“We Sacrifice and Eat Less”: The Structural Complexities of Microfinance Participation

Having borrowed money from a microfinance organization to start a small business, many women in El Alto, Bolivia are unable to generate sufficient income to repay their loans and so must draw upon household resources. Working from the women’s experience and words, this article explores the range of factors that condition and constrain their success as entrepreneurs. The central theme is that while providing the poor access to credit is currently very popular in development circles, the social and structural context within which some women operate so strongly constrains their productive activity that they realize a net income loss at the household level instead of the promised benefits of entrepreneurship. This paper explores the social and structural realities in which women seek out and accept debt beyond their capacity to repay from the proceeds of their business enterprise. By examining some of the “hidden costs” of microfinance participation, this paper argues for a shift from evaluation on outcomes at the institutional level to outcomes at the household level to identify the forces and factors that condition women’s success as micro-entrepreneurs. While there has been much discussion on the benefits of microcredit lending and increasing critique of it on both ideological and substantive grounds, there have been few ethnographically informed studies on consequences to users.