Hi Patrick! I'd be happy to go into this microenterprise stuff a bit more. In LDCs a majority of the population may be working without formal wage contracts, but instead be engaged in small-scale commerce (e.g. market stalls, selling gum on street corners etc) petty-commodity production (e,g, hot food, small repair or manufacturing shops, misc. services etc) or putting-out work of various kinds. Sometimes this is all gathered under the broad rubric of the "informal sector." Now in one sense a lot of these people can be considered to be running businesses. They buy inputs and sell outputs, and they need credit (less so in putting-out, but systems vary). What's striking when you look at studies of these sectors is how intricate, though on a very small scale, their financial linkages often are. But this shouldn't be surprising -- being poor in societies in which resources are stretched means that you have to be able to borrow to survive. (Indeed borrowing is necessary both for maintaining productive activity and often for simple consumption.) Lending sources take a variety of institutional forms, but that's another discussion. The trouble comes with the effort simply to redefine the poor as "entrepreneurs," shorn of history, class, context, and so on. This effort at redefinition has been part of the right-wing populism often associated with neoliberal reforms. There is a real effort in places to change people's subject-identities, to get them to think of themselves as capitalists, with "microenterprise" programs taking on an almost evangelical tone. A key aspect of this redifinition is the atomistic notion of the microentrepreneur, competing with all other microentrepreneurs and with little basis for common action. The hallmark of these programs has been lending, and the test of effectiveness has been not whether people are better off, but whether the loan gets repaid. That is, it is simply assumed that repayment proves that the loan was productively used and resulted in an improvement in well-being. Hence there is a lot of attention e.g. with Grameen bank on ways to pressure people to repay loans. I don't have to spell out for this list why loan repayment indicates very little, and given that informal credit transactions are often interlinked with other sorts of contracts, unbundling this and providing separate credit has an indeterminate effect. (It's also often assumed in these programs that microenterprises are highly profitable but rationed out of normal credit markets. I doubt that, and think that when profits are reported it's often at the expense of squeezing the reproductive side of the household firms e.g. people eating less. A lot of the apparent vigor of informal activity is a result of desperate efforts to keep a variety of income sources open.) It's entirely possible that there are places and contexts where these programs are useful, but often they seem to be either palliatives, or worse. I'm particularly worried about the credit-channeling model of NGO work, emphasizing lending at the expense of financial savings, but that's also another story. The left has perhaps been slow to adapt a trade-union model of organizing to these situations, which has given the right a window of opportunity to push this kind of project of redefinition. However, It should be noted too that often local initiatives which borrow much from trade union-type organizing get presented in the policy literature as microlending NGOs. I'm thinking of the Self-employed Women's Association in Ahmedabad, in India, which considers itself a union, pushes for members' interests in a variety of ways, and makes loans only as part of that program. But you'll often see it presented as just another Grameen Bank. The financing point which got me into this is that the activities of this "informal sector" are affected by financing conditions, and their financial circuits are often linked to formal sector finance. Therefore the financial sector cannot be considered simply an adjunct of large capitalist firms. Much of the discussion above is the result of work by my partner S. Charusheela. Best, Colin Colin Danby [EMAIL PROTECTED]
