The Politics of Microfinance: a Comparative Study of Jamaica, Guyana, and Haiti

Home , Bank of Jamaica, Desmond Hoyte, Freddie Kissoon, Women in Guyana

The Politics of Microfinance: A Comparative Study of Jamaica, Guyana, and Haiti

Caroline Shenaz Hossein

A thesis submitted in conformity with the requirements for the degree of Doctorate of Philosophy Political Science University of Toronto

The Politics of Microfinance: A Comparative Study of Jamaica, Guyana, and Haiti

Caroline Shenaz Hossein

Doctorate of Philosophy

Political Science University of Toronto

2012

Abstract

The microfinance revolution of the 1980s acclaimed micro-credit as a tool that would improve the lives of economically active people trapped in poverty. The 2006 Nobel prize awarded to Mohammed Yunus and Grameen Bank confirmed for the industry’s advocates that microfinance was a panacea, and billions of dollars have been channeled to financial services for the poor. However, a series of high-profile scandals in 2010 shook development agencies’ faith in micro lending, and support has waned in light of evidence that microfinance alone cannot change structural inequalities and end poverty. I show that politics operate throughout the industry, reproducing inequalities within the process of micro lending.

In my political ethnographic study of 460 people in three countries, I find that race and class politics is entrenched in all three countries, yet there are different outcomes related to attitudes of microfinance managers. In Jamaica and Guyana, micro lenders demonstrate that historically rooted racial and class biases go beyond gender to determine the allocation of micro loan resources. Ingrained biases interfere with the allocation of loans to the urban poor because discriminatory practices reinforce pre-existing social divisions. The Haiti case is

ii hopeful: lenders, particularly the caisses populaires (credit unions), are made up of socially conscious people who recognize the country’s exclusionary politics. Managers and staff have class origins similar to the clients they serve and view micro loans as a tool to contest class and race-based oppressions. Haiti’s case suggests that collective systems such as those found in the caisses populaires and informal banks are effective because they relate to people’s history; and managers influenced by the masses, organize financial programs that are responsive to their clients and remain free from elite capture. This bottom-up approach in microfinance determines a greater level of social transformation for the urban poor.

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I dedicate this thesis to:

My maternal great-grand-mother, Maude Gittens, a susu banker in Trinidad who held onto an African tradition that still continues in the Caribbean.

My paternal grandfather from Guyana, Mahboob Hussein, who encapsulated the very business people I write about in this project.

Acknowledgments

The people in this acknowledgement were vital to this project. My husband, Shayan Sen, a PhD mathematician, has helped me navigate this journey and always knew how to be supportive and caring.

I returned to graduate school as a mature student with a decade of field experience. After completing my Masters at Cornell, I thought about a doctorate, but as a first-generation university graduate in my family, I opted for the world of work. In the 1990s, I packed my bags and headed to Egypt for a few months, then onto Benin (West Africa), and the U.S. to work in international development, and later to Niger to manage a village bank. While living in Niamey, Niger, in 2004 I emailed Richard Sandbrook, an Africanist scholar (Toronto), about doing a doctorate and his reply convinced me to return to school two years later.

I thank those who came before me from lands as far away as India and Africa, who then settled in the Caribbean and later migrated to North America. My family is made up of small entrepreneurs from various parts of the Caribbean, such as Guyana, Grenada, Trinidad and St. Vincent. I thank my mum, Jacqueline (an Afro-Trinidadian-Vincentian), and my dad, Isaac (an Indo-Guyanese), who have given me much love and support. My siblings, Annie and Chris, understand the messy terrain as immigrant children in two (sometimes three) worlds. Other members of my family kind enough to listen to me over these years were Jolanta, Bibi, Rasheeda, Grannie, and the Sen clan in both Ireland and India, especially Ma and Baba.

Judith Teichman has been my mentor from the very start, first guiding me to be a teaching assistant, then as my teacher, and later as my thesis advisor. After years of doing, I was finally learning about development, and I am indebted to Judith and my committee for this. Louis Pauly, Chair of Political Science, made me refine my work’s relevance to the discipline and he always did so in a caring way. Njoki Wane, also my teacher, advised me with ease and worked closely with me on perfecting my theoretical approach, methodology and advising me on ways to make my work relevant to policy makers. I also want to thank Joe Wong (my teacher) who was not a committee member but was like one as he spent a lot time on my project discussing its methodology and broader implications.

During the past four years, I moved around in three countries to carry out extensive field work. Hundreds of micro business people in Jamaica, Guyana, and Haiti made this project possible by taking risks to speak to me. And I have many generous souls to thank for keeping me safe and informed. Let me start off with my talented assistants in Jamaica: Althea, Ackney, Wayne, Brian, Betty, and Mary; and in Guyana, Shebeca. In Jamaica, my friends made my stay enjoyable and opened up their hearts and homes: Maxine Henry- Wilson, Sharene McKenzie, Brenda Cuthbert, Rhea Alert, Kim-Marie Spence, and Henley Morgan. Much gratitude goes to the Beharry family in Tiger Bay for also hosting me. Thanks to Sankar, Danny, and Michael for teaching me about life in Guyana. In Haiti, my good friends Raoul Jean-Louis and Marie-Marcelle St. Gilles always gave me sound advice. Since 2008, Eric Calpas, Sylvain Luxon and Sergine Pierre assisted me in various stages of my

v fieldwork. And I am grateful for the lovely family dinners at Magali and Siniorr Raymond’s home in Bel Air, where we talked politics and microfinance.

During my Fulbright program in Jamaica, I was fortunate to study under John Rapley, the then-president of the Caribbean Policy and Research Institute (CAPRI) who gave me detailed comments on my interview tools. I am indebted to the team at the CAPRI team: Orena Hinds, Katrina MacIntyre, and Laura Levy, who organized my seminar Topsy Turvy Microfinance in Downtown Kingston on 26 October 2009. And I could not ask for a better panel: Damian King, Joseph Matalon, and Richard Troupe. I was also lucky to study at the University of the West Indies (UWI), where I grew as a researcher under Anthony Harriott, Chair of the Government Department. Many thanks to Norma Davis at the SALISES library. The good folks at STATIN and Angie Taylor of the PIOJ assisted me in finding data. Many others scholars at UWI were generous with their time, such as Claremont Kirton, David Tennant, Mark Figueroa, Errol Miller, Damien King, Michael Witter for the Jamaica case. I will miss my goat curry lunches with the late Barry Chevannes.

In Guyana, Kadasi Ceres, Chair of the Government Department, motivated me in a difficult research environment. Scholars at the University of Guyana (UG)—such as Michael Scott, C.Y. Thomas, and Freddie Kissoon—were generous with their time. I also thank Niebert Paul for all her friendship while I was a visiting researcher at the International Development Studies program. UG’s Librarian Malcolm Williams was most helpful in tracking down obscure sources. I found the staff at the Statistics Bureau in Guyana and the Cartography department resourceful. I thank all the activists in Guyana—many of whom I cannot name because of the possibility I may put them at personal risk—who made me aware of the political environment. In Haiti, Louis Herns Marcelin of the University of Miami and INURED and Suzy Castor of CRESFED coached me well during my visits.

My friends are all over the world and yet they manage to stay in touch and support me: Suzette Strong, Kemba Saibou, Ibe Ibeike Jonah, Donna Alleyne-Francis, Chandra Shoomoogum, Karla Bjordammen-Orr, Amina Ally, and Star Thurston. I miss the late Aniko Mesaros. At University of Toronto, this world was a much gentler place with colleagues like George Ojambo (coach), Teresa Kramarz, Jen Catallo, Celine Cooper, Adwoa Onuora, Charmaine Stanley, Sui-Mei Ooi, Danielle Pinto-Levy, Donna Outerbridge, Mark Purdon, and Pauline Beange (read a draft). Special thanks to very good friends Rebecca Sanders (Thai lunch pal), Khaled Ahmed (carrel neighbour) and Sarah Eaton (my big buddy) for always checking in on me. My best friend in the program was Agnes Mochama (read my conference papers). Thanks to Robarts’ librarian Elaine Genius. Several colleagues have been great to me: Radha Rajkotia, Ron Howard, Meagan Andrews, Wendy Koch, Quy Nguyen, Pat Morris, Evelyn Stark, Kim McKeon, Julie Redfern, Corey McCruden (read chapter 1), and Anita Campion.

None of this work would have been possible without money for my study. I thank U.S. Fulbright and the U.S. State Department for funding my Jamaica field work (2008– 2009). Special thanks to the IIE’s Cara Wollinsky; UWI’s administration’s Camille Bell- Hutchinson; and the U.S. Embassy in Jamaica’s Bernadette Hutchinson, the late Angella Harvey and my Fulbright colleagues Lynn Washington, Chello Rogers, and Reena Goldthree. Much gratitude to IDB’s Claudia Stevenson, Carina Cockburn, Jempsy Fils-Aimé, Sergio

Navagas, Mark Wenner, and Navita Aganu, as well as OPM’s development team, Jason Dennis and Dana-Marie Morris, with whom I shared some of my findings in a study. At the University of Toronto, Lisa Haley at the School of Graduate Studies awarded me travel funds to Haiti and Guyana in 2010. The Department of Political Science provided an annual fellowship, the Frank Peers Award (2009–2011), and the Royal Bank Scholarship (2010) to carry out field work in Guyana. Carolynn Branton, Liz Jagdeo, Louis Tentsos and Leanne Thompson helped me administratively and with grants, including the Ontario Graduate Scholarship. Le Centre d’études de la France et du Monde Francophone (Toronto) allowed me to carry out my fieldwork in post-earthquake Haiti. Many thanks to Tina Lagopoulos of the Center of International Studies, Munk Centre for processing the Val Duncan Award to Guyana. I am grateful for an academic grant I received from the Gender Studies program, and to Marion Reed who processed it. Audrey Glasbergen, Gail Copland, Janet Roopnarinesingh, and Brigitte Gonzalez assisted me administratively throughout my six years as a teaching assistant at UTSC.

Academics in various countries trained me to become the thinker I am: Sheldon Wein (Saint Mary’s University); Jane Arscott (then Dalhousie); and Cornell professors, the late Arch Dotson, Salah Hassan, and Muna Ndulo. As well, Cornell’s Gerry Levine and Brigit Shipman were kind to support my Fulbright application. At the University of Toronto, the scholars who assisted my learning in some way were Jazira Asemova, Al Berry, Alissa D. Trotz, Ken Bartlett (my teacher), Linda White, Dickson Eyoh (my teacher), Donald Schwartz (ethics review), David Welch, David Rayside, and Richard Stren. Roberta Rice was an excellent teaching supervisor. OISE students and professors welcomed me into their department on many occasions. I thank my colleagues at the National Conference of Black Political Scientists, who have made me feel welcome since my first year. And, I am also grateful to the support of my new colleagues in the Social Science Department and the Business and Society program at York University.

So much of my thinking process benefited from ideas of students and academics I met along this journey. Students in my course “Economic Development Programs in the Global South” (Toronto) helped me reflect on old material in a new way. Benson Honig’s (McMaster) small business research in Jamaica helped sharpen my analysis. Chapter 6 was presented as a paper, “Rethinking Gender and Identities in Downtown Kingston,” at the June 2010 Canadian Political Science Association Conference (CPSA) in Montreal, and Allain Noel (Montreal) made many useful comments. An early version of Chapter 3 (Jamaica case) was presented at the CPSA meeting in 2010, where Tim Shaw (UWI, Trinidad) and Laura MacDonald (Carleton) made helpful suggestions. My methodology section in Chapter 1 benefited from the critique of Julie Novkov (Albany) at the American Political Science Association meetings, September 2010. Duncan Cameron (Simon Fraser) and Anders Hayden (Dalhousie) also gave me insightful comments on my presentation “Politics of Microfinance” at the CPSA conference, June 2011. Gavin Fridell (Trent) made thoughtful comments on my paper at the 2012 IDS conference at Saint Mary’s, and Kate Higgins (North-South Institute) and Kari Polanyi-Levitt (McGill) offered helpful suggestions at the Canadian Association for International Development conference. Susan Promislov edited early conference papers, which would later become part of the thesis. And John Firth edited a first draft of my thesis. Colette Stoeber deserves much credit for making my work readable and its format consistent.

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Table of Contents

Acknowledgements v

List of Acronyms ix

List of Tables xvi

List of Figures xviii

List of Appendices xix

Nomenclature xx

Chapter 1: Introduction 1

Chapter 2: Historical Legacy and Current Politics 58

Chapter 3: The Jamaica Case: Exclusionary Micro Lending in the Slums 112

Chapter 4: The Guyana Case: Racial Exclusion in Micro Banking 171

Chapter 5: The Haiti Case: Inclusive Home-Grown Microfinance 202

Chapter 6: Gender, Female Privilege, and Microfinance 241

Chapter 7: Conclusion: Politics of Microfinance Compared 280

Appendices 321

Bibliography 353

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List of Acronyms

ACCESS Access Financial Services

ACLAM Action Contre la Misère

AIR Agency for Inner City Renewal

AIC Alternative Insurance Company

ASCA Annual Savings Clubs and Associations

AFD Agence Française de Développement

AFI Approved Financial Institution

APB Association des Professionnels de Banques

ANACAPH Association Nationale des Caisses Populaires Haïtiennes

ANIMH Association Nationale des Institutions de Microfinance d’Haïti

ACME Association pour la Coopération avec la Microenterprise

BCA Banque Crédit Agricole

BGB British Guiana Bank

BNSJ Bank of Nova Scotia Jamaica

BPH Banque Populaire Haïtienne

BRH Banque République d’Haïti (central bank)

BOP Base of Pyramid

CIDA Canadian International Development Agency

CPSA Canadian Political Science Association

CAFRA Caribbean Association for Feminist Research and Action

CAPRI Caribbean Policy and Research Institute

Carib Cap Caribbean Capacity Project

Carib-Cap I Caribbean Capacity Project I

CDB Caribbean Development Bank

CMFA Caribbean Microfinance Alliance

CMN Caribbean Microfinance Network

CRS Catholic Relief Services

CRESFED Centre de Recherche et de Formation Économique et Sociale pour le Développement

CCCUL Churches Cooperative and Credit Union Limited

COKCU City of Kingston Credit Union

CDC Community Development Councils (Guyana)

CNC Conseil National des Coopératives

CDF Community Development Funds (MIDA)

CDF Constituency Development Funds (in Jamaica and Guyana)

CGAP Consultative Group to Assist the Poor

COPE Credit Organization for Pre-Micro Enterprises

DDL Demerara Distillery Limited

DID Développement International Desjardins

DAI Development Alternatives Inc.

DBJ Development Bank of Jamaica

DFLSA Development Financing Limited South America

ESSJ Economic Social Survey of Jamaica

DOL Development Options Limited

FL Fanmi Lavalas (Aristide)

FDI Fonds de Développement Industriel FHAF Fonds Haïtien d’Aide à la Femme

FINCA Foundation for International Community Assistance

Fonkoze Fondasyon Kole Zepol

GBTI Guyana Bank for Trade and Industry

GAIBANK Guyana Cooperative Agricultural and Industrial Bank

GUYMIDA Guyana Manufacturing and Industrial Agency

GRAIFSI Groupe d’Appui pour l’Intégration de la Femme du Secteur Informel

GSBA Guyana’s Small Business Association

GYD Guyana Dollar

HCDC Hope for Children Development Corporation

MIF Multilateral Investment Fund (of the IDB)

ISI import substitution industrialization

ICIs informal commercial importers

ID Initiative du Développement

IDB Inter-American Development Bank

IFC International Finance Corporation

IMF International Monetary Fund

INURED Interuniversity Institute for Research and Development

IPED Institute for Private Enterprise Development

JACCUL Jamaica Association of Cooperative and Credit Union League

JAMFA Jamaica Microfinancing Association

JaMicro Microcredit Limited

JLP Jamaica Labour Party

JNBS Jamaica National Building Society

JNSBLL Jamaica National Small Business Loans Limited

JPS Jamaica Public Service

JSIF Jamaica Social Investment Fund

JSLC Jamaica Survey of Living Conditions

JBDC Jamaican Business Development Agency

JCC Jamaican Chamber of Commerce

JMD Jamaican Dollar

JSIF Jamaican Social Investment Fund

KNFP Konsey Nasyonal Finansman Popilè (rural and/or productive network)

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LAC Latin America and the Caribbean

MP Member of Parliament

MCL Micro Credit Limited

MCN Micro Crédit National

MED Microenterprise Development

MEFL Micro Enterprise Financing Limited

MIDA Micro Investment Development Agency

MFIs microfinance institutions

MARNDR Ministry of Agriculture

MEF Ministère d’Economie et de la Finance

MPC Ministère du Planification et de la Coordination

MINUSTAH Mission des Nation Unies pour la Stabilisation en Haïti (UN military)

MIF Multilateral Investment Fund

Nation Growth Nation Growth Microfinance Bank

NCB National Commercial Bank

NDFJ National Development Foundation of Jamaica

NDCs Neighborhood Democratic Councils

NDM New Democratic Movement

NGOs Non-government organizations

OPL Organisation du Peuple en Lutte (Préval)

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OPL Organisation Politique Lavalas (Aristide)

PADF Pan American Development Foundation

PNC People’s National Congress

PNP People’s National Party

PPP People’s Progressive Party

PIOJ Planning Institute of Jamaica

PAR Portfolio at Risk

PSOJ Private Sector Organization of Jamaica

QiFD Quisqueya for International Development

RBTT Republic Bank of Trinidad and Tobago

ROSCAs Rotating savings and credit associations

SSF Self-Start Fund

SEP Self-Employment Program

SALISES Sir Arthur Lewis Institute of Social and Economic Studies

SBCI Small Bank Credit Initiative

SBAJ Small Business Association of Jamaica

SBDT Small Business Development Trust

SDC Social Development Commission

SOFIHDES Société Financière Haïtienne de Développement

SPM Social Performance Management

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Sogesol Société Générale de Solidarité

Sogebank Société Générale Haïtienne de Banque

STATIN Statistical Institute of Jamaica

SAPs Structural adjustment programs

UN United Nations

UNCDF United Nations Capital Development Fund

USAID United States Agency for International Development

UQAM Université de Québec à Montréal

UG University of Guyana

UWI University of West Indies

UWI/Mona University of the West Indies at Mona

WOCCU World Organization of Cooperatives and Credit Unions

WOW Women of Worth

WPA Working People’s Alliance

List of Tables

Table 1.1: Poverty Levels in Jamaica, Guyana, and Haiti

Table 1.2: Female Perspectives in the Study

Table 1.3: Breakdown of Types of Interviewees by Country

Table 1.4: Methods Used to Interview Business People

Table 3.1: Number of Interviews/Sample Size for Kingston, Jamaica

Table 3.2: Major Micro Lenders in Kingston (2009)

Table 3.3: Perceptions of the Political Affiliations of Select Microfinance Actors

Table 3.4: Political Referrals for Micro Loans by Gender

Table 3.5: Types of Discrimination by Slum as Expressed by Interviewees

Table 3.6: CDF, Political Party and Micro lenders

Table 3.7: Interviews with Three Banker Ladies in the Slums

Table 4.1: Guyana’s Micro/Small Business Lenders (2010)

Table 4.2: Ethnic Group of Microfinance Managers (Guyana)

Table 4.3: Perceived Racial Identities of Bankers by Hucksters (2010)

Table 4.4: Gender and Racial Breakdown of Hucksters Interviewed Who Applied for loans

Table 4.5: Micro Loans by Race and Gender (2010)

Table 5.1: Caisses Populaires and Sol: Major Micro Lenders (November 2010)

Table 5.2: Race/Colour of the Heads and Technical Staff in Haitian MFIs (2011)

Table 6.1: Female/Male Access to Microfinance in Jamaica

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Table 6.2: An Analysis of Micro Loans by Gender and Race in Allbouystown, Guyana (2010)

Table 6.3: Gender Analysis of Microfinance in the Three Cases

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List of Figures

Figure 1.1: Photo of a Street in a Kingston slum

Figure 2.1: Photo of a State Banner (Guyana)

Figure 3.1: Race of Jamaican Micro Lenders

Figure 3.2: Location of Micro Lenders (2009) (Jamaica)

Figure 3.3: Microfinance Lenders and Party Politics

Figure 3.4: Map of Downtown Kingston

Figure 3.5: Anti-Partisan Feelings in the Slums

Figure 3.6: Self-Exclusion and Access to Microfinance (Jamaica)

Figure 3.7: Financial Models and the Needs of Inner City Business People

Figure 5.1: Map of Microfinance Penetration in Haiti (USAID map)

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List of Appendices

Appendix 1.1: Elite Interviews and Discussions - Microfinance Lenders and Stakeholders from 2008 to 2010

Appendix 1.2: Interviews with Micro-Entrepreneurs in Jamaica, Guyana and Haiti (2009 and 2010)

Appendix 1.3: Sample Interview Tool

Appendix 3.1: Description of Slums in the Study

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Nomenclature

Out of respect for the ordinary people I met, and in the tradition of Jamaican,

Guyanese and Haitian scholars, I choose to use the local dialect as much as possible. In the

Jamaican and Guyanese cases, I use the patois (or local Caribbean English dialect) for quoting interviewees. For my interviews, I wrote down the responses in patois. Only in a few instances do I translate the Creole English to Standard English, as I assume that the language and words are so similar to Standard English that the reader will understand the meaning.

Kreyol (creole French) is the national language of Haiti and mother tongue of most Haitians, and it is a language derived from French. Where possible, I use Kreyol words and I make translations usually in English or French if the meaning is not apparent.

Chapter 1 Introduction

We believe that poverty does not belong to a civilized human society. It belongs to museums. This summit is about creating a process, which will send poverty to the museum. Only sixty-five years after the 12-second flight of the Wright brothers, man went to the moon. Fifty-five years after this summit, we’ll also go to our moon. We’ll create a poverty-free world. (Mohammed Yunus, cited in Elahi and Danopoulos 2004)

Micro-credit emerged in the 1980s as an important tool in development circles because of its potential to help poor people move out of poverty when many of their countries were undergoing structural reforms. Advocates like Mohammed Yunus in the quote above believed (and many still do) that structural inequalities can be changed by making micro-credit accessible to large numbers of poor entrepreneurs. According to figures from the United Nations Population Fund (2010), more than three billion people—that is, 45% of the world’s population—currently live on less than two U.S. dollars per day and work in the informal sector (UNPFA 2010; Collins et al. 2009, 1; Easterly 2007, 5). And while access to microfinance is very useful for people working in the informal sector many of them are still being excluded, this time by micro bankers.

Millions of microfinance customers are poor women living in the Global South1— specifically, in Latin America, the Caribbean, Africa, and Asia. These business people run owner-operated enterprises and work in makeshift locations in the informal sector under

1 The Global South comprises what is also known as the “Third World” or “developing world.”

1 2

severe financial restrictions (Midgley 2008, 468).2 At the very first summit on micro- credit in Washington, D.C. in 1997, Mohammed Yunus, former Director of the Grameen Bank, claimed that micro loans could help these entrepreneurs move out of poverty. For the past thirty years, micro lending has been a prominent poverty-fighting tool in many developing countries—the tool through which significant community improvement can be realized

(Bennett 2009; Khan 2009, 147; Yunus 2007a; Gulli and Berger 1999, 58).3 Huge scale has been achieved where it is estimated that 205 million people sought financing in 2011 through approximately 10,000 microfinance institutions (MFIs) (Reed 2012, and Roodman 2012b;

Globe and Mail 2010; MIX 2007; Daley-Harris 2006; Rhyne and Otero 2006; Wahid 1994).

