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Microfinance andEmpowerment Call for papers   Seminar to be held at French Institute of Pondicherry, India 7 – 8 January 2004  Jointly organized by: French Institute ofPondicherry, IndiaLPE – Université de Provence / IRD, France                     Centre Walras – Université Lyon 2 / FRE 2476, France Scientific Committee Blanc J. (Centre Walras –CNRS, Université Lyon 2, France)De Miras Cl. (Institut deRecherche pour le Développement – Laboratoire Population Environnement, France)Guérin I. (IRD – LPE, FrenchInstitute of Pondicherry, India)Nair Tara (EDA Rural Systems, Gurgaon, India)ServetJ.-M. (Institut Universitaire d'Études du Développement, Genève, Switzerland)Sriram M.S. (Indian Institute ofManagement, Ahmedabad, India)   Presentation   Microfinance can be analysed through threedifferent paradigms[1], depending upon the priority: -      to establishprofitable and sustainable financial relations, -      to alleviate poverty,-      to empower poorpeople, especially women, scheduled castes and scheduled tribes. Empowerment or improved access to power is ameans and an end per se. It goes beyond Microfinance activities becauseit deals with social change process[2].This concept is used more and more often by media, political classes and NGOactivists as well. It is considered as a way to respond to the oppression,injustice or exploitation of disadvantaged people, i.e. the poorest, thewomen or the scheduled castes and tribes. Though widely used, this fashionableconcept is seldom the subject of research studies.  The growing popularity of the concept,paradoxically, has led to a vague and unclear definition of empowerment.Different people use this concept in different ways. Theoretically, microfinance may well initiate a “virtuous spiral” ofeconomic, social and even political empow­er­ment and, consequently, may appearas a means to increase the capabilities of vulnerable people. But how do thingsstand in practice? Available results of impact studies call forcircumspection.  Microfinance can freevulnerable people of certain links of dependence, but can also forge new kindsof dependence and subordination, thereby strengthening disparities[3]. In the field of microfinance, theissue of empowerment has been analyzed, especially from the perspective of gender.Much research has demonstrated that microfinance should include a genderfocus in order to have an effective impact in terms of gender poverty andempowerment.  It is true that all overthe world, inequities suffered by women are stronger than those suffered by men.However, an overemphasis on women as a specific microfinance target populationhas meant lesser focus on other underprivileged and vulnerable groups.  In many contexts, aside from the variety offorms that gender inequalities can take, others forms of disparities andinjustices, such as those linked to social classes, races, castes, tribes, etc.do exist.  Any study of empowerment mustconsider the interaction and interrelation between these different underprivilegedcategories. The key goal of this seminar will be to focus on suchinterrelations. Issues and call for papers By bringing together academics and practitioners, thisseminar hopes to pursue and encourage further reflection in the followingissues based on both field experience of the participants as also from atheoretical perspective:Definition,indicators and assessment There is no universal definition of empowerment, even if everyonerecognizes that this concept is about change, choice and power. Empowerment canbe defined in various ways depending on who is promoting it. The firstchallenge of the seminar will be to try to chronicle the different meanings of empowerment.  The question of definition is all the more crucial since resultsachieved in terms of empowerment depend on the choice of definition. Hence,results of evaluation of the impact of microfinance programmes on empowermentimplies choosing accurate indicators that vary from culture to culture and thepriority attached to each of these.  Forinstance, studies focusing on outcomes may come out with results very differentfrom those that are concerned about processes. Implicit preconceptions also presume results. Thus studies that givemore priority to conflict in households than to cooperation, and insist more onindividualized behaviours tend to highlight the negative impact of microfinance[4]. Even when a consensus definition of empowerment emerges, questions wouldstill remain: How can empowerment be assessed? How can we attribute empowermentto microfinance? Are there any appropriate indicators to evaluate it?  What kind of methodologies can we use? Howpertinent it is to differentiate between economic, social and politicalempowerment or between different levels of empowerment, for eg.,  individual empowerment, empowerment withinthe family, the community, etc.? How can the various approaches (like theexperimental, interpretative and participatory approaches, for e.g.) be used toassess empowerment and how have they been used up till now? The seminar wouldaddress these questions through methodogical analyses as well as specificimpact case studies.   