such as they are, must give way
over time to extensive extra-community linkages: too much or too little of
either dimension at any given moment undermines economic advancement’
(Woolcock, 1998: 175).
These ‘extra-community linkages’ are referred to as ‘bridging capital’. Relationships formed outside the immediate community provide new sources
of opportunity and information, effectively opening up new market opportunities. Whilst bonding capital provides the safety nets and trust which are
generally associated with home and community, bridging capital provides
the opportunities necessary for entrepreneurial development (Burt, 1997;
Granovetter, 1983; Portes, 1998). Striking the balance between bonding and
bridging capital as ‘economic exchange becomes more complex’ is ‘a highly
problematic transition’ (Woolcock, 1998: 175).5
4. The term ‘multiplex’ is used by Boissevain (1974) to refer to overlapping social ties, where
one person can be related to another in multiple ways.
5. This distinction reflects work on ethnic entrepreneurialism that argues that weak social
capital ties may be more supportive and valuable in terms of achievement and development
than strong ties (Burt, 1997; Granovetter, 1983; Portes, 1998; Woolcock, 1998). ‘Weak ties
provide people with access to information and resources beyond those available in their
own social circle’ (Granovetter, 1983: 209). However, Coleman (1998) argues that social
networks have to be closed for trust to develop.
Women-Targeted Microfinance in Bolivia
503
Microfinance institutions are well placed to support the transition from an
economy based on reciprocal exchange within intensive intra-community
networks to an economy based on monetary exchange and entrepreneurial
activity. Whilst the importance of bonding capital is recognized in the form
of a group guarantee, entrepreneurial income generation is encouraged with
the credit. Whilst the bonds among community and friends in underdeveloped areas are vital to economic production and therefore a good source
of collateral, they may be undermined by the entrepreneurial activity the
credit is aimed to support and encourage. People may, for rational economic
reasons, be unable to strike the balance of bonding and bridging capital in
a way which reflects the microfinance institution’s implicit configuration
of these elements. The institutions’ use of social capital to support income
generation may not reflect the most rational way to negotiate these tensions.
It is implied in literature drawing on the distinction between bonding and
bridging capital that those who are able to create and use bridging ties are
the ‘most ambitious’: ‘individuals of superior ability and ambition within
the business group itself are able to insert themselves into larger and more
complex social networks’ and so be able to achieve more highly by creating
more links outside of their community (Woolcock, 1998: 175). However,
dynamics between bonding and bridging capital are gendered, with bonding
capital corresponding more closely with women’s reproductive community
labour (Afshar and Dennis, 1992, Moser, 1993). The often-cited sources of
bonding capital — close knit communities, voluntary associations and the
family (Molyneux, 2002; Rankin, 2002) — require more work from women,
reflecting ‘the familiar assumption that women are naturally predisposed to
serve their families or communities’ (Molyneux, 2002:178). The invisibility
of this labour may be compounded by development interventions which only
value social capital for its economic impact.6
From this brief overview of the social capital debate, it is clear that the
assumptions made about social capital as collateral in microfinance do not
reflect the complexity of the way social capital has been theorized. The
remainder of this article draws on conceptual insights from the network
view of social capital to explore the dynamic way in which tensions between
reciprocal and monetary exchange are negotiated by women in a groupbased microfinance scheme. As we shall see, dynamics of gender, ethnicity
and place mediate how social capital is constructed and how access to
resources via networks is negotiated. Using the case study of women’s use
of microfinance in Luribay, Bolivia, I explore the construction of social
capital, and the norms and traditions which not only underpin trust and
networks, but also govern the bounds of individual achievement and income
generation.
6. See Cameron and Gibson Graham (2003) and Gibson Graham (2001) on the need to value
co-operative exchange as part of development, rather than seeing social capital only in
terms of what it can contribute to capitalization.
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METHODOLOGY
This article is based on ethnographic research allowing for a more nuanced
and in-depth exploration than is common in much of the literature on social
capital or microfinance. Participant observation, qualitative interviews and
focus groups provide the basis for exploring the construction of social capital.
The main aim is to examine the way that traditions, norms and trust underpin
the formation of networks and income generation, and the complexities
involved in balancing reciprocal, co-operative traditions and entrepreneurial
activities. The focus, given the use of women’s social capital in microfinance
programmes, is the way that these norms and traditions are gendered, and
how women negotiate the balance of social capital and income generation.