Yet this revolutionized form of banking for the poor called microfinance is not a new phenomenon. Germany’s Raifeissen—financial cooperatives that offered small loans to the poor—first emerged in the 1880s (Roodman 2012a, 56; Guinnane 2001, 368; Harper 1998,

8). This development of cooperatives and friendly societies led to the spread of credit unions and cooperatives, first to Europe and then to the Americas (e.g., Desjardins in Canada).4

Dunford (2009, 108) also argues that credit unions pre-date MFIs.5 In 1976, Yunus, who was

2 Hans Singer (ILO report, 1972) coined the term “informal sector” (citation in Dichter and Harper 2007). The definition of “informal sector” in this study is borrowed from an IDB study (Webber 2000, 1). This project examines legally owned micro enterprises that seldom pay taxes. 3 While the terms “microcredit,” “micro-banking” and “microfinance” are used interchangeably in the literature, this study deals with “micro credit,” very small loans made to the entrepreneurial poor (Midgley 2008, 468). The more common term “microfinance” includes a number of consumer financial services, such as loans, savings, remittances, insurance, and business consultation services for the micro market. (See Collins et al. 2009). 4 Credit unions and cooperatives are member-owned institutions, and credit unions are legal financial institutions usually focused on financial services and are regulated by the government. (WOCCU website, accessed 5 November 2011). 5 Cooperatives and credit unions often contest the argument that microfinance is a recent innovation, as they carried out small loans for members long before the concept was named. See Geertz (1962) for an analysis of cooperatives around the world.

then an economics professor at the University of Chittagong, revived the concept of micro loans in rural Bangladesh (Bennett 2009; Harper 1998; Counts 1996); and in 1983, he officially launched the Grameen Bank, focusing on the accessibility of micro-credit for poor rural women (Bateman 2011, 1; 2010, 1; Sengupta and Aubuchon 2008, 10; Credit where

Credit is Due 2000; Harper 1998, 33; Counts 1996, 34; Wahid 1994, 2). Yunus launched his experiment with a personal loan of $27 to a group of 42 women stool makers (Sengupta and

Aubuchon 2008, 9; Yunus 2007a, 50; Counts 1996, 39).

Grameen Bank’s goal was to contest the exclusion of the entrepreneurial poor from formal financial institutions, which tended to cater to the elite6 rather than to lower socio- economic groups (Yunus 2007a, 205; 1994; Schreiner 2002, 591). The intention of micro banking was to make sure that poor entrepreneurs were not excluded to financing by elites.

Microfinance revolutionized in the 1980s came during a period of structural adjustment programs by the Bretton Woods institutions, and Yunus, like many others in the NGO world, was working outside of formal financial institutions in order to get small loans to the poor so that they could cope under harsh financial reforms.

Microfinance as a Global Phenomenon

In the pre-Grameen Bank world (prior to the 1980s), poor people working in the informal sector had few options to access money: they obtained loans from friends, family, local moneylenders, or politicized government agencies (Sengupta and Aubuchon 2008, 17;

Yunus 2007a, 50; Matin et al. 2002, 278; Rutherford 2000, 32). Few had access to credit

6 Jamaican scholar Don Robotham (2000, footnote 5) defines the term “elite” as “a specific minority drawn from various minority classes that exercise political, economic, social and cultural dominance over a society or culture.”

unions because these focused on salaried workers. Some relied on informal banks

(community banks or rotating savings and credit associations [ROSCAs]), which exist in various forms all over the world (e.g., susus in Ghana, tontines in Senegal, chit in India, kye in Korea, merry-go-Rounds in Kenya, and Partner in Jamaica) (Ardener and Burman 1996).7

In the developing world, poor women of colour organized community resources to meet the needs of persons excluded from financial programs, most of which continue to function today.

The political elite in developing countries, such as Jamaica, made micro and small loans available through state-owned banks to the “small man” (poor people) excluded from traditional financing (Matin et al. 2002, 274).8 However, across the globe, state-owned banks

(perhaps with the possible exception of Bank Rakyat Indonesia) are generally political, inefficient, and corrupt (Robinson 2001; Morduch 2000, 620; Morduch 1999, 1570–1576).

When the state and banks excluded the economically-active poor, credit unions and cooperatives made loans to them. Still self-employed poor persons in the informal sector had

(and continue to have) limited finance options and often resorted to informal sources such as

ROSCAs or moneylenders (Anderson et al. 2009, 18; Collins et al. 2009, 54; Midgley 2008,

468; Armendáriz and Morduch 2007, 59; Rutherford 2000, 30–35; Harper 1998, 7; Niger-

Thomas 1996, 95; Geertz 1962, 243). In the 1970s, innovative non-government organizations

(NGOs) in Bangladesh, such as the Grameen Bank and BRAC, proposed the micro-credit

7 Informal banks such as ROSCAs are made up of individual citizens who pool their own monies and take turns borrowing a lump sum from each other (Rutherford 2000, 31–59). 8 The term “small man” is used in both Jamaica and Guyana to refer to a person who is poor and depends on the “big man”—the wealthy person—to ensure that their basic needs are met. In Guyana the term also refers specifically to poor persons of Black, Indian or dougla (mixed) ethnicities. (Fieldwork, Kingston, Jamaica, 2009; Georgetown, Guyana, November 2009, March–April 2010).

concept to increase incomes and diminish the exploitative grasp of moneylenders on the poor

(Dichter 1996, 10; Harper 1998, 26).9

Micro-credit is currently the favoured topic at global events on poverty reduction at the U.N. and the World Bank for its inclusive financing aspect.10 The Microcredit Campaign

Summit declared in 1997 that in the future microfinance would reach 100 million poor families (Midgley 2008, 474; Dichter and Harper 2007, 4; Elahi and Danopoulos 2004,

644),11 and the U.N. endorsed microfinance as a tool for helping meet the Millennium

Development Goal of halving poverty by 2015 because of its replicability to reach many people.12 Eight years later, the U.N. marked 2005 as the International Year of Microcredit in recognition of the salient role that microfinance played in the U.N.’s “First Decade for the

Eradication of Poverty” (1997–2006) in reaching 100 million poor entrepreneurs (Khan

2009, 148; Dichter and Harper 2007, 5; Daley-Harris, 2005, 2004; UN General Assembly

Meeting 2003). Awarding the Nobel Peace Prize to Mohammed Yunus and the Grameen

Bank in 2006 confirmed that poor people, especially women, are good investment risks (that is, they repay loans) and that micro-banking can contribute to reducing poverty around the world (Yunus 2007a, 155; 2007b). Today more than 205 million people have access to micro loans (Reed 2012).

9 An industry aimed to include excluded groups is still replicating patterns of exclusion that is why people turn to money lenders. See N. Srinivasan, author of Microfinance in India: State of the Sector Report 2008 (in McLeod Arnopoulos 2010, 321) finds that the poor in remote areas are excluded from microfinance. 10 Many conferences have recognized microfinance as an important intervention: Programme of Action of the World Summit for Social Development (1975); Beijing Declaration and Platform for Action of the Fourth World Conference on Women (1995); Programme of Action for the Least Developed Countries for the Decade 2001–2010; and International Conference on Financing for Development in 2002. 11 Microcredit Summit Campaign website www.microcreditsummit.org, retrieved 27 June 2008. 12 MDGs emerged from the Millennium Declaration, resolution 57/266 of 20 December 2002.

Advocates revere microfinance as an effective tool to end hunger and poverty

(Roodman 2012a; 2012b; Rogaly 1996, 102). Klobuchar and Cornell Wilkes (2003, 26) write: “If a social evangelist had a choice of picking one tool, one movement with the goal of emancipating the poorest women on earth, the microcredit phenomenon wins without serious competition.” In the eyes of supporters, then, micro-credit can do no wrong (Woller and

Woodworth 2001, 270; Hashemi et al. 1996, 635; Rogaly 1996, 105). But critics have found empirical evidence that in certain contexts microfinance has questionable impact on women’s empowerment and poverty reduction (Ahmed 2008; Rankin 2002; Rahman 1999; Goetz and

Sen Gupta 1996). Roodman’s latest book, Due Diligence (2012), also questions the perceived positive impact of micro loans on the poor. However, criticizing the tool is risky, and this is precisely because of its mission to help the poor (Bateman 2010, 34–42; Dichter and Harper

2007, 2–3). Champions of commercialized microfinance, such as Otero and Ryhne (2006) and Drake and Rhyne (2002, 4), tout the potential of micro-credit’s inclusive nature to reach massive scale and to increase incomes, and it is this potential that earned micro-credit its many supporters (McLeod Arnopoulos 2010, 16; Rhyne and Otero 2006, 5; Brody et al.

2005; Woller and Woodworth 2001, 271; Morduch 1999, 1609).

The Direction of Microfinance in a Neoliberal World

By the 1990s, the microfinance industry (including the Grameen Bank) had shifted its focus from poverty reduction to commercialization. During this period, organizations focused on financial viability (CGAP 2006; Drake and Rhyne 2002, 4; Matin et al. 2002, 274; Wahid

1994, 11). The increased scale and profitability of micro banking, which was the result of the

neoliberal13 push within the sector, provoked a debate among practitioners about the original intentions of micro-credit (Bateman 2010, 3-4; Midgley 2008, 477; Wilson 2001, 244;

Rahman 1999, 79). Institutions that were helping the excluded poor to access financial services were being pressured by donors and investors to recover costs.

In 1992, the Grameen Bank, compelled to cover costs and commercialize its operations, began to charge interest rates that were higher than market rates (Morduch 2000;

1999; Rahman 1999, 79; Wahid 1994, 12). Milford Bateman (2010, 21) describes this move from a development model to a commercial model as a “new wave” of microfinance,14 and found that supporters at both ends of the political spectrum embraced this “new wave” shift in micro-credit towards profitability (Roodman 2012b). As Morduch stated, “Advocates who lean left highlight the bottom-up aspects, attention to community, focus on women and, most importantly, the aim to help the underserved. Those who lean right highlight the prospect of alleviating poverty while providing incentives to work, the nongovernmental leadership, the use of mechanisms disciplined by market forces on-going subsidization” (Morduch 1999,

1570). The debate between social financing and commercialization endures in the industry.

Currently, the commercial side of the industry is dominated by new wave microfinance and a neoliberal political philosophy (Bateman 2010; Credit Where Credit is

Due 2000). It can be argued that the political project to ensure that financial institutions are

13 I used David Harvey’s (2005, 2) definition of “neoliberalism” as “a theory of political economic practices that proposes human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade.” See Harvey (2005), Chua (2003), Friedman (1982) and Polyani (1944) for varied perspectives on neoliberal politics and markets. 14 Bateman (2010, 161) suggests that the “new wave” microfinance conveniently fits neoliberalism but his view is contested by those advocates who feel microfinance was created to make financing inclusive. In a much earlier text, Harper (1998, 9) refers to the “new wave” as microfinance operating on a business-like model.

sustainable contradicts the original intention of micro-credit, which was to help poor business people access finance. Critics of commercialized microfinance (Bateman 2011; 2010, 161;

Dichter and Harper 2007, 21; Rankin 2001, 18; Rogaly 1996, 102) claim that its advocates

(such as Brody et al. 2005; Klobuchar et al. 2003) of commercialized microfinance are blindly committed to “money with a mission,” that is, a cure to poverty, despite the pressure from within these institutions to be profitable. The current neoliberal influence in development seems to indicate that micro lending as a profit-making enterprise has won over poverty-lending approaches (Peck Christensen 2005). And many of the cooperative models making micro loans to the poor are often overlooked.

Commercialized Microfinance: Profits and Investment

Commercial microfinance institutions (MFIs) that adhere to the tenets of economic liberalization and commerce—such as Bolivia’s Banco Sol, Peru’s Mibanco, Mexico’s

Banco Compartamos, and India’s SKS Microfinance Bank—all have received significant investment capital for credit despite controversy over their excessive profits and questionable collection practices (Malkin 2008; Sengupta and Aubuchon 2008, 12-17; Navagas et al.

2000, 338; Morduch 1999, 1576). Banks that do not claim to help the poor and do not depend on subsidies (and use their own capital) may be less controversial. The moral dilemma arises when certain microfinance banks, like SKS Microfinance Bank and Banco Compartamos, access subsidies and concessional loans from donors for money claiming they do banking differently from conventional banks.

Among the donors that have provided capital for microfinance to assist poor entrepreneurs is the United States Agency for International Development (USAID), the

largest donor agency in micro enterprise development since 1978, particularly in the

Americas. These investments have led to the expansion of microfinance based on a purely commercial model (as opposed to a poverty reduction tool which governments use them for)

(Bateman 2011, 2; Midgley 2008, 270). The Inter-American Development Bank (IDB),

Caribbean Development Bank (CDB), World Bank, and the International Finance

Corporation (IFC) and the which have significant micro-credit investments in Latin America and the Caribbean (LAC).15 In 2007, the IDB launched the Caribbean Capacity (Carib Cap) project to increase the technical capacity of microfinance retailers in the Anglophone

Caribbean countries, and IDB’s 2012 follow-on Carib Cap project focuses on improving the technical capacity of microfinance organizations.

IDB also provides financial support to Fonkoze (a micro lender in Haiti) and Haitian commercial micro lenders (Fieldwork in Jamaica and Haiti, 2009 to 2011). The World Bank,

IDB’s Multilateral Investment Fund (MIF), and the International Finance Corporation (IFC) have also had an important presence in Jamaica and Haiti in terms of capitalizing micro bankers (Anonymous Interview IDB, 20 February 2009).16 The Consultative Group to Assist the Poor (CGAP)—the World Bank’s agency—carries out extensive research, training, and technical assistance, and invests in innovation in the microfinance sector (Dichter and Harper

2007, 4; Daley-Harris 2006, 2004; Rogaly 1996, 100).

15 In this study, I use interchangeably, and where appropriate, the terms “Islands,” “Caribbean,” “Caribbean region,” and “West Indies.” All terms refer to the Caribbean countries as those belonging to the Caribbean Community (CARICOM), including Haiti with its observer status. 16 Several IDB projects support microenterprise development projects: ATN/ME-1089-RG Carib Cap project; ATN/ME-10342-JA, which assists rural lending expansion of MEFL in Jamaica; and ATN/ME-10862-JA, which provides risk management and operational management to micro, small, and medium enterprises often excluded from conventional banks.

On his first trip abroad as U.S. president, Barack Obama launched a $100 million dollar Microfinance Growth Fund for Caribbean countries at the Fifth Summit of the

Americas, themed “Securing Our Citizens,” in Trinidad and Tobago on April 17-19, 2009.17

This pledge reiterated America’s commitment to microfinance in the region and aligned with the local states’ needs to invest in slum communities vulnerable to transnational crime. I posit in this project that an investigation into the financial aid to micro loan programs is needed to better understand whether micro loans are helping the economically active or whether they are contributing to further instabilities and local conflicts.

Private investment vehicles from the West also support profitable MFIs and they do expect a return on investments. Pierre Omidyar of eBay, the Bill and Melinda Gates

Foundation, the Michael and Susan Dell Foundation, and Bob Pattillo of Gray Ghost have all invested billions in commercial microfinance (Bruck 2006).18 At the start of 2000, 89% of the capital of MFIs came from bilateral and multilateral agencies (CGAP Focus Note No. 25 in Chowdri and Silva 2004). By 2012, private investments from such groups as Blue

Orchard, MicroVest Capital Funds, and Sarona surpassed foreign aid in microfinance.

Corporate foundations, such as the MasterCard Foundation in Toronto, have made grants in microfinance. In 2005, Kiva, the world’s first on-line micro-lending platform, allowed middle-class individuals to also make investments in micro entrepreneurs in the Third World.

17 Obama declared a new partnership among the Multilateral Investment Fund (MIF) at the IDB, the U.S. Overseas Private Investment Corporation (OPIC), and the Inter-American Investment Corporation (IIC), for the purpose of launching a new Microfinance Growth Fund for the Western Hemisphere. See www.whitehouse.gov/the_press_office/The-United-States-and-the-2009-Summit-of-the-Americas-Securing- Our-Citizens-Future, retrieved 18 April 2009. 18 eBay founders created in November 2005 the Omidyar-Tufts Microfinance Fund (OTMF) with USD $100 million. See www.tufts.edu/microfinancefund. Atlanta, Georgia’s, Bob Pattillo operates the Rockdale Foundation, Gray Ghost Microfinance Fund, and Gray Matters Capital. See more at http://www.grayghostventures.com/

Big investors have capitalized commercial microfinance banks, and thousands of MFIs seem to be striving to attract capital investments from major investors. Billions invested into micro-banking is intended to stabilize countries, yet there are questions to consider: Are these resources being managed properly? And does internal politics complicate the profitability of these institutions?

The Main Debates in Microfinance

Micro-credit, as mentioned above, was sold to the world as an effective tool to combat poverty in the late 1970s. By the 1980s, many development projects had micro lending activities attached to them. The 1990s saw a trend to commercialize micro lenders, resulting in an entire sector committed to best practices to ensure that micro lenders were profitable retail entities with full recovery (as a business). While the result of this push towards commercialization has only been around one hundred profitable MFIs, the focus of investors and donors on profitability shifted microfinance from its original intent of poverty reduction and improved social impact to market-driven ideas of financial success (Bateman

2010; Khan 2009; Roodman and Qureshi 2006; Morduch 1999, 1609; Dichter 1996, 10;

Rogaly 1996, 101). Economists and anthropologists (Bateman 2011; 2010; Easterly 2007;

Harriss 2002; Kothari 2005; Rankin 2002; Mayoux 2001; Rahman 1999) provide significant evidence that microfinance retailers ignore local politics, unequal social structures, and vertical hierarchies, and that all of this reduces poor people’s access to development and

economic resources.19 This shift in the 1990s from a poverty reduction mission to the seeking of financial sustainability (and profitability) has profound implications.

Many scholars from various academic fields (Maclean 2010; Rankin 2002; Molyneux

2002; 1986; Hulme 2000; Rahman 1999 and Rogaly 1996) argue that microfinance cannot help the poor everywhere and in the same way. Veltmeyer (2007), Rahman (1999), and

Goetz and Sen Gupta (1996) suggest that the concept of empowerment, when incorporated into social and economic programs (such as microfinance), is often used to appease the poor without making positive transformational change in their lives or larger society. Vonderlack-

Navarro (2010), Rankin (2002), and Rogaly (1996) argue convincingly that micro lenders take a minimalist approach, one that is focused on repayment of micro loans and failing to create positive collective economic action.

Growing controversy over excessive profits in micro lending has raised questions, for example, about lenders like Bolivia’s Banco Sol, the world’s first commercialized MFI, whose high rates of return from interest have made the enterprise very lucrative. Critics are concerned that micro loans do not help the poor entrepreneurs. For example, in 2008, outcry was raised against Mexico Bancos Compartamos, whose enormous profits—which allowed

Compartamos to have an initial public offering on the Mexican stock market—came at the expense of its low-income female clients (Bateman 2010, 22; Malkin New York Times 2008;

Sengupta and Aubuchon 2008, 16). In another example, in 2010 Indian state and civil society leaders reprimanded SKS Microfinance for its unethical collection practices, high interest rates, and (reportedly hidden) services fees. MFIs that have chosen the path of

19 Easterly (2007, 117) questions whether money to help the poor will actually reach them in corrupt states.

commercialization have become very profitable, recognizing the high demand for very small loans and the fact that that poor entrepreneurs are willing to pay high interest rates for access to financial services (Roodman and Qureshi 2006; Drake and Rhyne 2002).20

While commercial retailers make access to credit available to excluded people, this type of retailing has a negative side. The Microfinance Banana Skins Report “Microfinance

Losing its Fairy Dust” in 2011, suggests that excessively profitable commercial micro lenders pose a reputational risk to the industry. Yunus (NYT 14 January 2011) labels such

Indian micro lenders as the “new loan sharks” of today. Eighty microfinance-related suicides were reported in the state of Andhra Pradesh, India, in December 2010 (Bateman 2011, 86).21

Poor clients harassed and shamed by MFI staff for not repaying loans, killed themselves for debts of less than US $800. In response, Indian officials issued ordinances to regulate and cap interest rates on micro-credit (various articles in the Economist, Wall Street Journal and

New Times between October and November 2010). Advocates of microfinance, particularly private microfinance firms, see the federal government’s swift reaction to curtail private lenders as a political act, claiming that the state’s motive is to limit private competition with state-run self-help loan programs.

The evidence of the beneficial effects of micro debt is thus mixed. Skeptics cast aspersions on microfinance’s supposed intention to help the poor given the questionable

20 This aligns with Prahalad’s (2006, 8) findings that there is money to be made at the base of the pyramid (BOP), and that when companies find a way to service this huge market, huge profits can be made. 21 “India Microcredit Faces Collapse from Defaults,” NYT, 17 November 2010. http://www.nytimes.com/2010/11/18/world/asia/18micro.html?_r=2&hp=&pagewanted=all, retrieved 20 Nov. 2010. See also a PBS broadcast on India’s microfinance issues: http://indiamicrofinance.com/microlending- india-pbs-news-report.html Also visit Reuters to read Flex Salmon’s “The Lessons of Andhra Pradesh.” , retrieved 18 Nov. 2010

activities of some managers and staff working inside the microfinance sector (Microfinance

Banana Skins 2011; Rhyne 2011; McLeod Arnopoulos 2010, 317; Ahmed 2008, 122). The perceptions that microfinance can do no wrong, that its managers are champions of the poor, and that it restructures formal finance in a way meaningful to social progress no longer exist.

This study provides insights into the activities of these micro-credit lenders and examines the local politics and motivation of the people in charge of this worldwide phenomenon.

Micro Banking, Poverty, and the Caribbean

Micro enterprise lending to the poor is not new in the Caribbean region. In Jamaica,

Haiti, and Guyana, African slaves and their descendants carried out market activities and engaged in informal micro banking (N’Zengou-Tayo 1998; Wong 1996; Witter 1989; Mintz

1955). Penny Bank in Dominica opened in 1949 (Barriteau and Cobley 2006; Lashley 2006).

In fact, the 2008 visit of Mohammed Yunus, then-director of Grameen Bank, to speak to business people at the Jamaica Pegasus Hotel (in uptown Kingston) underscored the importance of microfinance to Jamaican business elites (Collister 2008).22 Yunus also visited

Port-au-Prince, in October 2011, where he met not only with clients of Grameen’s Creative

Lab, but also with high-ranking officials and donors (Fieldwork in Haiti, October 2011).

Thus, in many parts of the Caribbean—specifically in Jamaica and Haiti where poverty is high—micro-credit is an important poverty-reduction tool for political leaders and many lenders (CDB 2010; Poto Mitan film 2008; Tennant 2008; CMN 2007; ECLAC 2000;

Lashley 2004a; 2004b; McFarlane 1997). The visits of Yunus and other microfinance experts

22 This event, held at the Jamaica Pegasus Hotel in New Kingston, was hosted by Bank of Nova Scotia Jamaica (BNSJ) and was by invitation only.

to these countries, in which they socialize with political and business elites and foreigners, legitimizes the work of these government officials—even when the positive impact of their programs on poverty is questionable.

