 privileged and pleased and happy to have Milford Bateman with us this evening. Milford is going to talk to us about his recent work on microfinance and this is an enormous privilege for us all. Milford is in my opinion the greatest specialist on this topic anywhere that has ever lived in the history of the world. This is absolutely true and this will be enormously informative so I've been looking forward to this session for a very long time. On my left Dr Tom Mahua from the Department of Development Studies will be the discussant of the session tonight so the structure will be the usual one where the speaker will be presenting his paper for 30 to 40 minutes and then Tom as the discussant will launch some topics for our conversation and then we'll open up for questions. After the session, after the questions etc. we have a small reception upstairs at the senior common room to which everyone is invited. Thanks very much. There will be a sheet of paper circulating in this room asking you if you wish to leave your contact details so we can get back to you with more extraordinarily interesting activities in our seminar series and other activities organized by the Department of Development Studies. So thanks very much for this Tom shall I pass it on to you first. So in addition to the pleasure of being a discussant at no extra charge I've also agreed to chair the session for tonight and I just want to say a few introductory words about Milford, Milford Bateman as you would have read he's a freelance consultant currently as I understand working on UNCTAD's trade and development report for 2016 in terms of the debt and development stream of that report. He hails to us from the Department of Economics and I'm going to slaughter the name. Yuraj? Yurei. Yurei Dobrila University of Pula Croatia. But also he's a visiting professor from the Development Studies Department at St. Mary's University in Halifax where we have common friends, old friends of mine in common as well. And on this topic of microfinance is the most extraordinary world famous leading expert on it. He has obviously published widely one of his most known books is titled Why Doesn't Microfinance Work 2010 Z and then a recent Jacobin article just out a week or so ago or maybe a little bit more titled the power of a dollar microcredit is nothing more than a socially validated way for financial elites to exploit the poor. Typically the convention is to also list off a few other of your more academic articles and I'm not going to I'm just going to give you a more personal introduction or compliment if you will that it's always I think a mark of a scholar that's you know I teach in debt involvement and I use your work repeatedly and I use it in my teaching it's a very authoritative work and my students in turn use it in their works and I think that's one of the greatest compliments I can pay to someone. And with that he's going to speak to us today on his second provocative title From Zorro to Zombie Explaining the Dramatic Rise and Fall of the Microcredit Model as Development Policy. Thank you Moffrey. Okay well after that fantastic introduction I'm a little bit overwhelmed but great to be here again I was here a couple of years ago and really enjoyed it and the air condition wasn't working then I see to remember so there's nothing that seems to have changed um you know there's something needs to be done about that but so what I want to do what I'm wanting to do tonight is really to take the argument on and to come to an idea that the whole sort of microcredit micro finance angle is pretty much confirmed as a dead duck and to explain why it is that it's still out there somehow like a zombie it keeps rising from the dead and it lumbers into town to terrorize the local people so I want to under the name of what's called financial inclusion so I just want to do a little bit about why there's a problem there and then just introduce the idea that they're trying to keep something that really should have died they're trying to keep it alive for reasons other than the stated reasons so let me just go through just a little bit which I think some of most of you will be will be familiar with anyway the microcredit model and I'm mainly talking about microcredit the two terms microcredit microfinance are interchangeable but I'm mainly talking about microcredit unless it becomes clear that I'm talking about the much wider issue of microfinance which includes micro savings micro insurance microleasing all sorts of other stuff so the original microcredit idea really was a product of politics back in the 1960s when in Latin America we had a lot of populations that were getting very restive about the way that capitalism or military capitalism was going and the way the US government there was really dictating the terms and economic policies there and so it arose out of a US government response to these sort of rising anger and the fear of another Cuba that was always in the mind of many policymakers in the US government and they wanted something that they could offer to the poor in Latin America in order to basically say well look you know don't look for these radical solutions help is on the way and you know you might find something in some of these things that we're promoting and one of the things they promoted was this idea of self help and individual entrepreneurship and alongside that really came this idea of microcredit so the poor by definition hadn't the resources to engage in petty business activities but with a little bit of microcredit they could actually move into that area and then you could say to them look you know help is on the way you're doing something and then if you have one or two success stories in every thousand people that try it you can put those not on the websites in the 60s but you could flag up those examples to say look it's working you know don't follow the sort of leftist tide or liberation theology you know help is on the way you're gonna you're gonna get better and it all boiled down to as well really not so much any economic progress for the poor but in in many say in a real sense simply the opportunity for the poor to get a little bit of a little piece of the action with the help of microcredit and this is a very powerful organizing principle the idea of opportunity we know that it underpins the american dream for example um that you know all that matters is not the outcome which might mean that one in a thousand actually has some benefit what matters is that you have the opportunity to be the one in a thousand so they try to sell the idea that things would become uh uh better for the poor and then of course Muhammad Yunus then comes into the story in Bangladesh so he arrives back in Bangladesh after a period of study and teaching in the US sees the microcredit models and decides well this is this is the way he wants to go down he made a few adjustments to the existing microcredit model bringing in something called social collateral where you don't need physical or financial collateral but merely you have a group and everybody guarantees everybody else so if one member of the group doesn't pay the other members of the group have to contribute to pay the defaulting member so with an innovation a few innovations like that uh uh Muhammad Yunus then became the the the father figure if you like of the uh of the of the micro of the burgeoning microcredit movement he was able to get a lot of support from us agencies and us right wing foundations and so he was able to set up his own uh bank uh the Grameen bank and his essential message to the poor was very similar in Latin America which was that he was going to bring capitalism down to the poor so the poor always felt shut out by what was going on um in the elite sections they weren't getting in on the benefit but now what his message was that they actually could uh benefit um from what was going on in fact Yunus went even further than that and in order to sell the idea he made rather ludicrous statements about eradicating poverty in a generation and uh our children will go to a poverty museum to see what this issue of poverty was all about so he basically was able to mobilize the resources to get this idea about microcredit um onto the agenda but very uh essentially supporting his ideas with the World Bank and particular USA idea because they had in mind at the time a particular version of capitalism just coming into vogue in the 1980s which we now know as neoliberalism or the washington consensus so this really was resonated with the World Bank and USA idea this idea that the poor would be included within capitalism so that accounted for a lot of the support that Yunus got so very soon the idea was going all over the world other countries were taking benefit that Africa then became a place where microcredit was supported then went back to Latin America it was in most parts of Asia and then after 1990 it went into post-communist east in Europe as well by the 2000s it was the most important development policy in terms of attention funding political support and popular support so it really was uh important and there are many famous quotes and I just gave one microcredit is the vaccine for the pandemic of poverty so it was just assumed now it was it was very very concretely thought within the international development community that microcredit was the way out and so that was really what was what was going on there but there was just one more change in order that the microcredit model really colonized everything in the international development community because the initial microcredit model was very much a subsidized