AN EXERCISE IN WORLDMAKING 2009 - ISS

9 Tailoring Credit Programs along the Logic of the Poor 105
that although no perfect targeting mechanism exists, the gains to the
poor from targeting should offset the costs.
Since the 1980s, there has been a policy shift in Bangladesh targeting
women in special credit programs. Studies have indicated how increased
income ‘improves the unique livelihood enhancement functions women
perform for their households as brokers of the health, nutritional, and
educational status of other household members’ (Goetz and Gupta,
1996: 46-47). Mayoux (2001: 438-439) points to how the perceived link
between savings and credit provision and women’s empowerment rests
on three assumptions: first, that women would invest in their own economic
activity; second, that this would result in increased well-being for
women and their families; and third, that economic empowerment would
enable women to renegotiate changes in gender relations in the household,
leading to social and political empowerment.
These assumptions are challenged to a large extent. In their research
on gender, power and control over loan use in rural credit programs in
Bangladesh, Goetz and Gupta (1996: 49) found that a significant proportion
of women’s loans were being controlled by male relatives. Out of
qualitative studies of 253 loans to women by four MFIs, the degree of
women’s control was broken down as follows: partial control at 24.1
percent, no control at 21.7 percent, significant control at 19.4 percent,
full control at 17.8 percent, and very limited control at 17 percent. The
findings come with the implication that the pervasive optimism for selecting
women as the main credit beneficiaries should be reconsidered,
given the risks women take in navigating horizontal and vertical relations
within the household and the community.
ZEROING IN: MICROFINANCE INNOVATIONS FOR THE VERY POOR
The issue of reaching the very poor is related to targeting and program
design, which are not only ‘hard issue’ tools in poverty alleviation, but
also political activities that affect the poorest. In this sense, the very poor
are discriminated against because they are perceived as credit risks. Having
distinct needs, they function according to a distinct logic: they avoid
putting all their eggs in one basket (or spread the risk by diversifying
sources of income), and make use of survivalist strategies to keep themselves
from slipping deeper into poverty. One way for microfinance programs
to zero in on very poor households is for MFIs to ‘modify their
products so that they are unattractive to non-target households, e.g.,