A cursory examination of the many informal vendors in the streets of the three cases of Jamaica, Guyana, and Haiti suggests that the enterprising poor may in fact benefit from micro loans.23 The increase in the size of the informal sector and limited economic growth suggest a need for microfinance (Bowen 2007; Yunus 2007b; Webber 2000). Given the high rates of inequality and poverty in the Caribbean, micro banking is a significant recourse for poor people there (CDB 2010, ii). (See Table 1.1 for poverty levels by country.) All three countries in this study ranked relatively low on the UNDP’s Human Development Index

Report (2009) compared to other Caribbean countries (CDB 2010, 45).24 In Jamaica, for example, a third of the population is reported to occupy property without legal claim

(Jamaica Gleaner 2009). Jamaica has the largest number of very poor citizens in the English- speaking Caribbean, and Haiti accounts for the greatest absolute number of very poor in the region, as well as the largest number of French-speaking poor in the Americas.

In the cases of Jamaica and Haiti, micro loans have become a principal part of poverty reduction programs. State agencies, such as the Jamaica Social Investment Fund

(JSIF), support important community projects—including microfinance programs—through the Inner Cities Basic Project (Bowen 2007, 155). Haiti, Jamaica, and Guyana have relatively

23 The Gleaner (April 2009) reported that one-third of Jamaicans live in squatter dwellings and hold no land title, a fact that suggests a significant number of Jamaicans work in the informal sector. The Jamaica Survey of Living Conditions for 2007 reported a decline in poverty (Introduction). 24 The rankings were as follows: Jamaica (100), Guyana (114), and Haiti (149).

denser markets in the region. All three cases are of great interest to the IDB, USAID, and the

CDB because of the sizable enclaves of poverty in the region and the potential for microfinance as a poverty reduction tool (Dalrymple and Harding Interviews, 27 April 2009).

Table 1.1 Poverty Levels in Jamaica, Guyana, and Haiti

Country Poverty Rate

Jamaica <20%

Guyana 43%

Haiti 77%

Web Source: Date for Jamaica and Guyana is from the Caribbean Development Bank (CDB) Report 2010, 45. Haiti data is from the World Bank data 2011.

The Three Cases

Although micro banking has had a long history in the Caribbean, the definition of what constitutes a “micro enterprise” varies among countries. In this study I define the urban- based micro-enterprises as an owner-operated business that has less than five employees

(Whyte 2001, 13). It is widely believed that investments in microfinance to the English- speaking Caribbean region have been largely unsuccessful (Daley-Harris 2006, 2004;

Westley 2005; Chalmers and Wenner 2001; Lashley 2004a, b) compared to developing countries in South Asia (such as Bangladesh) or Latin America (such as Bolivia or Peru). For the LAC region, evaluators found in 2007 that the top-rated MFIs were in Spanish-speaking countries in South America, with only one exception in the Dominican Republic (MIX website 2007, 2006).

In developing countries with large numbers of entrepreneurial women, microfinance has tended to operate effectively (Roodman 2012a). Poor penetration of financial services (in

this study, credit) to low income markets in the Caribbean, more specifically in Jamaica and

Guyana, is thus puzzling given the high level of female entrepreneurship in these countries

(Tennant 2008; Ulysse 2007; Honig 1998a, 1998b, 2000; Witter 1989). There is little consensus on why Caribbean micro lending has not fared well compared to other micro- lenders in the industry (Economist Intelligence Unit, October 2008, 10).25 Haiti stands out as an anomaly among Caribbean microfinance results: the micro lending sector has performed well in this country, despite its political instability and natural disasters.26

Microfinance access in the Caribbean, particularly in Guyana and Jamaica, is low.

Jamaican and Guyanese MFIs, which are well-versed in best practice microfinance, have failed in outreach to certain types of poor clients. Microfinance experts from the region suggest that the reason few poor people are accessing credit is because small countries like

Jamaica and Guyana have limited market absorption (CMN 2002); however this assertion is debatable. Small countries with sufficient suppliers are able to meet the demand in a number of countries in Central America. This is not the case in Jamaica and Guyana, as their micro lenders reach about 10% of those clients who demand microfinance. Haiti’s penetration is at

25% despite its highly complex political environment and weak infrastructure.

Microfinance is lagging in the Caribbean region and there are many contesting views on why micro lending fails in the Anglophone countries. Chalmers and Wenner (2001) argue that a relatively high standard of living, less poverty,27 access to remittances (Kapur 2005;

25 Out of the 20 countries analyzed, Jamaica ranks last overall in the 2008 microfinance index. 26 In Navajas and Tejerina’s IDB report (2006) examining twenty-three countries in the LAC region including Jamaica, Guyana, and Haiti, Haiti emerges as a potential microfinance leader. 27 Bowen (2007) refutes this assumption because the average poverty rate in the Caribbean is 30%.

Ndarishikanye 2005), and a highly educated labour force all work to create an aversion to self-employment.28 In other words, the richer a nation, relatively speaking, the less likely microfinance will be useful. Others contend that government subsidies interfere with microfinance performance because institutions that receive grants are less efficient with resources (Morduch 2000, 620). Alternatively, states with resources provide welfare payments that interfere with small business development.

One daring explanation is that citizens in the Caribbean lack a business mind-set.

Bajan scholar Lashley (2004) argues that Caribbean residents lack an entrepreneurial culture because people prefer jobs and only turn to micro enterprise for survival (Lashley Interview,

24 April 2009). In contrast, Haitian-American anthropologist Gina Ulysse (2007, 83) finds that Jamaican higglers have an abundance of entrepreneurship dating back to slave times.29

Like Ulysse (2007), rating expert Damien Von Stauffenberg (2000) argues that failure in

Caribbean micro banking is less about culture or smallness than about operations: managers do not adhere to best practice methods and systems. I found in this study, for example, that middle-class university-educated loans officers had no experience in the Kingston slums and this lack of context can negatively affect their outreach (Fieldwork, 2009).

In a multi-country study of the Anglophone Caribbean countries, Glenn Westley

(2005, 2) also points to weak internal management. Managers, although well-educated, lack skills and methodologies to attract borrowers from the shanty towns, which inevitably affects

28 This suggestion contradicts Honig’s (1998) and Ulysse’s (2007) research into Jamaican entrepreneurs. 29 The Jamaican term “higgler” dates back to the colonial period when women traders brought agricultural goods from the country to the towns (Ulysse 2007; Witter 1989). Most Jamaican business people I interviewed called themselves hustlas and those persons in higher level retailing referred to themselves as higglers.

microfinance outreach and performance. This weakness was evident in the Guyana case

(Fieldwork, November 2009 and spring 2010). Studies on the Jamaican microfinance sector

(Tennant 2008; Holden 2005; McFarlane 1997) point to man-made bottlenecks in the system that prevent financial access by the poor, such as interest rate caps and the lack of credit bureaus.

While each of these perspectives indicates weaknesses in the capacities of retailers, no mention is made of the role of personal or political biases that can affect the actions of local managers and staff persons. For example, a study of the Guyanese micro enterprise sector (McGarrell 2010) fails to mention race as a factor limiting the reach to a specific group of people. Identity politics and the ingrained personal bias of individuals managing microfinance programs clearly do affect the lending process, but this is not broached as an explanation as to why micro enterprise development is limited in these two countries.

Scholarly reviews of microfinance, particularly of the Caribbean region, thus do not explore the role of partisan identification and cultural factors in microfinance allocations.

Chalmers and Wenner (2001) have vaguely referred to a historical legacy unique to the region as affecting the performance of micro loan programs (Navagas and Wenner

Discussion, 9 November 2010), but it is not clear from their own work what they mean.

Managers in the Jamaican and Guyanese microfinance sector often come from an ethnic background that is culturally distinct from the majority of the poor who need microfinance.

Many of these staff persons market their program as helping poor business people, but they do not use microfinance as a tool to rebel against society’s ingrained class or racialized politics.

Still, Chalmers and Wenner (2001) have considered the possibility that context may affect the success of micro loan programs in the Caribbean region. My findings demonstrate that Jamaicans and Guyanese living in the slums do not trust the local micro-finance lenders or the managers and staff running micro loan programs, whom they see as excluding them, the borrowing clients, from microfinance. In contrast, Haiti’s ti machanns (small-scale market sellers) trust the micro lenders in general for their efforts to make micro-credit accessible. These lenders gain the trust of clients because they are cognizant of the local culture, planning programs accordingly to reach this market.

I contend that micro banking in Jamaica and Guyana has been stunted by identity politics and these lenders, who have ingrained prejudices, decide who gets a micro loan.

Many of these local managers believe that credit for the urban poor should be treated as charity (or as way to control or manipulate certain groups of people) and not as a serious sustainable and lasting financial program (Navagas Interview, 29 September 2010). Most of the Jamaican and Guyanese microfinance lenders interviewed for this study refused to acknowledge the role of politics in the allocation of micro loans. Indeed, most of the decision-makers who run these loan programs are socially removed from the lived reality of those seeking a micro loan (Bateman 2010, 109). This distance from the lived reality of borrowers produces racial and/or class biases in the allocation of loans.

The case of Haiti, however, illustrates that micro-credit can be inclusive in a politically complex and racially stratified environment. Black Haitian lenders (as well as whitened and foreign managers) are politically conscious and espouse an “economic democracy” philosophy for microfinance. When local managers are aware of the identity

biases in a society, they can program and organize credit to mitigate any political interference in the allocation of financial resources. In Haiti, the majority of individuals involved in micro lending are Blacks who are one or two generations removed from the people they serve.30

Findings of this case reveal that micro lending has a grassroots influence. Organizations such as the caisses populaires and cooperatives, as well as sols, have long been part of the local environment. Even non-cooperative lenders have adapted to the local culture, adjusting programs to meet the needs of the entrepreneurial poor in the cities.31

Understanding Politics in Microfinance: An Interdisciplinary Theoretical Approach

While economists have contributed significantly to the economic aspects of microfinance (Armendáriz and Morduch 2007, x), much of the literature on microfinance is produced by advocates. Economists like Roodman (2012a) and Bateman (2010; 2011) give a critical review and their books question microfinance’s impact on business people. Bateman

(2010; 2011) comes close to providing a political lens for understanding microfinance; yet, political scientists have not concerned themselves with micro lending, even though the micro lenders’ allocation of resources (e.g., economic resources) to the poor is an extremely political act. Local elites can misuse resources and exert their power over the powerless. The unfair allocation of resources through arbitrary politics can have a profound effect on the peace and stability of a society. Microfinance in the form of patronage, granted to certain

30 “Black” is defined in this study as people who are of African ancestry. See Winkler (2006, 89–99) and Hope (2006) for perceptive discussions on class and colour in Jamaican society. 31 In Haiti, the caisses populaires are financial cooperatives and have the legal right to collect deposits and make loans (Emails 3 and 4 August 2011 from Julien of l’universite d’Quisqueya and St. Gilles, CEO of KOTELAM).

persons, exacerbates tensions and creates divisions among people of the same community: some persons receive these hand-outs as preferential treatment that is usually politically motivated (Eisenstadt and Roniger 1984; Stone 1980; Scott 1972). This misuse of power perpetuates poverty, and can create anger among the poor masses.

In this study, I argue that managers who live in stratified societies like many countries in the Global South have historically rooted prejudices that are ingrained and come to the fore in economic development programs for the poor (e.g. Jamaica and Guyana). Yet, many of them will be inclined to deny that identity or partisan politics are active and affects the allocation of credit due to inherent race, gender, and class prejudices. The consequence is that these micro-credit programs are operated in an exclusionary fashion. However, these biased and discriminatory micro lending practices of local managers and staff are not mentioned in the works that question the impact of microfinance—such as Roodman’s Due

Diligence (2012) and Bateman’s Confronting Microfinance (2011). In fact, the microfinance industry as a whole does not analyze the persons in positions of power who allocate financial resources to the needy.

Supporters and skeptics of microfinance alike analyze, at great length, both the viability of institutions and the technical aspects of microfinance programs, such as best practice (Armendáriz and Morduch 2007; Morduch 2002; Rhyne and Otero 2006). In March

2012 the Inter-American Development Bank’s (IDB) call for proposals for a second phase of the Caribbean Capacity II project, recognizes the limited performance of micro lending as government subsidies, as well as the failure of managers to adhere to technical best practices, but there is no mention of cultural prejudices of staff that affect access to loans. A region

greatly impacted by historically embedded biases and political violence fails to address the concern of identity politics affecting its performance in the allocation of financial resources to the economically-active poor. Experts also repeatedly focus on the impact of microfinance on the poor—especially poor women (Roodman 2012a, b; Bateman 2011; Kabeer 2001;

Mayoux 2001; Rahman 1999; Mosely and Hulme 1998; Johnson and Rogaly 1997; Hashemi et al. 1996; Goetz and Sen Gupta 1996). Yet, the cultural make-up of the lenders themselves does not seem to be getting attention.

In this study, I build on the scholarship of social scientists in and outside of the

Caribbean who critique micro-credit as a tool to assist the entrepreneurial poor by adding analysis of the internally embedded biases in financial programs for the poor. Identity politics figure heavily in how managers distribute economic resources to local areas. The microfinance literature provides solid research on the social aspects and empowerment intersections between women and micro-credit (Vonderlack-Navarro 2010; Maclean 2010;

Armendariz and Murdoch 2007; Rankin 2002; 2001; Kabeer 2001; Mayoux 1999; Hashemi et al. 1996; Ardener and Burman 1996). However, analyses of other identities, such as class or ethnicity/race, are rare.

Development literature, as well, in general has had limited analysis of the intersection of multiple identities. As highlighted earlier, donors and microfinance lenders tend to focus on the implications of gender, in which poor women receive microfinance for retail

activities.32 During my field research, development experts in Kingston revealed that class bias (which, as we shall see, intersects with race) in micro lending analysis was “too controversial” to discuss and that government officials preferred to downplay evidence of social class bias by highlighting gender discrimination. In my view, however, these two issues are intertwined.

My research project demonstrates that party and identity politics are intrinsically involved in microfinance lending, and that microfinance lenders’ and political elites’ use of microfinance for political purposes, as occurs Jamaica and Guyana, is exclusionary. While advocates of microfinance (Rhyne and Otero 2006, 5; Morduch 2000, 624) are critical of state interference, these same critics refuse to consider that the internal identity politics of microfinance lenders limit the capacity of micro-credit to help the poor when local managers and staff—who are often different from their clients in terms of class, race, and gender—run these programs.

Many scholars from various academic fields (Maclean 2010; Rankin 2002; Molyneux

2002; 1986; Hulme 2000; Rahman 1999 and Rogaly 1996) argue that microfinance cannot help the poor everywhere and in the same way. Veltmeyer (2007), Rahman (1999), and

32 I contributed to Jamaican policy work for the IDB and Jamaica House (Government of Jamaica) in 2009 and introduced the idea that men in the slums, especially youth in the ghettos, were deliberately left out of microfinance programs (Hossein 2009).

small degrees in Haiti. Vonderlack-Navarro (2010), Rankin (2002), and Rogaly (1996) argue convincingly that lenders take a minimalist approach, focusing on repayment of micro loans and failing to create positive collective economic action. Again, the Haiti case shows that the collective model in microfinance is the best for reaching large numbers of excluded people.

Bateman (2010, 161) posits that the microfinance revolution not only supports dominant neoliberal political philosophy but also unacceptably downplays the political motivations behind micro lending activities. Rankin’s (2001, 29–32) work in the Kathmandu

Valley in Nepal suggests that this new economic order uses microfinance to create “rational economic women” and that a structural violence embedded into microfinance programs binds poor women to their oppressors (Rankin 2001, 30). Building on the work of Bateman (2011;

2010) and Rankin (2002; 2001), I examine politics not only as something external to microfinance, but as something that is deeply embedded in these programs through hierarchies of politics, gender, race, and class that give the lenders power over those poor individuals who best conform to their social norms. When some poor people take micro loans, they risk becoming tied to the politics of local elites (Rankin 2002, 30). In Portfolios of the Poor, Collins et al. (2009, 53) suggest that informal banks are a financial device for the poor who cannot access sufficient levels of financing. However, I move beyond these notions that the poor are passively indebted to local elites or that they use informal banks only to meet their needs: I argue that the participation of the poor in informal banking systems is a covert form of resistance. If micro banking is perceived by poor business people as politically motivated or exclusionary, then it seems logical that some micro entrepreneurs

would turn to informal, trusted banks to avoid being manipulated by microfinance administrators.33

Resistance from below is not new (Scott 1977). I build on the work of Jamaican political scientist Obika Gray (2003a, 2003c, 2004), who points to widespread urban resistance “social power” among the urban poor, including among very small businesses.34

Having worked in these slums, there is a power that resides within certain segments who do not accept partisan politics dominating their lives. While the poor cannot be defined as a homogenous group, a commonality of traits can be seen among low income business persons in all three cases. Microfinance borrowers in Jamaica and Guyana participate in and mobilize

“Partner” or “Box hand” (informal banks) as a form of social resistance. Jamaican hustlas rely on Partner as a trusted and locally owned community bank to avoid being co-opted by politicians and gang leaders, and Afro-Guyanese hucksters turn to Box hand to restore personal dignity when they are denied microfinance because of racial discrimination. In

Portfolios of the Poor, Collins et al. (2009, 26) trace 250 financial diaries in three countries and find that accumulating savings is a strategy of the poor, who channel their money through informal banks (such as ROSCAs). I contend that such informal banks not only provide coping tools for livelihood survival, but have been used over generations as a form of resistance when micro-credit programs are not trusted, exclusionary, or deemed political.

33 Jamaican business persons in the slums referred to themselves as hustlas, a term which for them has a positive connotation, as business people “tryin’ a likkle ting” (conducting business) in the informal sector. In the Guyanese context, hucksters are the micro entrepreneurs in the informal sector. 34 See Sives (2010, xx) for a different view.

Gendered Perspectives in this Study

The mobilization of people and organization of informal banking systems in slum communities in the Caribbean are achieved through the tenacity of poor Black women. Poor women with limited formal education come together to make financing options available through informal banks to excluded groups in their communities. While most microfinance banks target women-owned enterprises, many women do not qualify for micro loans. I found that there is a preferential treatment of certain women (chapter six). In every chapter, I examine the contributions made by women in informal banks. Women are not merely clients, they are also actors facilitating lending. In this study, I interviewed 256 female subjects (56% of the sample). As noted in Table 1.2, 64% (n = 177) of the micro-entrepreneurs I interviewed were women. The stakeholders35 (non microfinance actors) interviewed accounted for 45% (n = 83) of the sample; and in the Jamaican case, women stakeholder (not microfinance staff persons) interviews accounted for the majority of persons interviewed at

61% (n = 45). Thus, overall, a strong female voice is present in this study.

Table 1.2 Female Perspectives in the Study

% of Jamaica Guyana Haiti International Total Sample

Female Micro-entrepreneurs 146 19 12 0 177 64%

Total Micro-entrepreneurs 233 29 14 0 276

Female Stakeholders 45 16 18 4 83 45%

Total Stakeholders 74 50 48 12 184

Total Female Perspectives in Study 191 35 30 4 256 56%

Total Sample 307 79 62 12 460

35 Some stakeholders would include civil society experts, community activists, policy experts, and academics.

Given that micro-credit programs tend to focus on women worldwide, I analyze gender in contexts in chapter six. The Jamaica case in particular sheds new insights for female-focused loan programs—for various reasons. In the Jamaican microfinance industry, women dominate as managers and clients; yet, certain women are overlooked as clients for microfinance. In spite of the fact that Jamaican micro banking is dominated by female staff persons, there is no gender equality within the sector. The microfinance managers and staff persons, who are mainly women, exclude young male entrepreneurs from the slums from financial services. Scholars Miller and the late Chevannes have discussed the male marginalization thesis in urban Jamaica, where data shows that in the education sector, poor males are the most underperforming group. In contrast, the Indian Guyanese male lenders discriminate against Blacks (chapter four).

In the Jamaica case, however, it seems that having more women leaders in microfinance does not result in gender inclusive microfinance (as I will elaborate on in chapter six). Female managers are biased against certain women (those with children by more than one father) and male youth from the ghettos. This response is similar to the male

Indian staff in Guyana, who privilege Indians over Blacks, providing them with larger loans.

Moreover, in cases where micro loans do favour women, this has proven to have negative effects. Research findings corroborate with findings from other parts of the world that suggest micro lending targeting poor women disempowers them (Vonderlack-Navarro 2010;

Armendáriz and Roome 2008; Ahmed 2008; Rahman 1996). It exacerbates social conflicts at the community level, not only between men and women (especially those in a partnership/family business) but among women of the same social class (Mayoux 2001).

While the domination of one gender penalizes the other gender in Jamaica, this has not been the case in Haiti. Haitian microfinance, led by men, is reaching the needs of the most excluded group—that is, single mothers. Yet there seem to be no negative repercussions within the gender dynamic of educated males making loans to poor women. However, micro lending that is focused on females affects relations at the household level: Haitian women borrowers claim they give part of their loans to their husbands’ businesses, which may earn more revenue than their petty trade (Field visit, September and October 2011). The emphasis on women clients may not be useful in the future, especially when women are giving part of their credit to their male partners. Nonetheless, in Haiti female clients find overall that male managers are trustworthy and honest with them.

In each of the three cases under study, poor and uneducated women organize informal banks for business people excluded by microfinance programs. In the Jamaica case, women- run Partner banks are a form of resistance to clientelist politics that have overwhelmed some programs. In Guyana, Black women organize and participate in Box hand or Penny banks.

Box hand and Penny banks not only allow Black business people to access finance but serve as community support to restore dignity to people rejected from micro lending programs. In

Haiti, women organize Sol to reach the unmet demand for financing, a tradition that has endured for generations. Women in all three countries are thus making banking accessible at a community level for persons excluded from microfinance programs.

Argument of the Thesis: Internal Politics Active in Microfinance

Researchers generate hypotheses about their cases. In my experience researching this study, most of my assumptions were overturned, with the exception of the Guyana case.

Drawing from the scholarly literature on microfinance in the three countries, I developed a

number of working hypotheses that guided my preliminary research design. The research question for this project: why given the same inputs do microfinance program outcomes differ across contexts? An important outcome for microfinance is the creation of access and opportunities for financing. And my two sub-questions are: Is microfinance inclusive finance? And does micro banking reach economically-active enterpreneurs?

On the basis of preliminary fieldwork (May 2007 and November 2008), I came into this project assuming that Jamaica would be a case of effective and efficient micro banking.

Jamaica’s long-standing democracy and active trade unions led me to believe that its microfinance managers would be able to stop politics from interfering with micro lending to the urban poor. I expected micro-lenders (who were mainly women and who outwardly supported the promise of microfinance) to be conscious of the “garrison phenomenon” and to tailor their loan programs to remedy exclusionary downtown/uptown politics.36 My field research revealed that this was not the case. Instead, I found that the Jamaican microfinance industry was riddled with elite schisms and that poor people avoided what they saw as politicized programs.

In the case of Haiti, I had assumed from the outset that this country would illustrate the most ineffective credit programs and that its activities would be politicized due to racial and class tensions, foreign aid, the large presence of expatriates, and weak governance.