ToolsHow does microfinance act as a vehicle forempowering people?  The seminar does notaim to define the “best practices”. It seems more relevant to identify thestrengths and weakness of each methodology and its conditions ofimplementation.  It is likely thatmethodologies could vary in relation to the type of empowerment desired, typeof target population, local socio-economic context, etc. The issue of appropriateness to tool raises both theoretical andpractical questions which are strongly connected. From a practical point ofview, one can analyse the scope of each kind of financial service (credit,savings and insurance) and its effect in terms of empowerment There is also areal need to better understand the demand, and this understanding impliesknowing what the informal practices are. It is no longer an issue of contentionamong both academics and practitioners that the poor need microfinance,and not only microcredit, and that they are able to save[5]. It is, however, equally importantto recognise that there are diverse ways in which people manage their moneyinformally and they  have the necessaryfinancial know-how. Microfinance services rarely take into account this. Froman operational point of view, to be efficient, financial services offered mustattempt to mitigate the limitations of the existing practices while drawinginspiration from the way in which people live, think about and manage theirfinances on a day to day basis. From the theoretical point of view, there is aneed to reconsider the concept of money and finance.  Though defined as an “instrument” usually,evidence suggests that monetary and financial practices are strongly embeddedin social and cultural practices. Microfinance services, irrespective of theirperformance, do not replace informal practices. Beyond financial tools, the following themes could be analyzed anddiscussed at the seminar: · Individual or group-based approach? Obviouslythe latter seems more appropriate to support collective action and to makepeople aware of their rights and claims. But, when implemented without sufficient care, a group-based approachmay oppress the most vulnerable. Furthermore, in certain contexts, one maywonder if an individual approach would not respond better and more quickly topersonal needs. After having been seen as the condition of success, thegroup-based approach is being questioned more and more. Beyond lending , thisquestion also concerns the issue of governance. · Is it necessary for microfinance providers toundertake non-financial services? While it is obvious that people needcomplementary services (such as health, education, etc.), finding the best way of in­tegratingfinancial services with the non financial is more of an ‘art’ than simply atechnical ser­vice.· What kind of governance should bechosen? We can distinguish a certain number of “models” (the “commercial”model, Self-Help Group model, Grameen model and cooperative model, to mentiononly a few). What are the consequences with respect to empowerment of choosingone model instead of another? Here too, it is crucial to link theory withpractice. For example, while cooperative models seem to be quite appropriate tolink microfinance with advocacy and lobbying, its implementation raises manychallenges, in particular because “participation”, often promoted as a proxy ofempowerment, is not at all obvious. Political anchoring of microfinanceSome authors warn that public authorities would take advantage ofmicrofinance services to increasingly disengage themselves, giving priority tothe integration of the “poor” in market mechanisms atthe expense of their access to economic and basic social rights and makingthe success of their battles to fight poverty dependent on the capacity of NGOsand self-organization of local populations. While such concerns must not lead one to relinquish the idea ofproviding microfinance services to vulnerable people, they call for vigilancein regarding the different possible dangers They also underscore the need forits political anchoring. It seems obvious that microfinance projects arejustified only if strategic links are established with other forces of change,among which are networks and civil society movements, as well as defenceorganizations and lobbies of vulnerable people. In other words, microfinance isjustifiable only if it is integrated into a moreglobal reflection on the valuation of fundamental rights. Promoting a politicalanchoring of microfinance is easier said than done. Here too, the issue raisesboth theoretical and practical questions. · Tensions andconflictsNumerous research studies have already shownthat microfinance programmes, like any development