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Microfinance in neoliberal times

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Title:
Microfinance in neoliberal times the experience of an Egyptian NGO
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English
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Tobin, Sarah A
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Non-governmental organizations
Economic development
Social capital
Livelihood analysis
Applied anthropology
Dissertations, Academic -- Applied Anthropology -- Masters -- USF   ( lcsh )
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government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
theses   ( marcgt )
non-fiction   ( marcgt )

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Summary:
ABSTRACT: Development non-governmental organizations (NGOs) are under immense pressure to adhere to the programs and methods put forth by external donors, particularly if the NGOs rely on the funding to sustain their own organizations. Those external donors that represent neoliberal ideologies and enforce neoliberal practices, particularly in the area of microfinance, maintain a power that most recipient NGOs cannot evade. This becomes a difficult position for the NGOs to navigate as they try to accomplish good work in their communities. This research project is a study into the experience of one NGO, the Egyptian Development Organization (EDO), as it implemented microfinance programs in rural Egypt. The study revealed that EDO maintained an overall, structural orientation towards foreign donors and audiences, and employed discourses that appealed to neoliberal ideologies and practices.For the NGO, this orientation went beyond an accommodating lip-service and resulted in the institutionalization of demand-driven microfinance. Additionally, through decentralization EDO transferred risks and responsibilities to a more local level, and required the infusion of neoliberal ideologies into the practices and actions of microfinance borrowers even before their loans were disbursed. This thesis argues that a point of disjuncture occurs as the context of neoliberalism, specifically the aims of material accumulation through the mechanism of microfinance, meets the program participants practices of the development and preservation of social and human capital. This study found that microfinance program participants are both accepting and reproducing the rhetoric, often in ways that defy their own experiences within it.Their high rates of participation in microfinance, as evidenced by repeated and multiple loans, are pronounced considering that few have achieved the increased economic and financial gains promised by neoliberalism and microfinance. By conceptually conflating financial and non-financial capital gains, loan recipients were able to go beyond tolerating rhetoric that does not come to fruition, and justify continuous participation in the program. By perceiving investments into non-financial gains as valuable, the participants altered their livelihood strategies new ways that may or may not secure against vulnerabilities in the long run.
Thesis:
Thesis (M.A.)--University of South Florida, 2005.
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Includes bibliographical references.
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by Sarah A. Tobin.
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Title from PDF of title page.
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Document formatted into pages; contains 131 pages.

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oclc - 69647819
usfldc doi - E14-SFE0001294
usfldc handle - e14.1294
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Microfinance in Neoliberal Times: The Experience of an Egyptian NGO by Sarah A. Tobin A thesis submitted in partial fulfillment of the requirements for the degree of Master of Arts Department of Anthropology College of Arts and Sciences University of South Florida Major Professor: Kevin A. Yelvington, Ph.D. Nancy Romero-Daza, Ph.D. E. Christian Wells, Ph.D. Date of Approval: August 25, 2005 Keywords: non-governmental organizations, economic development, social capital, livelihood analysis, applied anthropology Copyright 2005, Sarah A. Tobin

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Acknowledgements I wish to thank my family, my mother Sally, my father Warren, my brothers Pat and Joe, and my sister Katie for their life-long love and encouragement; you all inspire me. I would like to thank my fellow students at the University of South Floridas Department of Anthropology for their reliable support, and for making me set aside the work and socialize once in awhile. I would like to thank my colleagues and friends in Egypt, especially Aubrey, Fahim, Ibrahim, Mark, Medhat and Nabil. A special thanks to Karen and Jennifer who helped coordinate the project from Washington, D.C. It is because of you that this document exists at all. A special thanks to Hala for translating hours upon hours of interviews. To Angie Reagan, Brenda Kuska, and everyone at the Institutional Review Board, I would like to give my thanks for all of your help. Finally, I wish to express my debt of gratitude, especially to Dr. Kevin Yelvington, and also to Dr. Nancy Romero-Daza and Dr. Christian Wells for making this thesis better, and along with Dr. Linda Whiteford and, most especially Dr. Jonathan Gayles, for making my graduate experience at the University of South Floridas Department of Anthropology a life-changing and most wonderful one.

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i TABLE OF CONTENTS List of Tables iii List of Acronyms iv Abstract v Chapter 1: Introduction 1 Chapter 2: Literature Review 8 Neoliberalism 8 The Win-win of Microfinance 11 Non-Governmental Organizations (NGOs) 14 Livelihood Analysis and Microfinance 18 Social Capital and Microfinance 20 Thesis Objectives and Research Questions 24 Chapter 3: Methods 28 Introduction 28 Conditions of the Fieldwork 28 Political Constraints on the Methodologies 32 Archival Research 37 Participant Observation 38 Interviews with Staff 40 Survey and Community Profile 41 Group and Individual Interviews of Implementing Organizations and Program Recipients 43 Chapter 4: Results 47 Introduction 47 The History of EDO 47 The History of Microfinance with EDO 51 A Typical Microloan Process 57 Microfinance Policy Development 64 Summary and Discussion 69 Loan Program Participants Perspectives and Practices 71 Housing Loans 73 Business Loans 83 Agricultural Loans 88

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ii Summary and Discussion 92 Chapter 5: Conclusions and Recommendations 95 Summary of Results 95 Connections and Contributions to the Literature 100 Recommendations 104 References 110 Appendices 120 Appendix A: Survey and Community Profile 121 Appendix B: Descriptions of Comm unities in Housing Loan Program 122

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iii LIST OF TABLES Table 1: Housing loan profile 76 Table 2: Number of interviewees and the percentage of renovations costs that the loans accounted for 77

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iv LIST OF ACRONYMS CDO: Community Deve lopment Organization EDO: Egyptian Development Organization GATT: General Agreements on Free Trade NGO: Non-governmental Organization PCUSA: Presbyterian Church (USA) UN: United Nations

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v Microfinance in Neoliberal Times: Th e Experience of an Egyptian NGO Sarah A. Tobin ABSTRACT Development non-governmental organi zations (NGOs) are under immense pressure to adhere to the programs and met hods put forth by external donors, particularly if the NGOs rely on the funding to sustain their own organiza tions. Those external donors that represent neoliberal ideologies and enforce neoliberal practices, particularly in the area of microfinance, maintain a power that most recipient NGOs cannot evade. This becomes a difficult position for the NGOs to na vigate as they try to accomplish good work in their communities. This research pr oject is a study into the experience of one NGO, the Egyptian Development Organization (EDO), as it implemented microfinance programs in rural Egypt. The study revealed that EDO maintained an overall, structural orientation towards foreign donors and audiences, and employed di scourses that appealed to neoliberal ideologies and practices. For the NGO, this orientation went beyond an accommodating lip-service and resulted in the instituti onalization of demand-driven microfinance. Additionally, through decentrali zation EDO transferred risks and responsibilities to a more local level, and required the infusion of neoliberal ideologies into the practices and actions of microfinance borrowers even before their loans were disbursed.

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vi This thesis argues that a point of di sjuncture occurs as the context of neoliberalism, specifically th e aims of material accumula tion through the mechanism of microfinance, meets the program particip ants practices of the development and preservation of social and human capital. This study found that microfinance program participants are both accepting a nd reproducing the rhetoric, ofte n in ways that defy their own experiences within it. Their high rates of participation in microfinance, as evidenced by repeated and multiple loans, are pronounced considering that few have achieved the increased economic and financial gains promis ed by neoliberalism and microfinance. By conceptually conflating financial and non-financ ial capital gains, loan recipients were able to go beyond tolerating rhetoric that does not come to fruition, and justify continuous participation in the program. By perceiving investment s into non-financial gains as valuable, the participants altered th eir livelihood strategies new ways that may or may not secure against vulner abilities in the long run.

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1 CHAPTER 1: INTRODUCTION Development practitioners, economists, an thropologists, and others have long been trying to bridge the gap of inequality that exists between th e poorest and richest in the world. As over one billion people live in f ood-insecure households with an income of less than $1 per day, the average U.S. citizen has the purchasing power to consume over 60 pounds of beef and nearly 50 pounds of pork per year (UNDP 2003, Robbins 2005). In the midst of abundant stories of developmen ts failures to reach the poor and help improve their situations, finding encouraging possibilities for the alleviation of poverty is difficult. Microfinance, however, has pr ovided that hope for both development practitioners and program partic ipants alike. Its use is pervasive, and the program has been proclaimed a veritable panacea for poverty alleviation (Rankin 2001:18). The lack of access to capital has been c ited as the primary obstacle to entrance into the worldwide market economy, to cons umption, and by extension to poverty alleviation for the worlds poor (M orduch 2000, Prahalad 2005, Robbins 2005). Microfinance programs provide small loans, primarily to groups of borrowers who lack the collateral required by traditional lending institutions. Microfinance, as opposed to microcredit, employs financial and non-fi nancial skills training alongside the loan disbursements. In this way, microfinance progr ams target the marginalized and those that have been excluded from the formal banking se ctor and that lack ac cess to other capital and financial resources.

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2 This places the microfinance borrowers in a position where their hope for access to credit, the global economic system and poverty alleviation requi re initial, start-up funding from those in the Northe rn donor regions. By Norther n, I mean those regions that have been typically characterized in the literature as the d eveloped North, the developed capitalist regions, the West or the First-World. These donations generally come from areas that support neoliberalism, to a greater or lesser extent. Neoliberalism is typically characterized by a reduction in the role and influence of the state in both economic and social affairs, as well as by the growth a nd prominence of the market, which has impacts at all levels of society (Kalb 2000). The literature suggests that an overwhelming number of Northern a nd international NGOs re ly on external aid from these sources for most of their pr ogramming and operationa l budgets (Atack 1999, Ebrahim 2003, Fisher 1996, Sullivan 1994). Not unsurprisingly, NGOs prioritize the requirements of these Northern funders a nd provide the accountability they require. Although donations have historically had c onditions and requirements attached, this Northward orientation now contai ns requirements for funding that result in the growth of neoliberal ideologies and practices within the organization (Ebrahim 2003, Fisher 1997, Magazine 2003, Rankin 2001). Microfinance, in particular, provides an ideal mechanism for Northern funders to impose neoliberal ideologies, intertwined with capital, on the local borrowers (Lazar 2004). One way to understand this phenomenon is through livelihood analysis. Livelihood analysis examines the conversion strategies of program participants with their material and non-material assets. It mainta ins an inclusive focus on financial and nonfinancial asset use and utilization, and provides a theoretical point of entry into the lived

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3 experiences of those participating in microf inance programs, the impacts of participation on their daily lives, and their perceptions and pers pectives on it. Anthropologists, and applied anthropologists in particular, ha ve a unique opportunity to study not only neoliberalism and the avenue of microfinan ce as they impact NGOs, but also as they impact the daily lives of the people involved in microfinance programs. This research project represents an ex amination of these phenomena with an NGO, the Egyptian Development Organization (EDO). There are two primary sets of research questions that become apparent fr om this context and setting, and guide this research project. First, in what ways has neol iberalism come to characterize and influence EDO? What are the ways in which neoliber alism is accommodated by EDO, as it works to secure funding from Northern sources fo r the creation of microfinance programs, and in what ways is neoliberalism influencing the implementation of these programs? Second, what are the perspectives and perceptions of microfinance by the program participants? What practices do they employ with the loan s during their particip ation? Specifically, what kinds of changes to their livelihoods do the microf inance program participants report as a result of their participation? What strategies do they report to have employed to safeguard against increased vulnerabil ities and why? To what extent are the microfinance programs actually accomplishing wh at they promise, in the context of neoliberalism in microfinance? These research questions, along with the thesis objectives, are explained in detail in Chapter 2. In this way, the research project takes on a small examination of the microprocesses of one NGO within the contex t of neoliberalism. It does not aim to challenge many of the assumptions of World Sy stems. It also departs from the arguments

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4 and issues of classical economic anthropologi cal literature. For example, the research project neither engages the larger questions of the formalist-substant ivist debate, nor does it take on some of the larger questions of th e transferability of Western economic models to non-Western societies (Bohannan 1959, Cook 1966, Dalton 1961, Polanyi 1957). Rather, the research project assumes that the social and economic spheres are embedded within each other. That is, it assumes that there are a number of market and non-market institutions in which actors livelihoods are embedded (Polanyi 1957). It takes inclusive view of the economy in order to understand th e cultural logic that informs actions within the market. Conversely, understanding the cultural logic requires an inclusive view of the economy, which extends beyond financial matte rs. This research project is an examination of one response to one avenue whereby the norms, attitudes, and behaviors of the Western market economy are rapidl y being disseminated throughout the worlds culture areas (Cook 1966:337). This masters thesis presents the results of the research I completed during the Summer term 2004 and the Spring semester 2005 as a graduate student at the University of South Floridas Department of Applied Anthropology. During this period I worked as an Intern at an Egyptian national devel opment organization, which for the sake of confidentiality will be referre d to as Egyptian Development Organization (EDO). EDO is one of Egypts largest development organiza tions, which is a rare achievement for a Christian organization in a predominantly Muslim country. According to its website, EDOs organizational mission is to promote the sanctity, equity and harmony of life nurture moral and spiritual awareness, enha nce a sense of belonging, promote respect for diversity, combat injustice, a ddress conflict, and advance so cial justice for individuals

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5 and communities. EDO aims to accomplish this mission through three areas of work including comprehensive community devel opment, information dissemination by their publishing house, and intercultural dialogue programs. EDO now has an annual budget of nearly $6.5 million. The history of EDO is explained in detail in Chapter 4. I initially became acquainted with EDO in August, 2001, when I applied for, and received, a job to work for the organization as an International Relations Coordinator. I was set to move to Egypt to begin my employment on September 14, 2001. Following the events of September 11, 2001, we mutually decided to cancel the employment, out of concern for a continuously shif ting environment for foreigners in Cairo, and my lack of knowledge of life in Egypt and the Arabic lang uage. Instead, I was placed to work with a Washington D.C.-based NGO that works in clos e partnership with and on behalf of the EDO. Three years after my initial employment offer, I approached EDO with the proposal to complete my academic-requirement of the internship with them. I was warmly welcomed. Rather than a semeste r-long internship as the Department of Anthropology requires, EDO requested that I spend a semester and a summer with them. This masters thesis is the result of my near ly eight months of inte rnship experience with the organization. My work experience included research ing, authoring and co-authoring grant proposals, concept papers, reports, case studies, webpages and sections of the 2004 Annual Review. I completed a series of interv iews of microfinance program participants and staff for these publications. These work tasks provided me an opportunity to examine the neoliberal-friendly orientation of the or ganizations publications and policies, and to identify the disjuncture of neoliberal ideals and practices embedded within the

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6 organization and the microfinance programs, with the actual perceptions of and practices within the microfinance program by the participants. The chapter to follow is a literature re view that situates my research project within the anthropological discussions of ne oliberalism, microfin ance, non-governmental organizations (NGOs), and livelihood analysis, with an emphasis on the applications of social capital. Chapter 2 explains the concepts and implications of neoliberalism as both ideology and practice. The chapter also examines neoliberalism as it impacts microfinance and NGOs. It discusses some of the more salient studi es on neoliberalism, microfinance, NGOs and livelihood studies, as well as how anthropology, particularly applied anthropology, is in a unique position to study these transnational phenomena and their local impacts. Chapter 3 discusses the methodologies used in this research project. It explains the conditions of the fieldwork, the specific wo rk tasks and duties I completed, the thesis objectives and research questions, as well as the political constraints on the methods that I encountered during the researc h. The chapter also situates th is research into a growing body of anthropological research in dangerous fields. It describes the advantages and disadvantages of the research methods of archival research, partic ipant observation, and interviews with staff and microfinance program participants. Chapter 4 explains the hist ory of the organization for which I interned as well as their history with microfinance. It explains the ways in which EDOs history and their programmatic experience with microfinance se rve as an expression of, and a conduit for, neoliberalism. In particular, the chapter elucidates how large dependencies on external funding and the requirements of those funders render EDO especially susceptible to the

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7 influences of neoliberalism, as evidenced in both external publica tions and within the organizations microfinance policies. It also explains the responses to neoliberalism and microfinance by the program participants. In particular, it highlights their investments into social and human capital throug h the mechanism of microfinance. The final chapter, Chapter 5, presents my conclusions of this internship research project and my recommendations for future research and applied work. This chapter summarizes the findings and result s, and indicates how this re search relates back to the literature. I suggest areas for future research that build on this research project, and discuss why applied research with NGOs is im portant and revealing, ev en as it is lacking in our discipline, and the unique positi on that we have to engage in it.

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8 CHAPTER 2: LITERATURE REVIEW Neoliberalism In anthropological studies, neoliberalism is typically depicted as a phenomenon related to the growth of capital, the tran snational flow of goods and ideas, and globalization that impacts all le vels of society (Kalb 2000). At the socio-political level, neoliberalism is most often characterized by a reduction in the role and influence of the state and in both economic and social affairs. It includes the rapid ex pansion of transor multi-national organizations such as free tr ade zones or international non-governmental organizations (NGOs) with the growth of international markets and exchanges, deregulation and decentralization of political and economic affairs. Further, there is an increased commodification of cultural lif e. For organizations such as NGOs, neoliberalism may be reflected through reforms that require m eeting cultural expectations for what were originally conceived as fina ncial accounting principles, including quality and accountability in service provisions, as well as institutional performance, which is measured in accordance with Western management and financial systems (Kalb 2000). This cultivation of an audit culture polices the activities of those organizations that may be located outside the purvie w of the state, such as NGOs, and reduces all aspects of operations and professions into outcomes-bas ed, quantifiable and inspectable models (Shore and Wright 1999). At the individual level, neoliberal ism includes the cultivation of the rational economic actor who is logi cal, goal-oriented, and makes strategic choices concerning a variety of directions, strategies, and tool s with which to respond to

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9 the problems and challenges in his or her surro undings, and in ways that make intelligent use of existing resources (Gordon 1991, McDonald 1999). Within the logic of neoliberalism, individuals, rather than the st ate, carry the risks a nd responsibilities to meet the changing demands put in place by the political economic shifts of financial deregulation and the growth of market-driven demands, and the concept of choice is valorized (McDonald 1999). That is, individuals are deemed free by the reduction of the states socioeconomic safety nets of tariff barriers, price supports, and production subsidies to participate in the international, competi tive markets and call upon their enterprising selves to use their own res ources towards that end (McDonald 1999). This is a particularly tenuous positi on for most of the worlds poor, as the governments capitulation to neoliberalism has led to the elimination of state protection, thereby individualizing people already on the econom ic margins and exposing them to the ravages of global capitalism (Magazi ne 2003:245). Through the growth and entrenchment of neoliberalism in all sectors of society, financial ra tionalization has come to replace state welfare and national development projects (McMichael 1995). In this way, neoliberalism constitutes a multi-leveled agenda of both ideology and practice. More specifically, it referen ces and encompasses both the ideology of neoliberal ism and the practice of neoliberal ization (Peck and Tickell 2002:383). The practice of neoliberalization transforms and creates a reality that the ideology suggests already exists, by constructing the very rules by which the activities are measured and the methods by which they are achieved (Peck and Tickell 2002). This transformation occurs via the avenues mentioned above, and more important to this study, through social projects (Larner and Craig 2005, Lazar 2004, Lemke 2002, Rankin 2001). The social

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10 projects may include developi ng social citizenship, attend ing to womens needs, and poverty alleviation, for example. However, ne oliberalism also dictates the methods by which they are achieved, including requi ring NGOs to incorporate market-led development initiatives and decentrali ze service provisions (Lazar 2004, McDonald 1999, Rankin 2001, Wittman and Geisler 2005). This may also occur through capacitybuilding measures, which include NGO training into Western accounting and management systems. With the marriage of ideology and practice through seemingly harmless social projects includ ing the provisions of small loan s intended to jumpstart the poors self-employment, neoliberalism as ideology is reinforced through neoliberalization as practice. Therefore, it is not the ideology of neoliberalism per se that is causing these changes. Rather, it is the practices of neoliberalizati on by those who adhere to the ideology and rhetoric, typically those in power in the economic North, that act in ways to bring about its fulfillment. Neoliberalism, as both ideology and practice, has become the landscape and the context in which NGOs enga ged in administering microfinance and individuals participa ting in it must respond. Microfinance, or the lending of sma ll, collateral-free loans alongside other development programs to the worlds poor by national and international development organizations, banks, and governments alike, has become the primary strategy and the foremost means by which access into internat ional markets becomes available. For the enterprising individual, fina ncial and non-financial payoffs are promised. Its abundant use and reputation is staked on the promised fit it produces betw een capitalist ideology and practice (Ehlers and Main 1998:436). Th ese great promises of success in the markets through microfinance pa rticipation remain despite a growing body of empirical