Given Haiti’s repressive politics and the polarizing social divisions in Port-au-Prince, I was surprised to find that this island nation has inclusive microfinance with a market penetration

36 Figueroa and Sives (2003, 65) define a “garrison” as a “political stronghold or veritable fortress completely controlled by a party,” adding that “any significant social, political, economic or cultural development within a garrison can only take place with tacit approval of the leadership of the dominant party.”

of at least 25% (USAID 2008). After three extended field trips (2008; 2010; 2011), it was apparent that among my case studies Haiti had the most effective forms of micro banking. In particular, those programs led by cooperatives and caisses populaires (credit unions) lead effective grass-roots micro lending.37 It was evident that identity and partisan politics can affect micro loan allocations positively or negatively, depending on how they are used by local managers.

In my political ethnographic study of 460 people in three countries, I found that the racial and class biases of micro bankers in Jamaica and Guyana result in the exclusion of poor business people—the very people micro-credit is intended to help. Race and class politics is entrenched in all three countries; yet there are different outcomes related to the attitudes, class, and race of microfinance managers. The variation in findings across the three countries is also a result of their historical and political environments. In Jamaica and

Guyana, micro lenders demonstrated that historically rooted racial and class biases go beyond gender to determine the allocation of microfinance resources. Even though lenders will not admit that identity-based prejudice interferes with the allocation of loans to the urban, they are fully aware that these ingrained biases do affect access to microfinance.

In Jamaica and Guyana, as a result of discriminatory practices and cultural biases, micro lending is a resource that counters its development aspect: it is exclusionary and it reinforces pre-existing social divisions in the society. Identity issues shape the attitudes of the managers and staff running these programs, yet they have refused to acknowledge that their

37 Haitians define cooperatives as associations based on the collective, where these groups assist a community’s social and economic developments (Montasse 2003, 53).

lending practices have racial and class biases in the allocation of microfinance. The very act of privileged people conferring monies to the poor in these social contexts is highly political because it involves the expectation of political support.

In contrast, the story in Haiti is hopeful. It is inspiring because this case shows development alternatives using indigenous solutions (Brohman 1995, 130). Haitian lenders, particularly those belonging to the caisses populaires, are made up of socially conscious managers and staff persons. Managers and staff are, at the most, one generation removed from the clients they serve, and they view microfinance as a tool to contest class and race- based oppression. Black and mulatre managers and staff person are cognizant of historical inequalities, and they take personal risks when they locate microfinance as a tool for ensuring economic democracy. Unlike in Jamaica and Guyana, the urban poor in Haiti trust microfinance programs because they see lenders adapting systems in a collective manner that is mindful of the country’s exclusionary politics.

Many Jamaican and Guyanese microfinance managers fail to acknowledge the fact that race, class, and gender bias shape their lending practices. While they market their services and products to investors and donors using the rhetoric of transforming lives through finance, in actuality they do not use loans as a transformative tool to help the poor. In these two countries, qualified business people are usually excluded from the micro-credit that is intended to help them. This exclusion in Jamaica and Guyana increases poor people’s, especially women’s, involvement in informal banks and diminishes their desire to take loans from biased micro-lenders—loans that would increase ties to political elites. Informal banks help people to access monies from trusted sources and restore their personal dignity.

Microfinance programs that are fixated on women clients have a negative effect on the people they intend to support in low income neighbourhoods. The increased presence of female microfinance managers, as in the Jamaica case, did not lead to more equitable lending, as male youths from the slums were less likely to receive a micro loan. In Guyana, racial, and not gender, bias blocked Afro-Guyanese female hucksters’ access to loans. It seems that gender alone cannot explain exclusion in microfinance, as historically rooted prejudices seep into microfinance programs to penalize the entrepreneurial poor.

Businesswomen excluded or manipulated by microfinance lenders draw on African traditions of collecting money from within their community to carry out their activities. One important finding of this study is that a women’s gender is not the only identity that makes it difficult for her to access microfinance. In Guyana, gender interacts with race and culture to situate a female entrepreneur. Despite race and class stratifications in the Caribbean, Haitian officials of cooperatives and the caisses populaires are socially conscious of the inequalities in their society and administer micro loan programs that are inclusive.

Microfinance in Jamaica and Guyana is thus counterproductive, because it either excludes the poor or provokes certain members of the urban poor to exclude themselves from microfinance. Poor entrepreneurs in both countries do not trust their micro lenders. Social divisions among microfinance actors and the poor are apparent in both contexts. Lenders have not been able to make banking inclusive because of the domination of identity politics,

in which class and cultural/racial identities drive their lending practices.38 As a result, poor

Black business people are excluded from obtaining the funds they need to do business.

This study shows that in all three cases politics is embedded within microfinance programs, and the manner in which the actors deal with these influences while managing microfinance affects how resources are distributed (Honig 2000, 106). Ffrench (2008), in his study of Jamaica, alludes to the political legacy of the state-owned micro bank, Micro

Investment Development Agency (MIDA), and he brings attention to the public perception of partisanship linked to this bank’s operations. I go further to find that banks which are politically aligned exclude viable micro-entrepreneurs. I found that in Jamaica and Guyana, microfinance managers and staff demonstrated bias in lending based on class, race, and gender. The lending decisions of these people advanced their own particular interests because they were perceived as helping to maintain profits and were rewarded with individual bonuses.39 Furthermore, the perception among poor borrowers of the collusion between actors in the microfinance field and politicians keeps many of them from seeking micro loans. The relationship between microfinance lenders and dubious political actors thereby confounds the social empowerment aspect of microfinance.

Politics in the disbursement of microfinance forces poor business people to retreat to self-financing options. Jamaican hustlas and Guyanese hucksters, deeming microfinance as manipulative and politicized, rely on informal banks. These community banks therefore

38 In Brazil, skin colour and class issues are relevant as in Jamaica and Guyana; yet microfinance documents analyzing the sector fail to examine this issue (Nichter et al. 2002) 39 See McLeod Arnopoulos’ (2010, 166–167) description of Vikram Akula, the former CEO of SKS Microfinance in India.

become centres of resistance. In the Jamaica case, hustlas gravitate towards the informal bank Partner to avoid supporting the established political parties, which attempt to co-opt and control them through conventional microfinance programs. I see this as a form of political resistance because poor business people, with the full knowledge that a loan can leverage a higher return, deliberately opt out of microfinance programs to avoid being what they refer to as “binded by a Big Man”: that is, controlled by political elites or informal leaders.

In the contrasting case of Haiti, microfinance managers have developed techniques that do not entail political control but instead foster inclusiveness. Because many of the managers come from a social and class background similar to the people they serve, they are aware of the challenges faced by borrowers—a social consciousness that is missing in the other two cases under study. Even the whitened Haitians, called the mulatres, embrace a radical rhetoric of economic democracy when using microfinance. Managers in microfinance who take on a radical rhetoric and see microfinance as a transformational tool take personal risks with their lives when they do so. Despite much adversity, Haitian lenders who understand first-hand the lived reality of the poor entrepreneurs have developed grassroots collective financial systems such as cooperatives and caisses populaires for ti machanns

(market women) that counter the widespread exclusionary politics in Haitian society.

Politics, Development, and Microfinance

Political elites can shape policies that encourage economic development or they can make policies that stunt it (Collier 2007, 64). After Haiti’s 2010 earthquake and fire in the

Croix des Brossales market, some of the ti machanns protested against the repayment of micro loans. Then President Rene Préval, with little communication to the microfinance

organizations and under political pressure, wrote off the loans, telling the ti machanns not to repay them. Haitian microfinance leaders dismayed with perceived political interference, lobbied for the state to cover these losses (Interviews in August to October 2011). Managers in microfinance realized that if the state interfered once, it would do so again, so they lobbied for the state to correct this policy. The President agreed to the industry’s request and reimbursed these institutions for the losses (Raymond Interview, 14 October 2010; Calixte

Interview, 6 October 2010; St. Gilles Interview, 7 October 2010).

Bankers in general claim “neutrality” in banking, and argue that the allocation of credit depends of the three C’s of credit: capital, collateral, and capacity to repay. Yet a state’s political environment and the managers who control micro loans are integral to the success of a micro-credit program: they determine whether the program flourishes or fails

(Matin et al. 2002, 283). Although Yunus (1998, 53) argues that credit plays a vital role in the social context and recognizes its potential to create social power, he does not discuss the political influences on the attitudes of microfinance managers and staff that can harm poor clients. Because MFIs and their staff directly and indirectly influence the lives of an ever greater number of poor people, a thorough understanding of the politics of microfinance has become particularly salient.

Yunus (NYT 2011; 2007b) further argues that credit in and of itself creates an economic power, a power that in turn develops appreciably the social capacity of the poor.

But at the same time he recognizes the problems occurring within the sector (e.g., suicides related to microfinance institutions in India). Microfinance, though a valid instrument for economic and social empowerment, does not operate the same way in all social contexts.

Depending on the circumstance, it may involve the alienation, manipulation, and oppression of the poor. Given microfinance’s reputation of providing adequate alternative financial services to persons traditionally believed to be unbankable, the fact that in some contexts many of the entrepreneurial poor are purposefully screened out of programs is an important finding.

Many governments in the developing world and elsewhere have subsidized credit to the entrepreneurial poor, especially in the agricultural sectors (Morduch 2000, 624).40 The impetus for state lending arose in order to fill the market gaps when commercial banks excluded the economically active poor from financial services. Many stories around the world confirm that state-managed micro lending programs were inherently mismanaged and subject to partisan politics. A Caribbean scholar, Bowen (2007, 153) found that Jamaican politicians did not support economic revitalization projects in poor areas because these leaders valued some degree of poverty in order to control constituents during elections through rewards (see also Henry-Lee 2005; Honig 1998). Given the vulnerability of the poor to political exploitation, political elites are predisposed to misuse microfinance for political purposes. Microfinance managers who associate with politicians are vulnerable to these tendencies. Hence, political elites who use microfinance do so to enhance their support base, and in turn taint the retailers of these resources.

Managers and people working in microfinance are well aware of the risks to their credit portfolios when they invite politicians to support their programs. In 2011, a Haitian

40 Harper (1998, 24) rightly notes that under colonial regimes, colonial banks failed to lend money to the local people, and at independence state banks subsidized loans to local business.

microfinance institution, Association pour la Coopération avec la Microentreprise (ACME), turned down a large grant from the Clinton Bush Haiti Foundation because of the negative public impact two American politicians would have on its portfolio (Raymond Discussion,

24 August 2011). Dichter and Harper (2007, 6) suggest that “much gamesmanship goes on in the field where politicians, the elites and governments take advantage of microfinance programs, using them for their own ends rather than for helping the poor.” Microfinance managers are aware that when they accept funds from politicians or a government there is a chance their program may be co-opted for political ends. If micro lenders are aware of the intentions of politicians, they will likely be ready to reject politically motivated funds (e.g., in the case of ACME).

The Microfinance Banana Skins (2011) report, funded by Citigroup, examined the global microfinance sector and observed that microfinance is “losing its fairy dust”—that is, its reputation as a tool to help the poor is threatened because actors within the industry abuse their power over the poor. Supporters of microfinance, such as Rhyne and Otero (2006, 19), have focused on politicians (external actors) who infuse microfinance with their own political agenda; but they have yet to see that the greatest risk to microfinance appears to come from within the sector.41 By 2012, the attitudes of industry experts and public sentiment towards micro lenders shifted as it became increasingly clear that these people have the capacity to take advantage of poor clients, particularly those with limited formal education. The climate is ripe for discussing political bias within MFIs.

41 See Rhyne and Otero (2006, 57) for observations on the political risks in microfinance.

In 2010, CGAP issued consumer protection papers in the interests of poor clients vulnerable to the unscrupulous tactics of certain micro lenders. CGAP also argued that these policies should recognize the politics that may lie beneath the surface and which are present in developing societies. In 2005, Kah, Olds, and Kah (2005, 25) raised the issue of political elites interfering in microfinance as well as village banking leaders becoming politicized themselves in Senegal. Village banking leaders used their power to convince members to vote for a certain political party. Although this case demonstrated that a political bias was active and denied access loans to certain members because of the political aspirations of microfinance leaders, political bias in microfinance has not become a major conversation.

In general, the literature on microfinance usually views politics as a problem external to the microfinance industry. It assumes that political interference occurs when government or political leaders manipulate policies and programs for their own political objectives

(Microfinance Banana Skins 2008, 20). In this paper, as pointed out above, I argue that politics is already embedded within many micro credit programs by the very people who manage these programs. Furthermore, political manipulation takes place within the microfinance sector and in some cases involves partisan and elite biases.42 Microfinance has focused on the “character” of clients; yet few empirical studies have scrutinized the persons who run microfinance programs.43 What about the values and character of the lenders? Honig

(2000, 106), in his work on Jamaican microcredit states, “There is too little attention placed on the character of the implementing actors—the employees of these retailers.” Instead, these

42 Bateman (2010, 109) alludes to detached elitist managers in Bolivian context, there is no literature discussing internal political manipulation by microfinance managers and staff of the poor. 43 See Hancock (1989), who examines the people and various development agencies involved in making foreign aid to the world’s poor.

employees are able to make judgments about the very poor regardless of whether or not their norms are in conflict with the people they are supposed to serve. Non-state actors that manage micro loan programs are currently not analyzed in terms of the power they may possess over marginalized groups. Bateman (2011; 2010) and Honig (2000) argue for a need to carry out further research on the role of employees implementing microfinance. In light of the increasing criticism of microfinance programs, strong-arm tactics in India, and excessive profits in Mexico, it is important to examine the actors (managers and staff) who control these economic resources available to the entrepreneurial poor.

Methodologies in Complex Urban Settings

For this study, I interviewed 460 people, mostly in Jamaica, Guyana, Haiti, but also in

Barbados, Panama, Canada, and the U.S., from June 2007 to October 2011.44 (See lists of subjects interviewed in Appendices 1.1 and 1.2.) I spent eleven months living in Kingston,

Jamaica, the country that forms my main case. Comparative data has also been collected on

Guyana and Haiti.45 I conducted in-depth interviews and focus groups in eight slums in each of the three countries. The slums in Kingston, Jamaica, are for most part located downtown

(south of Cross Roads) and include the neighbourhoods of Trench Town, Bennett’s Land,

Whitfield Town, Rosetown, Frog City, and the prime minister’s constituency of Denham

44 Dozens of informal discussions were carried out with experts in Haiti in 2011 during a professional assignment. For example, Joseph Similien of MCN and Evans Baptiste of Sogesol bank are not counted in the original sample size as well as three focus groups in the city of Cayes, Southern Haiti. 45 On 12 January 2010, Haiti experienced a 7.0 magnitude earthquake that left about 300,000 persons dead and 1.5 million people displaced and living in tent cities (GOH 2010, 2) so this affected long-term continuous work in the country (March and April 2008; in September 2010 and August to October 2011).

Town and Tivoli Gardens (Howard 2005).46 In Haiti, the bidonvilles (shanties) I visited were

Cite Soleil, Carrefour, Martissant, and La Saline, as well as Bel Air in Centre-Ville

(Aristide’s Lavalas’ stronghold) and Jalousie and Flipo in the hills of the chic suburb of

Petion-Ville. My focus group in Haiti was held in the low-income community of Bon Repos.

Guyana’s slums in Georgetown are Tiger Bay (undergoing gentrification) and Allbouystown.

It is in the latter ghetto that I carried out most of my interviews in November 2008 and again in the spring of 2010. Allbouystown is ethnically diverse, with a large Afro-Guyanese, dougla population, as well as East Indian, Portuguese, and Amerindian people.47

In all three cases, I interviewed at least one staff member in a variety of microfinance lending institutions: commercial banks, cooperatives and credit unions, microfinance organizations and state lending agencies, and moneylenders. The types of individuals interviewed included heads of private finance companies; financial intermediaries making capital for loans available (such as state agencies and private firms and foreign donors); heads of ROSCAs or informal banking systems; and leaders of NGOs or foundations.48

Public sector organizations include NGOs, churches, and those bodies reliant on donor and public subsidies. (See Table 1.3) Urban micro business persons (hustlas in Jamaica, hucksters in Guyana, and ti machanns in Haiti) are the main subjects of this study.

46 Kingston slums for this study were selected based on high incidences of poverty, party stronghold, relatively good access to the community, and a large pool of small businesspersons. 47 In Guyana, the term “dougla” refers to mixed-race persons of East Indian and African ethnicities (Gibson 2005, 69; St. Pierre 1999, 133). I am also using the terms “East Indian,” “Indo” or “Indian” in the Guyanese context to refer to both immigrant and locally born persons of Indian descent (Rodney 1981, 178; Smith 1964, 28). 48 This project benefited from the UWI (2006) study that looked at 430 micro and small businesses in Jamaica.

Illegal businesses were not included in this study, as businesses had to qualify for a loan. Of the 233 Jamaican micro entrepreneurs interviewed, 37% (n = 86) were men and 63%

(n = 147) were women. In Guyana, of the total persons interviewed in Georgetown, 37% were from Albouystown, an urban slum. In Port-au-Prince, Haiti, I interviewed 14 ti machanns and had discussions with at least a dozen global and regional microfinance experts.49

Table 1.3 Breakdown of Types of Interviewees by Country

Sub Percentage of the Country Entrepreneurs Elites50 Total Sample

Jamaica 233 74 307 67%

Guyana 29 50 79 17%

Haiti 14 48 62 13%

International experts 12 12 3%

Total Sample Size 276 184 460

Researchers I contacted prior to executing my field research were convinced that subjects would speak to me more freely because I was not a citizen of those countries. These researchers came from a variety of respected professional, academic, and social organizations and institutions. A Canadian and long-time resident of Jamaica, John Rapley, stated to me,

“As a foreigner you may have ‘less’ of a disadvantage” in performing field research than would a Jamaican national (Interview, 3 April 2009). In other words, being foreign brings its own set of challenges, and they are different than those a national inherits.

49 Additional focus groups relevant to the use of microfinance were carried out with 31 women in the town of Cayes, Southern province of Haiti. 50 The term “sub-elites” refers to a large group of persons, including microfinance managers and staff as well as stakeholders (community activists, government officials, donors, and political elites). Stakeholders are persons not directly involved in micro-lending activities.

At the same time, because geographical concentrations of Caribbean communities are widely known to exist in North America, my own Caribbean origin and identity worked to my advantage by establishing a “connection” with interviewees. The fact that I was born and raised in North America nonetheless placed me in an ambivalent space (Narayan 1997).51

In the field, I was conscious of my relatively privileged background and sense of being foreign in my immediate social environment, especially when I socialized with middle class

West Indians. Yet I readily adapted to the culture as it was already familiar to me and I was able to benefit from my semi-insider knowledge (Few 2007).52 I was also conscious of the fact that I travelled to the Caribbean with my own set of biases. I read and reread the

Pedagogy of the Oppressed by Brazilian Paulo Freire (2010), as his teachings suggest ways to engage with the poor and oppressed, such as those I interviewed in the slums. This awareness helped me to analyze and document their stories as told to me.

This study adopted a multi-method approach to researching the attitude and behaviour of microfinance lenders and borrowers in all three countries.53 I employed political ethnographic methods in the inner city contexts in order to describe the communities in detail

(Bayard de Volo 2009; Shadaimah et al. 2009; Wardle 2000). The multi-method approach I

51 As a woman of Afro and Indo Caribbean heritage, one with significant life and work experience in Global South countries, and often the only Black woman managing microfinance programs, I have encountered my share of racism in the development arena. 52 I did not anticipate that my being a Black woman in the academy might come under scrutiny by Canada’s state. On 19 November 2008, I was detained without justification for several hours by immigration officials working for Canada Customs at Lester B. Pearson airport in Toronto. Authorities held me, along with several other Blacks, under the false belief that we were drug “mules” because of our travel to Caribbean destinations. Immigration officials engaged with me in a hostile manner and dismissed my University of Toronto identity card and field notes as insufficient proof that I was in fact, as I claimed, a PhD student. Caribbean people travelling to North America often undergo such indignities, but I was misguided to think my Canadian citizenship—including a Canadian passport—would prevent such harassment. 53 Duncan-Waite and Woolcock (2008, 17) helped me in refining my own methodology and in understanding the importance of having local assistants to assist me in data collection.

used included: (1) secondary materials, including the following indigenous newspapers:

Jamaica’s national papers, The Gleaner and the Jamaican Observer, Haiti’s Le Nouvelliste, and Guyana’s private newspapers, Kaieteur News and Stabroek News; (2) interviews, both semi-structured and in-depth, of lenders, borrowers, and other actors; (3) focus groups; (4) surveys; (5) textual analysis of reports and internal documents; and (6) political ethnography and participant observation of life settings, film, and photography. (See Appendix 1.3 for a sample of interview tools used in the study with Jamaican hustlas.)

A set of complementary qualitative methods allowed me to uncover politically sensitive issues. Because of the political nature of my findings, and the potential opposition from supporters within the industry, I had to test and re-test my methods. Every effort was made to ensure data triangulation—collecting information from a diverse range of individuals and settings and using a variety of methods. For example, I conducted individual interviews and focus groups with micro business persons (60%) and did in-depth interviews with 184 sub-elites (40% of the total sample size), such as microfinance lenders and stakeholders. The contributions of both groups were analyzed separately (Marshall and

Rossman 2006; Maxwell 2005).

Questions were designed so that ordinary people could provide similar information that could be quantified and compared; other parts of the tool consisted of open-ended questions so that people could convey a narrative. In-depth structured interview tools focused on four main areas: (1) individual enterprise; (2) politics and microfinance; (3) identities in microfinance; and (4) community development. Interviews with managers and stakeholders were structured and semi-structured. As well, there was a follow up self-administered survey.

Interview tools were standardized as much as possible to enable comparison across the cases,

and tools were adapted to fit the local, contextual realities. In Haiti, the tool had to be revised

several times to account for the post-earthquake realities. My intention was to design

interview tools so that people could tell a story and, at times, engage in dialogue.

Data collection for this project focused on micro business-people who wanted or who

have (or had) a micro loan. Micro business persons participated in either individual

interviews or a focus group session. In a number of cases, vendors wanted meetings to take

place at their business so they could work while I interviewed them. Others requested that I

come to their homes; this enabled me to observe their home setting and share in their work

and life. On several occasions, I remained with a subject for an entire day, sitting beside

retailers at home, in a shop, or in a market stall. Many of the subjects had home-based

businesses, such as a grocery shop in the front part of the home, so I could witness the home

and work life simultaneously. This format allowed me to understand people’s contexts and

observe them in a typical setting: in other words, to share in their “lived experience”

(Seidman 2006).