The research took place in the municipality of Luribay, a rural Aymaranspeaking valley approximately seven hours drive from La Paz. Crucial to
this current exploration are the identity dynamics existing within the valley
itself. Luribay was settled by Spanish colonizers and governed from ‘Luribay
Town’ at the centre of the valley.7 The political animosity of the colonial era
remains, and there is palpable tension between the people in the Town, who
mostly speak Spanish, wear Western dress and define themselves as white
and urban, and the surrounding hamlets, where Aymaran is spoken and
women wear the traditional Aymaran dress, the pollera. Andean traditions
of reciprocity and co-operation underpin the construction of social capital
in these areas, but the way that networks facilitate access to resources in
the Town and the hamlets is markedly different, with consequences for the
livelihood strategies adopted.
The microfinance institution Credit with Rural Education (CreCER) has
been active in Luribay since 2000; it had been operating there for six years
at the time of my research. CreCER lends to groups of at least ten women.
Groups are self-selecting and promoters encourage potential members to
allow only responsible women to participate. Once groups are formed, CreCER lends amounts of between 500 bs (Bolivianos) (US$ 62.50) and 8000 bs
(US$ 1000) to the whole group over six months. CreCER targets women
in rural and peri-urban areas for their contribution to development as well
7. Luribay (population 9,004), is in the province of Loayza, Department of La Paz, Bolivia.
Luribay Town has a population of 230 and is surrounded by seventy-eight hamlets, the
smallest of which has a population of twenty and the largest 465, although these data do
not take migration into account. According to official data, the average life expectancy
in the Province of Loayza is 57, and in the Municipality of Luribay it is 54. There is a
26.7 per cent illiteracy rate in Luribay, which compares unfavourably with 17.4 per cent for
the department of La Paz as a whole. There is a high level of school abandonment, mostly
by girls. Basic services are lacking in Luribay. Most areas, including the Town, have no
water supply at all or an unstable one, there is no sanitation system and there are only
two health centres and three health posts for the whole municipality. None of the roads is
asphalted; public transport to the city is scheduled to be twice daily, but these services are
unreliable (PDM, 2005).
Women-Targeted Microfinance in Bolivia
505
as the reliability of their networks as collateral. It is committed to women’s
success, and empowerment is assessed in its impact reports. Social capital
is explicitly valued and supported with regular group meetings in which educational sessions are conducted. It prides itself on its ‘double bottom line’
of social and financial impact (Brott et al., 2006; Quiros Rodriguez et al.,
2003).
CreCER is one of the few socially focused microfinance institutions remaining in Bolivia, and is under pressure to make its operations financially
sustainable (Quiros Rodriguez et al., 2003). Although arguing that the social
elements of the intervention support long-term sustainability by promoting
client loyalty (Marconi and Mosley, 2006; Velasco and Marconi, 2004),
key elements are determined by the need to promote sustainability more directly. In order to encourage financial discipline and liquidity among group
members, repayments have to be made every two weeks. These repayments
are guaranteed by the value of women’s reputation within the group. In the
context of the complex balance of bonding and bridging capital and incomegenerating strategies in Luribay, the relationship between social capital and
income generation may be more complicated than CreCER’s ‘capitalization’
process implies.
SOCIAL CAPITAL IN LURIBAY
To understand the complexity of livelihood strategies in the Town and
hamlets of Luribay, it is important to examine the norms and traditions
which underpin social capital formation there, in relation to gender and
livelihoods. This will form the basis of the critique of CreCER’s womentargeted intervention, aimed at promoting income generation.
There is a rich vocabulary to describe reciprocal, co-operative traditions
in the Andes, recreating the principle of direct and commensurate return of
goods and favours exchanged (Isbell, 1978; Guillett, 1980; Zoomers, 2006).8
In addition, compadrazgo (an umbrella term for fictive kin including godparent relationships and festive sponsorship roles) is an important way to
8. Ayni, Mink’ha and Faena are co-operative traditions which define the importance of reciprocity and co-operation in the Andes. These words have their roots in Andean agricultural
tradition, but are used in different ways in different areas and their meaning is evolving
with the introduction of capital exchanges. Ayni is the Andean principle of direct and commensurate return of goods and favours. It is often heard in Luribay; it is a very present
part of everyday activity. Informally, ayni applies to a system of reciprocal favours; there
is also a more formal system where the gifts, favours and loans are noted down so that
the exact amount can be repaid. Mink’ha has various spellings, including minga (Guillet,
1980). Isbell (1978) defines minka as a calling for aid, and ayni as the response. In Luribay,
minka is increasingly used to refer to paid labourers. Faena is ‘public’ co-operation (Isbell,
1978: 167). Faena are public workdays, when all the members of the hamlet are expected
to work together maintaining the roads and the irrigation canal.
