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How Much Voice for Borrowers? Restricted Feedback and Recursivity in Microfinance

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  • Philip Mader

Abstract

This paper studies the governance of microfinance and asks about its recursivity: whether the system is responsive to changes prompted by feedback from borrowers or not. It draws on Hirschmann's heuristic of exit and voice and the idea of participation in development, to examine three channels of feedback from borrowers to rule†makers and ask to what extent they have facilitated or restricted recursivity in microfinance. The standardisation of microfinance along a financial template is shown to have created very open flows of financial information, useful for monitoring clients' exit, but not granting them voice. The more recent creation of systems for social performance management and pursuing ‘responsible' microfinance, however, has not resulted in similarly robust information flows, because, despite intentions to capture client satisfaction and feedback, these channels are severely restricted. They offer borrowers little chance to practically exercise voice and convey feedback which affects the rules. Recursivity studies, it is suggested, might integrate participation and exit/voice frameworks to explore the prospects of feedback from grassroots rule†subjects and better understand the factors that can restrict it. For microfinance, it is suggested that government regulation and clients' collective action could be necessary where the sector's governance system shows itself to be unresponsive.

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  • Philip Mader, 2017. "How Much Voice for Borrowers? Restricted Feedback and Recursivity in Microfinance," Global Policy, London School of Economics and Political Science, vol. 8(4), pages 540-552, November.
  • Handle: RePEc:bla:glopol:v:8:y:2017:i:4:p:540-552
    DOI: 10.1111/1758-5899.12474
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    Cited by:

    1. Vincent Guermond, 2022. "Contesting the financialisation of remittances: Repertoires of reluctance, refusal and dissent in Ghana and Senegal," Environment and Planning A, , vol. 54(4), pages 800-821, June.
    2. Tanima, Farzana Aman & Brown, Judy & Dillard, Jesse, 2020. "Surfacing the political: Women’s empowerment, microfinance, critical dialogic accounting and accountability," Accounting, Organizations and Society, Elsevier, vol. 85(C).
    3. Shymaa Bedaiwy & Dimity Peter, 2022. "An evaluation of Egyptian microfinance laws and regulations preventing overindebtedness of women," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(7), pages 1318-1333, October.
    4. Mader, Philip, 2024. "Orchestrating self-empowerment in tribal India: Debt bondage, land rights, and the strategic uses of spirituality," World Development, Elsevier, vol. 174(C).

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