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Assistance or Subjugation: The Impact of Microcredit on the Poor

In: Proceedings of the Conference on Human and Economic Resources

Author

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  • Gökçe Günel

    (Koç University)

  • Özge Aytulun

    (Koç University)

Abstract

With the changing definition of poverty, the poverty alleviation programs also take a different shape. Poverty reduction is no longer under the mere jurisdiction of the state and civil society: Market economy has also become an important actor. Microcredit, defined as a loan which financial institutions give to the poverty stricken people who do not have any collateral to start small businesses, is a significant tool, which has been encouraged both by international organizations like World Bank and UNDP, and by most developing country governments. In Turkey, microcredit has been initiated in 2002 by a civil society organization. Afterwards, the incumbent Justice and Development Party (JDP) government has paid special attention to microcredit: A member of the parliament from JDP, inspired by the Bangladeshi experience, started a foundation in association with the Grameen Bank. Currently, a microcredit bill that has been drafted by the same parliamentarian is being discussed. In this context, the traditional means of lending are being dissolved, while new opportunities are being laid out for major commercial banks and financial institutions. This article argues that through microcredit the poverty alleviation discourse is being used in order to promote market integration and deepening, thereby connecting the poor with the national and global economy. It is also a part of the neo-liberal governance structure, subjugating the poor to the market forces. Drawing on elite interviews with policy makers and civil society members, and in depth consultation with primary written sources, this study aims at contributing to the on-going debates by looking through the Turkish lens.

Suggested Citation

  • Gökçe Günel & Özge Aytulun, 2006. "Assistance or Subjugation: The Impact of Microcredit on the Poor," Papers of the Annual IUE-SUNY Cortland Conference in Economics,in: Proceedings of the Conference on Human and Economic Resources, pages 154-169 Izmir University of Economics.
  • Handle: RePEc:izm:prcdng:200614
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    Keywords

    microcredit; development; poverty;

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