IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Microfinance and development finance in India: research implications

Listed author(s):
  • James Copestake

This paper appraises options for research relating to microfinance in India, doing so in the broad context of rival macro pressures to accelerate economic growth, maintain political order, reduce poverty and adapt to climate change. This paper first set out a general well-being regime framework that can be used for this analysis and sketch the role microfinance plays within it. Section 2 uses it to inform a brief historical discussion of the evolution of microfinance in India. Section 3 develops the analysis further by considering possible effects of three external drivers of change: rising political aspirations; climate change and food insecurity; and new information and communication technology (ICT). Section 4 uses these examples to discuss methodological options for policy-relevant empirical research. It also suggests that microfinance is an important arena for exploring empirically the tension inherent in the idea of development management. The term microfinance is widely used to refer to institutions governing savings, credit, insurance and monetary payments by relatively poor people, including those regulated by both official laws and informal norms. Analysis of microfinance is widely framed as a purely micro issue, centered on the motivation and behavior of specific users and providers. However, such analysis is almost invariably located - whether explicitly or implicitly - in a wider view of how the state, markets and society institute poverty. In India as elsewhere, for example, private microfinance organizations is viewed positively as a force for promoting financial inclusion by “making markets work for the poor”; and at the same time viewed negatively as a smokescreen behind which the state can retreat from a ‘social banking’ strategy of mobilizing much larger resources to challenge pervasive and chronic indebtedness. Following Brett (2009) this paper regards such seemingly polarized views as jointly contributing also to an intermediate “pluralist liberal orthodoxy” struggling to identify the least worst combination of state, market and civic mechanisms for addressing poverty and oppression in countries where their potential to do so is deeply compromised by capacity constraints and vested interests. Microfinance – along with all potential instruments of development – needs to be appraised against country-specific historical realities. Evaluating it instead in relation to a universal view of its role in some idealized market or state-led view of development can be viewed either as a naïve and idle distraction, or as irresponsible and self-serving.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: wp10028
Download Restriction: no

Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 10-028.

in new window

Length: 20 p.
Date of creation: Feb 2010
Publication status: Published by:
Handle: RePEc:sol:wpaper:2013/57621
Contact details of provider: Postal:
CP114/03, 42 avenue F.D. Roosevelt, 1050 Bruxelles

Phone: +32 (0)2 650.48.64
Fax: +32 (0)2 650.41.88
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Baland, Jean-Marie & Bardhan, Pranab & Das, Sanghamitra & Mookherjee, Dilip, 2010. "Forests to the People: Decentralization and Forest Degradation in the Indian Himalayas," World Development, Elsevier, vol. 38(11), pages 1642-1656, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sol:wpaper:2013/57621. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Benoit Pauwels)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.