Table 1.4 Methods Used to Interview Business People

Method Jamaica Guyana Haiti Total

Number of Focus groups 7 1 2 10

Number of Persons in Focus Groups 77 6 14 97

Individual Interviews, 45 minutes on-site 156 23 0 179

Total number of people interviewed/spoken to 233 29 14 276

Ten two-hour focus group meetings (FGs) of six to eleven people were held at a neutral place, such as a community center or church or a bar, depending on the area.54 In

Kingston, I conducted five mixed-sex focus group sessions and two all-male focus groups sessions, involving 77 persons in total (see Table 1.4). Although the former groups were

“mixed-sex,” in the Jamaican context, women dominated these discussions, with men receiving only token representation. In fact, women participants often corrected the men, openly disagreed with their ideas, and mocked their use of patois, indicating that the men should “speak propa English” (standard English) and not the Jamaican vernacular.55 Given that understanding gender dynamics appeared to be important to examining the unique challenges men confront with microfinance, I became concerned about gender balance.56

Two all-male focus group sessions thus ensured that businessmen could also tell their interpretations of the operations of microfinance.57

In Kingston, borders and neighbourhoods had to be considered when planning these meetings. Focus groups organized in Whitfield Town, for example, were cancelled twice due to violence of warring groups. Violence did not interfere with the fieldwork in Port-au-Prince or Allbouystown; however, in Port-au-Prince, an area greatly affected by the earthquake, I was not able to work in my original slums and had to choose a community that was

54 I carried out two focus groups with 31 female MFI clients in Cayes (southern Haiti) and their views match those of the entrepreneurs interviewed in Port-au-Prince in 2011. I do not include these clients in this sample size because it was outside of the PAP area. 55 See the comments of Carolyn Cooper of the University of the West Indies on “Language Politics,” about the relationship between patois and social class in Jamaica, The Gleaner 15 Nov 2009, A9 www.jamaica-gleaner.com/gleaner/20091115/cleisure/cleisure3.html 56 Ahmed (2008) in Bangladesh and Vonderlack-Navarro (2010) in Honduras find that microfinance’s fixation of women forces men to opt of their family obligations. 57 An all-male focus group was held in Trench Town on 22 August 2009, and another one at Tivoli Gardens on 25 August 2009 (suggestion made by “Bling”).

advancing in its re-construction after the earthquake (Cité Soleil’s rebuilding was rather slow). In Guyana, hucksters preferred individual meetings to group sessions. In all three cases, I followed the practice of local scholars by working through a network of trusted contacts and employing ethnographic techniques. I also carried out participant observation both at the community level (arcades, markets, roadside stalls, and shops) and at bank and social functions with microfinance managers and political elites to observe their interactions with the poor.58 These methods are particularly relevant to this research because I was trying to understand power relationships between residents in slums and the richer citizens (political elites and micro bankers) who control economic programs for the urban poor (Coaching at

UWI and CAPRI 2009; Schatz 2009; Bayard de Volo 2009; Seidman 2006; Hall 2003).

Although I shared my own personal information in order to establish trust, my primary role was to listen to the participants’ stories. Often people interrogated the goals of this project and asked personal questions, seeing the interview as “an exchange of information” (Tafari-Ama 2006). In downtown Kingston, where life is based on personal relationships, the political ethnographic approach and participant-observation unfolded rather naturally at each site visit. It was common sense to work with informants in the marketplace, at their home, or place of business in order to understand the locale (Ulysse 2007; Tafari-

Ama 2006). In Jamaica, “hanging on a street corner,” “talking in a yard,” or “sitting on a bucket at a stall” became sites for the collection of rich research material, as these are the spaces where people discuss local politics (Freire 2010, 54–55).

58 In Jamaica, I met higglers and hustlas in the Coronation Market, the largest outdoor market on the island, and in arcades (indoor markets), including Redemption Ground, Pearnel Charles, Oxford Arcade, and the Craft Market. In Guyana, I met hucksters in Big market, Bourda and Pennington markets.

A large part of this study involved going local, and was dedicated to understanding how people live; to this end, I tried to get close to poor citizens to see for myself how they access money for business and consumption needs (Collins et al. 2009; Geertz 1962). My ability to access these areas influenced the selection of communities for this study. After several interviews with local researchers, I realized that it was important for the quality of my research to have research assistants who were community-based. Most assistants were Black low-income single mothers with some high school education, and all were either semi- employed or unemployed. Only in Jamaica did I have a Black male assistant, a young

Rastafarian who lived in a low-income community and had some college-level studies that were useful to this project. Figure 1.1 depicts a typical street with corrugated iron fencing for the tenement yards where I would conduct interviews before moving into the “yard.”

Each of the research assistants, often referred to me by non-partisan local notables, had lived experiences in the selected Figure 1.1: Photo of a street in a Kingston slum where communities, and each brought their interviews took place. own instructive lens to the project (Harriott discussions, March through April 2009; Levy

Interview, 9 March 2009 and 12 February 2009).59 If I had proceeded through informal

59 Civil society experts Sharene Mackenzie, Dr. Henley Morgan, and Richard Troupe were also helpful in the selection of local assistants.

leaders or political persons to obtain acceptable local assistants, my scholarship would have been tainted. This was difficult, in practice, to avoid; given the highly political nature of my social situation, it remained unclear at times how I could ensure that the people involved in my project were not political.60

Jamaica, with one of the highest crime rates in the world, is connected, both directly and indirectly, to international crime networks. Hence, doing research in this environment is a challenge (Harriott 2008; 2003, 7; Robotham 2003, 215).61 My experience of violence varied among the six Jamaican slums in this study (Duncan-Waite and Woolcock 2008, 6).

While conducting interviews in two slums, Whitfield Town and Rosetown, for example, I often heard gunshots in Rema, a nearby slum in Trench Town. Jamaican assistants were able to gauge how close the gunshots were from our location. On another occasion during my fieldwork, I encountered evidence of turf wars in Maxfield Park, where a man called “Five

Cents” found that my presence as an “outdoor”—someone unknown to him—undermined his perception of himself as an aspiring Don. The area leader from whom I had secured permission successfully opposed Five Cents.

Knowing the area borders was vital. In areas with less informal structures, permission from an area leader was required to use a specific lane or area. Borders, well known within the community, are often invisible to outsiders, and crossing them could be risky and arouse

60 In Jamaica, I let go two persons who I thought were too political and would not fit with the research needs of this project, which resulted in project delays. However, to preserve the integrity of this project, it was better to encounter delays than to proceed with overly political persons. 61 More on donships can be found in Blake’s novel Shower Posse (2004). Recent Jamaican films such as Shottas (2002) and Third World Cop (1997), or a classic film like The Harder They Come (1973), show the inner-city young men forming rebel groups to contest corrupt state power and business elites.

conflict (Anonymous, Interview 24 February 2009). However, my local assistants knew these boundaries well. An area leader from a People’s National Party (PNP) (one of Jamaica’s main political parties) stronghold told me, “No Labourite could come into disya area neva and not fi dead.” Furthermore, a reference from a trusted local person ensured that subjects could participate in my study without worrying about being perceived as informants. In

September 2009, my work was curtailed in Tivoli Gardens due to America’s extradition request for Don leader Christopher “Dudus” Coke for narcotics and arms trafficking.62 Local people advised that I not return to the community because of the tensions, suggesting that my

“foreign-ness” could put the subjects, others, and me at risk.

In order to have access to a community, a researcher requires a network. In the

Caribbean context, arriving with a referral is essential. People often said, “Don’t worry you will meet everyone you need to meet in good time.” In relatively small societies like

Kingston or Georgetown, interpersonal relations are denser, and indeed I did eventually meet the people I needed to meet.63 Institutional affiliation with local universities, such as the

University of the West Indies at Mona (UWI/Mona), and with U.S. Fulbright or local NGO projects gave me credibility in certain elite circles in Jamaica. In interviews, I downplayed any affiliation to the University of Guyana because of its antagonistic relationship to the

62 During this period, Jamaica’s national papers, The Gleaner and The Observer, provided up-to-date coverage. See the Guardian: http://www.guardian.co.uk/world/2010/jun/24/christopher-dudus-coke-us-extradition- jamaica and the Gleaner, “Dudus: The man who holds the nation hostage [. . .]” (23 May 2010) and the Observer’s “The women behind the Dons” (23 May 2010). International press like the New York Times reported “Jamaica Declares State of Emergency” (23 May 2010), and an op-ed piece by former PNP advisor to Michael Manley, Orlando Patterson, referred to “Jamaica’s bloody democracy” (NYT 28 May 2010). Also see Aljazeera’s (2010) report on the Tivoli Gardens civil conflict in June 2010. 63 I met and asked then-Prime Minister Bruce Golding questions about microfinance on 23 July 2009 in his West Kingston office when carrying out fieldwork in Tivoli Gardens.

state. In most cases, it was better to use my University of Toronto affiliation to gain access to the banks and to state agencies. In Haiti, affiliation with Interuniversity Institute for Research and Development (INURED) under the guidance of Herms Marcelin was helpful in establishing my credibility with locals and when visiting slums like Cite Soleil. On my second trip to Haiti, the IDB assisted me in meeting micro lenders; and a local Haitian NGO,

Quisqueya for International Development (QiFD), set up focus groups.64 In August through

October 2011, I was affiliated with the local UNDP office, which made meeting stakeholders easy at times.

My previous professional experience in Jamaica allowed me to draw on colleagues for other potential interviewees among their peers. I adapted a version of the “leaders naming leaders” method used by Caribbean political scientist Hintzen (1989) in his work in Guyana and Trinidad, and within weeks of my arrival, I was able to meet all the senior microfinance officials. However, this method did not connect me with private finance companies working in the slums, because they were outside of this development network.65 It was rather through the triangulation of my data (by reading national newspapers and interviewing ordinary people) that I discovered these latter companies.

Research that requires access into slum areas must be planned carefully in order to safeguard not only the researcher’s well-being, but that of the subjects. Local academics point out that research can have dire consequences for local people long after outsiders have

64 In exchange for QiFD assisting me, I shared information I had on the microfinance sector and I trained a technical staff person on focus group methodologies. More information on the Haitian NGO at: http://www.qifd.org/ 65 The PIOJ collects information on the Micro, Small, and Medium Enterprise (MSME) sector each year for the annual publication Economic and Social Survey of Jamaica (ESSJ).

left (Ulysse 2007, 168). Gunst’s Born Fi Dead (2003), for example—a book that followed

Jamaican drug posse (gangs) in the U.S.—reportedly was the cause of the deaths of two of its informants (Tafari-Ama 2006, 204).66 In each of the three countries I visited, I secured people’s identities and gave them complete anonymity. This gave me access to the corridors of power and information.67 Only in Jamaica did I have to pass through a series of small test- like situations with the local gate-keepers who knew the local bosses before I could go into people’s homes.

During my field work, it was vital that a trusted person confirm who I was to the subject, as people were wary of divulging information for fear of reprisals. I also had to abide by rules; in some cases, I was allowed to take dictation freely, while in others, such as when I was conducting research in high people-traffic areas, I could not write anything down. As

Freire (2010, 131) suggests, knowing how to engage people is critical to data collection processes: sometimes knowing when to write and when not to write is important.68 I never used a tape recorder during my field research, as this would have limited my access to sensitive information. Confidentiality is particularly significant in Kingston and Georgetown settings. “Aliases” were used for all business persons interviewed in order to protect their identities, and in many cases I avoided including details and I modified dates and locations to

66 Copies of Born fi Dead are banned in Kingston because of political bias, and the former Prime Minister, Edward Seaga, allegedly sued the author and publisher. 67 See Teichman (2002, 2001) for ideas on how to interview political and business elites. 68 In Cité Soleil, professor Herns Marcelin discussed issues (without writing) and later wrote down his notes entirely from memory (Haiti fieldwork, April 2008).

ensure complete anonymity (Tafari-Ama 2006, 15).69 Aliases of subjects included “Fatty,”

“Brother,” and “Big Red”—and, as part of the process, Jamaican research participants gave me the local nickname of “Fluffy.”70

Obtaining recent and micro-level data on the informal sector in all three countries was particularly challenging, especially in post-earthquake Haiti.71 Jamaican research institutions have excellent secondary materials and data about the country’s social and economic environment. These institutions include the Planning Institute of Jamaica (PIOJ); the Sir

Arthur Lewis Institute of Social and Economic Studies (SALISES); the main library of the

UWI/Mona; the Statistical Institute of Jamaica (STATIN); and the Social Development

Commission (SDC).72 In Guyana, the Bureau of Statistics and Cartography department was helpful in accessing general data by regions, although poverty rates in the slums were unavailable. However, obtaining documents on Guyana’s micro/small business from civil servants is nearly impossible unless you have contacts. Furthermore, unlike in Jamaica and

Haiti, the current regime in Guyana seems antagonistic to academics of any kind, making research difficult.73 I did find the University of Guyana’s library useful for archival work, and the International Development Studies department, directed by Clive Y. Thomas, also

69 In one case, an interviewee called “Goalie” agreed to an interview on the condition that if I ever met the director of her bank about her case: she was paying a debt stolen by the former employee. Due to aliases, it took time, but in the end Goalie was reimbursed by the credit union. 70 Jamaican comedienne, Miss Kitty, coined the term “Fluffy” when referring to plus-size women. 71 In October 2010, the Ministry of Commerce and several government agencies were operating out of tents, portables, and trailer-like structures. 72 Smaller libraries are housed at the Small Business Association of Jamaica, Agency of Inner City Renewal (AIR), Development Options Limited, and in the office of Dr. Claremont Kirton, Economics Department at UWI/Mona. 73 A Guyanese academic and journalist for a privately owned paper, Kaieteur News, was reportedly attacked for his criticism for the state. This academic was fired from the University of Guyana after 26 years (Kaeiteur News 27 January 2012).

had back copies of its journal, Transitions. In town, Go-Invest, a quasi-state agency, has an extensive collection of newspaper clippings on small business.

In the aftermath of the 2010 earthquake, Haiti has few book shops. There is little material on microfinance written by local researchers, with the exception of consultants and practitioners. However, I did obtain data from some Haitian institutions: the Center for

Economic and Social Research and Training for Development (CRESFED) publishes a journal by local scholars entitled Rencontre and think tank INURED also has on-line publications and reports about the bidonvilles. Université de Quisqueya holds undergraduate theses on microfinance. Bookshops in Petion-Ville carry a small collection on Haiti’s politics by local scholars, and films and documentaries on the political environment are found for sale on the streets in the city center and Petion-Ville.

Organization of Dissertation

This dissertation is organized into seven chapters. The second chapter, “Historical

Legacy and Current Politics,” analyzes the enslavement and colonial histories and current politics in each country. Chapter 2 is also supportive of the theoretical framework in that it maps the political history of each country and explains the unfoldings of enterprise development. For instance, exclusionary lending is active in the electoral democracy in

Jamaica that is tied to class-based clientelist politics, and Guyana’s political parties are racialized between East Indian and Afro-Guyanese. Whereas, Haiti’s political history, an undemocratic state steeped in racial and class conflicts, has staved off race or class biases in microfinance.

The next two chapters examine exclusionary traits in micro lending. Chapter 3, “The

Jamaica Case: Exclusionary Micro Lending in the Slums,” documents the facts that 61% (n =

142) of Jamaican hustlas are not accessing micro loans, and 41% (n = 96) have consciously opted out of microfinance programs. Dark-skinned Black poor people in the slums are deliberately overlooked, largely because of microfinance managers’ personal biases. In addition, hustlas opt out of such programs when they perceive micro-credit is tied to partisan or informal politics. A principal aim of this chapter is to show that Jamaican microfinance functions in a way that defeats its purpose: it is not empowering marginalized people, but reinforcing their exclusion. Chapter 4, “The Guyana Case: Racial Exclusion in Micro

Banking,” reinforces the thesis findings that micro-credit is exclusionary to one racial group.

I argue that Indian-dominated micro loan programs operating in an Indo-centric political environment alienate Afro hucksters. Race discrimination against Afro-Guyanese limits their access to micro loans. Informal banks, such as Partner in Jamaica and Box hand in Guyana, are the result of poor Black women organizing community savings plans. These banks are revealed as being not merely coping mechanisms to build lump sums of cash, but forms of social resistance to the manipulative politics of managers in micro-credit.

The fifth chapter, “The Haiti Case: Inclusive Home-Grown Microfinance,” departs from the other two cases by showing that Haitian lenders, mostly the caisses populaires and informal banks, are inclusive of the masses’ needs despite society’s deeply entrenched racial and class politics. Black Haitians that lead the caisses populaires display a social consciousness. The Haitian people’s love for collectives has influenced the country’s micro lenders. And, micro banking, unlike many of the country’s other development projects, effectively reaches marginalized people (Zanotti 2010).

In chapter 6, “Gender, Female Privilege and Microfinance,” I examine the other principal type of exclusionary politics affecting microfinance development—gender identity.

Worldwide, women are important to micro banking in general and in organizing informal banks, and the Caribbean experience is no exception to this norm. As noted in Table 1.2, in this study I interviewed 256 (mostly low-income) women (or 56% of the sample) about access to microfinance. In the Jamaica case, female privileging in micro lending exacerbates problems for poor women. When micro lenders focus on certain types of women who fit with the lender’s own personal biases or privilege women over men, female clients are made vulnerable to social conflicts in their communities.

Male exclusion in microfinance creates conflicts in poor Jamaican households. In the

Guyana case, the reverse is occurring: (Indo) males dominate micro lending to the detriment of Afro-Guyanese women. Yet Afro-Guyanese hucksters hold that one cannot analyze gender without race. In the Haitian case, we find educated males making micro loans to very poor women; however, there is a call for “mixity” (gender balance) in microfinance programs so that men do not feel ostracized by financial services and withdraw from their family responsibilities. But these programs, largely driven by the caisses populaires (and influenced to some extent by the informal banks such as sol), are managed by socially conscious officials who are rooted in the norms and culture of the society.

Racial and class-based biases permeate micro-credit programs, disadvantaging the economically-active poor in slum communities. In chapter 7, “Conclusion: Politics of

Microfinance Compared,” I discuss policy implications and suggest that internalized biases are occurring in countries stratified by cultural cleavages from enslavement and colonization.

I am convinced these findings travel to other developing countries. Through this project, I found that identity biases limit microfinance growth and development and deny people access to loans for potentially viable micro-businesses in the slums. Business people are also self-excluding themselves from programs they deem to be manipulative. Finally, Haiti’s case provides instruction on how class and racial biases can be mitigated to make micro lending programs responsive to marginalized urban entrepreneurs.

In summary, Yunus’ optimistic quote at the beginning of this chapter to make poverty a relic of the past is less likely when pro-poor financial experts are oblivious to the identity and/or partisan politics within the industry. Microfinance leaders are not examining their own staffing to see if it is representative of the people they serve, or have hired individuals who know the lived experience of the poor. For real transformative change to take place, staffing and politics need to be managed. For many who have studied and worked at the local level this suggestion should not be contentious. As long as identity issues plague the microfinance sector, and the historically rooted prejudices are not understood or taken into account, then it is doubtful that microfinance will truly be inclusive financing.

Chapter 2 Historical Legacy and Current Politics

Introduction

Caribbean people share a history rooted in the colonial, imperial, and slave experience as well as a dependent relationship with the U.S. (Mann 2008; Fatton 2002, 2007;

Paravisini-Gebert 1997; Rodney 1996; Terborg-Penn 1995; Fanon 1967; Smith 1964; Stoby

1931). These histories have resulted in a racial class structure in which marginalized Black groups form the base of an economic pyramid (Hallward 2010, 1; Garner 2008, 16; Mars

1995, 172; Burrowes 1984, 26-28; Smith 1964, 100–102).74 Business elites, often white or lighter complexioned, have been linked to the state for strategic and financial reasons, and these collusions persist today (Horowitz 1985).

As I suggest in chapter 1, formulators of microfinance programs seldom consider culture, despite the fact that it is vital in most developing country contexts. And, this is ironic given that Caribbean bankers have insisted that their distinct cultural histories be considered in the constitution of lending programs, which has resulted in the creation of their own regional network of microfinance separate from Latin America. Yet when they administer programs, Jamaican and Guyanese lenders have failed to adapt their policies to the requirements of their local contexts, that is, to the characteristics and needs of the borrowers their programs were established to serve.

74 Burrowes (1984, 26) refers to this racialized economic environment in the Guyana case as a “colour pyramid,” where whites are at the pinnacle of economic might, and “field hands,” made up of Indian and African laborers, are at the bottom.

58 59

Some Caribbean lenders fail to acknowledge the racial/class hierarchies and politics of their own settings, even though they are aware that politics shape the nature of their societies. Kothari (2005) argues, “The grim reality is that the legacy of slavery and colonialism with racial, gender, and class hierarchies continue [sic] to replicate themselves.”

This replication persists in contemporary social and economic programs, such as microfinance, leading to the exclusion of many people in the slums. The fact that microfinance managers fail to observe the powerful impact of historically rooted class and race-based oppressions within the Caribbean society perpetuates the predicament of those who are marginalized. Colonized views are ingrained in the educated managers running these programs for the urban poor, which is how these deeply embedded social biases unfold in microfinance programs. Because race, class, and gender identities are powerful factors in the exclusion and self-exclusion of poor people from micro banking, then, it is necessary that we examine the historical role of identities.

In this chapter, I discuss the political history of all three countries and frame identity and partisan politics in the context of slum communities. I show that a country’s political history can explain why internal class or race politics affect certain programs to the urban poor (e.g., micro-credit). First, I review the making of Jamaica’s political history and the emergence of clientelist politics among Blacks of different classes and shades. Second, I examine Guyana’s pluralistic history and the political elites’ (mis)use of race-based politics to control the opposing racial group. The Anglophone countries Jamaica and Guyana, which were colonized by the English, arrived at independence much later than Haiti, my third case.

Both Jamaica and Guyana have had relatively stable electoral democracies and neither of these countries have ever had a military coup. In the final section, I analyze Haiti’s predatory

political past, steeped in both class and racial conflicts in which violent and oppressive regimes since independence have alienated the moun andeyo (poor masses). Repressive politics have forced excluded people to develop their own coping systems, such as collectives and cooperatives, at the local level (Fatton 2007; Montasse 1983).

Three Cases: An Overview of Enslavement and Colonialism

Legacies of enslavement and colonialism are etched in many Caribbean people’s identities because today’s racial make-up is a direct result of a history of racial intermingling.

As Bakan (1990, 6) states, “The ideology of racism was encouraged and legitimized by colonial powers and those who supported colonial rule.” White male European slave masters

(usually British, Irish, Dutch, Spanish, or French) raped female slaves, and this introduced a new racial category: mulattos (mixed raced), persons of lighter-complexioned skin. As a rule, the fairer or lighter-skinned a person is, the better is that person’s social position (Hope 2006;

Bakan 1990). In each of the three countries, those in this lighter-skin racial category inherited the wealth and status of their forefathers (Smith 1964, 27).75

Guyanese economist C.Y. Thomas’s (1988) typology of race and class politics is relevant to the Caribbean context, where the moneyed elite—composed of colonialists

(whites) or traditionalists (whitened or creole/mixed race)—and the political elite

(coloured/Black/East Indian) dominate the disenfranchised Black masses. The British first referred to this mixed racial group as mulattos, and later Jamaicans called Black persons of

75 Smith (1964, 27) argued that offspring by slave women and white men had an “intermediate status” that ranked them better-off than slaves.

light-skinned complexion brownings (Brathwaite 1971).76 Within the creole-Jamaican society, a class structure tied to race emerged in which mulattos or brownings had the right to vote and dark-skinned Blacks did not (Rodney 1996, 61–62).77 Only persons of a lighter skin pigmentation assumed positions of power in the colonial state. I found that the term “Afro-

Jamaican” was and continues to be complex, and can include (or exclude) many shades of colour. Mixed raced Jamaicans are able to apply the label “Afro-Jamaican” when it suits their purposes. Today, the island’s richest families are white Jamaicans (like the Issas, Stewarts, and Matalons). Over the years, inter-marriages have become complex, with brownings intermarrying with the island’s minority whites, Chinese, Lebanese, and Syrians.

Like Jamaica, Haiti’s intermingling was between white and Black. The French slave masters intermingled with les brossales (African-born slaves, also called Congos) and this created the mulatres (mulatto/mixed race) group (Trouillet 1995, 67; Casimir 1993, 74). The mulatres were the first to emerge as the dominant class at independence (Heinl and Heinl

2005, 22). Intermingling has resulted in complex racial groupings based on shades of skin colour, but the three dominant groups are les blancs (whites), les mulatres, and les noirs

(Black). Most of the moun andeyo (poor masses) are Kreyol-speaking (Hallward 2010, 1;

The Agronomist 2003; Voodoo and the Church 1998).78 Today, however, there is a Black class that has used education as a tool to move up the social ladder from the Black masses.