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11 evidence to the contrary (Ehlers and Main 1998, Kabeer 2001, Lazar 2004, Mahmud 2003, Milgram 2001, Pyle and Ward 2003, Rahman 1999, Rankin 2001). The Win-win of Microfinance The premise of microfinance is based upon the assumptions that capitalist market mechanisms and the promotion of economic grow th can improve, what are referred to in the development literature, as private a nd public outcomes. Market-led economic development strategies such as microfinan ce increasingly rely upon the anticipated and sustainable contributions th at the entrepreneurial poor can make towards economic growth in their low-income communities. Micr ofinance, as an extension of neoliberal practices, ensures commodity ma rket participation by indivi duals, the growth of new markets and increased levels of consumption as individuals create the need and demand within their own communities. The assumption is that by engaging in self-employment or enterprising projects th rough the acquisition of credit, the microfinance participants will reap large economic rewards themselves (Dreze and Sen 1989) and achieve welfare objectives for their families via the rationali ty of the market (Rankin 2001). This has provided hope for both microfinance administra ting institutions and program participants alike by upholding up a win-win solution in which everyone benefits (Morduch 1999). With rhetoric that often resembles get rich quick schemes or an enterprising self-help model, a typical po rtrayal of a microfinance r ecipient includes a middle-aged female who desires to better provide for her poor family. She is given a small loan of, typically, a few hundred U.S. dollars or less. The depiction goes on to describe how, through her ambition, hard work, and a skills training course in sewing, weaving or

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12 another income-generating skill that is able to be conducted from or near her home, the entrepreneurial microfinance participant is delighted to find that all of the promises have been met. That is, her income increased, he r family is healthier and stronger, and her increased economic power al so empowered her in house hold management decisions. Even a cursory overview of development publ ications brings forth the impression that microfinance is the primary means by whic h families incomes increase, financial independence from debt is achieved, and ove rall well-being is improved. These nuclear families profiled in the literature typically portray slightly dirty, yet happy children surrounding their valorized mother, who is fu lly encouraged by her caring husband (For examples, go to the websites of The Microcredit Summit Campaign: http://www.microcreditsummit.org, or the United Nations Year of Microcredit: http://www.yearofmicrocredit.org ). In addition to heart-warm ing stories typical of that described above, microfinance legitimation has also occurred via the endorsements given by internationally nota ble names, including the United Nations and their declaration of 2005 as the The Year of Microfinance, the World Banks prodigious literature on the subject, and Hillary Clint ons speech at the Microcredit Summit, among others. The promises of the win-win of micr ofinance place the borrowers in a position where their hope for access to credit, entr ance to the global ec onomic system, higher incomes and poverty alleviation require at least an initial start-up cost from a donor, typically located in the North. The struct ural advantages for these subsidizing governments and organizations in the world eco nomy maintaining the power to decide who enters the world economy, how and when th ey enter it, and in what capacity means that even the most progressive local microfinance programs must meet external desires,

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13 typically an adherence to the capitalist ethic of the maximizing indivi dual and neoliberal logic of unregulated, free and competitive markets, in order to receive funding (Ebrahim 2003). These lending organizations, such as non-governmental organizations (NGOs), must both accept the values in place by those w ho donate and try to translate them into an effective tool for meeting community-wide objectives. However, the conditionality of funds, or the stipulations in place in order to receive the external funds, is the primary mechanism by which the international ideologies and practices are transmitted to local realms (Ebrahim 2003). In areas where subs idies are funding more than microfinance programs, including community development initia tives such as literacy classes, health campaigns, and agricultural assistance, the ideo logies of the North in all of these spheres can become prominent in aspects of the pr ograms designs and implementation, or may even serve as the precursors for the economic agendas themselves (Fisher 1997). This socioeconomic determinism diffuses the a dherence to neoliberalism by the donors into transformations of the borrowers lives and their communities conditions, for better and for worse. Microfinance, in this most common form, links the international and the local, and the formal and the informal into one cohe rent structure. In doing so, this financial engineering has brought internati onal ideologies neoliberal ideologies in particular into the forefront of local communities through the re-scaling of international systems of power into the smallest corners of rura l communities engaged in the microfinance agenda. It is within the cont ext of these global forces that local microfinance programs occur. With varying experiences and degrees of success, microfinance participants the people who are ultimately both the recipien ts of, and a force behind, microfinance

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14 programs perpetuation are the people compelle d to participate for a variety of reasons and in differing types and levels. Within this framework, local microfinance lending institutions become the perfect conduit through which international neoliberal ideologies are transmitted, alongside capital to the local borrowers (Lazar 2004). Non-Governmental Organizations (NGOs) The tripartite separation of societies into the state, business and private sector, and civil society places non-governmental organizations (NGOs) into the growing body of non-state, non-business entities. Often define d by what they are not, NGOs have gained strong reputations as a prominent part of ci vil society, demonstrating virtues such as altruism, innovation, and effectiveness in service delivery that have been welldocumented (Ebrahim 2003, Fisher 1997, Magazi ne 2003). NGOs have not only risen in numbers and scale with the liberalization of worldwide financial markets and investments in non-state strategies for development, but also in their functions and roles in societies, generating much enthusiasm and large amounts of literature on the subject (Ebrahim 2003, Meyer 1995, Pfeiffer 2004, Rankin 2001). Desp ite the prodigious literature on the macro-level NGO revolution, very few studies particularly ethnogr aphic studies, on the micro-processes and discourses employed by NGOs in order to create knowledge, negotiate conflicting agendas, and legitimate actions have been developed. Despite the unique role that anthropologists, particularly applied anthr opologists considering many of their employment placements within NGOs, ca n contribute to this conversation, they have remained surprisingly silent (Fisher 1996, Fisher 1997, Markowitz 2001).

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15 Some of the greatest challenges confronting anthropologists in this area are the fragmented, multi-local sites that charact erize many international NGOs (Fisher 1997). Simply finding staff to interview may prove difficult as rates of turnover amongst locals may be high, and as those employed elites achieve their personal ends of emigration (Sampson 2002). Further, expatr iate staff have the annoying habit of returning to, say, Canada or Switzerland at the end of thei r tours (Markowitz 2001:43). Beyond questions of interviews, studying NGOs may require inte rnational travel, access to seminars and conferences in a variety of se ttings, the ability to follow th e project from the donor to the field when projects themselves may onl y be six months or one-year long in term. Other challenges may include access to development elites, and the successful employment of cultural and linguistic competency in each of these settings (Abramson 1999, Markowitz 2001). Completing research with in this context is difficult given the fluidity in relationships, flows of money, and variability in settings for practice. Studying NGOs is an unconventional type of research. It is this distinctive mi x of theoretical and methodological approaches that explains both the dearth of information on the microprocesses of NGOs and provides a unique o pportunity for anthropo logists to utilize ethnography, particularly pa rticipant observation, in unconventional settings. The imperative for anthropologists to engage in research in this context has never been greater, as NGOs role as mediators of the global and the local is undeniable. NGOs have been shown to work effectively on beha lf of those at the lo cal level; they have advocated for protest and mobilized collective action, particularly those NGOs working in environmentalism (Brosius 1999, Dian i 1992, Escobar 1995, Meyer 1995). At the same time, however, NGOs interests in attending to local needs come under pressure by

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16 governments and program funders or donor s. The literature suggests that an overwhelming number of Northern and intern ational NGOs rely on external aid for most of their programming and operational budgets (Atack 1999). With the very existence of the NGO riding upon a consistent stream of funding from external sources, the attention to priorities adjust accordingly, and NGOs acc ountability aims towards especially large Northern funders and donors, whose contri butions will sustain the organization. This Northern orientation more closely resembles business relationships, and results in the growth of neoliberal ideologies within the organizations (Ebrahim 2003, Fisher 1997, Magazine 2003, Rankin 2001). Through this c orporatization of NGOs, NGOs become contractors, constituencies become custom ers, and members become clients (Fisher 1997:454, Lazar 2004). With such kind of donor-based orientations of accountability a nd priorities, it is not a surprise to find NGOs using a both-and approach. That is, NGOs may orient their local involvement in such a way that makes th em both attentive to th e needs of the local communities and also to those needs that th e international funders are interested in supporting. For Fisher (1997), NGO legitimacy rest s on this point; they must be able to articulate one to the other e ffectively. However, power rest s securely with the donors of capital, and the NGO discourse with funde rs becomes, in this way, You want microenterprise? We got microenterprise (M arkowitz 2001:42). In fact, so much donor funding is now ear-marked for microfinance th at NGOs that have criticized the program in the past have since adopted these progr ams in their developm ent agendas (Fernando 1997, Litherland 1997, Rankin 2001). This process renders the NGOs little more than

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17 public service contractors, simply NGOs cont racted to provide the services the funders desire (Korten 1990:103). Further, the process of donor determ ination goes beyond programs and their designs and into their methods as well. With the current stress on local participation by donors, NGOs may find themselves pushing so hard to employ participant-oriented methods, that a fetishization of participati on results which often attributes actual outcomes to levels of participation (Abramson 1999). In other words, the funders see quantitative outcomes, such as the number of participants, a sufficient measure for qualitative outcomes, such as empowerment . Empowerment and training are reduced to target figures for those attending course s, meetings, capacity-building sessions and talks (Lazar 2004:313). The fetishization of pa rticipation does not ask about how and in what areas people are participating as much as it asks about participation by numbers of people in numbers of communities. That is, quantitative outcomes override qualitative outcomes. In this way, NGOs must meet the quantitative targets set by the donors or they lose their funding (Lazar 2004:313). By se rving the donors interests in the creation of microfinance programs and ut ilizing participatory methodologies that aim to improve local conditions, NGOs become the intermediary point between the global and the local. This position may bring benefits to the loca l communities such as improved health care, but it also brings new burdens and new requi rements, specifically the adherence to neoliberal ideologies and pract ices (Fisher 1997, Magazine 2003). One salient anthropological study f eatures these global-local links and negotiations in the area of microcredit. Lazar (2004) highlig hts the ways in which NGOs working with women in microcredit programs in Bolivia become a mediating force. The

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18 NGO translates the individualized, neoliberal discourses that the donors and development agencies, as well as the implementing NGO its elf, want to see Bolivian women become as a series of social projects in citizensh ip. The microcredit program, as one of these citizen projects, extends small loans to wo men in order to facilitate the creation of empowered individual, entrepreneurial, act ive citizens who will take responsibility for their own and their families welfare, and who are prepared for the market rather than the state to provide for them (Lazar 2004:302). In this study, the assumptions of marketbased economic rationality and the privatizati on of the citizen are inculcated to the program participants through the microcredit programs. Thereby, a new mediated local was created that ultimately served to compete against and exploit the collective identities of borrowers. This occurred, to a larg e degree, because the NGO relied upon the borrowers preexisting collective resources to both help guarantee their successful navigation of microcredit repayment, as well as sustain the NGOs receipt of international donations. Livelihood Analysis and Microfinance Another way in which the mediated local in the global-local link has been examined and understood is through live lihood analysis. There are, unarguably, variations in the local res ponses to global capitalism (M intz 1977). Livelihood analysis comprises one of the ways by which we can understand some of them. Livelihood definitions vary, yet all definitions seem to involve the capabilities, material and nonmaterial assets, and activities that are requi red to make a living, recover from stresses and shocks, maintain or enhance those capabilities and assets, and decrea se insecurities and

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19 vulnerabilities in light of economic change (Huq 2004). Livelihood expresses the idea of actors striving to make a living, attempting to meet their various consumption and economic necessities, coping with uncertain ties, responding to new opportunities, and choosing between different value positions (Long 1997:11). Therefore, it implies more than just making a living. It encompasses ways and styles of living (Long 1997:50). Although livelihood studies may focus on cas h income as well as other economic activities such as income in-k ind or productive diversification for sustaining livelihoods, recent livelihood studies have often gone be yond incomes to the other sources of financial and non-financial assets that peopl e command and utilize as they make a living and respond to the variable s that affect it (Huq 2004, Lont and Hospes 2004, McCabe 2003, Rahman 2004) Further, we do know that people utilize non-financial resources in efforts to secure or enhance their financia l security (Purcell 2 000). In this way, the possibility emerges for convertibility and ex change between financial and non-financial assets. Non-financial assets gain influence in their positionality and use by actors for both financial and non-financial ends by actors through their sequencing, substitution, clustering, access, trade-offs and trends (Scoones 1998:8). This convertibility and exchange of non-financial and financial resources becomes salient in livelihood examinations of microfinance. The first major anthropological effort to link microfinance and livelihoods in the literature are a series of essays in the book Livelihood and Microfinance: Anthropological and Sociological Perspectives on Savings and Debt (Lont and Hospes 2004). In the book, this inclusive perspe ctive is brought to bear on st udies of microfinance program participants and lending institutions throughout Africa, Asia, and North America. Unlike

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20 a majority of the microfinance literature th at focuses heavily on the mechanics and the methods of microfinance, the livelihood anal yses included in the book shift the focus back onto the program participants and th eir experiences (Lont and Hospes 2004). The studies all assume that microfinance transac tions are more than economic exchange; they stand for a whole host of monetary and nonmonetary transitions, which are socially regulated and imply the use of a combinati on of different types of capital (Lont and Hospes 2004). Both the articles in this book a nd this research proj ect, aim to understand the context for actions that involve material and symbolic capital, which play a crucial role in microfinance programs. That is, they aim to understand the sources and locations of material capital, which includes money and financial pow er. Similarly, they aim to understand symbolic capital, which includes hon or, prestige, authority and legitimacy. It is the configurations of symbolic resource use and utilizati on by those in power, particularly through powerful discourses and id eologies, which legitimates their authority and actions in economic, cultural, social realms. In particul ar, Bebbington (1999) suggests that the primary form of capital, both in terms of access to and utilization of other forms of capital, becomes social capital. Social Capital and Microfinance More and more microfinance lenders ar e recognizing that there is a social dimension to economics. The development literat ure often indicates th at they believe the key to higher levels of financial capital w ithin microfinance programs is achieved by institutionalizing, enforcing, or enacting social capital. Social capita l, in the microfinance literature, is typically defined as the institutions, relations hips, and norms that shape the

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21 quality and quantity of a soci etys social interactions (World Bank 2001, as cited in Rankin 2002:4, for example). This definition deri ves from Pierre Bourdieus definition of social capital as, "the aggregate of the actua l or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition" (1986:248). Both definitions stress the importance of relationships and networks, which provide a context for economic and non-economic exchange. The World Banks definition focuse s primarily on relationships and networks. Bourdieus definition, however, prioritizes the resources th at lend themselves to the networks and relationships. The development literature indicates that economic development in general, and microfinance in pa rticular, now assume that social capital is an effective mechanism by which individuals, particularly through pa rticipation in civil society, can overcome structural oppression and domination, and enhance their economic and social positions (Quinones and Seibel 2000, Rankin 2002, World Bank 2001). Development institutions and interventions ar e increasingly reliant upon social capital in microfinance in order to promote sustaina bility and economic growth, particularly through group-based lending mechanisms (Rankin 2002). However, neoliberal reconstructions of social capit al within development schemas have more often focused on uncritically increasing the quantit y of social capital, as the ne tworks and relationships for exchange in developing countries and tran sitional economies, without addressing the power issues that inhere in so cial capital. This is most often proxied by numbers of, and memberships in, civil society organizations. Those in support of the neoliberal logi c and market-led development initiatives have often praised the role of social capital in fostering successful microfinance

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22 programs. Without ever defining how they c onstruct social capital, Quinones and Seibel (2000), for example, utilize social capital disc ourse in the strictest economic terms. In their study, the need to disburse cheap cr edit to the poor is obvious (Quinones and Seibel 2000:195). Use of government funds th rough rural banks in microfinance projects is criticized, as governments have moved from economic policies characterized as repressed, to the pro-reform, pro-poor freedom in deregulation. For Quinones and Seibel (2000) the great est obstacle to poverty alleviation is making microfinance lending affordable to the poor, so that individua l agents might benefit from having the opportunity to utilize their so cial capital. Their add loans and stir formula for poverty alleviation assumes that at any time actors so cial capital is ready to be formed, invested, reinvested, consumed, replicated a nd transferred for economic gain. What Quinones and Seibel miss, however is that social capital was never intended to be a value-positive glue that only ne eds to be primed for use. Social capital is more complex. It is a locus of power negotiations that the assumptions of neoliberals overlook. Rankin (2002) illuminates the ways in which Bourdieu ( 1977) highlights that social capital is not engendere d by individuals, but rather inhe res in social structures and cultural logic. In other words, individual pa rticipation in microfin ance does not simply guarantee an increase in social capital, nor does non-participation c onstitute squandering it. Rather, individuals can accumulate obligations, opportunities, and resources to participate by virtue of social position. Bourdieu (1977) saw the distinctions between economic and social spheres as arbitrary, a nd conceptualized the spheres as embedded both within each other. Becau se of the embedded nature of economics in social structures, social capital becomes a locati on where inequalities, for example, become

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23 emergent and influential, and can be re produced. Microfinance is comprised of participants whose lives are characterized by inequalities. There are varying degrees of poor and non-poor borrowers, men and wome n, and values for undertaking a certain project. The loan types, amounts taken, a nd social positions of the borrowers may become an area of power contestations due to the conflicting nature of these relationships and the social capital that i nheres in them. Studying microfin ance at the level of social capital, as revealed through livelihood analysis, reveals much about the discursive entrenchment of neoliberal ideologies. It illuminates the implications of prioritizing market-led approaches to development over, a nd at the expense of, st ate-sponsored social welfare, as well as the strategies employed by the program participants in the mediated local to adjust to a swiftly shifting cultural and economic climate. Ultimately neoliberalism, as both ideology a nd practice, serves as an important, if not the most important, driving force behind th e use and growth of microfinance. Microfinance, as a social project befitting ne oliberalism, requires the international flow of both capital and ideas in order to su cceed according to donor standards, and the burden to achieve that is placed upon the implementing NGOs. This renders NGOs the mediator, working to link the global forces a nd local needs in ways that are meaningful for both, if NGOs expect to survive. That is, for the NGO to acquire donations for operations and institutional n eeds, they must have the at least a sufficient amount of participation for the donors to justify con tinued financing. As microfinance program participants become expose d to ideologies and program s from the North through the NGO, their assets and vulnerabilities in fi nancial and non-financial areas come to the fore. This raises the question of how NGOs are responding to those two contrasting, and

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24 often contradictory forces the global and the local. Given the di fficulties in studying NGOs on this topic, it is not surprising th at anthropologists have few contributions towards this answer, despite their unique abilities to do s o. Markowitz (2001) indicates that ethnography, the bulwark of anthropological methods, is an ideal way to understand how NGOs connect with other aspects of soci ety including the st ate, municipalities, families, production and exchange systems, and cultural institutions (Markowitz 2001:40). Anthropologists placements within NGOs provide a unique avenue for studying elites and those in power by studying up (Nader 1972). Thesis Objectives and Research Questions This thesis incorporates the context of neoliberalism as both powerful ideology and practice, and examines the responses to that context by an NGO that is taking on microfinance programs. This thesis argues th at a point of disjuncture occurs as the context of neoliberalism, specifically the aims of material accumulation through the mechanism of microfinance, meets the pr ogram participants practices of the development and preservation of social and human capital. My primary objectives are to identify th is disjuncture of neoliberal ideals embedded in EDO with the actual perceptions and practices of the microfinance loan program by the participants, and to understand the experience of EDO as it negotiates this point of disjuncture. Because of the overal l limitations on both access and methods, as described in Chapter 3, this research project should be considered exploratory in nature, and subject to further additions and revisions with more thorough and in-depth research.