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extend reciprocity networks via fictive kin or festive sponsorship. These traditions facilitate the exchange of labour to ensure an adequate labour supply
at key points in the agricultural calendar, as well as exchanges of favours,
goods and gifts in fiestas. Developing reciprocity networks and maintaining
co-operation are vital to survival and production, and maintaining a good
reputation within these systems directly influences access to resources.
Women bear most of the responsibility for maintaining community and
kinship relationships. Gender ideology in the Andes is governed by the principle of chachawarmi.9 Literally translated as ‘manwoman’, this refers to
the complementarity of roles within the partnership unit: the man is the public face of the partnership and the woman faces inwards (Choque Quispe,
1988). The equality implied here disguises gendered subordination and the
uneven burden of household and community labour (Choque Quispe, 1988;
Galindo, 2006; Paredes, 2006). The responsibility for organizing agricultural production entails time and labour spent maintaining co-operation and
extending the reciprocity network, which may leave little time for additional
income-generating activities.
Women in Luribay are responsible for organizing work on the land, but
refer to this as ‘helping their husbands’, as virilocal marriage is the norm
and land tends to be in the man’s name. Women are responsible for subsistence and agricultural production as well as household chores. In some
households men have paid employment, for example in the municipal council or Agrarian Union, or professions, such as mechanic or photographer.
However, alcoholism is a problem and it is a commonly heard complaint
that husbands don’t do any work. Regional migration is male dominated,
and women are responsible for keeping the household’s land while husbands
are earning money in La Paz, Sao Paolo or Buenos Aires. Women complain
that household chores are entirely women’s work, and that ‘there is no rest
for women!’. Their responsibility for agricultural production and household
chores further reduces the time available for investing in income-generating
activities.
The hamlets are characterized by agricultural production, with little
through traffic and close knit communities. Reputations and trust networks
9. Chachawarmi broadly refers to the complementarity of gender roles which is an organizing
principle throughout Andean society, permeating all spheres including agricultural work
(Harris, 1978). One is only fully an adult citizen in Andean society if one is in a partnership of
man and woman. Chachawarmi is the formation of a social persona of two gendered halves,
and complementarity and co-operation within the chachawarmi is the ideal. Commentators
do not dismiss the possibility that chachawarmi could be a more equitable division of
the household (Balan, 1996; Harris, 1978), and comment that the Andes is a ‘cultural
area traditionally characterised by weak patriarchal features in spite of the social and
economic roles played by kinship-based reciprocal exchange systems’ (Balan, 1996: 84).
Harris comments that ‘if there are elements in social relations among the Laymi [Aymara]
which may be considered patriarchal, they are not placed within the domestic unit’ (Harris,
1978: 32). However, Aymaran feminists point out that the ideal of chachawarmi disguises
women’s subordination within the household (Choque Quispe, 1988).
Women-Targeted Microfinance in Bolivia
507
are jealously guarded, which makes it difficult to start entrepreneurial activities in the hamlets themselves. There are a few stores selling basic goods
including toilet paper, matches, soft drinks and dry biscuits, and people tend
to go to the one run by a member of the same reciprocity network — either
kin or fictive kin.10 For stores to enter into direct competition, by, for example, lowering prices, leads to swift condemnation and loss of reputation.
Whilst these stores are generally run by women and are referred to by the
woman’s name, they represent a very minor source of income and the priority is agricultural production. For most of the day, the stores are locked
while they are working in their fields.
Agricultural production is the main source of subsistence and production
in the hamlets, and as a consequence co-operation among reciprocity networks is vital. Fruit produce from the hamlets is sold in La Paz, and it is
generally women who make the seven hour journey to sell their produce.
The stereotype of rural Aymaran women in La Paz is of savvy negotiators
who know how to drive a hard bargain. The women in the hamlets of Luribay
affirm this and are very proud of their reputation, so it is striking that there
is a complete lack of commerce in the hamlets. Sanctions against profiting
from someone upon whose co-operation you later rely on necessitate the
formation of extra-community links, for example in the city, in order to
engage in income-generating activities.
