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Alex Counts is the President and CEO of Grameen Foundation and a biographer of Muhammad Yunus, the Grameen Bank founder. Given his position in the large network of Grameen, he holds sway in the microfinance world and beyond. So when he publishes an attack on independent research on his blog, I take to represent a reasonably broad antiscience sentiment in the microfinance industry.
In his article, the head of Grameen Foundation laments the emergence of “a new generation of researchers” rising to “debunk the myth of microfinance being an effective tool to fight poverty” (I consider myself part of this generation, but I’m sure Counts doesn’t mean me). He writes about a “conflict” between researchers and practitioners, questions whether practitioners are to blame for not having brought researchers into the fold, says researchers have supported sensationalist reporting against microfinance, and claims they have not tried to contribute (enough) to poverty alleviation. Then he delves into an elogy for Tim Ogden, head of the Financial Access Initiative at NYU. The overall message – research results which don’t support microfinance should be disregarded; the title-giving Haiti cue is a bit of a red herring – is akin to a call to sticking one’s head in the sand when threatened.
The ostrich, unlike the microfinance CEO, is falsely believed to stick its head in the sand when it feels threatened.
Image: Bob Jagendorf/Wikimedia Commons CC BY-SA 3.0.
I’m writing this to respond to Counts’ piece and his core request “that we get beyond debates about “whether microfinance works” to more fruitful and action-oriented dialogues about “how it can work better”.” The following is my small defense of academia. Read the rest of this entry »
Tom Heinemann’s film “The Micro Debt” has received a lot of flak from the microfinance community. The documentary, posing a sharp critique of microfinance, features interviews with microfinance borrowers, proponents and critics on three continents. It deals particularly critically with the work of Muhammad Yunus and the Grameen Bank in Bangladesh. One response to Heinemann’s criticism has been the production of counter-counter-knowledge (against Heinemann’s counter-knowledge), promoted via Youtube, courtesy of the world’s most trustworthy PR company. Another has been to draw into question Heinemann’s integrity as a journalist, referring to the film as “grossly inaccurate”, “false and defamatory”, and “digging for dirt”.
But “The Micro Debt” isn’t going away. It has been shown in over 14 different countries and awarded numerous prizes. Most recently, last Friday it was awarded the Lorenzo Natali Journalism Prize Grand Prize, a prestigious award for journalistic work granted by the European Union in co-operation with Reporters Without Borders. “The Micro Debt” was selected out of a field of 1,300 contenders and commended as “a shining example of world-class investigative journalism, challenging entrenched assumptions”.
Courtesy of the prize, “The Micro Debt” is now also viewable online.
Part 1; Part 2; Part 3; Part 4
Tom Heinemann was vilified for not whistling everyone else’s tune; now, the Lorenzo Natali Prize is rehabilitating the film and the filmmaker. It shows that telling an unpopular story and confronting received wisdom is still what investigative and independent journalism is about. Conversely, what (if anything) has the world learned from microfinance promotion films like “To Catch a Dollar“? As for the claims of factual inaccuracy levied by Friends of Grameen against Heinemann, a short follow-up segment, to be aired early next year in Norway, may bring more clarity; watch this space.
(phil)
Few documentaries in the past years can claim to have had as much impact on transnational development as The Micro Debt. Tom Heinemann‘s documentary film, produced for Norwegian public broadcasting, has contributed to a wave of critical reasoning about microfinance, but also to the axing of Grameen Bank’s founder, Muhammad Yunus. While Heinemann wasn’t out to harm Yunus, the documentary’s fallout (as well as the Indian microfinance crisis) was an opportunity for politicians in Bangladesh to remove a weakened Yunus from office.
All in all, The Micro Debt doesn’t shed a good light onto microfinance, and in return has come under fire from the microfinance community, an epistemic community which doesn’t take criticism well. Grameen Foundation in particular has mounted an organised attack on Heinemann and his film, engaging PR firm Burson-Marsteller to disseminate counter-claims and draw into question the film’s integrity. But The Micro Debt is becoming increasingly difficult to ignore or deny. It won in the “Television” category at the Avanca Film Festival in Portugal earlier this year, and may win more awards at the various other festivals internationally where it has been nominated. And it’s going on tour in the USA and Canada this month (see below).