76The term “browning” refers to light-skinned or mixed-raced Jamaicans, who often are well-educated and belonged to the upper-middle class. I use the term “light-skinned” reluctantly, but it is the only term to describe the blatant colour codes within these contexts. 77 In the Jamaican and Haitian cases, I employ the term “dark-skinned” to refer to persons maintaining African physical features. The terms “Afro-Jamaicans” and “Black Haitians” are complex, and pigmentation and class is often aligned with these variations in skin colour. 78 Vodun, or voodoo, is a traditional religion practiced by many Haitians and often functions as a signifier of class. See Voodoo and the Church in Haiti (1998).

And in the past there were two main groups: mulatres and bossales (African-born slaves).

Casimir (1993, 112) finds that before independence the two groups, mulatres and bossales, united to fight the French oppressors. After the French left, the whitened elites—called

“bourgeoisie” or “mulatres,” specifically the French-speaking Catholic whitened minority— economically and politically dominated the majority of very dark-skinned, uneducated,

Voodoo-worshipping Haitians.

Despite the systemic racism, an educated Black elite emerged in politics, first manifested through the Black liberation leaders Jean-Jacques Dessalines and Toussaint

L’Ouverture. This pro-Black politics, referred to as Noiriste (Black Nationalism), was first witnessed in Haiti shortly before independence in the early 1800s (Robinson 2007, 15; Heinl and Heinl 2005, 21).79 Dessalines and L’Ouverture appealed to the mulatres, freed slaves, and brossales as leaders capable of usurping power from the French (James 1989). Inspired by the 1789 French Revolution, the slaves carried out a violent revolution, assisted by the

Americans, to overthrow the French (Girard 2010, 57; Robinson 2007, 6; Paquin and Brax

2006, 27; Heinl and Heinl 2005, 111; James 1989, 127).80

After two centuries of slavery, Haitians, inspired by the French Revolution, liberated themselves (James 1989, 72). The start of freedom began in April 1792 when France agreed, through the Jacobins’ decree, to give freedom to mulatres (mulattos) and certain creole-

79 L’Ouverture used Noiriste philosophy to mobilize the Africans and Haitian-born against the French colonizers. Some historians have noted that L’Ouverture, a freed slave, himself owned slaves. Also, review The Black Jacobins: Toussaint L’Ouverture and the San Domingo Revolution by Trinidadian C.L.R. James (1989) for an account of Haiti’s Revolution. 80 Robinson (2007, 6) argues that the U.S. supported the Haitians against the French because the Haitians assisted the U.S. in eventually acquiring the Louisiana Purchase from France.

Africans (Haitian-born Blacks) (Heinl and Heinl 2005, 48). Once they were free, creole-

Africans Dessalines and L’Ouverture led the brossales to claim independence from France

(Smartt-Bell 2007, 197–244; Trouillot 1995, 37; Heinl and Heinl 2005, 83–85; Farmer 1994,

71). In this bloody revolt, Dessalines and his troops defeated Napoleon’s army and forced all

French settlers to leave. On 1st January 1804, Haiti was the first Black republic, but it remained isolated and an outcast from the international community for a long time (Acacia

2006, 18; Stotzky 1997, 19; Trouillet 1995, 97; Farmer 1994, 76). As slavery was not abolished in Britain until 1838 and in America until 1865, the Western powers wanted to contain the truth about Haiti’s independence so as not to disburb the slave rebellions on the plantations.

In Guyana, colonial masters, such as the Dutch and British slave masters, raped

African female slaves and introduced a mixed-race group of white and Black, as in the other two cases. African male slaves were feared, belittled, and defined as lazy by white masters

(Rodney 1981). And the female slaves were viewed as submissive and sexual. It is important to note that the racist alienation of poor Black men continues in current politics in a way that is relevant to this project. As in the Jamaican story, these whitened elites (mulattos) were at the top of the economic ladder due to their advancement under the English colonialists, while

African and Indian Guyanese workers formed the base (Rodney 1996; Burrowes 1984, 26;

Smith 1964; Stoby 1931).81

81 See Smith’s (1964, 29) work on the plantation economy and the staggered race and social structure.

As a result of the extensive indentured labour program, many other ethnic groups were imported and settled in Guyana. Indians composed the largest group of indentured servants brought into the country because of the British colonial ties to the Indian sub- continent. This resulted in cultural plurality. The intermingling of Guyana’s two dominant groups—Africans (who were former slaves) and East Indians (indentured servants)— introduced another mixed race category unique to Guyana (and Trinidad) called dougla

(offspring of Africans and Indians).82 Racial diversity in Guyana includes the various mixed- race group categories, as well as European (English, Portuguese, and Spanish), Chinese, and

Amerindian, the indigenous people (Smith 1964, 7).

Imperialism and Resistance

Imperialism at the turn of the 17th century saw the free labour of slaves used to extract sugar and rum from the colonies. Eventually, offspring of the white planters inherited the land and riches (Girard 2010; Gardner 1971; Black 1965). Saint Domingue (Haiti) was first colonized by the Spanish, who eliminated the indigenous population on arrival. France eventually took control of Saint Domingue, which became the most profitable sugar- producing colony in the Americas (Heinl and Heinl 2005, 18). The Treaty of Utrecht (1703-

1738) granted the British Empire the Asiento contract, according to which England became the authorized slave distributor for the region (Black 1965; Young 1958). In Jamaica after

1775, white indentured servants (such as the Portuguese and Irish) moved into plantation management as Negro slaves increased in numbers to 200,000 (Black 1965; Smith 1964, 42).

Britain gained control of Guyana from the Dutch in 1814, and applied a planter system

82 Refer to the definition of dougla in chapter 1.

similar to Jamaica’s in the early years (Mansru 2005; Smith 1964, 19; Bennett 1875).

Because the plantation system was not sustainable without forced labour, after slavery ended the British used an expansive indenture system in Guyana and Trinidad, and to a lesser extent in Jamaica (St. Pierre 1999, 35; Rodney 1981, 38).

Anti-slavery movements in Europe also stirred resistance in the colonies. Haiti’s successful revolution spurred Jamaican slaves to fight their colonizers for freedom in this revolt led by the Trelawney maroons. In the early 19th century, slaves in Jamaica and Guyana initiated their own uprisings against the masters (Black 1965). It took several attempts before they were successful. Jamaica’s maroons, originally called “Coromantes” (runaway African slaves) launched guerilla-style warfare against the slave system and its owners.83 In 1808, slave uprisings in the British colonies forced the passage of the Abolition Bill. The Maroons fought British slave masters and escaped to the mountains, where they staged attacks on the planters (Black 1965). The abolition of slavery at that time remained merely a law on paper: the practice continued until 1838 (Brathwaite 1971), when freedom came to more than

300,000 Jamaican slaves.

The Dutch ruled Guiana for two hundred years, and during the 18th century the colony changed hands several times between the Dutch and British (Singh 1006, 7; Burrowes 1984,

3–5; Schomburgk 1970; Bennett 1875). Guyana’s slaves, led by Coffey, attempted resistance in the unsuccessful Berbice Slave Uprising of 1763 (Hope 1985, 19). In 1814, Guiana was renamed British Guiana (later known as Guyana) and the British were heavily invested in

83 In today’s Jamaica, maroons, such as Nanny and Cudjoe, are celebrated for their resistance to slavery.

maintaining their lucrative sugar estates (Hope 1985, 19). Similar to the Jamaican experience, Guyana’s slaves were aware of the abolition movement in England, and in 1823, thousands of slaves revolted in the Demerara Rebellion, which was defeated by the British.84

Like Jamaicans, the Guyanese people had to wait for freedom until 1838 (Burrowes 1984,

26; Schomburghk 1970, 124). Rodney (1996) made a compelling point that slavery did not end in Guyana until the early 20th century because of the slave-like indentured system of

Indo-Guyanese.

Thousands of African slaves in all three countries lost their lives during a century of struggle against slavery. European empires also lost lucrative trade when slavery ended, having to employ more costly wage labor. A capitalist system with freed slaves who wanted wage-based employment led to the demise of many plantations, which were not efficient or profitable without forced labour. The plantocracy economy, controlled by whites, continued for years after the emancipation period, as the British imported cheap labour from their other colonies, such as India, to work on the plantations. Cheap contract labour undercut the demands for market-led wages by the freed slaves. In 1836, foreign banks, such as England’s

Barclays Bank and Canada’s Bank of Nova Scotia emerged in the region to provide loans to assist the white planters. Despite the access to financing these plantations were not sustainable enterprises after slavery ended.

84 Rodney (1981, 31–33) documents the recurring slave revolts, which created problems with productivity for the white planters.

Colonial Jamaica and Its Political History

Jamaicans, though freed from slavery in 1838, remained colonized by the British. It was during this time that a concerted Black nationalist movement surfaced, and the year 1865 saw a turning point in Jamaica’s struggle for independence. At Morant Bay, Paul Bogle,

Jamaica’s national hero, with the help of the Maroons led a revolt against British rule (Bakan

1990; Black 1965), marking the beginning of the Jamaican people’s resistance to British control. The British response to this rebellion was to appoint a new British governor,

Governor Grant, to introduce development policies in education and economics to modernize

Jamaica. This effort by England was to appease the demands of the freed subjects.

Jamaicans welcomed these investments in education and infrastructure, but most industries remained in the control of the British. In 1929, Jamaican farmers exploited by the

United Fruit Company formed their own association: the Jamaican Banana Producers

Association (Black 1965). This and other banana associations spread throughout the productive industries, as workers recognized the need to mobilize into associations and cooperatives to improve wages. This movement led to the rise of political groups in 1938, and from these political groups, which were tied to trade unions, emerged political parties that were focused on the struggle for liberation.85 In towns and villages across Jamaica, however, people remained unhappy living under colonial rule. Jamaican migrants working in the Panama Canal realized then that the white colonialists were using them unjustly. Among

85 Major parties in Jamaica were linked to the trade union movements: Bustamante Labour Party (later known as JLP) was linked to the Industrial Trade Union and Manley’s PNP was tied to the National Workers’ Union.

these migrants was Marcus Mosiah Garvey, a leading Black nationalist who first promoted black pride in the slums of Kingston, where he lived for a number of years (Sives 2010, 3).86

Overseas, Marcus Garvey’s pan-African politics under the Universal Negro

Improvement Association was a movement to free Black people from unjust colonial rule

(Sives 2010; Martin 1983; Black 1965). In the 1930s, Garvey’s ideas resonated in the ghettos with the Rastafari movement, an oppressed social group, as his positive black teachings fit with their own African philosophy (Grant 2009; Barrow-Giles 2002; Bakan 1990; Martin

1983, 52).87 The Jamaican diaspora living in New York as well as African-Americans facing similar struggles supported his cause. However, British colonizers, local whites, and browning elites found Garvey’s Afro-centrist discourse divisive: local whites, for example, opposed Garvey’s distinction between local whites and the Black masses. Norman Manley and Alexander Bustamante, the Jamaican leaders who led the country to self-government in

1936 and later independence from Britain, were threatened by Garvey’s radical call for poor

Blacks to take power from foreign and local whites (Martin 1983).88

Bustamante and Manley viewed Garvey’s philosophy as a distraction from the independence project. Alexander “Busta” Bustamante, a creole white (later to be named one of the founders of independence), was to become the country’s first prime minister.

Bustamante, who earned his money as a money lender to the poor in the ghettos, was leader

86 Marcus Garvey remains an important political figure for underprivileged Black youth, as witnessed at Liberty Hall on Duke Street, in downtown Kingston. 87 Rastafari, a faith that developed in Jamaica in the 1930s, has spread to most Caribbean countries. Rastafari is as a cultural and political movement and a way of life infused with Judeo-Christian teachings and Ethiopia’s Emperor Haile Selassie (1930–1936 and 1941–1974) is considered God incarnate, or Jah. 88 Self-governance meant that the Jamaican educated elites would manage their country’s political and economic affairs locally with limited involvement from Britain.

of the Bustamante Industrial Trade Union (BITU), which in 1943 partnered with the Jamaica

Labour Party (JLP). Norman Manley, also a white Jamaican and Bustamante’s cousin, was affiliated with the National Workers’ Union (formerly the Trade Union Council) and later created a rival party, the People’s National Party (PNP). In 1936, the self-government achieved by these two local elites set the stage for a two-party system in Jamaica (Bakan

1990; Black 1965).

By the late 1940s, nationalism was on the rise. Jamaicans of all colours (races) unified in the struggle for independence. Payne (1994, 6) suggests that in Jamaica, the “basic homogeneity and small size of the country allowed for the construction of a national identity.” Instead of undermining the trade union and cooperative movement, political leaders incorporated workers into the political system. In 1943, Bustamante and Manley collaborated in the fight for universal suffrage because they resented that Jamaicans, who fought alongside British troops in World War II, were denied the vote. Both cousins organized labour through their respective political parties, thus dividing the working classes’ political loyalty between them (Bronfman 2007, 69; Charles 1999; Black 1965). As a result, political elites often resorted to clientelistic tactics in order to retain the poor’s loyal to their political party (Helmke and Livistsky 2004; Dittmer 2000; Szeftel 2000; Stone 1980).89

In 1955, PNP became the first sitting local party and the Cabinet was authorized to seek independence. British colonizers granted permission to Jamaican leaders to work with regional leaders to set up a political federation with Trinidad, Guyana, and Barbados, which

89 Clientelism is defined as an exchange of material rewards (e.g., money, jobs) by a boss or elite in exchange for intangible services, such as political support by the poor, the clients (Scott 1977). I find that Szeftel’s definition of coercive dependence and threat of violence for her work in Africa fits the Jamaican experience.

would be termed collectively the British West Indies. Under a newly crafted constitution, the

PNP was re-elected in 1959 as the governing party. However, in 1962 the Federation broke down as Jamaicans agitated for independence. In that same year, Jamaica gained its own independence. Bustamante, who had launched the Jamaican Labor Party (JLP), was the first person to govern an independent Jamaica.

Throughout the 1960s, Bustamante and Manley, in order to obtain power, enticed poor Blacks with promises of jobs, money, and houses to carry out thuggish politicking against other poor Blacks (Gunst 2003; Ledgister 1998; Payne 1994; Stone 1994; Keith and

Keith 1992; Bakan 1990; Harder they Come film 1973). Stone (1986, 1994) argues that since the 1967 election, armed political gang leaders from Kingston’s downtown slums have organized party activists. At election times, Kingston’s ghettos become sites of conflicts over scarce resources, because people know that having their party in power means money for them. Election violence was so intense in the 1970s that musician Rasta Robert “Bob” Nestor

Marley held a peace concert and reflected on the political wars in his reggae music (White

2000).

Independent Jamaica

Jamaica, with a population of 2.7 million (World Bank 2011), has a long-standing democracy that has been shaped by its political history. Today many descendant beneficiaries of the planter class live in hill top mansions in the wealthy Beverly Hills area, while descendants of slaves live in the impoverished shanty towns below and continue to work in informal markets (Rapley 2003). Socio-economic factors are compounded by differences in skin-colour to produce a class-based apartheid that divides Jamaicans. Most residents living

in the downtown ghettos are very dark-skinned and those who control resources are usually educated and fair-complexioned. This colour and class dynamic has changed little since the colonial period. The independence struggle itself saw near-white leaders, Bustamante and

Manley, bringing the Black working classes as activists into the political process through the trade union movement. For most of the country’s history, then, party leaders have been educated, light-skinned browning elites and their followers have been poor Blacks.

Politics in Kingston, Jamaica’s main urban centre, is marred at election time by racialized violence. Whitened political elites make promises of money, lodgings, and jobs to very poor political activists who, if they fail to deliver the vote for their candidate, will lose the political hand-outs. Academics have written extensively on this entrenched mechanism wherein elites use uneducated Black masses in the ghettos to carry out heinous crimes to assure votes and political victory (Sives 2010; Bronfman 2007; Tafari-Ama 2006; Ledgister

1998; Stone 1994, 1986, 1980; Nettleford 1989).90 Panton (1993) argues that this division between the classes, which is tied to racial markings, has laid the foundation for a patron- clientelistic framework in Jamaican politics. Poverty, endemic in the urban areas of

Kingston, has enabled political elites to misuse resources to secure votes for their party, and this trend continues into present-day politics (Henry-Lee 2005, 84). Years of whitened politicians using residents in the slums to carry out their dirty work has led Blacks to distrust near-white political and business elites.

90 In Going Home to Teach (2006, 89–99) Anthony Winkler argues that being Black is less a colour and more like a way of being where one’s class also denotes colour. In other words, poor Blacks may view a rich and educated dark-skinned Jamaican not as Black like them because of the class distinction (This issue will come up again in chapter 3).

While political elites continue to control the slums, relatively new actors called

“Dons” emerged in the 1980s. Dons are informal leaders in the community who run lucrative illegal activities (e.g., drugs and weapons trafficking) and provide security and welfare services for slum residents in exchange for complete control of the community. The rise of don power came about in the 1980s, when structural adjustment programs and reforms limited politicians from disbursing benefits to followers. Dons at this time became important actors in the provision of welfare. With the rise of the narcotics trade in the Caribbean since the 1980s, Jamaicans are very aware of their politicians’ alliances with Dons. The local connotation “Big Man” refers to either a politician or these informal leaders. Indeed, the collusion between politicians and Dons is a common theme in popular film, theatre, music, and media.91 The practices of political gifts, kickbacks, and handouts from the politicians or

Dons are thus deeply entrenched in downtown Kingston (Keith and Keith 1992, 160).

Political slums in Kingston are defined by an area’s affiliation to one of the two political parties: PNP or JLP. These slums, also called “garrisons,” take on a “political tribe” persona: residents are either “PNP” or “JLP” depending on which political party controls the area. An entire community votes one particular way and there is no tolerance for opposition.

Some garrison communities have an established structure, referred to as “one order,” in which an informal leader Don controls all of the community’s affairs (Rapley 2006, 95-97;

91 Perry Henzell and Trevor Rhone’s The Harder They Come (1973) and recent films such as Shottas (2002) and Third World Cop (1999) show the ties between criminals from the ghettos and political and business elites. Nordisk’s film by Asgar Leth, Les Chimères de Cité Soleil (2007), shows the warring gangs allegedly set up under Aristide.

Figueroa and Sives 2003, 66).92 In songs and movies, the concept of “politricks” (politics characterized by dishonesty) is widely discussed among poor Jamaicans, showing that they are aware not only of how politicians use them for votes, but of the high costs of any benefits that come through partisan politics when Dons are involved (Bonitto 2008).

Dons, tied to the political elites by guaranteeing votes in exchange for government contracts, must ensure that residents vote for the correct party. In the 1980s, structural adjustment programs (SAPs) imposed by the International Monetary Fund (IMF) scaled back welfare functions, leaving informal leaders to fill the gaps and provide basic welfare services and policing in certain ghettos. These measures secured popular support from many of those who live in the garrisons (Robotham 2003, 216). Because of increasing profits from the extortion of business elites and from the drug and weapons trade, Dons now often have more financial resources and power than elected leaders.

Dons have created “states within a state” (Sives 2010; 2002; Bronfman 2007; Tafari-

Ama 2006; Robotham 2003; Harriott 2003; Stone 1986). For example, Tivoli Gardens’ former Don, Christopher “Dudus” Coke—whose informal trade and registered legal businesses are known as “Incomparable Enterprises” and “Presidential Click”—received state contracts for millions of dollars in construction and for the cleanup of gullies and sewage systems (Robotham 2003, 215; Charles 2002, 32).93 In 2010, capture of Dudus for

92 The Garrison: A Place Governed by Its Own Laws, a novel by Jamaican writer Sean Harris, gives insights into the informal power structures in the Kingston slums. 93 For Tivoli Gardens’ drug lord’s various activities, including contracts from the State, see: http://www.timesonline.co.uk/tol/news/world/us_and_americas/article7135596.ece

extradition to the United States led to widespread disorder and rioting in West Kingston and resulted in the deaths of policemen and residents.

Given the presence of both clientelist politics and a democratic tradition, there are opposing views about the country’s political history (Stone 1986). On the one hand, Jamaica is seen as a long-standing pillar of democratic traditions; on the other, the country is characterized as an electoral sham, where political elites incite electoral violence, engage in clientelistic politics, and misuse democracy for their own self-serving interests (Sives 2010;

Rapley 2006; Figueroa and Sives 2003; Harriott 2003). Although Jamaica’s state has been stable since independence, and its democracy is secure in spite of class inequalities and clientelism to control votes (Stone 1986), clientelistic tendencies in Jamaican politics make it difficult to imagine that such manipulation is absent in economic programs (such as microfinance) in the garrisons.

Jamaica’s Post-Colonial Politics: Presidents Manley and Seaga (1972- 1992)

Jamaica’s post-independence period had two main actors: the PNP’s Michael Manley

(1972–1980; 1989–1992) and the JLP’s leader Edward Seaga (1980–1989). Both men have left an indelible mark on the politics of the country. Patronage politics were prevalent during the political era of both Seaga and Manley: in particular, both leaders were associated with the clientelist politics that still grip the country today (Bronfman 2007, 69). Since independence, the JLP governments under Bustamante, Sangster, and later Shearer (1962–

1972) were successful in institutionalizing political hand-outs to ensure the electoral vote.

Once in office, the JLP governments moved the country towards import substitution

industrialization (ISI) policies to attract foreign investment and to develop local industries

(Jamaican Information Service website 26 May 2011; Payne 1994).

Michael Manley—the son of Norman Manley, the PNP leader in early times— emerged in 1972 as an important leader for the Third World non-alignment movement. To get to office, Michael Manley engaged in clientelistic politics because there was an understanding that patronage motivated his supporters (Sives 2010). He came to office with a socialist agenda that involved: (1) ensuring that the domestic economy was free from foreign control and accountable to the people; (2) reducing social inequalities through the distribution of social benefits, such as education; and (3) ensuring people’s participation in the political process (Payne 1994). During his first term, he nationalized foreign-owned enterprises and forced joint ventures between local and international firms (Panton 1993).

Manley developed his version of “democratic socialism,” which provided welfare services to the poor, and where possible he rewarded his supporters with housing and literacy and employment programs, such as the self-employment program. In 1977, the government acquired local branches of foreign banks, such as England’s Barclay’s Bank, and merged them into the fully Jamaican-owned National Commercial Bank (NCB), which began lending to Black small and medium firms (Deborah Thomas 2004, 79). Manley’s nationalist policy limited trade between local businesses and America because of state levies on American bauxite firms and an increasingly close relationship to Cuba. American leaders, antagonized by these moves, restricted imports from Jamaica.

While Manley’s nationalization proved beneficial to a growing local business class,

Edward Seaga, aware of Thatcher’s and Reagan’s neoliberal agendas of the 1980s,

challenged Manley. The pro-market national paper, The Gleaner, also criticized Manley’s socialist stance, labelling him a “communist” (Sives 2010, xxvi; Payne 1994). Although

Manley decided to change his nationalistic platform to a free market one, this shift in his agenda towards market-led policies came too late: his statist moves and the “communist” label lost him the 1980 election to Seaga’s JLP (Payne 1994). The extreme electoral violence of the 1980 election resulted in the deaths of 889 people (Sives 2010, 118; Howard 2005; The

Jamaica Observer, “Mayhem and Massacres,” 7 September 2000; Ledgister 1998).