non-governmental led model okay so will bank and us idea appreciated the idea of self-help and the idea of individual entrepreneurship but they hated the idea that it was all subsidized so somehow that had to be taken out and the way forward was to turn it into a business okay to commercialize it to privatize it to marketize it or really essentially to neoliberalize the whole concept and even when they turn it into a business there was always the understanding that somehow these new for-profit market-driven institutions would responsibly lend to the poor and as I'll come on to that clearly wasn't the case and so you had a lot more of the institutions along with the world bank and us id then taking taking this whole idea forward and it became the anti-poverty and bottom-up development intervention of all time it had a very seductive attraction to it it basically supposed to show that capitalism or bottom-up capitalism or granulated capitalism as some have called it actually works okay so the poor don't really need to call for how to say traditional interventions on their behalf like welfare programs like an active state like wealth redistribution because they're going to get their benefit on their own terms through individual entrepreneurship so you can imagine how important how seductive that was to the international development community that they wouldn't have the poor wanting to form trade unions or social mobilization or petitioning the state to do things or electing a left-wing government all they needed was microcredit so you can see how that was powerful to elite within the international development community and the other really nasty aspect that came out of it is that if the poor remained in poverty and that's again I'll come on to that's largely what happened they remain in poverty well then maybe it's their fault first all if they don't access a microcredit well then you know you had your opportunity you chose not to take part in it therefore it's your problem but even if they did take a microcredit and they failed well you know that's the way the game goes and it was a way of putting the blame for being in poverty back onto the poor so this was a very powerful organizing a principle that the poor could now be blamed for their own poverty they had all the attractions all the instruments to hand and if they were still in poverty well maybe they were doing things not right okay so that was that was an important aspect of it so microcredit really became the zoro of interventions and it comes into town helps the peasants escape from their poverty and exploitation so it was seen as a very positive intervention something that really is going to be benefiting and then it all collapsed then the whole idea basically collapsed where did it start well it started initially in Bolivia because the Bolivian economy was the testbed for the commercialized variants of microcredit so Bangladesh if you like was the the start of the microcredit experiment but Bolivia was used as the testbed for commercialized microcredit and what happened was that the market expanded lots of new entrants came in and they blew the whole market up in around 2009 2000 now at the time it was said that this was just a one-off this was a special case won't happen anywhere else because markets are smart people learn bankers are smart bankers are responsible responsible so this won't happen again but then he started happening again on a regular basis in Bolivia Morocco Pakistan Nicaragua and then we had a huge crash in Andhra Pradesh which is really instructive of the motivations and the incentives and how destructive they are in a very Wall Street style sense we also handy it also became clear that instead of engaging in the whole microcredit movement in order to benefit the poor it became quite clear that the equation was the other way around that people were moving into the microcredit movement in order to extract resources from the poor so in very many cases we had the case of Banco Compartamos in Mexico where the original owners became multimillionaires the shareholders made four five six hundred million dollars and that started a lot more examination from a sort of an independent perspective on what microcredit was really all about and then very quickly we had a lot of revelations about most microcredit institutions were basically about enriching the senior managers and the shareholders and the idea of poverty alleviation was something that was bolted on and was mainly promoted by the PR department then we had a rather explosive document came out the British government at the time was getting really pissed off with all these surveys and a comment about microcredit not working so they commissioned a survey of all the previous evidence pertaining to microcredit that said it had a positive impact so they gathered a team of microcredit specialists and evaluation expert one of them is here Marin Duvendak is here in the audience and the Duvendak report as it's called basically poured water on the idea that these previous impact evaluations actually said anything positive about microcredit they couldn't actually find anything it's a great report to have a look at and their conclusion was really quite explosive because it said the case for microfinance has essentially been built on foundations of sand okay so that was that really had an important impact within the international development community it was one of the first that actually and the most important survey because it had a huge number of cases that they looked at three and a half thousand impact evaluations we used and then to get you right up to date we had the sort of breakdown of the randomized control trial so this is a method of evaluation that is supposed to be more accurate and so a lot of the people who were using this said well this will show that microcredit has a real impact and unfortunately it didn't okay it basically said that there is really no impact from microcredit or a tiny impact so basically the whole thing is is hardly worth the candle so very quickly on the fundamental points one of the big problems with microcredit is it was it was founded on a fundamental misunderstanding okay by by Muhammad Yunus basically and Muhammad Yunus basically his idea was that if you provide microcredit in small villages in Bangladesh then the poor will be able to produce something sell it locally and they will be able to get themselves out of poverty so Yunus in a sense configured poverty as a supply problem people need a little bit of help in order to produce something locally but the problem of poverty isn't really so much about that it's more about the demand the poor by definition don't have the resources to buy what they need within their community the resources the things they need are actually in most cases there but they don't actually have the resources to consume these things okay and that's the real problem and we call it in economics is called saves law the idea that supply creates its own demand and it's been debunked so many times but Yunus believed in that that if he could get everybody producing tiny little things in the village that somehow among the same poor community there would be the demand to to do that and by and large that doesn't actually operate and it's very interesting that it there's a misunderstanding similar to Amartya Sen who said that the famines were about a lack of food when in most cases or in many cases it's really about purchasing power the poor don't have the purchasing power to consume what is in many cases actually available so it's a similar logic or a similar logical error and that's one of the reasons why we can't find any real evidence that microcredit creates any employment or any really higher incomes within the community because already those types of things that people want to do are already being supplied so if I move into the communities to provide baskets generally I put out a business the person sat next to me already providing baskets and we call that displacement okay so in many poor communities as I say there isn't really a problem of the supply so adding to the supply really isn't the solution so that's one of the fundamental problems and one of the reasons why because a lot of people in in difficulty realized that there was nothing with a microcredit that they could produce and sell they said well look you know it isn't going to get me anywhere only into more debt as I'll come on to I might as well just use it to buy whatever I need to survive through to the next month so that's why we had a rise in the amount of microcredit going into consumption spending partly because the poor understood that there's nothing that can be done in my community with a small microcredit that isn't already being done okay and so that's just a rather you know the it superficially looks good but when you look into it in a little more detail you realize some things actually missing there second point is microcredit doesn't really address the key issues that we know come through in economic development okay and this boils down to an idea about what sort of enterprises do we need when we're trying to develop a local economy now we actually have quite a lot of information on what sort of enterprises the successful economy is used in order to develop and I've given a you know just some ideas there they have to be formally registered they should be operating at minimum efficient scale they should be operating as near as possible to the technology frontier using new technologies and innovations they should be driven by skills and innovation they should be connected in some way that