In the Town commerce has a prominent role in the local economy, but
individual success on the basis of competitive entrepreneurialism is viewed
negatively. The guiding principle for income-generation activity in the Town
is ‘we all have to make a living here’. If someone is seen to compete with
their neighbours by selling the same goods at a cheaper price, they are
condemned for being selfish and lose custom as a result. However, there is
more opportunity to form extra-community linkages in the Town. Staff at
the government offices and NGOs working in Luribay are based in La Paz,
but stay in the Town from Monday to Thursday every week, providing a
market for the hostels, inns, restaurants and shops there. Whilst there is very
little circulation through the hamlets, the road from La Paz leads directly
to Luribay Town and people come from La Paz to sell their goods at the
weekly market fair. Women from the Town make cakes and soft drinks for
sale in the fair.
Residentes are people who have their roots in Luribay but now live in
La Paz. Connections between Luribay and Residentes are maintained, including a home-town association in La Paz. The Residentes emphasize their
indigenous roots and come back to Luribay for fiestas in which they dance
traditional Aymaran folkloric dances. They are fluent in Spanish, are educated, and have the safety net of property in La Paz to allow them to take up
10. Crandon-Malamud (1993) finds similar dynamics in a canton in highland Bolivia, where
events in the Town were seen as opportunities to make a profit, whilst in the hamlets
exchange was underpinned by social dynamics such as festive sponsorship.
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opportunities in the developing market in the valley. Some Residentes own
businesses in La Paz and divide their time between La Paz and Luribay. All of
the Residentes who had businesses in the Town were women, and the income
from this business was seen as supplementing the income of husbands in La
Paz. As such they are entirely outside the reciprocal and co-operative networks which are so important to the way resources are accessed in Luribay.
Maintaining links with Luribay provides indigenous cultural capital in the
city (Canessa, 2006) and income-generation activities which may not be so
available in La Paz (cf Crandon-Malamud, 1993).
The varied constructions of social capital in the valley and the different
opportunities to balance bonding and bridging capital and income generation
means that different people are better placed to benefit from the intervention.
The following section draws on the experiences of women in five credit
groups, three in the hamlets and two in the Town, to see how their positions
influence the way they can use the groups and the credit.
USE OF MICROFINANCE IN LURIBAY
The use of the groups and the credit facilitated by CreCER in Luribay
is markedly different among Residentes and people in the Town and the
Hamlets. The varied construction of social capital and the optimum balance
of bonding and bridging capital is crucial to the consideration of whether the
microfinance institution is supporting women’s livelihood strategies.
The majority of CreCER’s group members in the Town invest their loans
in commerce. Women who own shops take out large loans, over 4000 bs
(US$ 500) over six months, and buy in bulk in La Paz to sell retail in Luribay.
Other women have smaller commercial activities, and take advantage of the
weekly market fair. Group members in the Town stress that they manage
their loan responsibly, keeping the money from the loan separate and using
the profits from commerce to repay the loan in the bi-monthly meetings.
Doña Carol had been in a credit group for six years. In response to my
question about how she invested the loan, she emphasizes that everyone has
to invest the loan in a productive activity:
We all have to have an activity with which to pay back — if we just eat it then we can’t pay
it back. So you have to have an aim with the credit. I take it out for the bakery, to make my
cakes. I sell them every week on Tuesday in the market fair. I take the credit out just for that.
It’s exclusively for that. The shop and the hostel are separate. With 5000 Bs. over 8 months,
I buy flour, eggs and sugar. And I have no problems paying that back, because I know that
I’m going to be able to sell [the cakes]. The ones who have land, I don’t know how they
cope. (interview, Doña Carol, aged 48)
Doña Carol acknowledges that it is easier for those who sell locally to meet
the two-weekly repayment schedule than for those engaged in agricultural
production for sale in the city. By taking advantage of the traffic from
Women-Targeted Microfinance in Bolivia
509
outsiders going through the Town, women who participate in credit groups
there can balance the need to maintain reciprocal traditions and the need
to make a profit. This indicates that the microfinance institution’s repayment schedule and aim to capitalize group members is commensurate with
commercial livelihood strategies in the Town.
Residentes have a different perspective on participation in the groups and
are well placed to use the credit profitably. Doña Margarita owns a hostel in
the Town, and spends two weeks in Luribay and two weeks in La Paz every
month. She takes out a loan of 8000 bs (US$ 1,000) every eight months and
invests it in her hotel. She has made improvements, bought new sheets and
hired help.