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25 There are two primary research topics a nd questions that are important in the contributions to anthropological literature and provide a comprehensive theoretical framework for the organization of th is study. They include exploring: 1. In what ways has neoliberalism come to characterize and influence EDO? What are the ways in which neoliberalism is accommodated by EDO, as it works to secure funding from Northern sources fo r the creation of microfinance programs, and in what ways is neoliberalism influencing the implementation of the microfinance programs? This first set of questions aims to explicate the degree to which neoliberalism has come to define EDO in their two primary roles: fi rst, as an internationally-recognized NGO involved in international fundraising in or der to sustain day-to -day operations, and second, EDO as an NGO that implements development programs in Egypt, namely microfinance. 2. What are the perspectives and percepti ons of microfinance by the microfinance participants, and what are the actions a nd practices they engage in during their participation? Specifically, how do the participants in mi crofinance programs report changes to their live lihoods as a result of th eir participation? What strategies do the program participants report to ha ve employed to safeguard against increased vulnerabili ties and why? To what extent are the microfinance programs actually accomplishing what they promise, in the context of neoliberalism in microfinance? These sets of questions, together, elicit th e credit practices of the loan recipients, the perceptions and rationales for those practi ces, and the perceived benefits of the loan

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26 programs. When they are studied together, a more complete reveali ng of the experiences of microfinance program participants occurs. Perspectives and perceptions are useful to study in their own right. They explain why people do what they do, irrespective of whether their perceptions actually conform to reality (Mazzucato and Niemeijer 2004:155). For example, understanding the pers pectives and percep tions of microloan program participants may help us to gain insi ght into why people may act in ways that are non-rational according to neoliberal ethos and ideals. That is, they may undertake endeavors that defy the rationali ty of the market and do not lead to financial gains. This is an important topic given the prevalence of such definitions of, and the superiority often attributed to, the rational economic actor. Studying perceptions and perspectives offers an opportunity for a more complete understa nding of the lived experiences of the microfinance program participants; it is an as pect of participation that is not readily available from studying the pr actices alone. It is, however by studying the practices of microfinance program participants that we ga in knowledge about the points at which the programs promises and rhetoric compare to th e actual experiences that participants have with the loan programs. Studying the practices may reveal the answer to the what question, that is, What is different about mi crofinance program participants experiences from the promises of neoliberalism a nd microfinance? However, studying the perceptions and perspectives of microfinance program participants may reveal the why; Why are the lived experiences of microfinance program participants different or similar to the promises of neoliberalism? Answering these research questions is im portant as a contribution to the minimal amount of anthropological stud ies of neoliberalism, NGOs, microfinance, and livelihood

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27 studies in general. The resu lts of this study also can c ontribute to the growing body of literature that aims to unders tand and explain the lived real ities of microf inance program participants in the communities in which these phenomena occur. Together, the research questions bring forth the points at which th e global forces of neoliberalism and its influence on microfinance program implementa tion meet the lived realities of people who participate in the program. Furthermore, as an applied anth ropological study, this research project provides a unique opportunity to supply information on these processes back to the organizations for which we wor k. There are precious few opportunities that anthropologists have to provi de their studies directly to program planners and policymakers, and this study represents one of those unique occasions.

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28 CHAPTER 3: METHODS Introduction This chapter will outline the overall fi eldwork and research project, the methodologies employed and the rationale behind their selection, and will critique their effectiveness in my research project. There are five different, yet complementary, types of methodologies employed in this research given the constraints. Together, they provided both a complementary approach for th e results and served to effectively bring forth the data for analysis. Conditions of the Fieldwork In accordance with the requirements of the University of South Floridas Department of Anthropology, I embarked upon an eight month-long internship experience, upon which this Masters Thesis is based. For purposes of my academic requirements, I approached a national de velopment NGO in Egypt that I was familiar with, the Egyptian Development Organizati on (EDO), in order to coordinate this internship experience. At the request of a partner NGO for confidentiality I changed names and identifiers; this is explained in detail later in this chapter. The internship was paid in Egyptian P ounds (E) at a local salary rate (E,000 per month; at the time of research, $1.00 = E.0) and my airfare was included. My housing was initially arranged by EDO at a loca l girls school, and later another female, non-Egyptian colleague and I found our own apar tment, although I paid the monthly rent

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29 from my salary. Transportation to and from th e Cairo office (there is another office in the southern city of Minia) was provided on a mini-bus for me, as well as to all employees residing within close proximity to the Cairo o ffice. The work weeks were consistent with a typical U.S. schedule, as we worked fr om 8:00am to 4:45pm with a half-hour lunch break, Monday through Friday. Friday is typically a day-off in Egypt, as the Muslim holy day. However EDO closed Saturdays and Sundays in accordance with the demands of large amounts of interaction a nd exchange with Northern offices instead. There were over 150 Egyptians employed in the EDO Cairo office, and all of them were required to punch in and out on a timeclock. However, the five foreigners employed by EDO, like myself, all work in the International Relations Department in the Cairo office, and were not required to punch in and out on the timeclock. Th is is, at least, partly explainable by the unique circumstances that brought each of us to EDO. Only one was employed as a fulltime EDO staff person and paid by EDO. The othe rs were either short-term or part-time interns or volunteers. I was provided an offi ce setup similar to that of my Egyptian coworkers; I had a new computer with internet, a telephone and a printer. Each department has its own fax machine, and long-distance a nd international calls were made with the approval of a department manager. All EDO employees I came into contact within the Cairo office were selfdescribed as Orthodox Coptic, Catholic, Prot estant namely Presbyterian, or nonreligious. As a Protestant a nd Presbyterian myself, my religious beliefs were consistent with those of most of my co -workers. That is, we were in terested in pursuing social justice through development as a result of our faith-orientation. Proselytizing is illegal in Egypt, and there is a general mistrust of th e aggressive evangelism that characterizes

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30 many Protestant denominations in the United States. Therefore, a majority of us had adopted a belief that our work and actions were the representation of our faith. We refrained from discussing our faith with non-EDO employ ees unless asked, and instead committed ourselves to working for social justice rather than simply discussing the religious roots for it. Likewise, my political a ffiliations were similar to those of my coworkers, that is, both a liberal and a d emocratic according to the U.S. political categories. For example, I voted for Se nator John Kerry in the 2004 Presidential elections, and a majority of my co-workers indicated that they would have voted in a similar fashion. Cultural practices of dress and comportmen t were very similar to those in an office-setting in the U.S., and required no adju stments from what I would wear in a U.S. office. I dressed business casual. By busin ess casual, I mean that I refrained from wearing tank-tops or other slee veless styles, wore long skir ts or pants, and even the occasional pair of jeans. No female E DO staff wore head-scarves, and all donned cosmetics; I did the same. Men and women in teracted casually and openly, and most of the EDO employees in the Cairo office spoke E nglish at an intermediate or higher level. Even drivers and janitorial staff had picked up some English without formal education on the topic over their years of work in an English-laden environment. All of these seemingly small or unrelated issues impacted my daily life in three primary ways. First, I learned much about the strong orientation of EDO towards Western business practices through this. For example, I was fully expected to be on time if I intended to take the bus to work in the morning or home at the end of the workday, or I would simply miss it. Further, while my nonEDO friends both Christian and Muslim

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31 had Fridays off, I was required to work. Second, my sincere affiliations with the Protestant church, social justice, and lib eral politics helped build rapport with my coworkers. Third, the dress and comportment provided me with a relatively familiar and comfortable working atmosphere. These areas of life and work created an office environment that was very familiar to me. Wo rking at EDO was, quite surprisingly, not so foreign. In this way, the work environm ent contributed a relatively easy point for entrance into this research. This is in strong contrast to the political constraints and access limitations described later in this chapter. My primary objectives at EDO were twofold, in accordance w ith the internship agreement. I was to work as a regular, paid International Relations staff person, fulfilling my duties as requested for all departmental needs. These work duties included authoring and co-authoring grant proposals and con cept papers, sections of the 2004 Annual Review, program reports and webpages for the EDO website, special correspondence for the EDO Director including English-langua ge speeches and papers, and editing documents translated from Arabic into Eng lish by my Egyptian co-workers into nativelevel English language text. I was also asked to complete a series of case studies for a partner non-governmental organization, Homes R Us. Homes R Us is a U.S.-based, international non-profit. Its sole objective is to enable the building of simple and safe homes through microloan programs. Similar to EDO, Homes R Us maintains a Christian identity, yet aims to make its programs av ailable to all residents as part of its organizational mission. Initially under the lega l and organizational umbrella of EDO in Egypt, Homes R Us primarily uses EDO community development organizations to

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32 implement their housing loans, rendering most of Homes R Uss implementing organizations the same as EDOs. Homes R Us has requested confidentiality in their involvement with my research due to the critical nature of NGOs and microfinance involved in this study. In order to honor that request all names of organizat ions, including EDOs, the communities in which I worked, the names of interviewees, and other markers that I believe could point to Homes R Us have been changed. The second objective was to complete the rese arch that I needed for this Masters Thesis. This study was originally designed to utilize archival res earch and non-invasive observation. However, the completion of work-re lated tasks, i.e. interviews of EDO and Homes R Us staff and program participants for non-research purposes like case studies for Homes R Us publications and interviews for the EDO website, have become nice supplements to this thesis project. Because the interviews and data were obtained for nonresearch purposes, the Institutional Review Boards requirements for approval were met. Initially an archival and observation-based study, the thesis is now inclusive of interviews of those involved in EDO and Homes R Us s microfinance programs. This changes the research objectives and questions to a more inclusive focus on neoliberalism in the multiple levels of the microfinance program design, implementation, and participation. This latter objective is explained in detail below. Political Constraints on the Methodologies The current political climate in Egypt was the primary factor influencing which methodologies could be employed. There are four primary aspects of the current political

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33 environment in Egypt that influenced my res earch. First, even a cu rsory view of media reports indicates that anti-U.S. citizen (herea fter referred to as American), sentiment is pervasive throughout the Middle Ea st. Egypt, with its large to urist industry, has typically been known as one of the safer countries in the region, although th is may be changing. Despite Egypts reputation, I did experience some anti-American sentiment. Beyond brief statements that were yelled at me on the stre ets from time to time (most often statements such as "Crazy American"), the most glari ng anti-American sentiment that I encountered was a denial of an apartment I wanted to rent. The landlord offered the place. However when he learned that I am from the United St ates, he withdrew his offer stating, "I would rather rent the flat to a prostitute than an American murderer." Second, during my time in Egypt as well as during the write-up of this thesis, there was a rise in violence aimed at American s, Israelis, and other Westerners. In early October, 2004, over 29 people were killed when a Hilton hotel just inside the Egyptian border with Israel was bombed; one of my American EDO co-workers and her son were injured in the bombing. At nearly the same time, two additional sets of bombs went off further south at camping sites popular with Isr aelis. These were the first major terrorist attacks against tourists in Egypt since 1997. La ter during my stay in Egypt, on April 7, 2005, and then again on April 30, 2005, a total of three att acks killed six people and wounded 25, including 15 Americans. The largest, and most recent attack, occurred on July 23, 2005, at a resort town popular with tourists. During the c oordinated bombings of Sharm el Sheik over 200 people were wounded a nd 84 were killed, at least eight of whom were non-Egyptians.

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34 Not unexpectedly, the rise in violence a nd violent sentiments against foreigners was an impetus for limited access and mobilit y. When I asked about access to the field and the perception of pervasive anti-American sentiment along with the rise in violence, the Director of EDO was quick to point out that although anti-American sentiment was not an issue that weighed strongly on his mind, it was something that could not be ignored, It is out there, you know. The comb ination of the perception of pervasive antiAmerican sentiment, my expe riences with anti-American se ntiment, and the rise in violence prompted the Director of EDO to disallow any types of work where my exposure to communities was regular and pred ictable in its timing. For example, I was unable to observe or conduct in tensive interviews in communities several times per week or month. Furthermore, long-term research where my potential exposure to these threats occurred over the course of many months was also disall owed. This eliminated any possibility for extensive participant observ ation or intensive interviews at a local community development organization that make s decisions on microfinance applications and implements the programs. Third, some of the areas of Upper Eg ypt (Northern Egypt) in which EDO works are home to Islamic Fundamentalists that have been known to exhibit violence against foreigners. In fact, the government has restri cted travel to many areas of Upper Egypt for foreigners completely. When access is granted to foreigners in Upper Egypt, both secret and visibly armed military police accompany th em throughout both rural and urban areas; the tourist police wait outside office buildings, hotels, and even the homes of friends for the foreigners to re-emerge. During my time in Upper Egypt, I was pr ovided with vehicle escorts with armed guards at every field vis it and stop, as well as armed military escorts

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35 throughout the village visits. The tourist poli ce waited outside the hotel where I stayed, the EDO office in which I worked, and even accompanied me on my time off, including evening walks along the Nile and visits to E gyptian friends homes. It is, therefore, not surprising that the presence of weapons and the military in program recipients' homes and communities prevented access to some program recipients, as well as to entire communities. One community in which I was able to complete interviews has prided itself on now being free from the presence of Islamic Fundamentalis ts and terrorists of the 1990s. It is, in this example, only because of the shift to a "t error-free" community that I was able to enter at all. Likewise, th e specific homes and program recipients that I was able to visit and interview rested upon th eir reputations of bei ng congenial and open to foreigners and specifically Americans. Finally, the governments restrictions on academic research further complicated matters. Egypt has a long history of lim iting academic freedoms, and aggressively pursing those who are critical of the government. Most famously are the repeated imprisonments of academics including Saad Eddi n Ibrahim, among other social scientists, as well as the recent closing of academic cen ters of research such as the Ibn Khaldun Center for Development Studies. I was to ld by a professor at a prominent U.S. anthropology program that the restrictions on academic research in Egypt had grown so stringent that she was putting all plans fo r research on hold. I was told by the EDO Director of Development that my spendi ng large amounts of time in the field would render EDO subject to incr eased government scrutiny. Th e individual gave several examples of how the government has prev ented EDO from completing comprehensive program evaluations in the past, and the tenuous balance that EDO must strike in order to

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36 obtain information for programs, while honoring the governments restrictions on research. The EDO Director of Development explained that formal surveys were illegal without government approval, thereby renderi ng any attempts at large-scale, surveybased information collection in Egyptian comm unities impossible. Further, I was unable to write up or print out a formal list of ques tions for my interviews. As the EDO Director of Development informed me, a simple form of that nature ha d prevented EDO from completing a program evaluation of the housing microloan program just three years prior. The list of questions had been confiscated by local police, who witnessed the interviews. EDO was then ordered to discontinue the program evaluation. Because of time limitations in this eight-month internship, and the potential threats that increased government scrutiny could have upon EDOs da ily affairs in Egypt, I did not seek to complete research that would require governme nt approval for my work. All of the tasks I completed are included in this thesis were completed to fulfill work-related needs. This arrangement kept my internship-oriented work within the bounds of EDOs daily affairs. These events and situations place this research project into a growing body of anthropological studies in d angerous fields (Kovats-Bern at 2002). In these dangerous fields, anthropologists work and lives are formed by the realities of fear, threat of force, and violence in situations where more customary approaches to fieldwork are insufficient, irrelevant, inapplicable, imprudent, or simply nave (Kovats-Bernat 2002:1-2). With Nancy Howells influential study (1988) of anthropologists selfreported exposure to risks and hazards, more attention has been paid to not only what kinds of hazards exist, but also thei r impacts upon anthropologists fieldwork, methodologies, and write-ups. Most notably am ong those that have written about their

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37 experiences are Philippe Bourgois (1990, 1995), Allen Feldman (1991, 1995), Patrick Peritore (1990), and Jeffrey Sluka (1 990, 1995), among others. Kovats-Bernat (2002) describes the vital process of developing a localized ethic, where he utilized the knowledge of the local population as a guiding force in his methodologies, including their advice and recommendations that informed hi s levels of exposure to violence to an acceptable amount, his knowledge of questions that were too dangerous to ask, and his patterns of behavior that were important to follow to ensure his safety and the safety of those around him. In my research project also, these events and situations coalesced into severe limitations on my access, mobility, and met hodologies. My own localized ethic was guided by EDO. As the organization responsible for my care during th e internship period, they responded to the public events and circumstances with both caution and concern for my well-being, as well as in the interest of continuing their daily affairs without complication. It is because of these restri ctions that the methodologies employed are limited to archival research, participant obs ervation within the EDO office in Cairo, interviews with a limited number of EDO sta ff and the distribution of a survey to them (intra-office surveys are not subject to government approval), as well as limited interviews with program recipients with ve ry specific requirements. The rest of the chapter will highlight those met hodologies in greater detail. Archival Research Archival research was one of the first me thods that I was able to utilize. This provided the greatest source of hi storical data on the use of microfinance at EDO, as well

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38 as the information about larg er national and glob al occurrences explaining its use and growth in Egypt. Furthermore, archival research significantly contributed to my understanding of EDO, its mi ssion and history, strategies for economic development programs like microfinance, as well as other development programs and activities that are being used alongside microfinance. Most useful to me were the old grant proposals, program evaluations and reports, and concept papers written on microfinance at EDO. Over the course of the eight months in Egypt I was able to collect 17 grant proposals, six program evaluations and reports, three concept papers, and six Annual Reviews. They were easy to access, as they were housed in my own office. What they contribute to the understanding of neoliberalism and microfinance in Egypt is explored in Chapter 4. Participant Observation Although I was unable to become a particip ant observer with a local community development organization implementing microf inance, I was able to both observe and participate in the crafting of the messages and images of economic development at EDO in general, and microfinance in particular. My eight month, 40+ hour per week internship as an International Relations Intern provide d many opportunities to both listen to and learn from those working in economic development and microfinance programs at EDO, in order to fulfill my internship duties to fu rther promote their efforts to foreign audiences and potential donors. Over the course of my inte rnship, I authored and co-a uthored grant proposals and concept papers, sections of the 2004 Annual Review, program reports and webpages for the EDO website, and edited a variety of other documents, speeches, and videos. I

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39 authored two grant proposals totaling $1.8 milli on dollars, which included microloans as part of larger community development effort s. One proposal, which was coordinated with a Danish development agency and funded by th e Danish government, included the use of microloans as part of capacity-building efforts and advocacy training for over 75 local community development organizations througho ut Egypt. The other proposal, which was coordinated and funded by the Ford Foundati on, included the use of microloans for business establishment and expansion for disabl ed community members as part of a plan for growth in the scope of reha bilitation services av ailable. I authored two sections of the 2004 Annual Review. In addition to the Direct or General's message, which highlighted overall economic development achievements a nd strategies, I composed the official report of the Small and Micro Enterprise Institute at EDO. This section of the Annual Review included both statements of growth and achievements, as well as methodologies. I also composed the webpages for 14 different development projects, three of which were specifically related to economic devel opment and two of those on microloans specifically. Of the remaining 11 webpages, all five of the agricultural programs and two of the environmental programs have explicitly economic aims or use microloans in their methodologies. The remaining tasks and activitie s I engaged in as a participant observer are neither related to EDO's economic deve lopment activities or plans, nor utilize microloans in their methodologies. My work as a participant observer brought forth much information about the ways in which EDO is characterized by neoliberalism, and accommodates this discourse in their external publications for the acquirement of foreign donations, as well as the processes by which th is occurs. The results from my work as a participant observer in this capacity are explored in Chapter 4.