vertically or horizontally and they should be able to create new things new organizations and routines okay new ways of doing things that's not what informal micro enterprises do so to the extent that they start to take the resources then you're actually sending developing economies off in completely the wrong direction and that's what we're seeing very much today as the microcredit model gets bigger and bigger and bigger the amount of money left over for more productive purposes is getting smaller and smaller and smaller okay so that's one of the critical problems and you could there's so much evidence on that really it's untrue and so that well one of the key aspects of this is what we call crowding out so the more money that's actually put into informal micro enterprises that money is no longer available and in many cases it's coming out of funding for more productive enterprises and we call this crowding out I would have a look at the if you're interested in that the age of productivity of publication by the inter-american development bank which goes into this in some considerable detail it doesn't actually name microcredit as the guilty party but if you read between the lines you can see that it is okay and they say that poverty in Latin America is a function of the miss the the the weak intermediation of funds into the best possible enterprises instead it goes into the worst possible enterprises and that's becoming more and more of a problem 45 percent of Cambodia's financial resources are now intermediated and put into informal micro enterprises and consumption spending okay so that's a huge amount going into street selling so why are we surprised that Cambodia's not really developing Bolivia 37 percent of its resources goes into the informal microcredit sector rising from about 2 percent 25 years ago this is big money that's moving shifting out of the most productive uses into the most unproductive South Africa huge amount of finance has been raised mainly it goes actually into consumption spending but what doesn't go into consumption spending goes into street trading so again why are we surprised that they're not really developing the most productive enterprises there's also a crowding out aspect in terms of the market because the informal enterprises shine for a little bit take a little bit of demand in the market from more formal enterprises that could use it and then they collapse so they're actually a barrier to the development of the most productive enterprises that's another area we have to consider particularly I looked at some reports in Bolivia where if you look at World Bank surveys the most important thing that manages informal businesses the most important barrier to them is competition from the informal sector they're not able to get larger to deploy technology because their demand their market share has been eaten away nipped away at all these informal enterprises that only last a couple of years and then go under okay so that's a real problem for them and very much as in Africa the more in a sense the more micro entrepreneurs we have doing this situation crowding out in terms of the financial sector and the market that's the reason why under development really is taking place so this is something you know the microcredit books would say and the reality is a buy cheap sell dear type of economy in other words not really going to be going anywhere final problem is that when we converted the original microcredit model to neoliberal principles it turned it into a wall street style disaster so the idea as I said earlier was that if we convert these non-governmental organizations into profit seeking organizations bankers and those involved will will behave responsibly okay even though we deregulate light touch regulation somehow the belief in the textbooks found founded in the textbooks what would be that they would behave responsibly well they actually haven't because in every country where we have had a where microcredit has reached a significant threshold we've had a boom and then we've had a bust in other words they can't be trusted under a deregulated environment to behave responsibly so something's actually fundamentally wrong with the business model okay and it's not something that's country specific because it's happening everywhere and so as I said as I said earlier the the drive for maximum profit now in microcredit is driving the money away from the most productive enterprises and putting it towards the most unproductive enterprises and that's obviously having a very deleterious effect on the local economy because it contributes to what I've what to processes of deindustrialization of primitivization that's moving from fairly technologically sound companies and then moving to no technology companies and informalizing so you're informalizing the economy taking it from a state where where there's respect for the law and trade unions and labor rights taking it into a very much more going back in time basically and so I think one of the aspects that comes out of the neoliberalization is that if you come across David Harvey's concept of accumulation by dispossession the wealth is now not necessarily produced in companies through innovations but it's wealth generated by taking existing wealth from another group in society so it's actually wealth that's being taken out of poor communities in the form of interest payments and taken up to elite groups and Harvey calls this accumulation by dispossession I would also have a look at a new book that's just come out called the financialization of poverty which looks at that in a particular microcredit scenario and the author Phil Maider is here I would definitely have a look at that and that builds upon the idea of accumulation by dispossession so very quickly what's to be done well I think most even longtime supporters now accept that microcredit was a failed a flawed idea and it succeeds only in the sense that it's a great way of validating pre-existing ideas about capitalism that self-help and individual entrepreneurship are somehow magnificent beasts and with a little bit of microcredit this can really work so basically the microcredit movement validated that really important argument that is beholden of people like of institutions like the World Bank USAID and very much the sort of neoliberals but it also allows elites to make a lot of money and so that's what they're doing through investing in microcredit institutions through giving them loanable funds through basically engaging with that if you see I mean the two two the biggest supporters now the microcredit movement are visa and mastercard now you might argue well they're there because there's the directors are really interested in poverty reduction I would say there's not much evidence of that so they have other ulterior motives and very similar to the tobacco companies that when their market was disappearing in the west they moved to developing countries and started building up demand there and they're making a lot of money there so I think the motivation is very similar to the tobacco industry they're moving into new areas and they're hoping that by putting the poor in debt that there's a tribute that's going to go back up so for those two ideological and financial profit reasons the microcredit model must be saved so the call went out the microcredit model must be saved and of course the world bank comes to the rescue so the world bank was seeing that the microcredit model was failing they've realized this for a while now they've understood the implications for the ideological content of what they do if it's actually shown that individual entrepreneurship which is the basis of almost the entire neoclassical economics paradigm if it's shown well actually that isn't how wealth is created that isn't how countries develop then you can see that the radical implications of that are not to the liking of the world bank so also the idea that financial corporations base many in the united states but also you can make big money out of microcredit that's something that must be saved there's nothing wrong with that as far as the world bank is concerned so the call went out we have to save microcredit somewhere the way they did it was to rebadge it to call it something else or to mix it with something else and they're calling it financial inclusion okay so the poor now don't need just a microcredit they need a whole array of services and for unspecified unknown reasons somehow that is what's going to be the answer to to poverty in developing countries so no research has been produced on this no there's no transmission mechanism of about how including the poor in this array of financial services is going to deliver the goods but it goes ahead and the world bank and USAID have basically committed themselves to achieving universal financial inclusion by 2020 okay so this a microcredit has now been in a sense subsumed under this financial inclusion mandate and so it still lives on I put the quote there but Paul Krugman said and I thought it was very good that when you see an ever-changing rationale for a never-changing policy then something smells okay so the idea that that microcredit still works but now we call it something else then something's not going on there so it's largely a fraudulent intervention but it's it's with a design to keep something alive that perhaps should be should be allowed to die so my conclusion then is microcredit has now evolved into what we might call a zombie idea okay it just exists it's a dead idea even most economists associated with it will say well you know there isn't really any evidence