Aspiration problems for the Indian rural poor: research on self-help groups and micro-finance.

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Aspiration problems for the Indian rural poor: research on self-help groups and micro-finance.

[O]ne can deduce the importance of the 'cultural aspect', even in practical (collective) activity. An historical act can only be performed by 'collective' man, and this presupposes the attainment of a 'cultural-social' unity through which a multiplicity of dispersed wills, with heterogeneous aims, are welded together with a single aim, on the basis of an equal and common conception of the world, both general and particular, operating in transitory bursts (in emotional ways) or permanently, where the intellectual base is so well rooted, assimilated, and experienced that it becomes passion. (Gramsci, 1971: 349)

Introduction

When one returns from abstraction to real-world contexts, one confronts a messy interconnection of causal processes. This is particularly so in periods and locations undergoing significant change. It is widely acknowledged that India, as one of the BRIC economies, is undergoing rapid urban transformations that are subject to global and local forces. There have also been a number of changes in the conditions of the rural poor. Bonded labour still occurs that ties the very poorest, often of Dalit or 'scheduled castes' (SC), to long-term farming servitude on another's land; but the traditional labour relations of the very poorest have diversified. (1) Poor rural households now undertake a range of activities (Harriss-White, 2003; Brass, 2008; Breman et al., 2009). (2) Migrant work, often in construction or regional industries and particularly amongst males, has grown. Remittances by migrants and new attitudes amongst landlords to how they might use their land and capital have begun to change local land and labour relations. The growing problem of periodic flood and drought in some regions has also produced change (Bosher et al., 2007). With change have come new issues of social and economic mobility. In keeping with many processes that weave global, national and local threads, new circumstances have created both positive and negative aspects: opportunity, but also insecurity. The combination of micro-finance implemented through forms of initiatives between the state and different kinds of banks--state-backed, commercial, cooperatives--and self-help groups (SHG), which administer local pools of capital for small loans, provides one such example (Morduch, 1999; Karmaker, 2005 & 2008; Srinivasan, 2009).

Rural women in particular have been prime movers and beneficiaries of SHGs. Though various problems have been highlighted, the SHGs are widely considered to be a source of solidarity and of empowerment (Meenai, 2005, 2006). Often it is the household that ultimately holds any debt, but the women who administer it. Debt has been used in a number of different ways (e.g. Collins et al., 2009). Its use often goes beyond the original intentions of micro-finance, ranging from short-term urgent medical needs (often related to injuries or illness suffered by migrant workers), to specific investments, either directly in (usually tenant) farming or in small business activities that can be undertaken from the home. The use of this debt by the poor can be conceived of as 'rational' in the pursuit of development and survival strategies that are responding to new circumstances and opportunities. In this context, micro-finance in general and SHGs in particular are a preferred alternative to the usury of traditional local moneylenders. The terms and conditions are better, the lending more flexible, and, if the borrower experiences difficulty, the SHG, of which the borrower is also a member, is also liable to be more patient and understanding as a collective. Importantly, however, our research indicates that the accumulation of debt is not just a straight decision regarding investment in development and survival strategies. It is not purely rational in the discredited sense of the term used by mainstream economists. It is rather a more complex rationale.

Poor households can be both channelled and seduced into taking on levels of debt that are dangerous. This danger occurs in a variety of ways. Often the debt is invested in small business or employment activities that can be undertaken from home by women...

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