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40 Interviews with Staff Archival research and participant observa tion provided much of the context and groundwork for understanding the ways neoliberalism characterizes EDO and EDOs publications. They also brought forth informa tion on the growth of microfinance and its use in development projects. However, it was the interviews with staff that provided the crux of information on the influence of neo liberalism in the microfinance programs design and implementation. I had opportunities to interview a total of five EDO staff members and three Homes R Us staff who have worked both w ith microfinance program recipients and in the policy planning and trouble-shooting of th e programs, as part of the work-related tasks described above. They all have between one and 20 years of experience working in economic development and with microloans us ed in housing, businesses, and agriculture programs. The staff members were selected for me by the EDO Development Manager of Upper Egypt, at the request of the EDO Direct or of Development. Three of the five EDO staff I interviewed twice, the other two I interviewed more than three times each. I interviewed two of the Homes R Us staff once, and one more than three times. Each interview lasted an average of one hour; the data come fr om over 17 hours of interviews. The interviews were completed in both Englis h and Arabic with a pr ofessional translator, when necessary. Notes were taken on paper and typed directly into the computer. Tape recording of the interviews was not preferred in the busy office settings. There was no set, formal protocol. The first interviews were completed in an effort to understand general conceptual understandings of the role and practices of microfinance within larger economic development strategies and in the context of neoliberalism. Later interviews

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41 focused on each individuals perceptions of the use of microfinance and the practices they have seen employed by program par ticipants, including the benefits and disadvantages of the loan programs, as well as their personal feelings about the effectiveness of the programs. The results of these interviews are explored in the next chapter on results. The interviewing of five EDO staff members and three Homes R Us staff members was a compromise struck by EDO, and designed by the E DO Director and EDO Director of Development. This agreement was es tablished in an effort to provide me with information about the use of microfinance th at is not available in the EDO literature, including perceptions of, and practices with, the microloans, and also to minimize the time that I would need out of the office and in the field collecting th is information. It was also effective at soliciting information about the staffs perspectives on the microloan programs. The greatest assets to this secti on of interviews were the ways in which it provided a context for the inte rviews I had with housing, bus iness, and agricultural loan recipients, as well as defining the most sa lient aspects of the loan programs before, during, and after I went into the fiel d interviewing program participants. Survey and Community Profile In lieu of gaining information myself and enumerating the levels of participation in microloan programs and the accompanying community development programs within several communities, I was given the opportuni ty to use the above-mentioned EDO staff in the information collection process. I develo ped a 4-page survey for them to complete, which aimed to elicit and enumerate patte rns of participation in microloan and

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42 accompanying community development programs for statistical analysis, for my workrelated tasks. The survey is attached as Appendix A: Survey and Community Profile. There were, however, several problems w ith this method. First, there was no professional translator available to translate the form from English to written Arabic. Without someone available, the completion of the form was reliant upon the five EDO staffs English abilities. My own Arabic skills are not as well deve loped as a few of the EDO staffs English abilities. Furthermore, although the survey asked for simple enumeration of the community members partic ipation levels, the information was not as readily available as both the EDO staff and I anticipated it to be. A few of the five EDO staff had some of the information, but had to ask the local community development organizations if they had the remaining information. More than one month passed after the deadline by which I requested these forms be returned to me. At that point, I asked about them again. Two EDO staff returned the forms, one of which was only complete in part. The remaining three staff never returned the forms to me. This methodology was highly ineffective at bringing forth information on microcredit practices and part icipation. I was able to recei ve only two completed copies of the survey back from the EDO staff af ter the final intervie ws. Because I did not receive these before the final interviews with the staff members, I was unable to ask any questions about even the two completed copies I received. The completed forms do not, therefore, bring forth enough information to s ynthesize into cohesive results. The results are not included in Chapter 4.

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43 Group and Individual Interviews of Implementing Organizations and Program Recipients Selecting and interviewing program participants proved the most difficult method to employ. Despite the political restrictions mentioned above, I was asked to interview 25 agricultural loan and business loan recipients in order to complete the text for webpages and a series of case studies for the EDO webs ite. In addition, I volunteered to complete a series of 26 individual interviews for promotional case studies with Homes R Us. In order to interview the loan program administrators and participants, the interviews required that I elicit informa tion that foreign audiences and potential donors may be interested reading, including how loan program recipients' lives and families have changed as a result of participation in the microloan program. Because of this donorfocused aim, and out of a con cern that responses would be Kulu haga kwayesa (everything is good), specific time was set aside both with each implementing community development organization (CDO) and the begi nning of each of the 51 interviews to explain that I was interest ed in learning about the problems the loan recipients encountered as well as the benefits that th ey had experienced in the loan programs. Additionally, although my objectives as a E DO employee and Homes R Us Volunteer, as well as identification as an anthropology student for purpo ses of full disclosure with the interviewees, were explained in introductio ns at the beginning of interviews, some of the interviewees br ought up their personal concerns with their individual cases, as well as their hopes or fears for what my influence may bring upon their individual cases. Such conversations, however, were quickly curbed by the CDO, EDO, or Homes R Us staff persons when they were present, or by myself and the translator when they were not.

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44 When statements made by the interviewees were particularly oriented towards an everything is good response, we would re-q uestion the intervie wee about the loan disadvantages they perceived in a number of different ways and remind them that I was not in a position to influence their future wi th the loan program. Directly addressing these issues helped significantly in bringing fort h more complete responses from the loan recipients. It is still possible, however, that the reported perceptions of the loan programs are oriented in a more positive light than they actually believe. Likewise, loan practices may have been couched in terms that promoted the activities as more beneficial than they really were. As discussed earlier, the se vere limitations on access and on methodologies renders this study an exploratory study; only further fieldwork will evaluate whether or not this is the case. Additiona lly, questions that were cultu rally inappropriate for a onetime interview and visit for example, aski ng about the monthly income of very poor farmers, or how their families managed to relieve themselves or shower without a bathroom or latrine were excluded from those asked. Even though these interviews and samples were selected and arranged by EDO, Homes R Us, and the local community develo pment organizations, I did work to ensure that program recipients were given the option to not answer the questions or to leave if they did not choose to participate. Several program recipients chose both. For example, my visit to the village of Neglah (again, all identifying names have been changed) occurred on the eve of the Prophet Mohamme d's birthday. Because of the demands on women in preparation for th e holiday, many of them opted to leave early without completing an interview. Many also asked to prioritize their interviews in order to complete the interview more quickly, giving them more time to prepare for the holiday.

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45 Furthermore, because of the public nature of these case studies and donor-oriented materials such as the website, I was unable to guarantee confidential ity. My roles as an EDO staff member and intern and Home s R Us volunteer were made clear. Confidentiality, however, could not be promised the respondents. However, I do not believe that this kind of involved or committed anthropology with multiple and simultaneous obligations re nders the results inaccurate, ineffective or unusable in this thesis project. This kind of anthropological research is consistent with that found within, amongst other examples, anthropologists working with and studying non-governmental organizations (Markowitz 2001) companies (Kanter 1977, Burns 1975) and government agencies (Diers 2001, Ledford 1975). In the words of Shokeid (1971:1-2), with the existence of multiple attachments to the field there exists a possible bias, as well as a possible advantage. Specifically, within my own work, I too see a dualistic occurrence of both bias and advant age. The biases were discussed above. However the advantage is that asking questions about the loan recipi ents' perspectives on loans and their credit practices are consiste nt with questions that would be asked of interviewees in a context other than the de velopment of case studies for publication and fundraising. Although the context is different, including the umbrella of the Egyptian NGOs, the questions asked were similar and because of the intere st in appearing in publications and fundraising materials may have provided more information than a strictly academic endeavor may have brought forth. Regrettably, however, this significantly limited my sample. For example, my sample does not include anyone who had applied for a loan and been denied. This is my primary critique of the sample. Overall I, like many other anthropologists, carried out this research project as

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46 conscientiously as I could, given the cons traints and opportunities of multiple and simultaneous commitments and those of professional norms and ethics (Shokeid 1992). Through this process, I was able to interview 26 housing microloan recipients individually, 17 business microl oan recipients in groups, and eight agricultural microloan recipients in groups. I was also able to in terview seven housing, business and agricultural committees from local, implementing CDOs. Each individual interview and interview with the CDOs lasted approximately one hour. Each group interview lasted approximately three hours; this represen ts approximately 40 hours of interviews. Ultimately, the interviews successfully e licited the credit practices of the loan recipients, the perceptions of microfinance as well as their practi ces, and the perceived benefits of the loan programs as they rela te to their livelihood strategies. These are explained in detail in Chapter 4.

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47 CHAPTER 4: RESULTS Introduction As discussed in Chapter 3, this explorat ory research projec t utilized several different methods in order to best unders tand the perspectives on and practices of microfinance in light of EDOs policies and th e influence of neoliberalism. This chapter will present, analyze, and discuss the results relevant to my research questions. The results are organized in accordance with the research questions, followed by analysis, and summary and discussion. The History of EDO EDO began in the early 1950s with a $50 donation from the Presbyterian Church USAs (PCUSA) denominational office in the Un ited States to a past or of a Protestant church in Minia, Egypt. Initially, the funds were earmarked for literacy programs, but through additional donations, assistance quickly grew to include social services provisions in the areas of home economics health, agriculture, education, training, publishing, and disability serv ices. The initial methods for administering the integrated programs included the placement of a staff person in a village or urban neighborhood. These staff workers lived in the communities and became working residents who networked with local churches, mosques, a nd other service providers to cooperatively mobilize resources for more effec tive social service provisions.

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48 In 1983, EDOs publications indicate that the focus changed to implementing integrated, comprehensive community developm ent, rather than simply fostering an environment of social service provisions. In this new strategy, EDOs primary aim became enabling communities to identify and define their own needs and problems, as well as to mobilize resources for these actions themselves. It is with the new focus on community-level action and networking that EDO publications define the communities as a whole as partners in their development th rough the collaborative functions of existing institutions including churches and mosques, rather than the hosts of a EDO field staff developer. Between 1984 and 1991, EDO partnered with 14 communities and assisted these communities undertake 367 Community-Owned Projects (EDO 1992:7,10). In 1991, EDO reported undergoing another strategic shift in its approach to development. This time, the aim was to further enhance the implemen tation of integrated community development through the active rest ructuring of local networks and systems in partner communities with a self-help model, which is still used today (EDO nd1:6). This orientation towards devel oping more grass-roots structures and giving space to local concerns has evolved into the late 1990s and early 2000s as capacity-building. By either working with existing community development organizations (CDOs) or by establishing them in partner communities, EDO worked to enhance the capacities of CDOs to take on the comprehensive de velopment endeavor within their own communities. EDO provided assistance in the form of training in NGO management and start-up financial support. The initial inputs in financial capital and NGO training were completed with the belief that effective work on the front end will ultimately limit external inputs in the long-term and, ther eby, promote sustainable development. By

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49 January 2000, 184 CDOs were either already working with EDO or asking for capacitybuilding measures with their organizations (EDO nd2:30-40). In the near future, EDO aims to, again, adjust their strategies for development. By capitalizing on regional events such as demo cratic elections in the Middle East and regional economic shifts such as General Agreements on Free Trade (GATTs), EDO aims to solicit additional f unds from foreign donors to enable an environment of advocacy. Capacity-building measures, EDO repor ts, will foster the development of an active citizenry that will be enabled to a dvocate for local democratization efforts and activate the rights given to them by law (int erview with EDO Director on February 25, 2005); rights such as adequate infrastructure including water and el ectricity, an address system of house and street numbers, voters rights, and enforcement of gender-equity in the distribution of state welfare bene fits to the general populace (EDO 2004a). As of 2004, EDO has worked in nearly 200 communities, and has an annual budget of E,689,762 (at the time of resear ch, $1.00 = E.0). This annual budget of nearly $6.5 million pays the salaries of hundr eds of employees, the operational costs of two main offices as well as over 14 CDOs offices, and the development efforts affecting directly over 225,000 Egyptians per year. EDOs evolution from a social service provi der, to a promoter of self-reliance, to a facilitator of cap acity-building, and to an enabler of political a dvocacy is characteristic of the historical progressi on of Northern-based developm ent NGOs in general (Atack 1999, Korten 1990). Korten (1987, 1990) argues that the patterns of evolution of these NGOs are similar because many NGOs start out as a response to a human catastrophe or crisis or some other incidental catalys t, for example the small donation to EDO by

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50 PCUSA. However, as NGOs become more sophisticated in their understandings of the complexities of development issues, they transform and progress through these generations of development strategies and institutional orga nization (Atack 1999). It is interesting to note, however, that while EDO experienced the same transformation as Northern-based devel opment NGOs it is not a Northern-based development NGO. EDO is an Egyptian nationa l development organization in the sense that it is fully operational only in Egypt and overwhelmingly by Egyptians. Senior management are all Egyptian, as are field sta ff and program implementers. Foreign staff, that is foreigners paid as staff persons by EDO, have never exceeded five or six in number at any given time, and have worked primarily in the International Relations Department. Other Egyptian NGOs are more often financially characterized by duespaying membership or subscription, fees fo r services, or support from the Egyptian government, rather than the international aid and private donations th at characterize EDO (Sullivan 1994). Rather, what links EDO and Northern-based development NGOs are the large dependencies that they each share with Northern-based funders. The EDO 2004 Annual Review, for example, reports that 55 % of the revenue came from foreign donors. In this way, EDO is a neither/nor organizati on; it is neither char acteristic of most Northern-based NGOs, nor is it a typical E gyptian NGO. In the words of an Egyptian development specialist, It is Egyptian, yet Westernized. It is an intermediary PVO [private voluntary organization] not local but not international It is run by Egyptians but relies heavily on Western expertise, tech nical assistance and fi nancial aid. It has connections, money so it doesnt matter wh at its called! (as quoted in Sullivan 1994:86). Furthermore, the donations come from more than three foundations and

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51 corporations, 37 NGOs and religious orga nizations, 18 multilateral agencies and governments including four United Nations agencies and the World Bank, and numerous unnamed private donors. This secures EDOs position as not only heavily reliant upon foreign aid, but foreign development assistance from some of the most notable names in international aid. The faith that Northern donors have in EDO, as evidenced by large amounts of funding, is a belief that EDO is effectiv ely implementing comprehensive community development programs transferring skills and training in order for communities to effectively participate in mark ets, providing welfare to those marginalized by society, and contributing to the growth of civil society in order to successfully bring about neoliberal economic policies (Fisher 1997: 444). For some sincere policy-makers, comprehensive community development program s can also promote democratic ideals, which EDO reports hoping to grow and accomplish with the latest strategic shifts. Such a high level of dependency upon foreign aid by EDO renders it unsurprisin g that there is an influence from the neoliberal ideals of the donors; the logic of the system requires that EDO say and do things that are compatible with the political ec onomic ethos of the Northern donors. With the precursors of community development also underway, microfinance becomes a development tool that enables the growth of neoliberalism for the donors and EDO. The History of Microfinance with EDO In response to the nationalized econo mic system devised by President Gamel Abdel Nasser in the 1950s and the Open-Door Economic Policy of President Anwar

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52 Sadat, the economic reform and structural adjustment programs in Egypt by the International Monetary Fund (IMF), World Ba nk and funders including the United States encouraged President Hosni Mubarak to liber alize the Egyptian economy in exchange for the promise of a cancellation of a substantia l amount of Egypts large external debt (Ibrahim 2003). Consistent with other struct ural adjustment programs, subsidies were reduced, interest rates and inflation rose, a nd the private sectors space and prominence grew. Egypt has traditionally been rather conservative in the liberalization of the economy and has not experienced the same degr ee of inflation and sp eed of liberalization as parts of Latin America and Turkey (The World Bank 2004:13). Nonetheless, the effects upon EDOs microfinance programs were remarkable. EDO characterizes the development of microfinance in the organization as a reaction to these national economic events in their documentation. According to EDOs literature, Egypt is not a country with large numbers of informal moneylenders that are commonly found in many other developing countries. With th e reduction of the governments provisions to the populace and th e limited availability of credit, EDOs literature indicates that there was a compelli ng need for more financial capital in the hands of individuals. This capital was n eeded for the purchase of goods that were previously available at a reduced cost or free, as well as for the growth of small enterprise. EDO began promoting the growth of small and microenterprises in order to fill the income-expense gap (EDO nd3). In th is way, EDO is consistent with other international NGOs that were searching for innovative approaches to poverty alleviation that were both politically a nd economically feasible. That is, they would ensure that economic development programs did not run counter to the economic objectives of the

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53 state; in other words, these agencies were interested in political economic regimes that embraced the imperatives of liberal economic reforms (Fernando 1997:158). EDOs economic harm-reduction strategies for micr ofinance programs grew out of, responded to, and helped foster and smooth the tran sition into a liberalized economy in Egypt. In 1983, EDO began its first microloan pr ogram. The Loans for Development program offered credit and t echnical assistance for the s upport of individually-owned income-generating activities. For the first 10 ye ars of the program, the average loan size for these 1,512 recipients was less than E. From 1993 to 1996, however, the number of loans given was around 2,400, and the average loan size grew to E2,887. All of the archival documents from the fi rst fifteen years of microfinance are rife with these portrayals of EDO, in light of the structural adjust ment, in a position to capitalize on the economic clim ate to assist Egyptians th at are in need of poverty alleviation. EDO is portrayed as a compa ssionate organization, yet fully committed to preserving its obligations to the requirements of donors for instituti onal performance. For example, in program evaluations and reports the growth of the microloan programs is often attributed to the flexibility shown by EDO in allowing delayed repayments from clients suddenly faced with unanticipat ed burdens (EDO 1993a:3). Quickly, however, such praise is tempered by statements that th is is not a reason for concern for the overall performance of the program as EDO also re cognizes that such flexibility and genuine concern for the welfare of its loan client s must not be misinterpreted as agency ambivalence concerning the obligations of such clients (EDO 1993a:3). EDO is promoted in its literature for potential donor s as a favorable NGO to work with because of its compassion for those that are faced with unanticipated burdens, and primarily

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54 because such kind of compassion does not compromise or undermine its commitment to institutional performance and th e appeasement of the donors. As the loan programs grew, however, EDO was pushed to change the ways in which they administered the loans, and underwent a significant decentralization of services. Initially, all loans were fully admi nistered, collected, m onitored and evaluated out of the EDO offices. However, according to their own literature, the increased demand on time and resources of EDO staff and administrative systems became too burdensome for the NGO. Another source pushing for the decentralization of microloan provisions and services to the CDOs in partner commun ities was written in a microfinance program evaluation. It indicated that Because there ar e limited ideas for small projects, and the number of clients is greater than the ne w ideas, most cannot manage a new project because of the repetition of projects in a co mmunity and the lack of enterprising (EDO 1993b:11-12). In neoliberal terms, this demons trated that the ent repreneurial spirit amongst microfinance participants was missing. That is, indivi duals were unable to take on the risks given her and successfully beco me competitive in the market. This meant that additional precautions had to be taken at a more local level to ensure that markets were not overly developing in one area, and to facilitate greater mark et integration. In the eyes of the donors, these obsta cles to the growth of neoliberalism had to be removed. By 1995, the strain on EDOs staff and systems as well as the obstacle of propensities towards duplication of projects was met by small loan (les s that E,000) administration in local, partner institutions. Institutions such as CDOs were deemed by EDO as better equipped to monitor the choices of projects that were undertaken by the participants, and to take on the risks and responsibilities that accompany microfinance program

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55 administration (EDO 1995:7). By 2001, all administration of microloans in the Development Sector were moved to the CDOs. Introducing revolving loans became another benefit of decentr alizing the loan program in the mid-1990s. The decentralization of the microloan programs and use of revolving loans contained a better guarantee of achieving the donors criteria for success, which included high repayment rates and low duplication of projects Shifting risk to CDOs became a smart financial investment for EDO at an uncertain economic time. Decentralization proved an effective strategy when so liciting foreign funds and partnerships, and growing mi crofinance programs further. In 2000, Homes R Us (a pseudonym), one of the worlds largest hous ing microloan programs, started funding revolving loans for safe and decent housing through EDOs CDO partners, thereby adding another level of name recognition, donor support, and anot her avenue for the growth of neoliberalism. These aims toward expansionism are consistent with other microfinance organizations, as are EDOs met hods of safeguarding their own existence (Huq 2004:49). In 2001, EDOs microloan programs began a large separation into two different directions. EDO initiated the administration of microloan programs from their offices again, this time utilizing group-lending methodologies. At this time, EDO began the process of re-institutionalizing new microl oan programs for purposes of becoming a sustainable microfinance lending instituti on. As of 2005, the loans under the newly created Small and Micro Enterprise (SME) di vision are now administered directly by EDO through both individual and group le nding methodologies. Their demands have grown significantly over the last four years; 2,852 loans we re administered in 2001 and