that it works so all that activity all that mobilization of finance all the world banks activity really doesn't actually produce anything but it's kept alive for other reasons for neoliberals and neoclassical economists if you were to say that individual entrepreneurship is not the foundation of all wealth creation that would be that is just too too much okay so somehow the concept has to be has to be preserved it's too powerful a concept to allow it to die out just because it doesn't actually work okay and so my conclusion would be if there is one more disaster and there are several brewing around the world Mexico for a couple of years now has been on the edge of a total meltdown those the figures coming out of Mexico were quite shocking in terms of the extent of over indebtedness one of the projects that Tom mentioned I'm working on the moment is looking at the extent of this debt this over indebtedness how has it formed what can be done about it what are the driving forces behind it and what are the implications for the national economy if my Mexico's micro credit sector goes goes belly up what are the implications not just for the poor but for the rest of the economy Peru is in is is is hugely over indebted enormous amounts of money Bangladesh is still over indebted they saved a meltdown a couple of years ago by getting everybody together and knocking their heads and basically saying look stop with the growth okay stop with the profiteering try to share the market between you because if you guys go under the whole thing's going to go bust so then the graph of expansion then wrapped tailed off and now it's done but there's still big problems there and India just four or five years after a big collapse a lot of the signs are the India now that the companies they're involved are doing the same things lending to the poor in in in areas where they shouldn't be that they have no collateral they have no I they have no business acumen securitizing loan port micro and portfolios all the bad things that they did in 2010 the wall street style bad things they're now starting to do again as people's memories fade of what happened before and and they created an entirely new narrative that it was all the government's fault so we can go on doing what it is we can do so I think if we have one more collapse then I think the that might be a game changer but we'll have to see whether that collapse comes about so I hope that was something I think I ran through that a little bit fast but I think I'm on time thank you just a quick housekeeping um if you're so inclined to tweet you can tweet your comments to pound so as so as dev the the studies altogether st u d i e s or you can also tweet to pound es r c you want to say anything else on that no okay um so I've been asked to offer I guess some comments or interventions into this and seeing it's hot um and the style that I like to engage is to sort of increase the temperature a little bit myself so there's three things I want to briefly in a sense question you are asked for some clarification um or point towards I think or significant issues and questions within the microfinance literature the first is historical and you laid out a history of microfinance that begins in the 1960s 70s and my question is could it have been otherwise the evolution of microfinance the nature in which it is today it's profit motivation and I ask that because there are plenty of other and I know you're aware of these historical examples of microfinance like relationships within communities where people collectively pool gold together and lend it to their neighbors or collectively share resources among communities and has a very different social logic so why in the center or could the basic questions could it have been differently and could it have been more progressive in its evolution the second one has to do with the very significant issue of the question of of uh conceptual question of alternatives and you pointed uh to the to the question of crowding out microfinance and resources being absorbed there and then pointing in a sense towards the alternatives of a developmental state pointing towards amsden and and chang one thing and then you know this question of of industrialization more formalized enterprise so my my conceptual question there is what then what is fundamentally different or what distinguishes the neoliberal model of microfinance between what is ultimately a neoliberal model of industrialization elsewhere so how would the alternatives you're pointing to in terms of industrialization differ in the profit motivation of the ultimate goals of microfinance today so what's what distinguishes those two models and why should we take your word on the more formal sector as leading to something better or fundamentally different than the neoliberal model of microfinance today so it's kind of a conceptual thing if you will similar problems slightly different outcomes but tied to that what then is the source of finance in that model because you're you're you're opposing a productive response to a microfinance model how do we finance the the the sort of industrialization model what alternatives exist there the third intervention then in a sense is more practical so the first one is historical second one kind of conceptual third one in a sense practical and i see you're you're getting more and this is the question of the agents of change because and clearly there's a consensus that there needs to be some change and that there are different beneficiaries and that global finance has absolutely you know global financial actors have absolutely benefited from there's no doubt the the profit levels are incredible but to some extent it seems like you're relying on crisis to bring microfinance to an end and i'm wondering if you can point to some organized movements some agents of change who are pushing for change uh and and what kind of strategies might we share with our audience here in terms of more hopeful you know moving forward rather than waiting you know for mexico to collapse what what kind of alternatives that are out there exist that we might look forward to that's it okay i don't need to talk loud enough as it is so oh for the recording yeah okay um well the history could it have been otherwise that's i mean that's an interesting point but i think the tragedy was that um as the neoliberal paradigm was arising in the early 1980s it ran into the microcredit model and um it could only use this particular model to its own for its own uses i mean it you know so the part of the tragedy of the microcredit model is that it came up against neoliberalism at a time when it was still in its infancy if you like it was a non-governmental organization model without the influence of neoliberalism maybe it would have stayed a very marginal a very partial very small scale model in just one or two communities and we wouldn't have heard from it ever again but because neoliberalism came along at the same time and they could see enormous usefulness in what the microcredit advocates were were pushing the idea that individual entrepreneurship is really the beall and end all of poverty alleviation that you don't need to to to deploy what we might call collective capabilities you don't need to form trade unions electing left-wing parties all that sort of stuff um they realized that microcredit had a huge usefulness and so they entered into the financed and supported the main advocates people like Muhammad Yunus people like Hernando De Soto financed all the campaigns because they wanted the ideological points and then later on when it became a profit business then obviously they realized that that was a way to um uh get the profit motive into microcredit on behalf of another constituency so i think um it was unfortunate that it arose in a sense when it did um but neoliberalism has destroyed or has co-opted many other interventions and built them up into something big only for them to crash later so i don't think microcredit um is the only one that it did so in terms of alternatives i mean that is one thing that a lot of people say you know what are the alternatives to microcredit i mean i think they are they are out there um and uh i think there there is a lot of uh support for um uh alternative development trajectories we have many historical examples of local development i mean i give good examples from northern Italy after 1945 had a totally different consensus-based uh community-based model which turned uh a region Italy which was one of Europe's poorest into one of the richest and it was based on on a respect for cooperation or a respect for working together on an idea that we needed the latest technologies we don't want to just work for very simple businesses we need the latest technologies into our businesses lots of ideas and they built a successful model same in many parts of Germany with you know building on different constituencies coming together you had regional governments powerful trade unions chambers of commerce coming together and creating a decent model so i think there are alternatives out there and i think just uh i mean one of the uh i mean Latin America was one of the first countries and i think it's interesting that Brazil was probably the the pioneer in this case 1960s USAID financed proposals in Recife in Brazil so that was one of the first uh microcredit uh uh movements and now Brazil has come full circle and i i just got back from Brazil a couple of weeks ago where i was invited over by one of the biggest state banks in the state of Minas Gerais and they are looking for an alternative to microcredit so the politicians are