I took out the credit to be able to renovate the hostel. Now I’m building two new rooms
for lodgers over there. And then sometimes I need to buy new sheets and things, they get
old . . . [and] some other new things. Half my time I’m in La Paz, and half my time here. My
family’s in La Paz, and they work there. (interview, Doña Margarita, aged 50)
Unlike some of the people in her group who live in the Town and hamlets of
Luribay, Doña Margarita does not own land and comes to Luribay to look
after her hostel. She is not dependent on co-operation within the community
in the same way. Her lodgers in the hostel are professionals from outside
Luribay, including agronomists and people working for the Municipality
who come at least once a week. She also has the financial security of her
family in the city.
Being in a credit group is a way for Residentes to maintain contact with
Luribay. Doña Vera told me that the main reason she had joined CreCER’s
group in the Town was to be with her friends. She lives in La Paz and divides
her time between the city and her second home in Luribay, which she shares
with her husband. She joined the credit group in the Town where there are
other Residentes who similarly divide their time. When I asked her about
the credit itself, she told me she did not need it, and her husband chimed
in that she just drank it. For her, the group was a way of keeping contact
with the Town of Luribay and forming bridging links with the community
there.
Whilst the groups in the Town represent a network of bridging links
between Residentes and people in Luribay from various families with commercial interests, groups in the hamlets are made up of kin, friends and
fictive kin, and constitute the same co-operative trust networks which are
relied upon in agricultural production. In some cases the motive for joining
a group in the hamlets is to maintain bonding social capital rather than to
access the credit — ‘I joined the group when I came back from Brazil. My
sister-in-law said “do you want to join this group?” and I just said yes, I
didn’t really know what it was about’ (interview, Doña Sofia, aged 34); ‘my
mother-in-law told me to come and join — so I said alright’ (interview,
Doña Glenda, aged 26). Both Doña Sofia and Doña Glenda added that they
find repayments difficult and would rather leave the group. This indicates
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that in some cases the value of social capital is worth far more than the
loan.
Women in the hamlets invest their loans almost exclusively in agricultural
production. The most common loan amount is 1000 bs (US$ 125) which is
used to buy seed, fertilizer and pesticide. Doña Carlota is typical: ‘We’re
working on the river-bed at the moment, working to grow peas. That’s why
I took 500 bs out, to buy seeds and chemicals, and I’ll pay it back once I’ve
sold my peas — but we don’t earn much’ (interview, Doña Carlota, aged 62).
Being able to pay the two-weekly or monthly quota is a common problem,
especially in winter, as there is no income until they can harvest and sell
their produce. Many women, particularly those with smaller plots of land,
complained of this: in winter they have to wait four or five months before
seeing any profit from their investment, and even then the harvest is never
certain. To meet the repayment schedule they have to borrow from family
and friends, straining the relationships on which the solidarity groups are
based. Some take on extra work as day labourers in different communities,
adding to their already substantial burden of labour. They know that the
credit would be better invested in commerce, but it would be unwise to risk
reciprocal relationships within the community by engaging in profit making
activity locally.
Only one of the women interviewed in the hamlets is involved in commerce
and uses the credit very successfully. She runs a shop and invests her loan in
bread making and a juice maker, selling banana milkshakes to schoolchildren
as they walk by around midday. This is precisely the kind of entrepreneurial
development which microfinance is designed to assist.
I spend the credit mostly in the shop. I buy everything I can, what you can see here. But I
only take out 2000 bs [over six months] and that’s not much . . . I said to myself, I’m going
to make bread. And this year I decided to make milkshakes too . . . I bought the blender with
the profits from the bread. (interview, Doña Veronica, aged 32)
Doña Veronica and her husband do not have land and instead rent a small
plot. Her shop therefore provides the greater part of her income; she is also
able to devote more time to running her business, as she does not spend so
much of it on the land: ‘I couldn’t work on the land and have a business. If I
go to work on the land, I’m not going to sell anything in the shop’. Because
she does not have to spend the majority of her time working on the land, she
can open her shop at midday when the children pass by. Landowners have
to work their fields at this time and so cannot take advantage of the passing
custom from the school.
Doña Veronica is excluded from traditions and networks in Luribay, and
in some ways it is her lack of social capital that enables her to engage in
commerce and so make better use of the loan. As she does not own any land
she is not dependent on reciprocity and co-operation as the other women are
and she has more time to invest in her shop. However, her aim is to buy land
and so be able to build more security in Luribay, and become more involved
Women-Targeted Microfinance in Bolivia
511
in the community there. Land, family and contacts represent more access to
resources in Luribay than money.11
CONCLUSION
This article has aimed at a deeper explanation of how social capital operates
in development, looking at the construction of social capital in Luribay and
the different ways microfinance facilities are used by women members. In
development theory, social capital is postulated to show the importance of
trust, norms and networks to development. This case study of Luribay gives
a clear indication of how networks based on reciprocal and co-operative
traditions provide access to resources and are vital to survival and production.