Tom Heinemann: “The Micro Debt- a critical investigation into the dark side of Microcredit” (2010)
The real message of the film is that, after three decades, there is still no concrete evidence that microcredit actually does anything for the poor. Heinemann’s main point is that Western donors have been naive in their enthusiasm about microfinance, and his poverty-stricken interviewees testify that this might even worsen their precarious situation.
A misrepresented film
The film’s director Heinemann visited Bangladesh, the Mecca of microfinance, to check up on the successes claimed by Grameen Bank and other microfinance organisations regarding poverty alleviation. He investigated Grameen’s funding from the Norwegian government (where he uncovered financial irregularities amounting to $100 million) and spoke to numerous academic and practitioner experts. The film also shows him being denied interviews with Muhammad Yunus on several occasions.
The reactions to Tom Heinemann‘s controversial documentary “The Micro Debt” have mostly been strong. The film sheds light onto a number of questions, first and foremost the risk microcredit borrowers face of becoming trapped in debt. However, public debate has so far focused on two rather marginal parts of the film: a more-or-less resolved dispute over aid money (cf. “GrameenLeaks”), and a dispute about a house supposedly promised in the village of Jobra. It is worth investigating why so much publicity has been given to these two issues, and so little to the film’s main message: that microfinance can cause debt traps.
While the charges of financial malpractice in the Grameen conglomerate have now been largely cleared up, Muhammad Yunus still remains a target of negative attention from the Bangladeshi government. He is now apparently no longer Grameen Bank’s director. But Yunus’ personality and job status should have nothing to do with an impartial assessment of the virtues of microfinance. What becomes clear from the recent debate is how symbols are mobilised (and abused) in legitimising as well as challenging microfinance. However, this distracts from more substantial questions about what microfinance does or doesn’t, can or can’t, achieve.
Let us take a look at “The Micro Debt” and the reactions to it, and also take a look at another, less-known documentary with less impact but perhaps a better focus on substance: “Easy Money”. Both films make the allegation that microfinance can be exploitative and can cause more problems than it solves. But the reason why “The Micro Debt” has been perceived as so inflammatory, while “Easy Money” apparently has hardly been discussed at all, is that “The Micro Debt” attacks microfinance’s symbolic self-representations of success and integrity. Read the rest of this entry »
In the past few weeks, I’ve been silent here about the microfinance crisis events in India. But why not let others do the talking? This blog published (what I think was) the first analysis of the A.P. events right after the crackdown ordinance; following up with a two-piece search for the underlying causes (1, 2). Most of the causes I speculated about at the time are pretty much turning out to be true:
- interest rates were far too high and have been rushed down
- the sector was under-, or practically un-, regulated (especially, if Kaushik Basu says so)
- the borrowers were/are overindebted (far more than the MFIs were aware of, I assume)
- and the profit motive created perverse incentives for MFIs.
One prediction I won’t make, though, is whether microfinance in India will pull through. That depends on politics in Delhi (bailout or not?) as much as it does on the adaptiveness (not the resilience, which means “no change”) of the sector. But I wouldn’t bet my money on an MFI in India at the moment, given the pessimism of Vijay Mahajan (“If this situation continues, there will be no microfinance sector in 2011.”) or the SKS’ shareholders (shares down by 52 percent).
The real surprise story of the week, however, were WikiLeaks’ diplo-inslults.
Or really, were they? Only the Americans are really making a big deal out of the leaked diplomatic cables. If anything, the now-public secret assesments of sundry politicians should provide a few good-natured jokes at upcoming international summits. Would-be Israel-nukester Ahmadinejad will hardly be insulted by being compared with “Hitler”, and German Chancellor Angela Merkel and Foreign Minister Guido Westerwelle already had their share of laughs about “their” leaks.
governancexborders.com 