saying well look you know microcredit we're hearing great things about it so as our state development bank you really should be getting into it and the officers were putting up some resistance so they invited a you know a critic to come in and and discuss and at the end of it i think most people were agreeing that you know we have to think carefully and maybe about introducing microcredit or at least beefing up the programs they have and starting to look at alternatives in the form of maybe uh more lending to formal small and medium enterprises big movement there towards supporting cooperatives so there's other things to do it there's other ways municipal enterprises um in brazil i mean all over the world they privatize municipal services into private companies it's been a complete disaster brazil is one of those countries that are remunicipalizing things like water uh you know garbage collection things like that and so i think those those uh that that's a way of supporting those types of um alternatives um so i think the the alternatives are out there um and i think um i think i've answered the agents of change question the one another one i would i would look at is countries like cuba which have are now uh um on the on the cusp of of accepting things like microcredit because the u.s. constituents is really pushing them hard to accept this this wonder drug from the west called microcredit and one of the ways they're doing it is of course uh sponsoring tours and research fellowships at the prestigious institutions in the states so that people then have a buy-in to this microcredit and they don't want to listen to any argument that says it's perhaps not very good for them but the government is actually pushing ahead with with uh measures to try to finance the conversion of state-owned small businesses into workers co-ops and they can't do that with microcredit and they realize that they don't want to go down um the eastern european uh they followed the economy of bosnia very closely as a transition economy that went from a form of communism into a form of of capitalism which has been pretty much a disaster and they don't want to follow that so they're looking at the the financial institutions that bosnia didn't deploy development banking financial cooperatives community banking and did deploy they had a massive uh second only to bangladesh in terms of the penetration the microcredit sector and they're they're realizing that the alternatives uh types of financial institutions would be better for cuban conditions so i think um i think i've answered two of the questions together but i think that the alternatives are out there but i was also i mean i i've i've researched i've worked a lot in credit unions which are saver-owned financial institutions now i always think we're setting something up in Croatia where i spend most of my time and these are really these are great they're not they're not about making a profit providing a service to savers which means usually if you need a loan you can get a cheap loan because it's your own money it's not about making money for the shareholders there aren't any shareholders you're all all you have one vote one share one vote and the world bank was very anti credit unions in the 1980s as they were starting to push up the support for microcredit and one of the reasons was um to summarize is there ain't no way for someone to make money in a credit union but there is a microcredit and so what they felt credit unions are a form of fuzzy sort of community activity whereas microcredits you can get an entrepreneur in there make a lot of money pump out a load of microcredit and they didn't think credit unions offer that opportunity for somebody to make money now i would say well yeah what's wrong with that but everything in a sense the world bank was doing in the 1980s and 90s there had to be some money making potential for somebody because if there wasn't it meant it was for the service of the community well how lame is that you know so so they didn't support credit unions because there was this issue of you know well what's your average entrepreneur how can an entrepreneur make money out of a credit union well the answer is he can't you know he or she can't well then why are we going to support credit unions so that was one of the reasons why credit unions were in a sense avoided in the debate about financial institutions in the global south in the 80s and 90s now the situation is changing now and rather suspiciously the world bank has jumped on the credit union model now and is starting to promote the credit union model not quite sure why maybe they realize the error of their ways or maybe this is a good bit of camouflage if there seem to be associating with the forward looking credit union model maybe people won't will forget all the other things that they did so I'm not quite clear why but there's a lot more support from the world bank now for credit unions so I hope I answered those points no very much thank you thank you just before we go into questions and Alfredo is going to share that just a quick notice or announcement for next Tuesday not steal your thunder there's no we have plenty of thunder so and I'm just stealing a little bit maybe just a crack uh Joanne Martinez Alier will be speaking to us on is there a global movement for environmental justice uh same time same place okay notice will come out uh with that and a reminder to tweet widely enormously um questions comments uh yes opportunities here thank you very much for your talk it's a significant nice to present and thank you very much I have a question I think it probably is from Tom's first question to some extent that even in a so-called developed country like Britain even small and medium-sized enterprises over half of them have been going bust since the 1980s and this is interesting 79% of them bust within two years it's now down to only 59% within two years and now if there is small and medium-sized enterprises are not run by people who are in the such opportunities you have in Bangladesh and Bolivia and elsewhere what what what prospect was there that this is actually working right but how many units actually think of this idea slants now can I take some yeah yeah yeah okay yes yes yeah um I just wanted to if you could comment a little bit on cash transfers cash transfer as I don't know if anybody's read Jim Ferguson's new book in the application he addresses cash transfers kind of like a um solution that targets both the demand and the supply side of property so I was just wondering if you have anything to say about that particularly given someone like Modi's government is trying to roll them up universally um in the next uh coming okay thank you uh someone at the back yes ideology is a market-led development you're just wondering if there isn't a bit of a contradiction in that because why would state agencies prop up um like financial funds where they guarantee the low risk fund so that institutional investors can invest in the first place without this state led development I guess so state that money with aid money um these financial practices will see the last I wouldn't wouldn't have been possible in the first place and this goes beyond the simple deregulation state enforcement in regulation um in terms of providing the financial rules or regulations but this is a really a support for the everyday practices within the financial markets so why would why would that still be happening um if if they actually see that you know my friend is working why would still money go into that okay yes um I think homogenizing microcredit is deeply problematic um and that's that's what I disagreed with in the argument of course the the business model um approach of reaping profits from the poor and the whole um failure of microcredit in say Andhra Pradesh or SKS macrofinance I completely agree with but um there are alternative models within microfinance say for instance the self-help group way which essentially harnesses collective capability than is very community based there's no external company that's facilitating the entire process and there's enough evidence which is not the one in a one thousand uh base which clearly shows that self-help groups have helped uh the rural poor escape the interlock modes of exploitation which is essentially dependence on money lenders especially in developing countries like india the money lender is the only source of credit that you have if you're not linked to a bank so don't sg's then provide access to credit in that sense and the second is actually transitioning from the self-help group model to opening up your own bank account and it has been seen that um once you're a part of these sg's banks find it increasingly difficult to say no to you to open up bank accounts and hence it's actually helping uh the un unbanked actually get access to banks so um i wanted to know your views on self-help groups as a model in the context of micro credit and um i've actually seen that work in a lot of parts in india should we leave it and answer these and okay that's fine and then there'll be there'll be another round right okay the the first one that's that's an interesting question i mean i didn't have time to go into one of the one of the problems uh with micro credit is what you called uh you know the failure and the statistics on the failure of informal micro enterprises are very high so the average lifespan is about three years and then they they basically they come and they go so it's it's very high it's very high but um in impact in evaluations of micro credit one of the things that you don't you look at is you