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56 12,123 in 2004. Estimates are that 2005 will see 20,000 loans administered (Interview with Director SME division, February 16, 2005). Within three years, EDOs SME division achieved financial sustainability (2004b). This achievement of institutional success, according to intern ational donor standards, is pr omoted throughout their most recent literature (EDO 2004b). At the same time, integrated, comprehensive development is still a central component to EDOs development strategies, and EDO began incorporating microloans into every community development and cap acity-building endea vor. Because of the explicit focus on comprehensive community deve lopment, rather than merely microloan administration and business-related outcomes, and due to the access issues discussed in the Chapter 3, the remainder of my results al l focus on the loan programs administered by the CDOs in comprehensive community deve lopment programs within the Development Sector. Between 2001 and 2004, there were 14 C DOs involved in the administration of microloans as part of their integrated co mmunity development agendas. From those 14 CDOs, 3,510 loans were administered to taling E,136,194 (at the time of research, $1.00 = E.0). Women constituted 68% of borrowers. These loans are all individual loans with a guarantor, and constitute the le nding methodology in all of my interviews. By lending methodology, I am referring to the means by which th e loans are applied for, approved, and disbursed. Based upon what is reported in its own publications, over the last 50 years, EDO has reacted to the prevalence of neoliberal logic and ideals of th e donors by ensuring their own long-term institutional economic viabil ity. They have accomplished this through measures that include investing in the grow th of microfinance through partnerships with

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57 notable organizations such as Homes R Us, promoting neoliberalism in strategies such as decentralization, and responding to external pressure for sustainable development by reinvesting in institutional-level lending. Th e growth of EDO from literacy classes and social service provisions, into one of the largest Egyptian development organization in the country has further confirmed EDOs succes sful navigation of the global growth of neoliberalism for the organizations benefit. A Typical Microloan Process In an effort to best understand the microfinance programs that EDO is promoting in its literature and investi ng resources into growing, here I explain the typical microloan process. Unfortunately, with my limited tim e in the field, I observed few of these processes first-hand. This information derives from my work as a pa rticipant observer in the EDO office, and from my interviews of EDO and Homes R Us staff, CDOs and loan committees, and loan program participants. The loans can be broadly divided into th ree major categories: 1. housing loans, which are funded by Homes R Us, and impl emented primarily through EDOs partner CDOs; 2. business loans, which are earmarke d for business growth and expansion (they are also used for start-up costs associated with developing a business, however most loans go out for the purposes of business gr owth and expansion); and 3. agricultural loans, which are used for the costs asso ciated with farming, including seeds and fertilizers or household needs that relate to agricultural endea vors. All business and agricultural loans must have an income-generating or household expense-reducing component and constitute what I see as direct income-generating programs. That is, the

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58 income-generating component is an explic it and a primary component of the loan program that is anticipated to provide direct financ ial returns to the borrower. As for the housing loans, they constitute what I see as indirect income-generating programs. That is, the income-generating component is not always explicit, yet there are still anticipated financial returns to the borrower. For ex ample, there is still a strong neoliberal requirement for the commoditizing and monetizi ng of local labor in the construction and building work, thereby providing higher rate s of wage labor in the communities. For those who take out the loan th e neoliberal assumptions preva il, and there is a pervasive belief that a home is an asset that increases in value over time and becomes a stronger financial asset should the ho meowner sell or rent the hom e. Further, the increased structural capacities of new and renovated hom es constitute an addi tional space that can be used for new or enlarged at-home enterprises. Loans for consumptive needs, emergency needs such as healthcare, or larg e expenses including weddings or funerals are not available according to both EDO and Homes R Us policies, nor did I meet anyone who had obtained a loan for these purposes. If a CDO is interested in acquiring capital funds for microloans in their communities, they must present a proposal to EDO. Following EDOs completion of a feasibility study and Participatory Rapid Appraisal (PRA), the CDO then undergoes capacity-building and skills training in orde r to take on the tasks associated with administering microloan projec ts. These technical skills tr ainings and socialization to Western business methods typically includes the formation of a committee from both the CDO and the community that is responsible for implementing the loan programs. They are also responsible for developing accounting sk ills in accordance with Western styles of

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59 business and finance. Further, they learn how to establish the criter ia for the approval of microloan applications, and prioritize projects and populatio ns for microloans that are most salient to each community. The projects that the CDO and committees may select vary from community to community are tailored to their local needs. They may include projects such as microenterprise for female -headed households or stable modifications that utilize the livestock waste in local orga nic farming endeavors. For projects that are not specifically aimed at female recipients, th eir participation is not discouraged. In fact, CDOs and committees are encouraged to enhanc e levels of female pa rticipation to boost their loan portfolios and participation rates. Loan committees and the CDOs promote the loan programs around the community, and also talk about them in other community development programs such as literacy classes. This is the first step in bringing neoliberal ethics to the communities. The CDO is onl y able to participate in the microloan administration if they submit to training a nd socialization in the rational, Western business ethics of accountability and transpar ency, and to implement an audit culture incorporating these mechanisms of institu tional performance (Shore and Wright 1999). Either the CDO and loan committee will go to someone in the community that they believe would benefit from participating in the loan program, or the residents come to the CDO for the application. Consistent with Western banking practices, the loan committee and CDO make a decision and notify the applicants within one or two weeks of the receipt of their applic ations. In-kind materials, such as the bricks or cement for building or items for inventory from local me rchants, are available thereafter. All loans are disbursed in-kind, rather than in cash. Th ere is a pervasive beli ef by EDO staff that this limits a redirection of loan funds aw ay from the approved project and into other

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60 immediate cash needs. In this way, the CDO fosters the cultivation of the rational economic actor. The mistrust of community borrowers to complete successfully the purchase of the goods they require for their proj ects is pervasive. However, such a belief is not without justification. Other studies in microfinance indicate that borrowers frequently find that priorities and needs othe r than the original project plans arise for which the loan money is spent (Fernando 1997, Huq 2004, Rahman 1999). Loan recipients I interviewed themselves reported th at receiving their loan s as in-kind rather than as cash disbursements help them to organize themselves into goal-oriented individuals successfully navi gating their way as rational economic actors through the microloan program. Business and agricultural loans are repaid in accordance with the applicants employment. For example, self-employed or government workers are required to pay monthly as they are paid monthly. Farmers or agricultural day la borers are required to either pay quarterly or bi-annually, in acco rdance with local harvests. Repayment schedules are arranged by each individual wi th the loan committee. Typically loan repayments were complete within one year however those who had bi-annual repayment terms had 18 months to repay. Housing loans are paid monthly regardless of employment, and varied in repayment schedule s from one to four years, depending on the amount borrowed; larger amounts typically had a longer repayment schedule. All repayment terms, however, are designed to minimize the monthly repayment amount; monthly installments of the participants that I talked to from all of the programs never exceeded E155, and typically were below E. Interest rates for all loans are, in official documents referred to as adjustmen ts for inflation or administrative fees.

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61 However, in all the interviews they were di scussed as interest rates. As one EDO staff person explained, they are calle d interest rates in discussion. However, because they are officially labeled adjustments for inflat ion or administrative fees in accordance with Islamic law, it made the interest rate acceptable. For the program participants, lexically there are interest rates, but conceptually interest rates are legitimated by official discourse as adjustments for inflation or ad ministrative fees. Regardless of how it is termed, all loans contain 10% of the principa l added on and equally divided into each of the monthly repayments. Individuals either bring the installments into the CDO, or members of the CDO and loan committee go into the community to receive them; this varies from community to community. New loans are given, and often times in higher amounts, to program participants who complete their monthly payments on-time for the duration of the repayment schedule for the previous loan. This appears to limit the amount of debt-recycling or using new microl oans to pay off the old ones still owed to the loaning organization. I did not meet anyone who had done this, nor was it ever addressed as a concern by st aff or program participants. At the time of the research, loan re payment rates in each of the communities I visited were between 92% and 100%. On an individual level, when loans are not repaid within 30 days, two members of the committee go to the home of the borrower to discuss their potential loan default. Af ter 60 days of non-payment, a le tter is sent to the home of the borrower and to the guarantor explaining that the courts will become involved should the borrower default. After 90 days, a claim is made in the local courts for the loan money. Homes R Us has a policy that if loan repayment rates drop below 93%, they suspend the program in the community a nd disallow further borrowing. Routinely,

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62 however, I found that individuals reported that when they asked for a month forbearance from the CDO and loan committee due to emergency circumstances such as illness or death of a family member, they received it. There are seven different reasons that lo an applicants would be turned down by the committees for the loans. First, in lieu of credit history, local communities rely upon reputation as the best historical marker of individual economic performance. According to one EDO staff person, It is the whole committee that turns them down, but if this [bad reputation] is the reason, th ey dont reveal that. They say, Oh, we dont have enough money instead. Telling people they have a ba d reputation or telling the truth will cause problems in the community between familie s. They are all connected. But everyone knows the reasons this person with a bad reputation got turned down. Second, the project the applicant pr oposes does not have a clear aim or has too many goals that may be unachievable. Third, the project does not ha ve a clear work plan to achieve the goals. Fourth, the project is not prof itable enough [this is not a criter ia with the housing loans]. Fifth, the project is a repeat of other, similar projects alrea dy in the community. Sixth, in lieu of collateral or grouplending methodologies, all loan s are required to have a cosigner or guarantor. The lack of co-signer is grounds to be turned down for the loan. Seventh, the applicants have access to institut ional sources of large amounts of financial capital, such as loans from the local banks. Loans from family and friends that were generally available to all were not consider ed sufficient grounds to turn down someone for this reason. The assumption for the business and agricultural loans is that the project, presuming that the goals, work plan, and e nvironment are sound, should be able to cover

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63 the costs of the loans. For the housing loans, applicants must demonstrate an ability to repay from their work income. All of these criteria for entrance to the loan programs presuppose a level of neoliberal attachment. The loan participan ts must be goal-oriented, they must be interested in attaining higher levels of financial capital and able to manage the tasks associated with it, and they must contribute to overall integration and diversification of the local market. It is through the loan program development, requirements, and terms of implementation that Northern donor ethics and ideals become part of the establishment and development of microfin ance in these communities. The loan program participants in this study are typical of EDOs and Homes R Uss microfinance participants. The loan amounts for the housing program participants range from E,200 to E,000 (at the time of research, $1.00 = E.0). The business loans range from E to E,500. Agricult ural loans vary from E to E,000. These all represent the minimum and maximum amounts received by program participants in each of their respective loan programs. Wome n constituted 30 of the 51, or 59%, of the interviews. This is a slightly lower percentage than the organization-wide number of female borrowers reported by EDO at 68%. Because all of the interviewees reside within small towns or villages, we can assume that agriculture comprises a portion of either their income base or their labor c onsiderations. This is also true for business loan participants. For example, if a significan t portion of the customer base relies upon harvest seasons for cash income, the local busi nesses must also consider those seasonal fluctuations in cash and business. Alt hough some income smoothing is made through purchases on credit, cash does not come for most of these interviewees until harvest.

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64 Asking monthly income, particularly from the very poor, was inappropriate for these one-time interviews. However, we can assu me that most of these interviewees had a low income, as 53% of Egyptians live below $2 per day, and rural poverty is at 23% according to Egypts own relative poverty standards (World Bank 2002). Most of the interviewees whose homes I entered had lives tock or poultry in their home. Nearly all were married with children. The unique charac teristics of each group of loan participants are provided with the results for each type of loan program. Microfinance Policy Development In order to best understand the ways in which neoliberalism influences the design and implementation of microfinance, interviewing the staff responsible for the microfinance policy development proved to be the best method. As described in Chapter 3, I interviewed five EDO field staff persons who work in the microloan programs. In addition, I interviewed three Homes R Us staff members, the EDO Director of Development, as well as th e EDO Director himself. The responses of the staff are best un derstood in terms of demand-driven development. During my interviews with EDO and Homes R Us staff, they reported that development strategies in general, and especially microloan programs, were forged from a demand-driven approach. This stat ement is consistent with the archival documents, which indicate that a shift to demand-driven development through the decentralization of integrated microloan progr ams as well as the shift to more localized strategies for community development program s has been occurring at EDO for years.

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65 This focus on demand-driven development is co nsistent with the neoliberal ethic found in the private sector in general, and is now a characteristic of NGOs, such as EDO. In fact, one of the first markers of progr am success was that the demand for the microloan programs was high. All five EDO staff discussed the role of demand in defining success. Youssef (all names are ps eudonyms), the supervisor of all field activities for three communities, described this idea clearly: Revolving funds give interest and profit for the interest of capital itself, which benefits itself. The demand is high and that means that it is successful and meeting their needs Money changes things. It impr oves the relations betw een a wife and her husband, schools and education ar e affected, and the thinki ng of people changes from one person who doesnt know anything about the world to one who is starting to create a business. Loans for women affect their way of thinking. For Youssef, the logic is that the demand for revolving loans provides a source for both strengthening CDO institutional performance as the financial capital comes back to benefit itself and non-financial outcomes in the lives of the program recipients. Youssef indicates that by looking at the high demand for loans, we can believe that these nonfinancial outcomes are occurring for the micr oloan program recipients and meeting their needs. He also alludes to a level of tran sferability between fina ncial investments and non-financial outcomes, which becomes important in the discussion of loan participants perspectives on the programs. I asked, however, about obstacles to th at demand and the community members who do not apply for a loan, especially th e presence of American or other Western sources of funds during a time of anti-Amer ican sentiment. The overwhelming response from the EDO and Homes R Us staff is that the program participants really need the microloans. In their perspectives, the need for the loan is greater than any ideological

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66 allegiance or personal obstacle. From their e xperience in the field, the loan recipients overcome fear or trepidation, or other obstacles to cultivate of the rational economic actor because they need to. As one EDO staff person said: If they ask for a loan it is because they are in need. If they dont have a need for the loan, they cant take one. They dont as k for one 30% or 40% of the loans are American [in the source of their money], and people know it. For example, Homes R Us is American. People are in bad need fo r the money, and because they are in this need they dont think about where the mone y came from. If he doesnt want to take the money from America, he can bang his head against the wall and think about how he doesnt have any money. The working definition and construction of need by EDO staff is broad, however. In this scenario, the CDO is successfully cult ivating the neoliberal ethic and rational economic actor within the micr ofinance program part icipants, against the strong odds of pervasive anti-American sentiment. That is the need for the loan must outweigh all other allegiances, and obstacle s that prevent the disburseme nt of the loan must be removed or overcome. Need may also include wants and des ires, and even the loan participants own definition of need. Samy, the Dir ector of Economic Development for the Development Sector, recounted an anecdotal story about a man who was applying for a housing loan. He sold the four feddans of land (1 feddan = 1.04 acres) that he owned, his sole source of income, in order to collect more money to us e with a housing loan towards the building of a larger home. The loan part icipant went from being an owner of the means of production to an unemp loyed proletariat, now forced to sell his labor. When I asked Samy to explain why someone would sell their sole income source in order to build a larger house, and make a non-rational choice according to neoliberal ideals, he said:

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67 We cannot forget that a farmer cannot te ar down his house and rebuild it without walls, windows, and doors. There are things that he needs and this is the cost of them. This is what they can do. If he wants to sell things to make his life better, it is ok. This is the aim of development: to make things more Western, to make things better, and to get more stuff. We tell people Dream ! as we give them a little loan, to turn their project into a factory. For the man who sold his only source of income for a bigger house, the action was considered acceptable by the organization be cause he needed the money in order to purchase the necessary materials to rebuild hi s house. The loan reci pients definition of need was the only definition necessary in order to endorse the action. In this way, the loan participants definitions of need are acceptable as long as their aims are compatible with those of EDO. That is, if the aims are Wester nization and material improvements, then the definitions of need are as broad as they need to be in order to enact the disbursement of the loan. Because of the presence of the waiting list and the high demand for microloans, their prioritization ov er other development programs that do not have waiting lists has influenced EDOs strategies for program provisi ons. As Dorris, a supervisor of field staff, informed me: Microloans serve as the gateway or door to other programs. We make use of this point to allow girls in literacy classes or other girls educ ation classes to take loans. Girls get encouraged by their families to go to the health classes and literacy classes because they can take a loan afte rwards (emphasis hers). I was also told that when new CDOs start up, the first programs EDO begins with are microloan programs. As Samy, the Director of Economic Development in the Development Sector, told me, If the CDO has 1 million pounds, they would be able to

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68 spend it on loans in one week. The community would choose loans if there are 1 million pounds that could be spent in any way. In this way, EDO staff have defined s uccess as the presence of demand, through the broadening of the definition of need. The underlying assumption behind demand is that it is need-driven in a locally-defined manner over and above other non-neoliberal ideological beliefs, allegiances, or affiliations. This is the process by which demanddriven development is understood and enacted in these community-development efforts. In this way, EDO is designing the loan program policies and practices to reach more and more hands, over and above all other ideolo gies, allegiances and social programs. The shortcomings of the microfinance programs, as identified by EDO and CDO staff, were rendered decentralized and local rather than institutional or structural. EDO did not absorb the shortcomings of the program but required that each CDO deal with the program fall out they encountered in thei r own communities. The largest concern with the microfinance programs on the part of EDO and CDO staff related to what they perceived to be an increase in social stra tification prompted by the loan programs. This concern is most frequently manifest in an inability to reach the poorest of the poor with the microfinance program, which is consiste nt with other critiques of microfinance (Evans et. al 1999, Rahman 1999). The CDOs and loan committees, who are through decentralization of microfinance by EDO respons ible for addressing this issue, reported their difficult position in trying to deal with the issue. For example, one CDO and housing committee described a double-bind, in wh ich loaning money to the poorest of the community, or those without demonstration of repayment abilities, would effectively turn the loan into an unpaid grant. This would, therefore, compromise their own institutional

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69 performance. The CDO and housing committee had recently decided informally and in secret that they would grant the money to the poorest family in the community for housing assistance as long as the repairs dont impress anyone. For this CDO and housing committee, microfinance program structures combined with the pressure to demonstrate institutional performance meant that they were unable to help the poorest of the poor through the microloan program. They had to turn what was otherwise loan money into a grant, which undermined their lo an performance, and they regretted this position. There were multiple localized strategi es being devised in other communities to address the unique needs of the poorest of the poor, most commonly involving the funds gained from the 10% additi ons to principal repayments However, no institutional agreements on the best way to address these issues had been reached. In this way too, the neoliberal logic is endorsed and promoted at an institutional level. By addressing the shortcomings of su ch an endeavor as decentralized risk and responsibility, and rendered local rather than institutional or structural, EDO embodies neoliberal logic as an institution. E DO is passing the risks and responsibilities for microfinance programs to the CDOs a nd housing committees, who must, in turn pass the risks onto the individuals or suffer their own slighted instit utional performance. Summary and Discussion With the overall structural orienta tion of EDO towards foreign donors and audiences, becoming well-versed in the employ ment of discourses that appeal to the donor ideologies of neoliberalism is not unexpe cted. This is characte ristic of other NGOs whose financial dependency lies with fore ign aid (Ebrahim 2003). Neoliberalism is