Women’s livelihood strategies in Luribay are designed to preserve these vital
networks and generate income, but the importance of not profiting from
someone whose co-operation you rely on, and respecting the principle that
everyone has to make a living, complicates these strategies. CreCER’s aim
to capitalize beneficiaries and encourage income-generating activities on
the basis of a group guarantee overlooks this complexity, and in some cases
women’s commitment to repay disguises the measures taken to preserve
their reputation and place within the group, community and social network.
Traditions of reciprocity and co-operation underpin the formation of networks in the hamlets and the Town, but the resources and support accessed
by the networks in these two areas differ significantly. Whilst in the hamlets
reciprocity networks are vital to agricultural production and subsistence, in
the Town local commerce is a more significant part of people’s livelihood
strategies. Land ownership is an important part of belonging in the hamlets as it engenders trust and long-term security; the reciprocal co-operative
traditions underpinning social capital are recreated by agricultural production. On the other hand, commercial activity is condemned as selfish and
does not engender the formation of networks. Although seen as effective
saleswomen in the markets in La Paz, women in Luribay do not engage in
competitive commercial activities as this would undermine their reputation
and so threaten their social capital, which is worth more to them than petty
commercial activity.
In the Town, by contrast, commerce plays a bigger role in livelihood
strategies and, particularly for Residentes, represents the bulk of their income. The Town provides opportunities to form extra-community linkages
locally, in the weekly market fair and among professionals from La Paz
working in the valley. There are also more opportunities for commerce in
the Town with the circulation of outsiders, which allows income generation
11. Zoomers (2006: 1035–6) cites the Andean adage: ‘When there are relatives there are friends,
even without money. But when there are no relatives there are no friends, not even with
money’.
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to be balanced with the co-operative ethos underpinning what is considered
fair business behaviour in the Town.
The distinction between bonding and bridging capital elucidates the function of social capital in livelihood activities in Luribay. However, the formation of extra-community links depends on more than just ambition, as
implied in the literature. Maintaining reciprocal networks and policing the
norms and traditions of co-operation falls to women and the onerous burden
of labour which this implies means that women do not have time to form
extra-community linkages. They have rational economic reasons for prioritizing co-operative exchanges between kin and fictive kin rather than income
generation locally. Once the fruit is harvested these women are renowned
for their business activity in the cities, where they can engage in competitive
commerce without jeopardising relationships locally.
This article has focused on the elements of the intervention which are
framed by the FS approach to microfinance, namely the social capital guarantee and the two-weekly repayments. These aspects value women’s social
capital primarily as a guarantee against the loan and aim to promote capitalization and good financial discipline with regular repayments. Whilst this
system effectively supports the way that social capital and income-generating
activities are linked for women engaged in commerce in the Town, it has
contradictory effects in the hamlets. There, the strategies adopted by women
to make their repayments can involve taking on further debts from family
and friends, in effect straining their social networks, or selling their labour in
other areas of the valley, exacerbating one of the main gendered inequalities
in development — paucity of time.
This study highlights the need to look at the construction of social capital
in order to understand its role in development. Trust, norms and networks can
inhibit as well as support production and income generation, and livelihood
strategies are embedded in culturally situated notions of acceptable enterprises. The gendered nature of these norms and traditions and the gendered
division of labour are important parameters to consider, as are the intersections of gender with ethnicity and rurality/urbanity. I have argued here that,
in the hamlets, women’s social capital takes the form of bonding capital,
and the assumption that this can be used to promote income generation can
have contradictory effects for women, even if it achieves successful results
at the institutional level. Whilst social capital can form part of a more inclusive notion of development, the harnessing of networks in order to promote
income generation and capitalization may seriously undermine the vital role
that they play in subsistence and production; these all-important networks
may be damaged or even dismantled by a definition of development that
remains focused on income.
Women-Targeted Microfinance in Bolivia
513
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Kate Maclean is Lecturer in Human Geography at King’s College London
(Strand, London WC2R 2LS, UK; email: [email protected]). She has
worked on women-targeted microfinance in West Africa and Latin America,
building on feminist critiques of citizenship, economy and social inclusion,
and is currently looking at transnationalism and financial democracy.