look at the startups and then you create some jobs and some incomes and then you don't really follow it through a couple of years later to find out what actually happened to them so in in a sense one of the problems of impact evaluations and i've done quite a few on on local development is that you tend to look at all the upsides all the the new startups and then you're never there when there's when they fail in a couple of years time and the average the the typical local economy in the global south is subject more to something called turbulence or uh churn which is lots of new micro enterprises and lots of failures so then the the number basically stays the same you just have a high level of entry but then with a lag you have a high level of exit so really you're not actually creating very much other than this constant turnover um and uh but the exit part has not been included in any of the valuations and that was one of the points i made in in the book i did how is it that i was using you know the the exit entry and exit in in surveys i was doing but yet most of the evaluators in microcredit only look at the entrance and say look at this we've had 100 000 usm new micro enterprises forgetting the fact that in two years later 96 000 of them go out of business usually with debts for the people concerned um interestingly tomorrow i'm giving a talk on looking at the situation in the Balkans and particularly Greece and the european commission has just introduced a 100 million euro program of support for micro credit for Greece and the idea is that um uh you know unemployed Greeks will be able to access you know a couple of thousand dollars and start a new coffee bar or uh some you know some simple low tech low capital type of business and um and then when it was pointed out to them that statistics on failures so something like half of all the micro enterprises went out of business in the last five years because nobody's got any money so what good is actually trying to start up businesses in the same sector um and when i wrote to the commission on this and said look i mean this absolutely makes no sense they wrote back to me says well our data actually shows the end micro credit will be good because the rate of micro enterprises they're they're doing very well and from data we have from 2001 to 2004 oh no that was the start of the credit led boom the situation is totally different now so that's one of the big problems if you don't factor in the exit side you only get the upside and you lose the downside cash transfers um i haven't done that much on them so i don't i don't know that much about how they work but i do there is one problem with them and that if if it's a form of giving in a sense uh not a micro loan but a grant okay so there's no interest to pay but the sort of business you can start with a cash transfer um if that's what you're going to use with it um is is still a micro enterprise and they have as i said a very very poor track record of being associated with development if it's just a cash transfer as a form of income i don't know i mean i i don't i really don't have that much data to know whether that's a good thing there was an article actually in the tom mentioned the latest edition of jackabin there was an article on cash transfers very critical of it and i read that and but i don't know that much but but if it's about cash transfers to start businesses then the same problems as you have with micro credit arise um the question over here about about why you know this this the the two reasons why the financial inclusion movement has taken off i don't think that i mean i think the state provides support for microcredit in the sense of the regulatory framework and the the the the advocacy and those sorts things but i don't think the state provides a lot of money the most most of the finance now going into microcredit is from wall street and from hedge funds and from bill gates and from you know of conventional private sector funds looking for big returns um the indian microcredit sector was boosted up by a lot of hedge funds they were getting 8 percent 12 percent 8 to 12 percent on on the money they were lending to microcredit institutions for on lending at 40 percent bosnia is the same they're getting up to 15 percent and then the microcredit institution on lends it at 40 percent um so really the state doesn't need to put any of its own money up from they don't you know because these the private sector has realized there is a seriously good business opportunity now in microcredit but they have to get the regulations right and that's where the state plays a role in making sure you have a light touch regulatory uh environment allowing these companies and most of them suspiciously are based in luxembourg and netherlands um and uh you know so what are they doing there um at switzerland so it's because it's low regulation low regulation so they can do all sorts of things so the state doesn't get involved in financing it's it provides the regulatory support to allow these companies to do what it is they want to do okay uh the final one um the self help movement keeps coming back uh i mean if if the poor are then taking money in order to finance consumption i think then i think the self help group is a much better than taking it from your average microcredit institution so i think that's absolutely fine the problem i have is that when you say they take you through the self help group to start a business because if they're taking five hundred dollars and opening a shop on the street then that runs up against the same problem that microcredit creates in other words the type of businesses you create with that sort of money are not the businesses that are historically associated with getting out of poverty reduction countries that get out of poverty actually get rid of those types of businesses as they move in a different direction so actually starting to allocate money into inflating that sector is actually in a sense going backwards um so i think i think the self help movement is is a step away from microcredit but of those who advocate that the it's better to take money to start a business from a self help group is still not going to really contribute very much thank you uh yes in affordable water you have them in all these sectors and they are again tangled up with microfinance organizations for poor to take loan from a microfinance to be able to fund consumption of these products so generally i just want you have corporations investing in them and venture capital fund all of these kind of okay yes i just like to ask you have you done any study on microfinance there are islamic microfinance which is just interested in other way i mean that that's really true like lot of this like islamic banking is nothing to do it's just using the Arabic terms for interest but the our microfinance in the Islamic world which are based on Pat Hassan which is alone and you only pay back exactly what you you borrow and i've been involved in some of these and these do seem to have you done any study on the impact of this because there's no big there's no interest to pay and and and people do manage to escape from poverty as well as this brat has given some very good lessons on uh if you're starting with the ultra poor and and a lot of the emphasis is on the ultra poor and you do need in the initial stages cash transfers food support you need health support so there is a whole scheme of helping the ultra poor so i just wondered if you've done any study on that from our perspective as a developer organization it's only one tool in the kit to help people it's not the the only microcredit isn't the only the only answer you have to deal with other issues and finally you know some microcredit organizations they have what they call a risk plan so should the be like a cycle in the bank or their or their house burns down so their loan is not they're given another uh you know they rebuild their house and they're given another chance to start their business so have you done any study on those sorts of things and and what is your opinion about that thank you there was a question at the back was there another question at the back logos i think i understood the question before slightly different so why does it persist why why does it persist if it has so many busts so from the point of view of investors you said they make eight percent or ten percent but at some time sometimes at some point it goes bust so and then you said the state doesn't step in to guarantee the payment so how does this make financial sense from their point of view okay can i answer can i just one more have how many additional questions have we got we got one here okay let's let's do sorry okay yeah yeah okay louder if you get the economic proficiency responded as opposed to explaining about that um the ideological okay yeah um okay um the first question was about the bottom of the pyramid type of uh the multinationals get into providing tiny amounts of of shampoo or whatever to to the poor i haven't done that much work um on that um that sort of strategy i've got a chapter coming out the book we've got coming out on social enterprises and i i use the social enterprises set up by Muhammad Yunus under the Grameen family network to have a look at and to critique that so the idea that um multinational corporations or even Grameen bank affiliates can get into the idea um of of supplying uh these types of of products to the poor um uh is not perhaps a valid argument um the one the one example i looked we looked at was a tie up between Grameen and Danone which is one of the big companies and it's