Tracing Microfinancial Value Chains

Abstract

The global expansion of the microfinance sector demands new conceptual work that recognizes microfinance's simultaneous imbrication in profit-oriented global finance and socially oriented development programs. Drawing from our respective areas of specialization in Latin America and South Asia, and an extensive review of the literature, we posit here that microfinance is best understood as a global industry, with traceable value chains. Microfinancial value chains are vertically organized by hierarchical relations of power, and populated by diverse actors performing various forms of gendered and class-stratified labor. Our conception of microfinance draws attention to the industry's reliance on the devalued labor of women, and the influence of class and geographic divisions on the functioning of microfinancial chains at all levels. Our chain-oriented conceptualization disrupts prevailing paradigms for studying microfinance by allowing us to analyze exactly where, and under what conditions, value is extracted across multiple global sites.