📰 New publication “Financialization of the fight against poverty”

Isabelle Guérin has contributed to the book Financializations of Development, recently edited by Ève Chiapello (EHESS, France), Anita Engels (University of Hamburg, Germany) and Eduardo Gonçalves Gresse (University of Hamburg, Germany) with a chapter entitled “The financialization of the fight against poverty: From microcredit to social capitalism”.

Abstract: Social capitalism is an attempt to financialize the fight against poverty by creating new markets that are both capable of serving the poor and attracting social investors. Inspired by the apparent success of microcredit and its double bottom-line rhetoric, these pro-poor markets claim to be demand-driven, improve welfare and share value. These markets are just starting to emerge and are mostly at the experimental stage. However, it seems that they have the same shortcomings as microcredit. The constraints of profitability and scaling up are incompatible with risk-taking and with a quality offer, adapted to local constraints, social norms and cultural practices. Many of these products do not bring the expected welfare since this would require much deeper structural measures and infrastructures to be achieved. Value sharing hardly takes place since an important part of the risks are subcontracted to local populations. Ultimately, many social capitalism initiatives look like risky experiments for which local populations pay a large part of the price. While social investment accounts for a growing share of the financing of anti-poverty policies, there is reason for concern, as with microcredit, of excessive concentration on the few profitable markets and creditworthy customers, to the detriment of the whole range of goods, services and infrastructures that are unprofitable but desperately needed by the poor.

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