Edward Seaga, an American-born and Harvard-educated son of white-Jamaican parents, had returned as a graduate student to study African spirituality and religions in the countryside and in Tivoli Gardens (West Kingston). In the 1960s, Bustamante saw potential in Seaga’s charisma and appointed him Minister of Development and Welfare. Welfare portfolios gave Seaga the power to reward party followers, and he started building housing complexes in the Kingston neighbourhood of Tivoli Gardens (Gray 2004, 179).94 These buildings are still standing in “Belgium,” “Haiti,” and “Bumbs” (West Kingston). Later,

Seaga served as Minister of Finance under Hugh Shearer and he eventually replaced Shearer as leader of the JLP in 1974 (Payne 1994; Panton 1993).

In the 1980s, Seaga’s pro-market politics enticed brownings and near-white Jamaican elites to return home to invest (Sandbrook et al. 2007, 17). American investors, Seaga’s close allies, were given export-free-zone contracts, and soon President Ronald Reagan wanted to

“showcase Jamaica as a free enterprise experiment in the Caribbean” (Panton 1993, 68–84).

94 Gray (2004, 179) notes that the PNP’s Tony Spaulding built housing schemes for supporters in Arnett Gardens.

American firms aligned with Seaga’s free market policies and invested in the country. For example, Hanes Jamaica Limited, a Virginia-based company, set up in Kingston’s free trade zone where Jamaicans assembled products from American-made materials (see Life and Debt

2001).

Seaga also agreed to SAPs with the World Bank and stabilization programs with the

IMF, which negatively affected the poor (Thomas 2004; Bernal 1994; Davies 1994). As part of the market reform, Seaga implemented licensing requirements on higglers (informal market vendors), a policy he dubbed “formalizing higglering”) to enable the government to collect taxes and to restrict their importation of goods (Ulysse 2007, 50).95 Seaga renamed higglers “informal commercial importers” (ICIs) (Ulysse 2007, 95; Freeman 2001, 1008),96 a name change intended to bring these entrepreneurs under the tax structure, as well as to arrange a system for import duties for the state. Yet, no social benefits were to accrue to this group, nor was there any state policy to assist the vendors to access credit and business training, even though many of these sellers came from slums that elected him to power.

Ulysse (2007, 277) argues that higglers were negatively targeted by the Seaga government through taxation, the seizing of goods by custom officers, and harassment by police when selling in streets or the open-markets. This harassment led to the formation of the Jamaican

Higglers and Sidewalk Vendors Association in 1986.

95 See Wong (1996), Witter (1989), Harrison (1988), Katzin (1959) and Mintz (1955) for work on higglers. A more recent study by Freeman (2001, 1021) examines the new role of the “suitcase trader” (e.g., higgler). 96 At a SALISES conference, a rich businessman argued that cheap imports brought in by higglers are to blame for the downfall of the manufacturing sector in Jamaica, and labelled these traders “smugglers” (Witter 1989; UWI 1989). This issue was noted in my interview with a white businessman in Kingston, 21 July 2009.

Seaga’s control of informal traders and push for free markets was rewarded with a constant stream of American aid. The increased USAID budget enabled Seaga in 1985 to improve relations with the informal sector through the self-start fund (SFF), a program to support new micro enterprises in slums communities (Webber 2000, 7; Richfield and Pace

Investment Limited, 1994). The SSF program was managed by Seaga’s wife, and party activists of the JLP were the main recipients of the micro loans. The political nature of the program was underlined by interviewees, who stated that Seaga’s SSF program only helped its JLP supporters (Interviews at MIDA and SSF, 10 March and 15 April 2009).

Unbeknownst to the IMF, then, Seaga’s political welfare programs were a cover through which he gave benefits to supporters in West Kingston.97

Like previous elections, those in 1989 were violent. Politicians doled out benefits and money to gangs and activists to bring in the vote. In his second term as Prime Minister,

Manley had a new political platform—“Better Must Come” and “Power for the People”— which continued the move towards a free market ideology (Sandbrook et al. 2007, 17; Bernal

1994; Best and Forrant 1994; Panton 1993). As part of his rightward shift, Manley launched the Micro Investment Development Agency (MIDA) in 1991 with USD$800,000, whose small loans were reported to me in interviews as being based on political patronage and clientelism for members of the PNP (Anonymous Interview, details withheld on purpose;

Ffrench 2008; Richfield and Pace Investments Limited 1994). In 1991, the Manley government implemented a three-year enterprise project, and party candidates were required to contribute funds into the project (Chin Interview, 10 March 2010).

97 Barriteau (2006) makes a similar argument about former prime minister Eugenia Charles of Dominica.

For thirty years (from 1962 to 1992) politics in Jamaica was dominated by white/near-white elites and financed by wealthy families (Thomas 2004; Thomas 1988; Keith and Keith 1992).98 A Black educated class emerged in the post-independence period, and when Manley retired from politics, the country’s first dark-skinned prime minister, Percival

James (P. J.) Patterson, took office in 2006, followed by the first female leader (also dark- skinned), Portia Simpson-Miller (Robotham 2000, 1).99 Within the PNP party, there was in- fighting for years following this because some politicians (of fair complexion) criticized

Simpson-Miller for her lack of education (Sives 2010, 171; Field work 2009).

In 2007, the next leader of Jamaica, Bruce Golding (2007-2011), a browning from the

JLP, once advocated for the end of “tribal” politics (clientelism) won by 50.26 per cent of the vote (Sives 2010, 171). Initially, he had a serious dispute with Seaga over this issue, and it resulted in Golding leaving the JLP, and in 1995 he created the New Democratic Movement

(NDM) (Figueroa and Sives 2003, 82). After a short stint, he returned in 2002 re-join the JLP and to replace Seaga as leader of the JLP. Golding also became a member of parliament for what had been Seaga’s West Kingston constituency. Amidst controversy, Golding suddenly resigned in October 2011, allegedly because of his connections to a former Don of Tivoli

Gardens. Andrew Holness (another browning, light complexioned Jamaican) became prime minister until December 2011). Despite the internal conflicts in the PNP, on December 29,

2011, Simpson-Miller was re-elected prime minister (2012 to present).

98 Keith and Keith (1992) point out that UWI academics have criticized the near white complexion of capitalists and heads of state agencies. 99 Opposition Leader Simpson-Miller (2009) is the MP for South St. Andrew (which includes Whitfield Town and some of Maxfield Park included in this study).

In July 2010, Golding’s West Kingston constituency rioted when citizens opposed the

U.S. extradition request for local Don Christopher “Dudus” Coke of Tivoli Gardens on drugs and weapons trafficking. Golding allegedly hired the law firm Manatt, Phelps and Philip to fight the American request. This controversy once again implicated politicians, including

Golding with being in collusion with drug dealers.100 And while politicians reject these alliances, the press routinely exposes the relationships (Harriott 2008; Rapley 2006; Hope

2006).101 Leading newspapers The Gleaner and the Jamaica Observer often criticize politicians for links to Dons. Politicians complain about criminal elements, yet they often attend funerals and social events with Dons who are known for their illicit activities. The constituency of Prime Minister Portia Simpson-Miller (2012 to present) in South West St.

Andrew is also overrun with gangs, area leaders, and Dons vying for control.

Microfinance in the slums is vulnerable to a historical legacy of clientelistic politics in which Big Men make cash allowances available to the urban poor. The lending environment is complicated by a history of politicians allocating economic resources to party followers, which later shifted to Dons making loans to slum dwellers. Not only do financial institutions make micro loans but informal lenders such as politicians and Dons are active in micro banking.

100 See more at the Jamaica Observer, a leading national paper: http://www.jamaicaobserver.com/news/Taxpayer-tab-for-Manatt---Dudus--Enquiry-soon_8146902 101 On-line stories in The Gleaner going back to 2001 discuss relations between Dons and politicians. See http://www.jamaica-gleaner.com/gleaner/20091207/lead/lead10.html and http://www.jamaica- gleaner.com/gleaner/20010514/news/news1.html), and Ian Boyne’s piece, http://mobile.jamaicagleaner.com/20090517/focus/focus1.php

Colonization, Independence, and Guyana’s Political History

Guyana, a pluralist country and another English-speaking case, is one of the poorest countries in the region. Guyana is the only Anglophone country in South America and it identifies itself culturally as Caribbean. It is also a relatively small country with great diversity among its population of 756,000 (World Bank 2011), composed of six recognized races: East Indians, Africans, Europeans, Amerindians (indigenous peoples), Chinese, and mixed race; as well as three main religions: Christianity, Hinduism, and Islam (Hope 1985,

13; Smith 1964, 117).102 The National Census (2002, 2) found that the largest ethnic groups were East Indians at 43.5% and Africans at 30.2 %, with mixed-race (dougla and others) background at16.7%, Amerindians at 9.2%, and whites and Chinese less than 1%.103

The Dutch first ruled Guyana (1580–1803) and later the British (1803–1966) (Dalton

1885). In 1833, freed slaves, no longer forced to live on the plantations, pooled their earnings from agricultural sales and wages to form cooperatives. With no state services, former slaves organized cooperatives, and it was through these that the Negro “village movement” grew

(1838 to 1852). Guyanese historian Maurice St. Pierre (1999, 69-70) reports that cooperatives became the only alternative for Blacks, who were denied financial services under colonial rule. In 1914, freed slaves formed “Task Gangs” to organize into cooperatives—such as “Up and On Clubs,” “Buying Clubs,” and “Saving Unions”—and to meet their livelihood needs. Africans denied loans under the colonial administration relied

102 Guyanese historian Walter Rodney (1981, 1–3) explains that the indigenous people of Guyana were the Amerindians, the people who inhabited present-day Guyana when the Dutch explorers first came to the coastal areas in 1598. The Amerindians are made up of the Caribe, Arawak, and Warao tribes. 103 Gibson (2005, 10–11) finds that since 1992 there has been a steady population decline of Afro-Guyanese and contends that Afros do not identify with being Black and will choose the mixed-race category because of the oppressive state politics.

on these cooperatives and informal banking systems such as Box hand to buy land and villages. Buxton is an example of Africans collectively coming together to buy title of the land to create an ancestral home for emancipated slaves (Greenidge 2001, 17; Daly 1974,

141; Smith 1964, 40).

Despite these efforts, however, colonial state leaders and the planters thwarted

African entrepreneurialism by bringing in cheap foreign labour to sustain plantations and control market prices. As outlined in an earlier section, prior to the emancipation, British planters had relied on free labour to ensure profitable rice and sugar estates. Once slavery ended, the British activated large-scale indentured laborer programs from 1824 to 1917 as a way to continue running the plantations. During this period, the British East India Trading

Company brought in Indians (also called coolies) to farm for very little pay. East Indians lived in logies (old slave houses) and worked on sugar and rice plantations, and their low wages undercut the bargaining power of the freed Africans (Mansru 2005, 4–5; St. Pierre

1999, 42; Singh 1996, 4; Burrowes 1984, 4–6; Rodney 1981, 178; Nath 1950).

Plantations were dependent upon British subsidies—including the indentured servants program—to operate. Because the British state subsidized Indian labour, white planters no longer worked within a market system, nor were they required to give in to African wage demands (Greenidge 2001). Mansru (2005, 68) argues that this importation of cheap migrant labour thus limited African emancipation, as Africans were unable to bargain for higher wages. Planters labelled Africans as “lazy niggers,” further dividing the two landless groups

(Rodney 1981, 181). Colonial masters used this discourse to emasculate Blacks and especially the males. Blacks responded negatively to the Indian immigrants, who undermined

their bargaining power with the planters and they regarded these foreign-born Indians as inferior because of the latters’ language and religions—Hindu and Muslim—which they saw as cultural attributes far from the Western ideal (Rodney 1981, 180). The indentured servants program resulted in deep-seated tensions between Africans and Indians.

Guyana’s political history—steeped in plantation class interests marked by racial divisions—is complicated (Young 1958; Stoby 1931; Dalton 1885). Portuguese and Chinese groups, initially imported as indentured servants, transitioned into the merchant class once the British started importing cheap labour from India (St. Pierre 1999, 38; Smith 1964, 44).

However, the Portuguese shop-keepers were hated by the Afro-Guyanese, who felt they were discriminated against. As early as 1856, during the Angel Gabriel Riots, Africans rebelled against the Portuguese for not selling goods to them (Majeed 2005, 149; St. Pierre 1999,

39).104 A colonial system rooted in racial stratifications that separated and played the races against each other (especially Indians and Africans) (Garner 2008, 19). The English left

Guyana with the coming of independence set for 1966, and those whitened elites who stayed such as the Portuguese and Chinese inherited political and economic power.

Race Politics in Post–Independent Guyana

Modern-day politics is rooted in the racial and polarized politics of Guyana’s past.105

Prior to Guyana’s independence in 1966, two leaders had emerged: one Afro, Linden Forbes

104 National Museum in Georgetown’s notes state, “Their (Portuguese) success was evident with the consequence that the Negroes became jealous and displayed animosity towards them.” Wording constructs the Afro-Guyanese as violent and angry and Indians as industrious. (Visit, 10 May 2010). 105 In the television program Spotlight, which aired a segment entitled “Reconciliation in Guyana” to discuss the problematic race relations in the country (22 April 2010), UG’s Andrew Hicks, argued for affirmative action for Afro-Guyanese to level the playing field.

Sampson Burnham, and one Indo, Cheddi Jagan, who forged an alliance to oust British colonial control. They also created the People’s Progressive Party (PPP). Starting in 1954,

Jagan assisted in the development of rice and sugar farming in Black Bush Polder and West

Ruimsveldt as a way to drum up political support from the Indians. Greenidge’s study (2001) on land settlements suggests cooperative development under Jagan’s PPP recruited supporters and party politics assisted his PPP supporters. In 1955, this power-sharing arrangement broke down, and Burnham broke away from the PPP and created the People’s

National Congress (PNC) (Gibson 2006, 372; Trotz 2004, 2; Singh 1996, 57; Smith 1964,

179).

Post-colonial Guyanese politics has replicated the British system of racial division to possess control. Cheddi Jagan, father of independence, and a person from a humble social background recognized an opportunity to use the racial demographics of the country for his own agenda. Jagan called on Indo-Guyanese to “apanjaat,” a Hindi word for “vote for your own kind” (Nettles 2007, 63; St. Pierre 1999, 138). At independence, the Western powers feared Jagan’s Communist leanings, yet Jagan emerged as the party’s leader in 1957

(Ramharack 2005; St. Pierre 1999, 177; Jagan 1997; Burrowes 1984, 100). Jagan and

Burnham had developed ethnically based political parties, in which Indians rallied around

Indo leader Jagan, while Afros supported Burnham (Gibson 2005, 8; Dupuy 1996). Burnham learned quickly that he had to widen his appeal beyond the Blacks and bring in middle-class support (Currie Interview, 3 May 2010; Philips Interview, 30 April 2010).

The 1960s race riots shaped the country’s modern politics and race relations. Racial tensions began in 1962 on “Black Friday” when people rioted against new taxes brought in

by the PPP (Singh 1996, 77; Hope 1985, 50). By 1964, racial violence between Jagan’s

Indian base and Burnham’s Afro constituency had elevated to new levels (Hope 1985, 50): at least 175 persons were killed and thousands more injured, and hundreds of women were raped (Trotz 2004, 5–7; Burrowes 1984, 189). With the increased violence, many Portuguese and Chinese emigrated elsewhere giving the Indo-Guyanese an opportunity to rise as the dominant racial group in business over the African and Amerindian people (Scott Interview,

13 May 2010; Shury Interview, 21 April 2010).

These 1960s riots entrenched fear about the “other side” and many communities still remain racially segregated. In villages like La Grange or Goed Fortuin (West Bank

Demerara), Indo-Guyanese live in close-knit segregated communities, holding onto memories of the riots (Fieldwork, April and May 2010). In the 1966 election, Burnham played on the fear of communism encouraged by the U.S. and branded Jagan as a Cuba- supporting Communist. This resulted in an electoral win for the U.S.-backed PNC under

Burnham and in coalition with D’Aguiar’s United Force to form the first government in an independent Guyana (St. Pierre 1999, 177; Daly 1974, 193).

Post-Colonial Guyana: Politics under Burnham’s PNC (1964 to 1985)

Burnham’s authoritarian regime ruled for 21 years and was characterized by socialist rhetoric and clientelist practices (Burrowes 1984, 275). Hence, Guyana by the late 1960s had become a single-party government led by the minority ethnic group, the Afro-Guyanese, to the exclusion of the large Indian population. Burnham embraced nationalist development to confront the foreign-owned enterprises that dominated the economy in the 1970s, such as

Bookers Stores Limited, Geddes Grant Limited, and JP Santos and Company Limited

(Burrowes 1984, 295; Davis 1979; Smith 1964, 60). Bookers, the largest British firm of these, referred to as “Bookers Guyana” since the colonial period, finally left in 1976 under

Burnham (Sookdeo 1997; Burrowes 1984, 14; Smith 1964, 83–85). Burnham’s government

(1970–76) nationalized sugar and bauxite companies, such as the American company

Reynolds and Canada’s Alcan (Burrowes 1984, 280-284). These dominating state-owned enterprises discouraged local Indian businessmen from investing in the country, which led to mass emigration (Greenidge 1981).

Burnham invested in nationalization projects and cooperatives because they fit with his socialist political agenda. He drew on the African legacy of cooperative development after slavery as part of his state-controlled agenda. Burnham defined cooperatives as the mechanism needed “To make the small man a real man” (Burrowes 1984, 246).106

Burnham’s “Declaration of Sophia” viewed cooperatives as the vehicle for economic empowerment, and in 1970 Burnham declared Guyana a “cooperative republic” (Barrow-

Giles 2002, 210). Although his tri-sectoral strategy of private sector, state, and cooperatives were intended to emancipate the “small man,” few citizens believed this given the corruption and mismanagement under his regime (Thomas 2007; 1988, 251; Raghunandan and Kistow

1998, 75). Indeed, cooperatives were largely mismanaged by Burnham to fund his party supporters.

The state’s tagline—“To make the small man a real man”—never materialized because it was imposed top-down by political elites (Barrow-Giles 2002, 210; Burrowes

106 The Guyanese term “small small man” refers to a poor person.

1984, 246). Burnham created the Guyana National Cooperative Bank, the country’s first locally-owned bank, and later set up other state-owned banks, such as the Guyana

Cooperative Agricultural and Industrial Bank (GAIBANK) and the Guyana Bank for Trade and Industry (Sookdeo 1997). Starting in the 1970s, the Guyana National Cooperative Bank and GAIBANK are believed to be the first micro lenders. However, these institutions were mainly political tools, and clients were not required to repay loans because they pledged political support (Greenidge 1981, 175). Raghunandan and Kistow (1998) argue that the

Burnham government’s subsidies to cooperative banks allowed him to misuse funds for his own personal gain, resulting in financially unsustainable cooperatives.

Throughout the 1970s, Burnham’s leftist propaganda penetrated every aspect of life

(Thomas 1988, 260). At an agriculture commune in the jungle, the mass suicide by 900 followers of Jim Jones’s People’s Temple in 1977 signaled to the public that the Burnham regime would permit highly questionable activities as long as long as they paid off the regime (Singh 1996, xv; Burrowes 1984, 294). However, the Black urban masses, which had been duped into believing the Burnham government would help them, eventually resisted his paternalistic power and corrupt regime (Burrowes 1984).

Guyanese scholar Greenidge (1981) argued that state power reached so far into people’s everyday lives that fear was rampant. The state controlled the private sector and community development. In order to hurt the Indian opposition, Burnham banned imported staples important to the East Indian diet, such as flour, split peas, and potatoes (Mars 1995,

180). However, his interference in the market for political control harmed not only Indian- owned businesses engaged in imports, but his ban on imports also negatively affected the

Afro-Guyanese who supported him (Kaeiteur News 11 December 2011; Samaroo, Interview

6 May 2010; Philips Interview, 30 April 2010). Policies to subjugate and humiliate Indo-

Guyanese led to the emigration of Indian business class and professionals to the U.S. and

Canada, and regionally to Trinidad and Barbados. Burnham’s corruption accelerated an economic crisis in the early 1980s, and poor Afro-Guyanese turned to huckstering (trading) as a means of survival, and a way to resist the political handouts of an oppressive regime.

Educated Blacks who questioned Forbes Burnham’s undemocratic regime became political targets. One of the best-known critics of the regime was Walter Rodney, an Afro-

Guyanese intellectual who formed the leftist Working People’s Alliance (WPA) (Rodney

1996, 60).107 Rodney claimed that the Burnham regime employed the “divide and conquer strategy” that white colonizers used to control African slaves and East Indian indentured servants. Rodney argued that Jagan and Burnham misused the poor for their own political ends: Jagan used anti-Black messages to scare the rural land-owning (but poor) Indians into voting for him, and Burnham rallied the Afro-Guyanese to support him. To counter the race politics instigated by the political elites, Rodney called for an inclusive nationalism, one that would include the two largest racial groups (Dupuy 1996; In the Sky’s Wild Noise film 1983).

His proposed alliance between the races threatened the political elites because they knew their power, based on race, would be lost if voters united along class lines. Although it is contested, it is widely believed that Burnham’s fear of Rodney’s political opposition resulted in the latter’s murder in 1980 (ibid).

107 WPA is no longer an active political party but some of its high-profile members are still active in society (I will not name them).

The killing of Rodney frustrated citizens. Western nations ostracized Guyana because of its rampant murders, kidnapping, corruption, and serious financial problems. State- sanctioned violence escalated against the citizenry. Clientelistic and extra-judicial killings alienated American support: in 1982, USAID cancelled a $15 million loan and the ambassador was recalled (Majeed 2005, 25). Years of mismanagement and an atrocious human rights record led to massive emigration of skilled human resources (Singh 1996, 129).

In 1985, change came under a new government. Burnham died in office and his Vice

President Desmond Hoyte took over. As a result of the financial crisis, Hoyte’s government adopted SAPs which moved the country towards liberalization of the markets (Mars 1995,

175). This policy change also meant increased support for small business (Kissoon Interview,

7 May 2010). However, this focus on micro and small business development was short-lived because when Cheddi Jagan’s PPP re-assumed power in 1999, his policies reverted support to large businesses. A policy move that favoured Indo-Guyanese (Anonymous Interview, 6

May 2010).

Indo-Guyanese Political Domination (1992 to present)

After more than two decades of Burnham’s preferential treatment for Afros, the

Indian-led PPP came to power in 1992. Guyanese scholars (e.g., Kissoon 2010; Gibson 2006;

Trotz 2004; St. Pierre 1999; Hintzen 1989; Thomas 1988; Kemp 1985; Rodney 1981; Daly

1974) document the use of race by both Afro Burnham and Indo Jagan to control people.108

As in the 1960s, Cheddi Jagan diverted resources to rural Indian communities by shifting the

108 Mars (1995, 171) says that the state places a high premium on ethnic partisanship. I observed that the political environment is controlled by Indian elites, both Hindus and Muslims (Fieldwork, May 2010).

allocation of benefits such as housing, loans, and employment from the Afros to the Indos

(Scott 2007, 40). Jagan not only continued such race-based patronage, but intensified Indian political extremism (Fieldwork 2010; Greenidge 2001). In 1997, Jagan’s American-born

Jewish wife, Janet Jagan, took office after her husband’s death and intensified the racialized system favouring Indians (Currie Interview, 3 May 2010). Caribbean scholar Percy Hintzen

(1989, 105) has found that “clientelism is expected to play a significant role in elite support particularly under conditions where regime politics and programs have had a negative consequence for major segments of the population.” In this way, the Jagan’s continued to practice patronage to secure their power.