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70 pervasive in EDOs historic al development trajectory and publications. However, neoliberalism in EDO practices goes beyond an accommodating lip-service for the foreign donors, and has become institutiona lized as demand-driven microfinance. Additionally, through decentrali zation, EDO transferred risks and responsibilities to a more local level, leaving the tasks of he lping the ultra-poor to the CDOs and loan committees in ways that are bot h difficult and potentially threat ening to their institutional performance and accountability. Undoubtedly ther e are certainly benef its to approaching development in a decentralized way, incl uding strengthening local democracy, granting local organizations legal standing, and tr uncating bureaucracy (Wittman and Geisler 2005:62). Village-level governan ce structures, including the C DOs, are ultimately trained through the capacity-building requirements to meet the demands of microfinance programs and their administration under the rubric of Western-style accounting and management practices. By extension, if the CDOs fail to meet the rigors and responsibilities of the new management practices, it become s a failure of their integration into a neoliberal framewor k. In turn, the CDOs pass the pressure onto microfinance program participants by requiring them to be, at least in the loan application, goaloriented and rational with their activities in the microfinance program, and accept the loans in-kind rather than in cash. In this way, the donors are achieving th eir aims and reaching thousands of Egyptians each year; EDO is achieving its ai m by both continuing to achieve institutional growth and performance as well as provide development programs to thousands of Egyptians. But what about the program par ticipants? Are they experiencing the winwin situation of increased financial outcomes and enhanced well-being that

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71 microfinance has promised to provide (Morduch 1999)? How do the loan program participants respond to the pre ssure by the CDOs, EDO, and the structures that inhere in microfinance programs to become rational economic women and men? These answers will be explored in the next section. Loan Program Participants Perspectives and Practices As discussed in the previous chapter, the interviews constitute a bulk of the data collected regarding microfinan ce program participants pers pectives and perceptions on microfinance and their practices within it. Lo an program participants perspectives and practices for three categories of microloans housing, business, and agricultural are explored under each loan type. The following section then summarizes and discusses the overall patterns in the persp ectives and practices of microf inance program participants in light of the pervasivene ss of neoliberalism in EDO and in microfinance. Most salient to the discussion are the perceptions and prac tices of the loan participants with regard to financial capital, social capital, and hu man capital. Financial or economic capital typically refers to cas h assets or funds. Social capital, in the microfinance literature, is typically defined as the institutions, relationships, and norms that shape the quality and qua ntity of a societys social interactions (World Bank 2001, as cited in Rankin 2002:4, for example). This definition derives from Pierre Bourdieus definition of social capital as, "the aggregat e of the actual or poten tial resources which are linked to possession of a durable networ k of more or less institutionalized relationships of mutual acquaintance and rec ognition" (1986:248). This research project examines the relationships and networks the World Bank emphasizes and the

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72 heterogeneity of resources that are the focu s of Bourdieus social capital. Human capital is less commonly found in the microfinance li terature. However, human capital typically includes human resources such as health, education, labor, and knowledge (Start and Johnson 2004). Human capital also closely relates to Bourdieus cultural capital, which focuses on education. As described in Chapter 2, examining the perspectives and practices of microfinance program participants from the pe rspective of a liveli hood assets framework enables us to look beyond incomes, and other fi nancial assets such as cash savings, to a more inclusive view of the uses of social a nd human capital assets in the security against vulnerabilities (Hospes and Lont 2004:7). This study assumes that, as Youssef described above, one form of capital can be used to acquire other forms of capital in locallydefined terms of exchangeability and convertibility (Start and Johnson 2004:19). Bourdieu (1986) recognized that social and cultural capital, or as used in the microfinance literature social and human capital, are direc tly tied to and exchangeable with economic or financial capital. That is, social capital may be utilized to acquire financial capital, as in cases such as bo rrowing money from friends. This concept is pervasive in the microfinan ce literature and has been institutionalized through grouplending methodologies, and the object of prom otion for many microfinance lending institutions (Rahman 1999). Likewi se, financial capital can be u tilized to invest in social capital, as loaning money may bring future gifts or obligatory vi sits (Dzingirai 2004). Similar examples can be given for human cap ital and social capital, such as teaching prestigious students or the ability to develop networks of friends without impediments from ill health. Also, human capital and financ ial capital exchanges may include selling

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73 labor or gaining a higher le vel of education in order to earn a higher wage. How microfinance participants might work to cultivate or invest in non-financial assets such as social and human capital is not easily intelligib le by neo-classical notions of rationality, and requires an expansion beyond traditi onal economic boundaries (Kabeer 2000, Start and Johnson 2004:19). Additionally, neoliberal lo gic finds the cultivation or investment in symbolic capital a non-rational endeavor if it does not lead to financial gains. Expanding analysis to the exchangeability and convertibility of financial and nonfinancial capital in the microfinance endeavor enables a more inclusive examination of the perspectives of loan programs participants, as well as a logic and rationale that is not necessarily rational in the neoliberal framewor k, of their activities. In order to illuminate the perspectives a nd practices of loan participants, these results examine the ways in which the asse ts of social and hu man capital, along with financial capital, are utilized to secure agains t the vulnerabilities that were present in the lives of loan program particip ants, in light of their part icipation in the microfinance endeavor. Exploring the ways in which thes e activities include s equencing, substitution, clustering, access, trade-offs, and trends in fi nancial and non-financial assets, is a first step towards an asset-based livelihood anal ysis of microfinance (Hospes and Lont 2004:10), and understanding the perspectives and practices of microfin ance participants. Housing Loans According to Homes R Uss publicati ons, it is estimated that 20 million Egyptians live in what is called poverty housing. Poverty housing in Egypt is generally characterized by Homes R Us as homes that lack an adequate latrine/toilet if there is one

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74 at all; the cohabitation of livestock and anim als with humans; a lack of electricity and running water; the imminent co llapse of old, saturated mud-brick walls that draw water from the heavily-irrigated land; and highly flammable ceilings made of agricultural gleanings and remnants such as palm branches and dried sugar cane. Since it began working with EDO in Egypt in 2000, Homes R Us has provided loans that have been used in the buil ding of over 6,000 homes throughout Egypt. At a country-level rate of over one home per day, Homes R Uss microloan program for poverty housing is one of the largest housing microloan programs in the country. Homes R Us uses EDOs CDOs for most of their loan administrations, and Homes R Us staff who work out of a local office for the others The process involves th e distribution of inkind contributions and the recipients repay th e building and labor costs back in cash to the CDO or Homes R Us on a set schedule, w ith adjustments for inflation as discussed previously. The maximum allowed in any co mmunity for any loan is E,000 (at the time of research, $1.00 = E.0). As discussed in Chapter 3, I was grante d access to 27 homes in four different communities for interviews for the purposes of composing case studies on the impacts the loans had on the families for Homes R Us. The communities were selected, as were the interviewees, for the reasons described in Ch apter 3. That is, they were congenial to foreigners, particularly U.S. citizens, and we re able to host guests like myself without concern for the military and tourist police that were escorting me. I was informed by both EDO and Homes R Us staff that all of th e interviews I conducted in each community were representative of that community. Local economies can vary greatly, and often in accordance with the fertility of the agricu ltural land around the community. Descriptions

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75 of all four communities can be found in Appendix B: Descriptions of Housing Loan Communities. Community B, for example, is a relatively wealthy community surrounded by high yielding, fertile land. It s residents were often considered by EDO and Homes R Us staff as richer, more jealous, that is more likely to build bigger houses, more greedy for more loan money, and most likely to take the maximum loan amounts available. However, I never heard community residents or members of the CDOs discuss the residents of their communities in comparison with others. Again, the names of the communities and program participants have been kept confidential at the request of Homes R Us. All renovations of all homes in the four communities were being completed at the time of the interviews, or had been comp leted during the spring of 2005. All respondents were either be ginning their loan repayments or in the midst of them. Table 1 demonstrates the overall numbe rs and ranges of renovation costs and contributions that the loans made towards those costs for each of my interviewees. All monetary amounts are listed in Egyptian P ounds (E) at the time of research ($1.00 = E.0). Multiple loans taken by one family have been combined into one loan amount, as the loans all contribute to the renovations of one structure. This table represents a large diversity in loan amounts and renovation costs. For example, the two loan recipients in Community C whose loans constituted 100% of total renovation costs, had amounts of E,800 and E,000, respectively. In Commun ity A, one household had two loans totaling E,000 and renovations for E,000. For this household, their loans constituted 45% of the total renovation costs for one structure. Two interviewees from Community A and one from each of the rema ining communities did not know either the

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76 cost of the renovations or the amount of the loan that was borrowed. They are not included in the table. Table 1: Housing loan profile. Multiple housing loans in one household have been combined into one amount. All monetary amounts are in Egyptian Pounds (E). Community # of Interviews Cost of Renovations ( E) Amount of Loan ( E) Loan as % of Total Cost A 3 3,000 40,000 1,500 5,000 10% 50% B 6 25,000 85,000 5,000 10,000 6% 20% C 6 1,800 2,100 1,200 2,000 63% 100% D 7 2,000 16,000 1,500 5,000 25% 100% What is immediately apparent from this table is the large range in costs of renovations, especially when compared to the limited span in loan amounts. According to EDO and Homes R Us staff, construction costs in rural Egypt vary depending upon the materials used and the extent of renovations that are undertaken. For example, the cost of tearing down a mud-brick home and rebuild ing a one-story home with a concrete foundation, using reinforced ir on and concrete ceilings wi ll be over E,000. This is compared to a E,000 renovation that would pr ovide for cementing a dirt floor, adding temporary ceilings made of agricultural gleanin gs such as dried sugar cane, carpentry for doors and windows, connecting to utilities of running water and electricity, and developing a sewage field for a latrine. According to formal statements on Homes R Uss loan program in Egypt, loans constitute between 50% and 80% of all renovations costs. Furthermore, their formal statements in publications and brochures in dicate that a home can be built for E,900. Only three of my interviewees fit into these fo rmal categories, or approximately 14%. Most (14) of my interviewees had loans c onstituting less than 50% of the total renovation

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77 costs. The remaining five interviewees had loans that accounted for more than 80% of the total cost of renovations. The counts pe r community are listed in Table 2. Table 2: Number of intervie wees and the percentage of renovations costs that the loans accounted for. Community # of Interviews Less that 50% 50% 80% More than 80% A 3 2 1 B 6 6 C 6 2 4 D 7 6 1 Totals 22 14 3 5 Because the largest number of interviewees is in the Less than 50% category, I focus the remainder of this section on thei r loan practices and pe rspectives. Further, because Community C has no program participants in the Less than 50% category, they are not discussed. The characteristics of Co mmunity C that may explain this difference are highlighted in Appendix B: Descriptions of Communities in Housing Loan Program. The reports of these 14 interviewees br ought forth substantial information on the loan perspectives and practices of this la rgest group of housing loan borrowers. Where the loans constitute less than 50% of the total renovation costs, families employed a variety of, and multiple methods of, asset sale s or adjustments in order to collect the remaining renovation costs. The most common response was that the money was acquired through the sale of their wooden ceilin gs; there were four responses in this category. This response was followed by thr ee responses of borrowing from others and using household [cash] savings. A few (2) limited their renovation expenses by acquiring the donations of labor and/or materials. This effectively kept the cost of the renovation the same, but limited the amount they had to pay out. The following statements were each given by another res pondent: selling livestock, selling wedding

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78 jewelry, borrowing from the bank, borro wing goods from merchants, and selling another house. There is no discernible patter n of combined assets that were sold or utilized in the acquisition of increased financial capital fo r the housing renovations; each household free-listed the assets they sold as they worked to increas e the financial capital available to them to improve their homes. Each household seems to differ in this regard within my small sample. All 14 interviewees consolidated their various, multiple assets into a single, larger asset their improved home. Individuals repo rted a higher increase in non-financial and a very slight increase in financia l gains, at best, with an investment in the home. It was a loan recipient in Community D who reported the only instance of improved financial capital along with social and hum an capital as a result of cons olidating his assets into an improved house. With a loan of E,500, th e family invested their E,500 in cash savings into tearing down the old mud brick home that lacked a bathroom and kitchen, and had agricultural gleanings for a ceiling. The home was rebuilt with bricks and cement. This time, however, plans included a barbershop in the front of the home, which has increased the male head of households income substantially from before the renovations, when he used the old homes entryway, bringing forth an increase in financial capital. Although he admitted that he was worried about being able to repay this loan, with the complete deplet ion of his cash savings, he al so reported an increase in social capital. He said: Fortunately, my relative gua ranteed the loan, which made me feel unafraid to try a loan. The idea of the loan is good. I only have to think about repa ying. If I am helped, I need to help in turn, so I enc ourage others to take a loan too.

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79 For this loan recipient he utilized his relati onship with a relative to cash in on his social capital. Through this relationship he has the resources of a co-si gner that enabled the disbursement of the loan. This combination of relationship and resource constitute an expression and utilization of his social capital for financial ga in. This experience brought his social capital to the fore for a financial endeavor. It also prompted him to help in turn and build up networks and relationships that will assist others to attain the financial resources and capital he has attained and to improve their homes. In this way, the growth of support and encouragement from others, a nd for others joined by the experience of taking out a loan, constitutes a growth in social capital for this household. In terms of human capital, the family reported that before the renovations they had only one source of running water in the house, and no kitc hen or latrine. He reported that the establishment of two kitchens and two la trines, complete with running water, has improved his familys health. The individual/household benefits that we re reported, however, are often at large sacrifices and risks for the participating families. Individuals reported their experiences with often times difficult asset consolidat ion and expensive home improvements, with only an anticipated pay-off in increases in human and social capital. One loan recipient in Community B had renovations that cost E,000. Before the renovations, the house was full of humidity and swelling mud-bricks The latrine was always full to the top because of the high water table in this heav ily-irrigated community. The matriarch of the family reported that once she fell through the ceiling made of agricu ltural gleanings while airing laundry on the roof, and that once th e ceiling fell on her head. The family felt endangered by their housing conditions. Their loan amount was for E,000, the

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80 maximum allowed in the program, which c overed only 6% of th e total costs of renovations. The remaining money came from the sale of another home, along with borrowing E,000 in building materials from a local merchant. When asked about the large amount of debt that was requi red for this endeavor, she said: When people say Oh you have a nice house, I say, It doesnt matter [that I had to become indebted to do it]. Money will come and go and come so you can pay the installment. But what is most important is that you have a clean house, and thats most important. In an important example of acting non-ra tionally, this household expresses using financial and economic capital fo r distinctly non-fina ncial ends. The values that are more important than financial and ec onomic capital to this family are social capital and human capital. Social capital is expr essed here as honor or pres tige by the owner of a nice house. This place of honor or prestige is a resource in relationships with people in the community. That is, the family may have ne w opportunities for networks or relationships with other community residents where they might not have in the past. Human capital is a value for this family because of the ties between cleanliness and good health. Not only is the house clean from diseases and enabling better health, but now it is also safe. Like the family above, most of the loan recipients indicated that repaying this loan, and extending oneself and family deeply in to debt with now more limited assets to draw from in an emergency was difficult, but ultimately worth it for the improved house and benefits in increased soci al and human capital, particularly for their children. All of the households interviewed mentioned at leas t one benefit to thei r children, including improved health with running water and a latr ine, safety from snakes and scorpions, and the installment of electricity and creation of a space to complete schoolwork. In an

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81 explicit investment in cultural capital a nd the education of children, many of the respondents reported that they were selling off and consolidating assets for the home improvements for the expressed pu rpose of their childrens bene fit. One loan recipient in Community B said, We dont look to ourselv es, but now to our children. A loan recipient family in Community A had home renovations that cost E,000. They took a loan for E,000, and made up the remaining E,000 with a loan from the bank, personal savings, and a loan from other famil y. When asked about the large level of debt and the potential outcomes, the family patria rch equated both the risks and the outcomes of this kind of investment in the home and cultural capital with the outcomes of ensuring an education for his daughters: When I sent my oldest daughter to the uni versity, it was the same situation as the house. What are you doing?! said the neighbor s. We gave our children freedom to grow intellectually. We are he re in a rural area, but we think not about eating, but about our children, that they can have an education; a weapon. For these loan recipients, this investment in an improved home was an investment in their childrens health, education, futu res, and overall well-being, even at the risk of their own social marginalization. Although the investment in children wa s a common response, the high rates of reported investments in the advancement of opportunities for girls were notable. Frequently, parents boasted about the achievements of their girl s at the same time as they boasted about their boys. Young girls often spoke with me of their love of school and aims for their futures. For example, two eight year-old girls, Hannan and Hala, described their excitement about what their renovated ho me would bring, We want to have a desk in our room. Their excitement over having a desk increased the girls interest in

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82 discussing school, where Hannans aims are to become an Arabic language teacher and Halas desire is to become a pharmacist. Although the sample size is small and it is difficult to state conclusively, it is plausi ble that this investment in children also constitutes an investment in young women. In these communities where men may have multiple wives, girls are the most frequent school drop-outs, and girls marriage before age 15 is not uncommon, this kind of en couragement for young girls is remarkable. Further, the young women themselves also reported gains in social capital because of the housing improvements. For the family from Community B, the 14 yearold daughter said: Before [the community-wide housing improve ments] it was like a village. Now its like we live in a small town. All the loans have affected children. My friends from [the nearest urban center] only used to invite me to their homes. Now I invite them to mine also. It has changed the way we talk. Of course I would take out a loan too. The young people, such as this respondent, repo rted that social inve stments are important in the development and maintenance of social networks, a particularly salient aspect of young Middle Eastern womens so cial capital (Holmes-Eber 2003) As in the case of this young female, these non-financial outcomes were ultimately worth the loan and the risks that accompany it. By investing in their child ren, the loan recipients were also investing the families human and social capital. These housing loan program participan ts can clearly command additional resources such that a Homes R Us microloa n constitutes less than 50% of the total costs of renovations. However, this ki nd of livelihood strategy inve sting financial capital into non-financial outcomes is perceived to be only feasible with the assistance of the housing microloan program. Many loan progr am participants invoked the metaphor of

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83 yeast or a seed that will developing into so mething larger. For example, the family of the adolescent girl in Community B, me ntioned previously, reported, Most [of the borrowers] come from the middle class, and if I wait until I can pay E,000 E,000 for my house, it will never come. The lo an serves as the yeast to go to that risk. Another loan recipient from the same community said, If [Homes R Us] increased the loan maximum amount, it would be better. Right now, its li ke a little bit of yeast for what were doing. Another, in Community B said, The loan encouraged us to do [the renovations]. The CDO has encouraged us for this. Its a small seed. Some, similar to a family in Community A said out right, Without [the loan] we wouldnt be able to do this. A program recipient in Community D said, We wouldnt think of changing anything without the loans. We woul d just stay as we are. Not one program recipient indicated that the loan was unnece ssary or superfluous. In fact, of the 14 respondents whose loan constituted less th an 50% of the capital for the housing renovations, 50% of them i ndicated that they were only able to complete their home renovations because of the microloan. The other 50% indicated that the loan helped them, either in terms of the capital to invest or in prompting the decision to begin the process of consolidating and repr ioritizing assets. Business Loans As highlighted in Chapter 3, I had ac cess to 16 different business microloan recipients. They were from seven different communities and were both men (6) and women (10), young and old, as well as disabled. They were selected by EDO for interviews because they are representative of business loan participants. Their projects

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84 were all income-generating projects; most commonly business expansion, rather than business start-up with loans for first-time borrowers at E and upwards of E,500 for those who have a history of timely re payment. Within such a diverse group of microloan program participants, finding patterns of loan perspectives and practices in terms of livelihoods proved difficult. However, for this portion of th e results, I focus on the responses of the women, as they constitu te the largest number of respondents, and bring forth the most salient respon ses regarding livelihood strategies. For the women in business expansion, the primary aim of the loan application was increased income. However, they most often reported gains in social capital as the primary benefit of the microloan program. The most frequent gains cited include increased networks, particularly through an expansion in the number of friends and business associates, and improved mari tal relations and relationships. Nearly 50% of the interv iewees believed that increas es in social capital through increased networks occurred as they began developing business associates and meeting others who are involved in the local busi ness community. Before the loan I didnt do anything but sit at home, said Magda, now I meet people and have things to do. Three others reported that they are now acti ve in the community and meeting other merchants as part of their experiences with the microloan projects. For the women engaged in these business microloan programs, although the initial aim was primarily to diversify their livelihoods through increased incomes, the so cial benefits of new or improved networks were the first benefits th ey reported. That is, they saw non-financial benefits and an increase in their social networks outsid e the home by engaging in a financial endeavor.