programmes, unavoidably challenge the balance of power inthe local areas where they are implemented - balance of power between men andwomen, between castes or between other social groups (ethnic, religious,professional, etc.) or even between microfinance programmes and informalfinancers. Such a challenge necessarily induces tensions, or even conflicts.Pretending to avoid them would be unrealistic. Very often conflicts are considered as perverse effects, while they are– at least some of them – part of social change. On the other hand, one shouldbe concerned about their implications - which are acceptable and unavoidable,and which are not? One should also be concerned about the means that can beused to limit them -  is it necessary ornot to limit the target population? What relations should be established withgroups which are not targeted? How can we best manage tensions when theyappear? · Governance and « socialdialogue »From a theoretical point of view, recent developmentsin the field of social justice, in particular with Martha Nussbaum and AmartyaSen’s work, conclude that economic freedom and political freedom reinforce eachother mutually and cannot be promoted separately. We are aware to what extentinequities are strongly embedded in social and cultural considerations. As aconsequence, whatever be the context, even when state interventions caninfluence the level of equity achieved by legal means or public schemes, only“social dialogue” or public debate - a means to express individual needs andpreferences - can deeply transform mentalities and traditions or culturalnorms. The question then is: how can we promote such a social dialogue? Aremicrofinance organizations likely to act as a vehicle for social dialogue andunder what conditions? At the moment, do we have any concrete examples ofmicrofinance organizations which have been effective in terms of lobbying andadvocacy? Political anchoring of microfinance must be understood as a new formof governance with strong complementarities between public action, “market” andcivil society.  The relevance of suchcomplementarities in the current world cannot be denied, but the question ofhow the roles and responsibilities should be distributed among these differentactors appears to be more complex. This is particularly true since publicaction works on different levels (from local authorities to supra-nationalauthorities). Far beyond microfinance, such new forms of collective action canbe found in numerous activities (common resources management, local development,etc.). Case studies are welcome to enlighten the example of microfinance.    Abstracts / Full papers Abstracts (by e-mail) should be received bythe organisers by 15 October 2003and full papers by 30November 2003. For further details please contact:Isabelle Guérin, Head of the Microfinance ResearchProgramme Jane Palier, Research ScholarFrench Institute of Pondicherry11, Saint-Louis StreetPondicherry - 605 001Ph. (0091) 0413 233 4168 Fax. (0091) 0413 233 9534Email. Jane.Palier@ifpindia.org or Jane.Palier@etu.univ-lyon2.fr   Inscription Form  Microfinanceand Empowerment, French Institute of Pondicherry, 7 – 8 January 2004    Ms / Mrs / Mr /  Name:____________________________________________________________________Organisation:____________________________________________________________________________Postal Address:_________________________________________________________________________________________________________________________________________________________________Ph:_________________________________________Fax: _______________________________________E-mail:_________________________________________________________________________________  I wish to present a paperon: _______________________________________________________________________________________________________________________________________________________Pleasesend an abstract (between 400 and 500 words) by email to Jane Palier jane.palier@ifpindia.org or jane.palier@etu.univ-lyon2.fr)  [1] MayouxLinda, 2000, « Micro-finance and the empowermentof women - A review of the key issues », Genève: ILO Social Finance Unit, 55p. [2] See the contribution of Beteille André,« Empowerment », Economic and Political Weekly, mars 1999. [3] See GoetzA.M. and Sen Gupta R. 1996,« Who takes the Credit ? Gender, power, and control over loan use inrural credit programs in Bangladesh », World Development, Vol. 24,N°1, pp. 45-63.Hashemi S.M., Schuler S.R. Riley A.P.,1996, « Rural Credit Programs and Women’s Empowerment inBangladesh », World Development, Vol. 24, N°4, pp.635-653. [4] See Kabeer N., 2001, « Conflicts over credit :Re_evaluating the empowerment potential of loans to women n ruralBangladesh », World Development, Vol. 29, N°1, pp. 63-84.[5] See, for example, the special issue of the Journal ofInternational Development, 2002, n°14. See also, Rutherford R., 2000, The poor andtheir money, Delhi: Oxford University Press.