about providing yoghurt um to to to the to the rural poor in Bangladesh and and buying from farmers the milk and it's a very complicated process it involves a multinational company which is now using that the sort of the capital um you know the reputational capital they've built on helping the poor to get into other markets in Bangladesh without any regulation with buying your licenses very cheaply so i'm i'm a bit suspicious about Danone's has a reputation for doing some some dodgy things there and the important thing is that it's not as good as a similar program in India called operation flood which is pretty solidly uh evidence that it had a very important impact when the poor were forming milk cooperatives but Danone didn't and Grameen Danone doesn't go into that they didn't want the idea of cooperatives smelled a little bit too collective so they wanted a very a very sort of individualistic but operation flood seems to have done a lot better um but they weren't interested in what was best which makes me suspicious that if you're interested in supporting initiatives to help the poor then you look at all the alternatives and if there's one next door in India which seems to be working why do you choose one with a multinational company involved you know you've got to think through that one so on the islamic finance i've had this many uh you know i've i haven't really looked at islamic finance at all um so i've got no real comment to make on that other than if if it is about creating the same types of small informal businesses then it again runs up with the same barrier that all other programs that support informal businesses run up against the that they are not the driver of development um you know i mean it's fairly uh clear that that is not the way um uh development takes place it's formal SMEs or large companies it's not informal micro enterprises now this wouldn't matter very much if only a tiny amount of your financial resources went on these programs in a sense you could experiment but if you're saying as in the example i gave you 40 percent of bang of Cambodia's financial resources are now intermediated through into informal micro enterprises that's a game changer that means that but Cambodia will never escape poverty if most of its resources are creating street sales i mean that's not good or or or consumption lending so that's the problem i have with that even though i appreciate the subtleties of islamic finance it might actually provide a better service the ultimate outcome is is pretty much the is pretty much the same on the issue of the boston when when i said that the state provides the regulatory background but then the state and this is the wall street style the wall street aspect to microcredit in the run up where so when microcredit is expanding the owners and the shareholders are making out like bandits and then when the whole thing goes bust then the state is called to come in and clear up the mess so it's very much a wall street scenario and we had a great example in 30 commas in south africa where we had a come an organization called african bank now it was basically a reckless lending it was pumping out money into the poorest communities when people were struggling they would be given another loan part of which you used to pay off the existing one and then you carried on this you know so it's like a ponzi scheme and eventually this ponzi scheme blew up and it cost the south african government because they came in they had to bail it out on the basis that it would create so much anger if they didn't and they paid something like or they bailed it out to the tune of around 1.6 billion us dollars so basically the private sector interest took the money on the way up when it all went bust they stepped back and the state so that's pretty much out straight out of wall street playbook and and the main shareholders were pension funds investment funds and a lot of government personnel so it wasn't even the poor they were bailing out it was middle class mainly white institute owned institutions that they were bailing out so that's what happens when it goes wrong bosnia has got a similar when several of them bust the government has to go in i mean in bosnia now several of them have gone bust and there is a big problem of over indebtedness in bosnia so one of the biggest international aid programs is called plus and it is about debt counseling to the poor and advising them not to access a microcredit um so for 10 years they've been telling the poor that this is your salvation they're now spending something like eight nine ten million dollars on programs in all the major indebted cities in bosnia actually bringing people in who are over indebted and trying to cancel them out of it but also having a general message you know by all means you know just just stay away from it so that's how much it's gone full circle so it's a bit crazy um what was the last question oh yeah that's an interesting one how have the economics profession responded to failure um i i mean this is uh very interesting because um many of the uh well just recently i think i mentioned that um several high-profile professors from the top us institutions mit yale harvard have come out with a series of of reports that basically say that you know yes there's there's no impact from microcredit it's so small and it might even be negative but it's so small we can't even identify it and in a sense they these are these are economists who are who in earlier times built their reputation on microcredit and the way you build your reputation in the united states is you get research funding to produce articles so as long as they were selling microcredit in the 19 late 1990s early 2000s they were getting they were inundated with financial with funding so much so and it's a fairly common career path in you know academic circles you open your own NGO so several of the most high-profile open institutions that now evaluate and they got tons of money from the gates foundation us a id all the main microcredit parties and institutions so it was interesting that the way that they've dealt with the fact that after all these years it now turns out that there's nothing in it how do they respond well what they're doing is they're taking the lead and i saw a couple of um uh uh tweets by one of them that was and this is one of them that built the whole model up and built a career and now he was challenging other people to say uh you know look these things don't work is that what you other guys think in the practical field because we don't think it works so in other words taking the lead as being one of the people saying it's not working so they've come to full circle and uh it's it's really quite strange i mean there's a there's a there's a sort of saying about first they repose you then they accept you then they say well we knew this all along so i i think there's a case on that many but i mean it's the set we've all seen inside job yeah i mean you know we know how um uh the u.s. academic profession was i mean wall street was very very much insinuated in all into all the cracks and fishes in the u.s. academic profession people got lots of money to write you know reports 20 page saying that deregulation is an absolute must for wall street without then saying who was paying them to to say that and i think there's a lot of that in microcredit i mean a lot of people have had you know have been taking a hell of a lot of resources in order to say things which now turn out not to have been right and some people are keeping quiet but some people are going on the offensive and saying you know where we knew this was not right and you know what are you guys going to say sort of saying that as though they were there all the time sort of thing so so yes uh well it's strange i mean he's uh uh he came under a lot of criticism recently and um but because of the mismanagement of the grimean bank and lots of things went on there which were bad and it was interesting to see how um when the the government the Bangladesh government came in and then said look you know so many things we've got to and they sacked him basically so he was sacked now supporters including Bill and Hillary Clinton and others said it was because of the politics but they then commissioned an independent report on what's been going on in the grimean family so it's not just the bank it's the family of social enterprises and what they found was astounding mismanagement corruption etc etc etc the report went out there and not one single western media outlet picked it up if you can get it you just google grimean grimean bank uh into me uh uh what's he called my uh intermediate report or something interim report interim report ministry of finance bangladesh and you go through that and it's a really savage indictment of what went on there how they mismanaged it um you know this was not about poverty reduction it was it was it was there were lots of all sorts of other things but nobody picks it up um and so but but professor Eunice is still a major figure he carries on all over the world speaking and and stuff like that i mean i i don't know i mean he's he's moved out of microcredit now and he moves into something called social business so this is the new way that poverty is going to be uh eradicated and actually we did a chapter on this in this book coming out looking at that social business model and whether there was any any water in that but i think it's very difficult if you you you start something and then things later on come apart and you know it's it must be very difficult thank you move forward um okay um a question there how many