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85 With regard to success in marital rela tions, the ways in which husbands treated their wives were considered the largest measures of social capital gains. Participation in the business loan program became a resource for women to enhance their relationships with their husbands. Mervet said, Before I opened this project, I didnt know anything about my husbands problems. He would neve r share them with me. Now he does. Fadia too described how her marita l relations are better: He used to travel [migrate] for work. I opened a shop to sell shoes and groceries from the house. Now, he doesnt travel for work. He stays with me and works with me because I have an income. We used to spend his money for the house. But now I have chickens for us so that we dont have to buy a lot of meat. I take the tuna, rice, and pasta from the shop. Now Im responsible for feeding the whole house from my shop. Fadias increased income and responsibility has resulted in discontinuation of her husbands seasonal migration in search of wo rk. Instead, the shop in their home is the primary source of income and of food for th e family. Now the family is able to stay together as one unit, year-round. For Fadia, th e increased resp onsibility to feed the whole house, as well as manage the loan and busine ss, is worth it for the benefit of having the family together as a unit year-round. Despite the growth in social capital that the women reported through new and increased social networks and marital relati ons, they all indicated that their financial gains were small. This was attributed to in sufficient loan amounts for the projects needed to bring forth a significant increase in fina ncial capital. In their cases, the small microenterprises did not bring forth the financial benefits th ey needed even to guarantee their loan repayments, much less excel in bus iness. The women reported that they had to borrow money to make the repayment up to 25 % of the time. Furthermore, most of the

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86 women sought additional loans fr om other sources. Thirty percent of the female business loan program recipients indi cated that they have simultaneously taken loans from multiple sources, and 50% had taken out sequential loans from the EDO CDOs. Their knowledge of microcredit lenders showed them to be savvy consumers. Laila explained her position on what constitutes a good microloan lender: The EDO CDO has strict requi rements. You have to show ID, you have to show that you have the ability to repay, and you need a guarantor. But the other association is doing greater work because they dont ask these things. You only pay weekly there. You pay a smaller amount for a longer period of time, and with a larger interest rate. The shopping for the best microloan lenders in order to acquire the inputs required for a business is a process that Miriam also described: In the beginning, I took the maximum E,500 from the EDO CDO and established the shop. But there ar e other things that I needed to add to the store, and that E,500 wasnt enough money to both establish the shop and to buy them. I had to look other places. I looked for other asso ciations, loans, and buying on credit from other merchants. If you take from other asso ciations, you have to repay here and there at the same time. If you take more money from one location you only have to repay to one place. The CDO didnt ask if I had a lo an from another place, so it wasnt a problem. However, the use of multiple loans and higher le vels of investment in the businesses were also not enough to guarantee fi nancial gains and increases in income. In fact, all the women, except one, reported having difficulties finding the financial capital to pay back the loan at least once per year They detailed five personal budgeting strategies that help keep that number to a minimum. First, some saved a small amount each day. Second, some saved a larger amount each day during the week before the loan installment is due. Third, some required their customers who purchased goods on credit repay in time for her to make her loan installment. Fourth, some strategically timed the purchase of goods for the store that had high rates of anticipated sales in time for the loan payment. Fifth, some

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87 sold chickens and eggs to make up the savi ngs/repayment gap. These were all strategies by which the women reported repaying their loan on time. Their detailed knowledge of the timings of local markets, sources for qui ck profits, and the calli ng on social capital by requiring that those who purchased on credit pay with cash in time for her to make the loan repayment were the strategies that wome n used to shift their credits, debts, and financial capital, while continuing th eir investments in social capital. The rhetoric of business loans, as well as the application process, is projectoriented for financial outcomes. Although some reported a small increase in financial outcomes, a majority reported the greatest benefits of the program were non-financial. Even additional investments in the business endeavors through multiple or sequential loans did not bring forth higher financial ou tcomes. Rather the gr eatest outcomes the women reported were related to developi ng or increasing social networks and relationships, and enhancing marital relations. However, it does not appear that the program participants became disillusioned with the business loans and withdrew from th e program. In fact, the results point to the contrary, as 80% of program participants reported taking out multiple, simultaneous or sequential loans in an effort to fulfill the promises of increased incomes. The power of the promises of increased income through microfinance combined with experiencing successful growth in social capital were e nough to keep women engaged in the pursuit of more loans at higher levels.

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88 Agricultural Loans As discussed in Chapter 3, I had access to eight agricultural loan recipients in one rural and agricultural community, as well as several representatives from the CDO. This community was selected because of its 20-year history with EDO and the congeniality the community has with its large number of foreign visitors. Th e selection of the interviewees was completed in the midst of a very busy harvest season; whoever was able to take time away from the fields was invited. Five of the loan program participants I interviewed were women, and three were men; th is ratio is relatively consistent with the community-wide figures of 23 women participat ing in the agricultural loan programs and 17 men. Four of the five wome n had husbands who were work ing as day laborers in the nearby fields if they are working at all, sarcastically reported one woman. Only one womans household owned land. All of the women took out loans, ranging between E and E,000, for purposes of buying chemi cal fertilizers and pesticides, and alfalfa and wheat seeds. A few used the loan money to rent land and a few began cultivating vegetables for consumption and lo cal sale. As for the men, the loans ranged from E to E. The primary purchases with this loan money were new technologies in cross-bred seed s that have been used in th e area and have demonstrated a higher yield than the seeds these farmers traditionally plant, which they plant on borrowed, shared, or rented land. The men all supplemented this income with day laboring in others fields as well. The loan recipients whose incomes were solely from agriculture were required to pay back one-t hird of the loan every six months for 18 months. This arrangement coincided loan re payment with the harvest seasons. If there were additional, regular sources of income, the program participants were required to pay

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89 back the loan as their regular income would provide for them monthly or quarterly for one year. All repayment terms include a 10% charge added to the principle. The interviews with the women agricultu ral loan recipients, which I focus on exclusively in this section because of th eir responses, demonstrated ongoing livelihood diversification within the hous ehold through the growth of th e tasks they were taking on outside of the home. These task s either had traditionally be en non-existent within their household or the traditional tasks of men. Thes e strategies of live lihood diversification also demonstrated shifting roles for women in the community. Of the women that I interviewed, all of th em reported that th ey were not working outside the home prior to thei r participation in the agricultural loan program. All of the women also reported working outside the home in agricultural endeavors after taking the loan. With the rented, small plots of land, the women were able to plant alfalfa, which serves as a consistent, cuttable source of fodder for livestock. Additionally, the women were cultivating small plots of wheat and/or vegetables for sale or consumption. They used fertilizers and pesticides purchased w ith the loan to increase the yields and therefore, their income, from these small endeavors. When I asked about the benefits that the loans brought to these women, one participant answered: The loan means that we have everything at home. We used to have to buy the alfalfa fodder, then feed the animal to get the milk to make the butter to sell it for food for the children. Now, because we have the al falfa fodder and vegeta bles ourselves, its all free at home. Before the loans, we used to have to go out to buy what we need. Now we dont. Everything we need is now available at the house. The loan is like a job opportunity and employment.

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90 All of the women expressed thorough know ledge of this job opportunity and their employment as smallholders. Con ceptualizing it as employment outside the home with benefits inside the home enabled the women to take on additional tasks and work outside the home, without fundamentally altering the household divisions of labor. Women detailed the costs of alfalfa seeds a nd cultivated livestock feed, and knew the going market prices for what they were se lling; they exhibited knowledge that is consistent with entering the market, or engaging in their employment. Alfalfa, for example, is a crop that grows continuously and is simply cut for fodder, thereby providing a consistent source of househol d expense decrease. These out-of-home activities that resulted from participation in the loan program also benefit the women within the household, as sh e is now more efficient and cost-effective in her management of household tasks. In this cas e the outside labor engagements reinforce womens roles within the home. The women were aware of how tenuous this situation was, and were under large amounts of pressure to succeed at both their microprojects as well as maintaining the home. Three of the five wome n indicated that they have had sick children and animals whose care has required the use of additional income. These rather frequent occurrences prevented the women from being able to pay their loan installment that time. Between January 2005 and May 2005, three women indicate d that this had happened two or three times, or roughly 50% of the time. Rather than borrow from friends or family or sell assetsto meet their expenses and make the loan installment, as in th e case of business and housing loans, the women further individualized their loan management and asked for a one-month extension from the CDO. In all cases, the women reported that they had

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91 received the extension, and employed money saving strategies in the home to make up for the increased expenses. One strategy the women a ll agreed upon as an eff ective way to limit household expenses is by limiting food intake. One woman said: Food is the first expense that gets cut if the money is short. Instead of making a meal, I make fried potatoes. Instead of buyi ng meat, I can kill a chicken in our house. We make things that are cheaper to eat. From this small sample, it is difficult to understand how pervasive compromised nutritional status became as a result of microfinance participation. It is also difficult to know how severe the food insecurity became fo r the participants. However as an agreedupon means to limit household expenses by all the female interviewees in the agricultural loan program, this indicates that this strategy may be prevalent among a much larger group. If that is the case, it put s the women in a very tenuous position. That is, it pits their dual requirements of succeeding at the microprojects and managing their household against each other. Performing well in one requires the sacrifice of the other. Despite this difficult position, the women a ll reported never borrowing or collecting money from any source other th an their own incomes in order to repay the loan. One explanation for this is that in this co mmunity there was a stronger emphasis on the individualization of managing household budgets. This was evidenced by the reports of fear of humiliation and shame as a result of not being able to pay ones loan. As one woman said, I was embarrassed to go ask for money to borrow from [family and friends]. If I went to someone and asked for E and they say no that they dont have it, I get embarrassed. Another added, Its li ke a psychological burden. In case we cant repay [the CDO and loan committee] have to send a warning paper th rough a lawyer. Its

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92 embarrassing. Everyone will be like Oh Hanna n, eh, eh, eh [disapproving sound], she cant repay her loan. For these women, their roles in relation to the household were expanding in size and form as a result of the microloans, which were serving to reinforce traditional gender roles with increased pressure to manage e fficiently microprojects and the home. This was also occurring at a time when there were diminished supports for short-term borrowing from family and friends, and a need to fu rther individualize thei r loan and project management. It is difficult to know how the experiences of women in the agricultural loan program compare to those of men. Given my small sample size, additional research would be necessary to understand the experi ences of women more fully, to understand the experiences of the male participants, and then to compare the two. Summary and Discussion Based upon the results from this study, it is clear that neoliberalism is penetrating all aspects of the microloan programs. Th e growth of neoliberalism through EDOs organizational structure and development stra tegies for 50 years, and specifically the investments and expansion into microfinance programming for over 20 years, constitute institutional-level responses to neoliberalis m. In light of the enveloping nature of neoliberal logic throughout th e institution, it is interesti ng to note that microloan recipients are both accepting it and reproduci ng it, often in ways that defy their own experiences within it. The continued participation in microfinance, as evidenced by repeated and multiple loans, is remarkable considering that few have achieved the increased economic and financial gains promis ed by neoliberalism and microfinance. In

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93 fact, in the case of the agricultural borrowers women have experienced a retrenchment of patriarchal ideologies rather than the em powerment and social growth promised by microfinance and participation in the market. The centrality of money became an impor tant focal point in understanding the logic of microfinance. Money has become the mechanism by which both EDO and the program participants aim to improve their ow n position in their respective contexts. EDO has attained a larger budget, which serves as a significant marker of institutional growth and performance. Loan program participants, however, do not have the luxury of identifying significantly increased incomes as their marker of growth. Rather, nonmonetary gains such as a larger house or in creased social and huma n capital sufficed as the marker of benefits or success. It is by conceptually conflating financial and nonfinancial capital gains that loan recipients ar e able to go beyond tole rating rhetoric that does not come to fruition, and justify continuous participation in the program because the gains are then consistent with those promised. Many of the results examine this relati onship between financial and non-financial costs, benefits, and transfers between. That is, financial assets a nd non-financial assets are able to be acquired, sold or released, consolidated, substituted, clustered, accessed, and traded (Lont and Hospes 2004). Rather than a dichotomous relationship, the embedded fluidity with which they were vi ewed as compatible and interchangeable suggests that microfinance in this context is successful, however. By successful I mean that the program recipients are able to use the loans to mobilize their assets for whatever ends they find most suitable to their own positions and livelihood securities,

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94 particularly those ends th at are non-financial, within the limits and context of neoliberalism and microfinance. Ultimately, EDO is complicit in fostering both the conditions for the entrance of neoliberalism and its widespread growth through the mechanism of microfinance. Program participants responded to the increased pressures of their new obligations to the CDOs in loan repayment by conflating financ ial and non-financial gains. This enacted a broader definition of success so that their own practices and experi ences fell inside that definition. It is by perceiving investments into non-financial gains as valuable and worthwhile, as valuable and worthwhile as financial gains in fact, that livelihood strategies altered in new ways that may or may not secure against vulnerabilities in the long run. Certainly EDOs role in creating the need for microfinance, as well as the mechanisms for its growth and expansion al so indicates that EDO is complicit should those new livelihood strategies not secure against the vulnerab ilities as, once again, neoliberalism and microfinance have promised.

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95 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS Summary of Results Through the internship portion of this pr oject, I had the opportunity to become acquainted with the publications and policies of EDO in their microfinance programs. It was through the work requirements of this internship experience that I was able to examine the relationship between EDOs publications, the work that I was completing in their service and the responses of the interv iewees, with regard to neoliberalism and microfinance. This work, although exploratory in nature, represents the beginning of the kind of research that app lied anthropologists working in the growing field of microfinance can contribute to the discussi on, including participant observation that reveals organizational experien ces in a neoliberal contex t and ethnographic evidence on the experiences of program participants. Methodologically this research project emerged from the work requirements of the internship and utilized ar chival research, participant ob servation, and interviews with staff and program participants. The research ai ms were only achievable in Egypt at this time because of the work arrangements that I had with EDO and Homes R Us. In this way, this study also represents the kind of re search arrangements and contributions to the literature that anthropologists can make in da ngerous or difficult fields of research. Given the world-wide and pervasive anti-American sentiment that U.S. anthropologists may experience during their fieldwork, this type of research projec t enables the anthropologist to engage in ethnographic re search in areas that may otherwise be inaccessible.

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96 As described in Chapter 4, the ne oliberal-friendly publications and characterizations of EDO as a compassionate, yet accountable and eff ective administer of development programs, particularly microf inance, go beyond lip-service. The historical trajectory of both EDO and their microfinan ce programs progressed through phases that more closely resemble Northern-based NGOs, with high levels of dependency on external aid for institutional performance and sust ainability. Furthermore, elements of neoliberalism can be found in the microfin ance programs designed as demand-driven and implemented through decentralized channels with those educated into audit culture (Shore and Wright 1999). This process passes on the pressures to perform in accordance with the demands of accountability and goalorientation to the microfinance program participants. The microfinance programs of EDO and Homes R Us do not translate into fulfilled promises of increased incomes, direct or indirect, on the parts of the participants, however. With limited increases in financ ial outcomes, loan participants reported diverting their investments into social cap ital and human capital, and also reported acquiring larger gains and outcomes in these non-financial areas. Rather than becoming disillusioned with microfinance and ending their participation in the program, the conflation of financial and non-financial outc omes legitimated claims of success and benefits, which perpetuated the partic ipation in microfinance programs and the participants reproductions of the rhetoric. In this way, the rhetoric of neoliberalism and microfinance proved compelling and powerfu l. As Bourdieu (1998) indicates: For neoliberal discourse is not like others it is a s trong discourse which is so strong and so hard to fight because it has behind it all the powers of a world of power relations which it helps to make as it is, in particular by orie nting the economic choices of those who dominate economic relations and so adding its own specifically symbolic force to those power rela tions (Bourdieu 1998:95).

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97 The force of the world of power relations both economic and symbolic is particularly difficult to evade, especia lly when couched with in the ideology of beneficence. Appeals to donor beneficence ar e well reported within EDOs publications and apparently well received, if one uses their levels of ex ternal funding as a measure. However, Eversole indicates th at this laudable goal of helping the poor could be achieved without the stigma of patern alistic giveaways (2003:181). In addition to the paternalism inherent in the Northern dona tions to microfinance program s, Adam Smith characterized those actions in the capitalist system that ap pear benevolent as dis guising self-interest: It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, says Smith, but from their re gard to their self-interest (Heilbroner 1999:54). Keeping in mind that the donors do have self-interest in contributing to microfinance programs, including the continued growth of capitalism, increasing the rates of consumption and the opening of new markets, their claims of beneficence fail to completely disguise their self-interested pursuits. Beneficence, with the promises of wealth creation and social welfare achievement, constitute the mechanism by wh ich microfinance enables the reimagined local possibilities (Ros eberry 1996). That is, locally c onceptualized po ssibilities now include the idea that a small loan, alongside edu cation, can achieve a sim ilarity in life and lifestyle with the donor elites. However, th e program participants experiences showed that a $100 loan simply cannot reproduce the incomes of the elites. In fact, this study found that financial returns from small loans were rarely reported. As Roseberry (1996) argues, the construction of this reimagined reality is enough to engage those exploited

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98 by the illusory reality the ideology creates. Roseberry also reminds us that, men as they imagine themselves and as narrated or imag ined by others could not be separated from men in the flesh (1997:29). International donors despite self-characterizations of their aims as altruistic, are paternistically catalyz ing the reimagining of local possibilities in such a way that microfinance program participan ts continue to strive to achieve the ends promised to them. NGOs are also not immune from the compelling discourse of neoliberalism, or opportunism and self-interest (Meyer 1995). Mi crofinance lending institutions, such as EDO, are culpable in the promotion of ne oliberal logic by bypassing the state for the acquirement of capital and in their utilization of the knowle dge and discourse put forth by consolidated internationa l powers (Briggs 2001). Ironica lly, through demand-driven microfinance policies, a decentralization of administration, and a heavy reliance on external funding, EDO has removed themselves from their responsibility in ensuring that the livelihood adjustments made by the program participants secure against long-term vulnerabilities. By conceptualizing the dr ive for microfinance as coming from the participants themselves, EDO is enacting a passing the buck framework; it is a diversion of responsibilities. That is, should the livelihood adjustments of the program participants not secure against long-term vul nerabilities, EDO will be able to point to both the high demand from the participants and the rational, economic ideals required by the funders as the responsible parties. EDO b ecomes, in this scenario, a public service contractor that simply matches the demands of the local communities with the supply from the North (Korten 1990). With EDO s reliance upon Northern funders for its existence, EDO only needs to invest its time a nd energies into promoting itself as worthy

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99 of further donations and provide evidence of this in terms the donors require, such as institutional performance and participation levels, rather than investing that time and energy into fulfilling the pr omises of neoliberalism a nd microfinance to those participating in its communities. As Rahman (1999) points out, if the NGO is required to choose between contradictory pos itions of institutional fi nancial performance or the objective of effectively serving the poor, it is likely the donors will sacrifice the latter, especially when the donor and international development communitys attitude and support reward the former (152). There are, however, some serious ethical questions raised by EDOs practice of employing local microfinance borrowers resour ces in the service of their institutional sustainability. EDO uses the participants time, financial and non-financial resources, and their pre-existing social networ ks to enable the participants to enter successfully and perform in the microfinance program. EDO also utilizes their partic ipation in order to create and justify statements to donors of lo an portfolios and repayment levels. Further, EDO and Homes R Us are taking advantage of the inability of the majority of microfinance participants to access credit elsewhere in order to build up their microfinance participation levels, which in tu rn is used to bols ter their annual budgets, meet their institutional development goals, and maintain organizational sustainability (Lazar 2004, Rahman 1999, 2004). According to the 2004 Annual Review, at least 37% of the years expenditures went out in the form of microloans fr om both the Small and Micro Enterprise Sector and the Development Sectors combined. With such a large percentage of recent expenditures in the form of loan disbursals, it is not surprising that EDO is working so hard to secure external aid and growing micr ofinance programs.

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100 Connections and Contributions to the Literature As discussed in Chapter 2, neoliberalism and microfinance are compelling logics that are theoretically, rhetorically, and programmatically uph eld as the greatest hope for poverty alleviation. The logic of neoliberalism indicates that by decentralizing and individualizing economic behavi ors, financial and non-financ ial aims can be achieved. With the win-win of microfinance prodigi ous within the development and economic literature, it is difficult to fi nd fault with, and compelling case s against, such kind of logic and theorizing. However, when examined empirically, microfinance raises many more questions than it answers. Within my study, microfinance is not achieving the ends of increased financial benefits that it prom ises on a broad basis. However, what microfinance is accomplishing is a reconceptu alization of the succes s and benefits of the program. Microfinance is a tool by which program participants are reevaluating their non-financial assets and adjusting them in acco rdance with what they believe to be their best security against future vulnerabilities. In lieu of fina ncial gains, non-financial asset building became a livelihood strategy that ma de microfinance programs beneficial and even successful. Non-financial asset buildi ng also became a way to make participation valuable for both EDO and its institutional performance, and also for the program participants as they sought to make thei r participation meaningful for themselves. The means by which we can reconcile both reports of contentment with the microfinance programs and the lack of financial outcomes is through an examination of social capital. It can be argued that social capital is the primary capital of all capitals. It is the most serviceable of all capitals and the one that people would most be interested in securing and growing (Bebbington 1999). Social capital becomes a necessary antecedent

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101 to financial capital, as it is contains the networks of trus t and accountability required for the extension of financial capital. That is, within microfinance and microcredit arrangements, without social capital there is no access to financial capital (Bebbington 1999, Purcell 2000). We can presume that this assu mption is true for this study as well, as all the loan participants in this study re quired a co-signer in the formal application process, and I did not meet anyone who repor ted not having a co-signer. Further, they were all required to be a person of good repute; a social position that embodies the webs of social positions and power relations in the community. Although microfinance explic itly aims to address th e needs and desires for increased enterprises and incomes that may emulate those of the West, as Dhaouadi (2002) argues, they cannot be removed from the desires for increased Western sociocultural influences including language, knowledge, and science. This is one way in which we can understand the interviewees reports of contentment, satisfaction, and success in their microfinance program participation de spite the absence of increased financial outcomes. That is, even though microfinance failed to bring forth th e higher levels of financial outcomes, the reimagining of non-financial possibilitie s, including raised levels of prestige with the acquirement of a la rger house, increased social networks with a new business, and increased efficacy with in household tasks comprised sources of reported satisfaction for the borrowers. We know from other studies of local financial arrangements, such as rotating savings and cr edit associations, that the credit programs, as a process, also serve to solidify, perpetuate and even expand such networks of relationships in the disinteg rating context of neoliberalis m (Purcell 2000:148). That is, social capital begets social capital, even in a context that prioritizes financial capital. In

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102 this study as well, borrowers can and do prio ritize social capital e nds and enact social capital through financial mechanisms when faced with capitalist economic rationality, individualism, alienation and anomie (Purcell 2000). While microfinance donors and EDO focus on the primary function of microf inance and economic ends, the participants themselves shifted the focus on microfinance and human and social capital ends. This reimagining and reprioritizing of non-financial po ssibilities, and providing the means by which to achieve them, constitutes the microfinance program meeting a need. This need, however, was often met at a great risk. For example, by consolidating assets into one house that is difficult to partition or segment in times of need also ra ises the participants vulnerabilities. A fire in the home could seri ously and devastatingly impact the families livelihood security. For female borrowers, taking on the microloans and the often difficult repayment conditions rendered many of their families subject to compromised nutrition and food security. Although human and social capital gains are not the primary aims of the program, their outcomes despite the risk s and new vulnerabilitie s are sufficient to render the program participants satisfied with the program and their continuance likely. I argue that additional res earch is necessary to confir m these results, however. My position as an EDO and Homes R Us intern brings into question the interviewee responses, as they may be skewed in a manner that is more positive than the respondents actually believe. In that case, this study may be considered a best case scenario, which is remarkable in its own right. The idea that mi crofinance projects, as revealed in the best case scenarios, are not fulfilling their promises to increase financial gains indirectly or directly potentially undermi nes the nature of the projec t itself. However, if the economic and development litera ture on microfinance continues to fail to reveal this, the

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103 unrestricted growth of microfin ance, and by extension neoliber alism, can be expected to continue and grow in these areas. Microfinance is the development initiative in 2005 and will continue to be well into the twenty-first century (Rahman 1999, United Nations Year of Microfinance http://www.yearofmicrocredit.org ). Because of the sizeable amounts of attention given this strategy for poverty alleviation by outside examinations a nd the particularly enthusiastic responses within the developm ent and economics literature, more attention needs to be given to the actual experiences of the program participants. Anthropologists are in a particularly unique pos ition to bridge the gap, and re veal the points of disjuncture between the external examinations based in rhetoric and theory, with the actual experiences of microfinance progr am participants, as I have at tempted to do in this study. In this way, this project represents the ki nds of research that anthropologists can undertake to address policy issues, despite the restraints and difficulties inherent in studying NGOs and international development. Applied anthropologists, in particular, are in a unique position to contribute to the microfinance discussion, as they aim to understand and inform contemporary issues and help to develop, guide, and correct policies and programs that impact contemporar y populations. Applied research in a multisited ethnography (Marcus 1995), studying up (N ader 1972), relatively safe research in dangerous fields, and the anthropological study of microfinan ce are all possible through such arrangements as my internship. It is because of the knowledge that micr ofinance is not diminishing and is only increasing in its global reaches, that anthropol ogical studies be considered in light of the larger, global phenomena at work. Neoliberal economic policies, and all the attendant

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104 changes they bring, are continui ng. Microfinance is poised to become either a tool of the neoliberal economists who aim to bring about new reaches of global capitalism, or an effective tool for poverty alleviation. If the la tter is the aim, revea ling the experiences of program participants is vital. Recommendations The more typical microfinance policy r ecommendations made by anthropologists such as Rahman (1999) include ensuring that loan amounts do not exceed debt capacity, not engaging in microfinance at the expense of social and community development, and adjusting rigid and fixed repayments into project-based repayments schedules, all of which EDO is already working on. Therefore, I do not offer the typical microfinance policy recommendations. Rather, I suggest areas for enhancing the supports and programs in non-financial areas that result fr om participation in microfinance programs. The reality is that donors, who are ensuring the con tinuance of microfin ance, are acting in accordance with neoliberal ideologies and pr actices. With the growth in microfinance, NGOs in a similar position as EDO are implementing the programs in accordance with the stringent donor requirements, which do not appear to be ebbing anytime soon. That said, EDO can and should take appropriate meas ure to see that the fallouts from their microfinance programs are minimized. There are four ways by which EDO can enhance safety nets at a time when they are being systematically removed elsewhere. First, EDO should provide loan forgiveness for those who lose when entering the market. Second, EDO ought to bolster non-market-driven programs and develop programs for the enhancement of social and human capital that do not require financial inputs. Third, EDO

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105 would benefit by introducing qual ity of life indices for meas uring program success rather than loan portfolios or participation levels. Fourth, EDO should progressively pursue studies and methods beyond those required by program reports to donors including quantifying participation that both reveal the experiences of the program participants and can provide a feedback mechanism to alter programs accordingly. They are each explained in detail below. As described in Chapter 4, some communities are providing small grants in order to assist those who cannot repay. They are ab le to finance this by utilizing the capital gained from the additional 10% charged on top of the principle to borrowers, which comes back to local CDOs, EDO, or Homes R Us. Despite these measures taken to help those who cannot repay, there was no discussi on of what to do when businesses fail or agricultural yields significantly diminish. One years drought, a fire in the store or home, or a virus killing the wheat or poultry would be enough to push most of these microfinance participants into total loss. The nature of business, loans, and credit are risky. Despite the risk minimization that occurs during the project planning and application process, there are still many variables outside the borrowers control. Further, for the participants whose endeavors fail, the loan still needs to be repaid. In a telling moment, the women business loan participants reported that they knew of two businesses that failed, and attributed the failure to the borrowers lack of adequate training. Regardless of the levels of tr aining, education, or inculcation to neoliberal practices, there will continue to be businesses that fail for reasons outside the borrowers control. Because of the inability to guarantee busine ss success, I recommend that for the cases where participants lose by joining th e market, their loans be forgiven.

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106 This does constitute a reinvigoration of the social service provisions that EDO has aimed to minimize. However, when combined with the latest organizational aims of advocacy for local democratization effo rts and community-wide infrastructural strengthening, the reintroducti on of social service provisi ons and safety nets do not constitute a contradictory approach. In fact the dual combination of spurring residents onto advocacy and providing some of the few remaining safety nets when either the markets or the state fail to come through w ith their promises, would constitute an innovative approach to local developmen t. It would ultimately form a more comprehensive base of services and program s, and provide more options to many who otherwise lack them. We have yet to discover if the livelihood strate gies employed by the microfinance program participants will actually secure against their vulnerabilities in the long run. Should the strategies the partic ipants employed through the market-led approaches implemented by EDO and Homes R Us prove to have enhanced the program participants vulnerabilities rather than secu red against them, the organizations would be in a position to protect those participants. Secondly, because the primary positive re sults the interviewe es reported were non-financial, the bolstering of programs that aim for the enhancement of social and human capital, and do not require financial inputs, would be of benefit. It is difficult to justify the requirements of fi nancial inputs if the program participants outcomes are nonfinancial. There are more fitting and appropriate means by which human and social capital enhancements can be reached, which do not require the financial investments of those on the cusp of becoming the poorest of the poor. These kinds of programs would consist of non-market-driven programs consti tuting, again, more of the social service

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107 provisions of EDOs past, and may include programs in education and health. Admittedly EDO already has vast numbers of programs in these areas. For example, EDO has been providing literacy classes for over 50 years, and health classes often address difficult subjects such as female genital modification. However, given the prevalence of neoliberal requirements in the microfinance programs, an examination into these neoliberal requirements in the non-financial programs woul d be a strong start to better orienting these programs. Even if a program does not ha ve an explicit financial input requirement, it would be important to know if individuals are able to achieve increased human and social capital in an environment so ridden w ith neoliberal ethics. With the non-financial aims made explicit, these programs would provide a more candid picture of the program participants aims and their congruence, or disjuncture, with those of the donors. Ultimately, it does seem both feasible and appropriate to enhance programs that foster human and social capital growth without requiring financial inputs, if non-financial gains are the program participants ideal ends. Thirdly, introducing quality of life indi ces for gauging program success would be a more realistic measure of the impacts of the microfinance programs than the more predominant use of loan portfolios and repayment rates (Abugre 1994). One may be able to gauge whether or not a program has been completed in accordance with predetermined standards by ascertaining loan portfolios, re payment rates and partic ipation levels. Those economic measures, however, reflect the perfor mance of the loan rather than the actual impacts of the program. Participation levels may tell you about the quantity of participation but ultimately fail to illumi nate quality of participation. Gaining an understanding of the impact of the microfinance programs on the overall quality of life of

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108 those who participate, however, is a mo re effective and accurate measure of the programs effects. As demonstrated in this thesis, the baseline data required by the donors does not always depict the experiences of the program participants. In order to do so, the measures by which the programs are assessed must be changed. Because most of the program participants recognized higher out comes in non-financial areas, only a more inclusive examination of the loan program w ill begin to fully capture the outcomes and to convey their importance to both EDO and to their donors. Finally, EDO should pursue additional studies and methods beyond those required by program reports to donors that reveal the experiences of the program participants. As a foreigner in what was potenti ally a best case scenario, I was able to learn much about the ways in which EDO a nd Homes R Us were and were not meeting the needs of the program partic ipants. If I was able to gain such knowledge in a short period of time with limited access, it is pr esumable that more applied anthropologists would be able to attain similar types of info rmation in other program areas. Further, the work of additional anthropologi sts particularly Egyptian anthropologists who would not be limited in access and mobility as I was would be a first step towards informing EDO of the actual experiences of th e program participants. Anthropological studies would also bring forth the strengths and weaknesses of EDOs policies. Anthropologists would inform EDO policy-makers and program designers in such a way that enables an altering or modification of the programs accordingly. Ultimately, I am not advocating for the dismissal of the microfinance programs by EDO or Homes R Us in their entirety. There were stories in which incomes increased, and the overall tenor regarding the program was quite positive. It is difficult to say that

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109 someone who is no longer in poverty housing shou ld not have had that opportunity to get out. EDO and Homes R Us are doing good wor k, considering the powerful and stringent constraints of the neoliberal donors. EDO did not become the largest Egyptian development organization by simply catering to donor requirements without regard for the participants. However, what I am advo cating for is a more inclusive and organic approach to local experiences and needs. In particular, I mean those needs that result from participation in the programs that the donors consider, from their self-interested positions, to be best for the participants. By enlarging the space give n to the program participants actual experiences, through the programmatic and methodological innovations describe d above, EDO would be able to continue alteri ng their policies for microfinan ce and community development programs. That is, they would still be able to meet donor requirements, yet could also become more effective in enabling program participants to achieve the ends promised them, or to assist them when they do not co me to fruition. With a rapidly shifting context for economic development programs such as microfinance, providing not only the means to enter the market and succeed but also the safety nets should they fail, may prove the best arrangement for both EDO and the pr ogram participants in the long run.

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120 APPENDICES

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121 Appendix A: Survey and Community Profile About the community 1. Name of community 2. Number of people in community 3. Percent of Muslims Percent of Christians 4. Rural or urban community 5. Services available in community Health Centers and Clinics Primary Schools Secondary Schools 6. Please describe the uni que situations and condi tions of the community: About the CDO 1. What year did the CDO begin working with CEOSS? 2. Is it registered with th e government? If so, when? 3. What is the area of specialty for the CDO? 4. How long has the CDO been administering loans in the community? About the Loan program 1. Was the loan program part of capacity building for the CDO? 2. What are the primary object ives of the loan program? Housing improvements Barn/Stable improvements Consumption Income Generation Other ____________________________________ About the Loan Program Applicants 1. Number of people who have applied for a loan and were accepted Number of females ______________ Number of males ________________ 2. Number of people who have been gr anted a loan and accepted the money Number of females ______________ Number of males ________________ What are the lowest and highest amounts given? What is the average loan amount? 3. Number of people who have been gran ted a loan and not accepted the money Number of females ______________ Number of males ________________ 4. Number of people who have applied for a loan and were turned down Number of females ______________ Number of males ________________

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122 Appendix B: Descriptions of Housing Loan Communities Community A Community A is a small, agricultural community of 9,000 people on the banks of the Nile, 75% of whom are Mu slim and 25% are Christian. It is home to a missionary family of U.S. citizens from the Mennonite C hurch, which is a rare occurrence in these communities that are so highly watche d by the government. Community A is approximately a 25 minute drive from an urba n center. EDO has been working with the CDO in this community in development a nd capacity-building sin ce 1992. Homes R Us began funding housing loans through the CDO in 2002. Since then, 325 homes have been built or renovated and E,500 ($136,083; at the time of research, $1.00 = E.0) have gone out to the community in revolving housing loans. The CDO reported that E,500 is the typical loan size, which is consistent with my interviewees. Community B In addition to the proximity of highly fertile agricultural fields, Community B is a community of 25,000 people that is approxima tely a 30 minute drive from the nearest urban center. 70% are Christian and 30% are Muslim; a Christian majority is not unusual in rural areas of Southern Egypt. EDO ha s been working with the CDO since 1980 in community development program implementati on and capacity-building. Activities in the community that are the work of the CDO include health and literacy classes, home economics classes, and income-generating trai nings and education. Homes R Us started in this community in 2000. In the histor y of Homes R Uss financial support to Community B, at the time of the interviews 537 homes had been built or improved with E,500,000 ($416,666). Community B constitutes nearly 11% of all homes that have been built in Egypt by Homes R Us, and 25% of those built in 2002-2004. The CDO reported average loan sizes are E,500. Howeve r, all of my interv iewees had taken out the full amount possible, E,000. Based upon a comparison and consultation with a Homes R Us staff person who also completed a series of case studies in this community and had figures similar to my own, my figures are typical of the homes in the community. Community C Community C is one of the communities that Homes R Us works in that is not also engaged in EDO CDO capacity-buildi ng. Rather, Homes R Us employs a staff person, who works out of a local developm ent organizations office, to oversee the implementation of the loan program and collec tion of repayment. Community C is a very poor area characterized by a l ack of irrigation and highly infertile, sandy agricultural fields. There are approximately 100,000 people spread out over a large area. 60% are Muslim and 40% are Christian. The community is a one-hour drive from the nearest urban center. Homes R Us began working in the community in 1999, and has provided loans that have been used in the building of 790 homes. Although the Homes R Us staff person informed me that the typical amount loaned is E,000, all my respondents had loan amounts of roughly one-half that size. One possible explanation is that in my collection of case studies by Homes R Us I was required to complete seven

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123 Appendix B (Continued) interviews that day, plus an interview with the CDO. With the large community spread out, the weather quite hot, a nd the community str eets barren and sandy, the Homes R Us staff person insisted that we remain close to her office in order to take breaks as needed. She assured me that the loan recipients were still typical program participants, despite this discrepancy. Without more interviews, how ever, it is difficult to know for sure. The CDO is scheduled to begin environmental programs and literacy programs with EDOs assistance later in 2005. Community D Community D is another community in which a Homes R Us staff person implements the housing loan program and utilizes office space in a local CDO. Community D is a small community of 12,000 people, 90% of whom are Christian. Agriculture is also the primary source of in come, complemented by small crafts. There is an onion processing plant that dries sweet onions for export, which is the largest employer in the area. It is approximately a 20 minute drive from a small urban center. Homes R Us began working in Community D in 2001. Since its inception in this community, Homes R Us has built or renovated 420 homes. E,000 ($125,333) have gone out in the form of loans, and because of the 10% adjustment for inflation that Homes R Us charges, E,122,000 ($187,000) have come back in and are being relent into the community. Homes R Us has plans to donate an undisclosed amount of the money gained from the 10% additions to loan principals for the re novations of two homes in the community where the residents are unable to repay and in need of safe homes. The Homes R Us staff person reported that the average loan size is E,000, and the most common loans fall into the E,000 E,000 range, which is reflected by my interviewees.


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Microfinance in neoliberal times
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ABSTRACT: Development non-governmental organizations (NGOs) are under immense pressure to adhere to the programs and methods put forth by external donors, particularly if the NGOs rely on the funding to sustain their own organizations. Those external donors that represent neoliberal ideologies and enforce neoliberal practices, particularly in the area of microfinance, maintain a power that most recipient NGOs cannot evade. This becomes a difficult position for the NGOs to navigate as they try to accomplish good work in their communities. This research project is a study into the experience of one NGO, the Egyptian Development Organization (EDO), as it implemented microfinance programs in rural Egypt. The study revealed that EDO maintained an overall, structural orientation towards foreign donors and audiences, and employed discourses that appealed to neoliberal ideologies and practices.For the NGO, this orientation went beyond an accommodating lip-service and resulted in the institutionalization of demand-driven microfinance. Additionally, through decentralization EDO transferred risks and responsibilities to a more local level, and required the infusion of neoliberal ideologies into the practices and actions of microfinance borrowers even before their loans were disbursed. This thesis argues that a point of disjuncture occurs as the context of neoliberalism, specifically the aims of material accumulation through the mechanism of microfinance, meets the program participants practices of the development and preservation of social and human capital. This study found that microfinance program participants are both accepting and reproducing the rhetoric, often in ways that defy their own experiences within it.Their high rates of participation in microfinance, as evidenced by repeated and multiple loans, are pronounced considering that few have achieved the increased economic and financial gains promised by neoliberalism and microfinance. By conceptually conflating financial and non-financial capital gains, loan recipients were able to go beyond tolerating rhetoric that does not come to fruition, and justify continuous participation in the program. By perceiving investments into non-financial gains as valuable, the participants altered their livelihood strategies new ways that may or may not secure against vulnerabilities in the long run.
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