more questions have i got one here and one here okay three questions and that will be it is that okay so just before we move into the questions briefly next Tuesday john martinez alie next Tuesday at five o'clock on is there a global movement for environmental justice and after this round of questions and milford's answer a little reception upstairs at the senior common room for anyone who's interested yes please the informal microenter prizes don't produce development that you need larger businesses and more it sounds like you're advocating more high-tech things um but and that's because that's produced development in the past and i would ask you if you think that the development that's happened in the past has been desirable from a social perspective it starts at unequal outcomes like that and then also um from an environmental perspective it looks like repeating that sort of development isn't possible at least if we want to have a stable climate and so is it so bad to be looking at alternatives um there was a question from yes um yeah i was very interested in your talk i was wondering if you could speak more about the beginnings of microcredit in central america uh because this is something i just haven't heard very much about i've read a lot about its failures today but this whole period of history generally is really discussed thank you yes okay sorry i just i need to intervene just because i would be remiss not to ask this question what is your response to the claim of gender empowerment in microfinance less about the industrialization capacity but what it does for women okay or can yeah okay the uh i mean i i take your point about past development and uh uh there are lots of problems with um uh formal small medium large enterprises uh you know i mean that's not the panacea either but uh putting it very basically i mean countries have got richer and have leased a freed up resources to all sorts of other things so to the extent that they've been able to channel what finance they have into the most valuable uses so that tends to be formal small medium and large enterprises now this as i said earlier this wouldn't really matter if microcredit only absorbed a tiny percentage of the of the finance that a developing country has then we wouldn't be so worried about it um it would be a bit like uh uh somebody says look i think um uh developing countries want rubik's cubes i think rubik's cubes are fantastic because they they encourage manual dexterity and thought processes so i think we you know developing countries need rubik's cubes we might say something in that maybe you know if you want to go off and send your own money and maybe you know do something with it but if the person said well no actually i don't want to do that but what i want to do is i want to make i want to close down all other development interventions and pop concentrate the money on rubik's cubes so that's when we would say well hang on you need more evidence that that's something good you know so it's the amount of money that's going into as i say cambodia 40 percent now goes into informal micro enterprises so all the other types of enterprises are reporting to the world bank and the i of c and all the others that they are having a cash crisis they call it the missing middle problem so all this money is going into microcredit and creating very little impact and it's taken away from the businesses that they're not perfect but we know that they're associated more with sustainable development now i agree that they're not the right way and i would like to see lots of even better types of institutions like workers cooperatives municipal enterprises that sort of thing but you know that's not the option that we're talking about we're talking about whether money a scarce funds goes into informal micro enterprises or it goes into more formalized but more risky types of businesses well the historical evidence is very much that you have to put it into the formal small medium large enterprises that seems to be the historical evidence central america i'll give you something on that uh rather than talk over it again i've just uh got um i did a uh a chapter on something an introductory chapter so i'll let you i'll let you have that if you see me at the reception um mobile money is now one of the that's part of this financial inclusion thing and everybody's waxing lyrical about it i think it sounds like a good a good idea that if you don't carry physical cash you have it on your mobile phone i think there are lots of good things and everybody's talking up and pessa and everything i think the downside to that is and this has been said on several occasions that it's now very easy at the click of a button a poor person can take a micro loan out well i think that's a good thing but i also think that's if we already know that there is a massive over indebtedness popular problem in so many countries are we not adding a little bit of fuel to the fire on that and i mean the kenyan i haven't got the latest but the kenyan over indebtedness statistics are pretty scary yugander is one of the worst um and uh the south african government don't want empessor in there they've put lots of problems in their way and because they think that south africans the poor are already so much over indebted uh you know and they have to go to a bank sign forms do all that if they could just click a button that the problem would be magnified so i think there are some great things with that i think it's fantastic that technology seems to have a usefulness but i think you know i'd be a little bit worried uh you know if then if there isn't a strict application of this and i'm also worried about the people pushing it the likes of visa and mastercard and city group and barclays bank if it were if it was oxfam and others largely doing the driving i would feel a lot a lot more comfortable about that and the final one gender empowerment i didn't talk about because i didn't have any uh a time to go on about that i think there has been a couple of studies out out now that basically say this was very much part of the myth uh of micro of micro credit and um uh certainly my own experience is in bosnia where we had a very famous uh called women for women international if anybody's come across it uh and it basically was taking women in the post conflict environment giving them a couple of hundred dollars and then setting themselves up in you know the most tiniest unsustainable business possible and um a couple of years later all of them basically all these businesses collapsed and uh it created so many problems of indebtedness and uh it was a disastrous intervention for women that they were really corralled into the least sustainable businesses possible i mean that was that was part of the problem but also the feminist movements in places like bosnia were against micro credit because their point was that look under the old system for good or bad in yugoslavia as it was um uh there was a lot of real gender empowerment i mean there was a very strong feminist movement it was one of the pioneers in a sense behind in the in the communist countries in terms of gender empowerment and a gender empowerment was equated with things like you know distribution of women in in the parliament and in government jobs and in also in the the professions which are typically male dominated so they have made real inroads and then gender empowerment in the new neoliberal era was uh in terms of can you get hold of a micro credit and you're expected to as one person said you know keep a cow in the back garden and that's that's empowerment and a lot of people said well that's not empowerment as we understand it the world bank might think that's empowerment but a lot of feminist groups were against what was going on there i'm not saying bosnia is the only one but i've heard that same sort of argument being in in many other countries that you know simply allowing uh somebody uh you know uh to access a couple of hundred dollars to go and stand on a table selling avocados in a street you know that's not empowerment in in a sense that as i wrote in the book i mean that's really the only empowerment there is that the market is being empowered because but what you're saying is that women to get a real empowerment the only avenue that's open to them is through informal micro enterprises they shouldn't be going out there calling for you know mobilization for real gender empowerment you know you'll find empowerment through micro credit and that's not on final question i would answer i would say to that is that bolivia had a prior to 1980 i mean they had many economic problems but they had built up a fairly uh comprehensive social welfare system which was very gender empowerment powering and this was built up under the old military government and the elected governments but it was seen widely as carry having many attributes of a fairly gender empowered country with with maternity leave and all sorts of other aspects and when uh bolivia had a bit of problems in the world bank and imf and jeffrey sacks came in they basically destroyed all that that infrastructure of empowerment and said if women want to be empowered they should take a micro credit and buy these services on the private market so i think that is perhaps the most disempowering act you can make you the empowering is valuable only to which uh only to the extent that it can be achieved through market means which is not real empowerment fantastic thank you so much for absolutely brilliant absolutely brilliant session thank you very very much and thanks everyone for coming and i hope i'll see you at upsets