For twenty years, PPP administrations (those of Cheddi Jagan [1992 to 1997], Janet

Jagan [1997 to 1999], Bharrat Jagdeo [1999 to 2011] allocated resources in a racially biased way to the Indo-Guyanese. In December 2011, another Indo-Guyanese of the PPP, Donald

Ramotar, was elected and he appears to continue the race-based politics. In 2006, Bharrat

Jagdeo, a protégé of Cheddi Jagan and a Russian-trained economist, won 55% of the votes

(Guyana’s Election Commission results 2006). Guyanese scholar Michael Scott (2007, 69) argues that Guyana’s democracy is one based on racial interests—or on what he calls

“communal democracy”—where people are organized along ethno-political lines. Since independence, Guyanese voters mobilized along ethnic, religious, and class identities (Garner

2008, 37; Horowitz 1985).109

109 Horowitz (1985) argues that most states are divided by identity, and he cites Guyana and Trinidad’s political parties that use race/ethnicity to mobilize votes.

Former President Jagdeo’s funding support went to cooperatives engaged in rice, fisheries, and sugar, in which the bulk of the Indians work and support the PPP (Burrowes

1984, 211). More recently, the PPP allocated development projects to Amerindians in the interior to develop a voting base. Like the other PPP administrations, the Jagdeo’s regime ignored the slums and towns, where most Afro-Guyanese live (Interviews, April 2010,

Names and exact dates withheld on purpose). In this context, Afro-Guyanese are siphoned off from economic resources and this is why they understandably define politics as the unfair distribution of goods (Interviews, May 2010).

From 1999 to 2011, the Jagdeo-led government turned down development projects when funds did not go to the Indians or to the Amerindians, the government’s two political support base.110 An example of ethnic patronage was the government’s rejection of a

European Union-funded enterprise project for Black youth in depressed urban areas (Alonzo

Beaton Interview, 30 April 2010; Currie Interview, 3 May 2010). Williams, Cummings and

Marshall (2007, 101, 110) have also reported that the Indian state allocates development projects to areas according to racial category, and that Black people, dougla, and mixed- raced people continue to live in the slums in intolerable conditions—with only shared sanitary facilities and no indoor plumbing. At the time of my field work (2010), it was reported that no substantial development projects went to Afro-dominated slums, except for a small sum of GYD$15 million (USD$75,000): however, these funds, disguised as money for community development actually carry out political activities, such as spying and interfering

110 Dawn Holder, an Afro-Guyanese lawyer, stated that Indian regions are favoured by economic inputs from the PPP state that perpetuates exclusion of Afros (Spotlight television show, 22 April 2010).

with local businesses, in order to control local opposition (Interviews cannot be named;

Canadian High Commission, Interview 18 November 2008).

Race politics is polarizing in Guyana by the fact that Indian political leaders control the cultural narrative, which praises Indians for their hard work and self-sacrifice and denigrates Blacks (Benschop Interview, 7 May 2010; Bristol Interview, 4 May 2010; Pearson

Interview, 3 May 2010; Gibson 2006,

376).111 Thus, politicians since independence have used race as the criteria to award their own racial group/ party followers with money, housing, and jobs to the exclusion of others (Gibson 2005).

Within this racialized context, no sense of a shared national identity truly exists. The Figure 2.1: A state banner depicting the motto “One People, One Nation, One Destiny” shows children from each of the country’s six races. country’s motto—“One people, one nation, one destiny” (Figure 2.1)—seems a hoax. Negative comments and stereotypes are pervasive in Guyanese society. The view of Afros as bad and Indians as good is embraced by an Indo- centric state. Indians interviewed remarked that “Indians tie di belly. Not every ting dis eye see it want” (in this case, ascribing the virtue of self-sacrifice to Indians). It is widely

111 Gibson (2006, 376) notes that Africans are labelled as bad, with names such as “criminals” and “rapists” to define them; whereas East Indians (specifically Hindus) are defined as good.

believed that under Burnham’s regime, Afro-Guyanese benefited from subsidies; yet in truth,

Afros and Indo alike were alienated within Burnham’s corrupt regime (Kissoon 2010a; b).112

The allocation of public goods based on race by the Indo-led regime is obvious.

Under Jagdeo’s regime (1999-2011) the state allegedly had links to the narcotics trade, extra- judicial killings, and grave human rights abuses such as death squads killing Afros (Amnesty

Report 2010; Gibson 2006, 375; Gibson 2005, 41; Majeed 2005, 97). Local dissenters were few, and those critics who dared publish stories against the state and the president was subject to violence and humiliation (University of Guyana, Interviews April and May 2010;

Anonymous Interview, date withheld on purpose).113 Citizens were aware of the potential consequences of criticizing the state. In my fieldwork, I found that ordinary citizens and civil servants were reluctant to participate in this project or to go on record. A former minister of the Jagdeo government confirmed that technocrats fear the consequences of speaking publicly, and government officials reported that they are micro-managed by the president

(Anonymous Interviews, Names withheld on purpose).

The Afro-Guyanese people claim that the state subdues agitation by using token

Afros to suppress them. For example, at the time of this fieldwork, the Indian-run state under

Jagdeo had set up an Empowerment Office led by the president’s advisor, Odinga Lumumba,

112 Kissoon argues in his column “Arrival and enigma: Fascism and the Guyanese East Indian mind” in the Kaieteur News (5 May 2010) that African Guyanese are negatively stereotyped and addresses the unsubstantiated notions that East Indians are entreprneurial. See more at: http://www.kaieteurnewsonline.com/category/features-columnists/freddie-kissoon/ 113 An academic and journalist had excrement thrown in his face allegedly for his criticisms of the president. See Stabroek News for information on this incident: http://www.stabroeknews.com/2010/news/stories/05/25/columnist-hit-with-bowl-of-faeces/ Because of such incidents, I was diligence to protect sources, because the state’s retribution tactics are well known locally.

an Afro-Guyanese from Buxton who supports the Indian administration, to deal with complaints of inequality.114 Managing the Afro-Guyanese with leaders of their own ethnic group ensures that they will remain quiescent. According to Lumumba, the Empowerment

Office was set up to address people’s grievances about wrongdoings by the state

(Empowerment Office Interview, 22 April 2010). But citizens have claimed that this office is a sham: University of Guyana (UG) academics (who cannot be named) state that the

Empowerment Office is the perpetuator of state violence against any Black opposition

(Interviews, Names and exact dates withheld on purpose).

Despite serious human rights allegations against the Jagdeo regime—including state- sponsored death squads (Amnesty Report 2010; Gibson 2006, 375; Majeed 2005, 97)—

Former president Jagdeo was awarded the UN’s Champion of the Earth prize for his leadership in environment in 2010 (Stabroek News 2010). Critics (who cannot be named) argue that the international community is mute on human rights abuses and narcotics- trafficking under this regime (Kissoon 2010b; Gibson 2005, 41; Majeed 2005, 97).115 Like

Burnham’s politics of the past, the PPP politics is very much rooted in the distribution of rewards based on race, with Indian political elites reportedly benefitting from kick-backs through contracts (Gibson 2006, 374).

114 Within the Afro-Guyanese community, Odinga Lumumba is viewed as an opportunist—first a member of the PNC party member, then the PPP to advance the racial agenda (Interviews in April 2010, dates and people cannot be named). 115 In a lecture, Kissoon argued that under the Jagdeo regime is a criminalized bourgeoisie, engaged in illegal activities to accumulate wealth, and that Afro-Guyanese are being replaced by Indians in every aspect of public life.

Clearly, then, since Guyana’s independence, various leaders have used race to consolidate political power (Ramharack 2005). The PPP leaders make resources available to allies and exclude outsiders who do not belong to the ruling ethnic group for their own political aspirations. An Indo-led regime has no interest in working in slums filled with opposition party people (Field work 2010; 2008; Thomas Discussions, 23 April 2010). This biased allocation of state resources leaves one of the nation’s poorest people, the Afro-

Guyanese, unable to access vital economic resources. In this hostile and racialized context, the dominance of Indo-Guyanese in politics and banking has reduced or blocked access for

Afro-Guyanese. Micro banks (most of which are run by Indos) are limited in their reach to

Afro-Guyanese, and loan sizes to this ethnic group are significantly smaller. Because microfinance programs are controlled mainly by Indo-Guyanese, who are viewed as oppressors conspiring with an Indo-centric state, they are unlikely to be regarded as empowerment tools by their Afro-Guyanese users. The new president Donald Ramotar

(December 2011-present) showed signs of continuing racial privilege to Indos (Confidential emails from University of Guyana 26 January 2012; Facebook 2012; Kaieteur News 27

January 2012).

Haiti’s Predatory Politics

In 1804, Haiti’s slaves fought for and won the right to govern themselves as the first free Black republic (Smartt-Bell 2007, 3). Trouillet (1995, 89) argues that at that time a

Black state was largely unthinkable because it challenged the global order of commerce, slavery, and colonialism. Hence, Haiti’s achievement of independence resulted in Haiti’s isolation for nearly a century, as it was widely believed that freed Blacks would undermine the lucrative slave trade and viability of plantations dependent on free slave labour.

In the centuries following independence, the country’s politics have been oppressive.

Leaders since Jean-Jacques Dessalines (1804-1806) have adhered to politiques du ventre

(politics of the belly) dictatorships, leaving the masses in complete suffering (Szeftel 2000).

Haiti is one of the world’s poorest countries and its people are trapped in extreme poverty

(GOH 2010; Fatton 2006, 17; McCoy 1997, 1–5).116 At least 77% of the 10.12 million people live on less than USD $2 a day (World Bank 2011; GOH 2010, 2; CDB 2010, 45;

Dupuy 2010; FAO 2008). Hallward (2010, 1) emphasizes the point that a mere one percent of the people own the country’s wealth. Haiti is a place not only blighted by natural disasters, but where racial and class politics complicate relations between the various groups: Blancs, mulatres (mixed-race), elites noirs (educated Blacks), and moun andeyo (poor masses).

Haiti’s history—from revolution to independence in 1804, to American occupation

(1915-1934), to the post-Duvalier era 1986—reflects the unstable and predatory nature of

Haitian politics (Fatton 2007, 2–6; 2002, 137; Maguire 1997, 156). The country has had at least 45 heads of state and about 20 constitutions since independence, and powers have shifted between educated noirs and whitened elites (Paquin and Brax 2006, 143; Heinl and

Heinl 2005, 119–301). Coups d’états, military dictatorships, and terror under the violent regimes of François “Papa Doc” (1957-1971) and Jean-Claude “Baby Doc” Duvalier (1971-

1986), Raoul Cédras (1991-1994) and Jean-Bertrand Aristide (second presidency 2001-2004) have negatively affected Haiti’s economic development. Haiti’s series of unstable political regimes and coups stand in stark contrast to Jamaica and Guyana’s electoral democracies.

116 Fatton (2002) uses the term politiques du ventre (politics of the belly) to characterize corruption in Haitian politics.

Port-au-Prince is composed of two extreme worlds: one rich and one very poor

(N’Zengou-Tayo 1998, 118; Rotberg 1997, 137; Stotzky 1997, 20–22). It is a country divided by class and race, where the tiny minority that control the country’s riches, mostly blancs and mulatres as well as elites noirs, live in secluded villas in Pétion-Ville, Montagne

Noire, Bel Vil, and Peguy Ville. Dupuy (2007, 25–26) argued that the Haitian bourgeoisie

(elites) were split into two dominant groups: blancs, mulatres who controlled the private sector, and the elites noirs who dominated the state. Scholarship on Haiti (e.g., Fatton 2007;

2006; 2002; Rotberg 1997; Farmer 1994; James 1989) has compared the country’s socio- economic situation to a form of apartheid, where the Kreyol-speaking moun andeyo are marginalized by the bourgeoisie. Yet these two social groups are very much intertwined.

With such economic divides of extreme wealth and dire poverty, local community organizations such as Fonkoze have called for economic democracy (to assist people to improve their economic situations) for the poor.

The blancs and mulatres see the bidonvilles (shanty towns) of “Jalousie” and “Flipo” in the hilltops as constant reminders of the grinding poverty of the excluded moun andeyo.

On January 12, 2010, at 4:53 PM, a magnitude 7.0 earthquake hit the southern part of Haiti, killing about 300,000 people and leaving 1.5 million displaced and living in “tent cities”

(Chauvet 2010, 3). Since the January 2010 earthquake, tent cities have dominated the chic town squares like Place Saint Pierre and Place Boyer, and these homeless citizens are constant reminders of despair in the country (Field trip, October 2011; Castor 2010, 22;

Chauvet 2010, 5-10). Meanwhile, the moun andeyo can view the wealthy mansions of the elites in the city below. In post-earthquake Haiti, no enclave is free from poverty, as the reconstruction is slow to respond to the housing needs of hundreds of thousands of people.

No matter the conditions the Haitian people are resilient. Haitians are descendants of

Beninese (then Dahomey) slaves, who brought West African informal banking concepts to the Americas and relied on these systems during times of austerity (Fatton 2007). These gwoupmans (community groups) tapped into an African heritage of working together called kombit in Kreyol (Fatton 2002, 52). Fatton (2007, 221) finds that the heritage of gwoupmans organized by the poor under repressive political regimes persisted. For example, immediately after the American withdrawal starting in 1934, the first official cooperative was organized

(Montasse 1983) because the financial times were so hard for the people. In the absence of any state to meet peoples’ needs, the poor organized among themselves. These cooperative groups were fashioned after the sol, a local savings program brought over from Africa (Heinl and Heinl 2005; Reinert and Voss 1997).117 In Jacmel in 1946, under the pro-Black

(Noiriste) Estime government, the first formalized financial cooperative, called a caisses populaires, was started on the island (Montasse 1983, 18).

The Rise of Noiriste Politics

In its period of diplomatic isolation of twenty-one years (1804 to 1825), Haiti was subject to aggression from Germany. During this time, no other state assisted Haiti (Fatton

2007, 138–139). This policy of isolation ended in 1825 when France forced Haitian officials to take out a loan (equal to US$21 billion today) from a French bank to compensate the

French for property losses, including loss of slaves. In the early 1900s, U.S. President

Woodrow Wilson, having imperial designs on the country, evoked the Monroe Doctrine and deployed American marines to Haiti, where they remained for twenty years (1915-1934)

117 Informal banks are referred to as Rotating and Credit Savings Associations (ROSCAs), see chapter 1.

(Girard 2010; Paquin and Brax 2006, 176; Farmer 1994, 18).118 American hand-picked mulatres—Dartiguenave, Borno, and Vincent—governed while the U.S. occupied the country

(Fatton 2007, 147–149). After the occupation, a succession of Black leaders—such as Estime

(1946–1950) and Magloire (1950–1956)—were elected. President Estime ran on a “Noiriste”

(pro-Black) platform as a critic of American imperialism, and used the communist threat to access American aid; yet he did not improve the economic situation for Haitians (Girard

2010, 8).

From 1957 to 1986, the Noiriste power of the Duvaliers, father and son, ruled Haiti with extreme violence (Girard 2010, 110; Heinl and Heinl 2005, 539–624; Saint-Gérard

2004, 1997; Farmer 1994, 102).119 In 1957, François “Papa Doc” Duvalier outlawed civil society groups and associations; used his personal armed gangs, the Tontons Macoutes, to brutalize the opposition; and controlled foreign aid for his own personal use (Marquis 2007,

157).120 His son, Jean-Claude “Bébé Doc” Duvalier, continued his father’s politics until his overthrow in 1986 (Farmer 1994, 19–21). Under this violent dictatorship, people organized locally and depended on cooperatives outside of the state purview to meet their basic needs.

The collapse in food production and increasing dependency on American imports resulted in the exodus of the poor from rural areas to Port-au-Prince, which currently holds about three million people (Dupuy 2010, 196). Both Duvaliers alienated the moun andeyo and left them to the benevolence of international NGOs (Mangones Interview, 11 October

118 See Girard’s (2010) historical review of American presence in the island since 1986. 119 Girard (2010, 109–111) argues that the Black power ideas promulgated under both Duvaliers were a “sham” because both father and son married mulatto women. 120 Graham Greene’s (1965) The Comedians is an account of the regime’s violence under Papa Doc.

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2010; Dupuy 2010). Migrants moved to the sprawling bidonvilles, such as La Salines,

Carrefour, and Cite Soleil, and survived by means of très petit entreprises (very small enterprises) strategies that generated only very low incomes (Calixte Interview in Pétion

Ville, 6 October 2010; Acacia 2006, 61).

In the early 1950s, Jean-Bertrand Aristide—a Catholic priest inspired by liberation theology who came originally from the outskirts of Port Salut (in the southern part of the country)—relocated to the slums with his mother (a micro entrepreneur, ti machanns) and thus became aware of the economic injustice against the moun andeyo (Girard 2010, 117;

Robinson 2007, 28). In the early years, Aristide’s use of liberation theology embraced social justice and economic empowerment as part of the response to building a strong civil society

(Dupuy 2007, 1; Heinl and Heinl 2005; Rotberg 1997). According to Fatton (2007, 197),

Aristide attempted to end the class divide and preached tout moun se moun (all human beings are human beings). At his church, St. Jean Bosco, in the slum of Bel Air, Aristide started the

Ti legliz (Kreyol for “Little Church”) movement, where he rallied the urban poor against the anti-democratic dictatorships of Jean-Claude Duvalier (1971 to 1986) and General Henri

Namphy (1986 to 1988) (Girard 2010, 117–122; Hallward 2010, 139; Robinson 2007, 29;

The Agronomist film 2003). President Henri Namphy (1986–1988) was aware that the

Aristide supporters were mounting a formidable opposition against his corrupt and elitist regime, and in 1988 his soldiers led the St. Jean Bosco massacre against them, killing at least thirteen parishioners (Girard 2010, 117).

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Aristide’s popularity grew among the moun andeyo and marginalized urban residents, as well as among activists such as the agronomist, the late Jean-Dominique.121 Aristide’s Ti legliz developed into a political movement with a strong party base in the bidonvilles. In the

1990 election, Aristide’s Front National pour le Changement et la Démocratie (later to become the Organisation Politique Lavalas [OPL]) was the first democratically elected party to take power in Haiti (Fatton 2006, 19; Robinson 2007; 31). On assuming power in 1991,

Aristide’s civilian government brought charges against the Tontons Macoutes and investigated the bank accounts of certain members of the elite. Aristide’s reforms were met with opposition from the military and business elites, and in Port-au-Prince, business elites still blame Aristide for the economic condition of Haiti in 2011 (Fieldwork, August to

October 2011).

Haitians once again were under unstable and oppressive political regimes. After only eight months in office, Raoul Cédras, a light-skinned commander, overthrew Aristide and forced him into exile in the United States. American support under President Bill Clinton assisted Aristide’s return to power in 1994, and his economic reforms conformed to

American neoliberal policy preferences. Aristide carried out market reforms in the financial sector in exchange for foreign aid (Heinl and Heinl 2005, 719). He also lifted the interest rate ceiling (which was 22% per annum) on loans. His liberalization of the economy was awarded with a generous foreign aid package from USAID (UNCDF 2003, 151).122 With liberalized

121 Girard (2010, 185) notes that Dominique was killed 3 April 2000. The Demme film, The Agronomist (2003), suggests that Dominique’s murder was political because he criticized Aristide’s changed politics. 122 USAID has had, since 1995, a pro-market agenda to liberalize the economy, specifically the USAID project Program for the Recovery of the Economy in Transition (PRET). From 2000–2005, USAID financed the project Financial Services Network for Entrepreneurship Empowerment (FINNET), which had a budget of 10.3 million

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markets and increased interest rates, at least three commercial banks started down-scaling and forming micro lending offices.

American policy prioritized a more liberalized economy. The removal of high interest rates was meant to revitalize trade and increase access to credit. This increased access to financing for the masses would open up trade and business, in the grasp of a few big families.

However, these reforms were resisted by the local business elite, who benefited from high interest rates and felt threatened by these new pro-poor policies. Local business elites suspected that Aristide’s economic reforms were hiding his redistributive “socialist agenda” to force the rich to pay taxes (Dupuy 2007, 113–120; Farmer 1994, 25). It is said that to the

Americans, Aristide appeared to be with them; yet he also connected to the Bel Air residents with his anti-foreign and anti-bourgeoisie speeches (Field work 2010; Dupuy 2007).

Since Aristide was constitutionally prohibited from three consecutive terms as president, his comrade and OPL-ally René Préval was elected in 1996. Once in office

Aristide and Préval’s relationship deteriorated over Aristide’s opposition to a number of proposed market reforms (Dupuy 2007, 200). Aristide broke away from OPL and created his political party Fanmi Lavalas (Family of the Flash Flood) to compete against the OPL. In the

2000 election, Aristide won and immediately disbanded the army and police controlled by business elites (who were against his win). In their place, he set up a secret paramilitary force

U.S. dollars managed by the private, for-profit sub-contractor Development Alternatives Inc. (DAI), which currently manages enterprise projects (MSME and HI FIVE) for USAID.

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called the Chimères (reference to gangs hired by political leaders)123 made up of young unemployed loyalists in pro-Aristide bidonvilles such as Bel Air and Cité Soleil (Girard

2010, 192; Fatton 2007, 212; 2006, 21; Dupuy 2007, 21; Les Chimères de Cité Soleil 2007;

Human Rights Watch 2004). Just as the Duvaliers created the Tontons Macoutes (state- sponsored gangs) to secure power, Aristide also armed male youths to carry out informal police services (Fatton 2007, 108–109; Dupuy 2007, 146; Les Chimères de Cité Soleil,

2007).124

Widespread kidnappings, extra-judicial killings, and corruption characterized governance under the second Aristide state (2000-2004) (Fatton 2007, 210–212; Human

Rights Watch 2004; The Agronomist 2003), as well as in the Préval administration (2006-

2011). In 2004, the U.S. George W. Bush administration wanted Aristide’s resignation and assisted in his controversial exile to South Africa (Fatton 2007, 206; Robinson 2007, 215).

The external interference led by the Americans to oust Aristide remains controversial.125

After the term of the U.S.-appointed interim leader, Miami-based Gerard Latortue, ended,

Préval was elected in 2006. This period of political instability incited warring gangs, and many splintered off into factions called “cells,” where they compete and fight each other over turf and power (Girard 2010, 213).126 Haiti is a dangerous place to live and work, and many

123 Chimères is a French word meaning phantom or ghost. 124 Hallward (2010, 161) is skeptical about the accusations that Aristide created a violent para-military force. 125 Robinson (2007) argues that Aristide was kidnapped and forced into exile by U.S. President George W. Bush. However, Haitian scholar Fatton (2007, 206) argues that Aristide’s re-election (2000) was different, as he clamped down on opposition and his government was corrupt. See also Haitian scholar Alex Dupuy’s work on the Aristide’s regime in The Prophet and Power.

126 Gangs have transitioned into various roles: some are paid assassins, others are linked to the narcotics business, and others extort money from businessmen like Bolus to act as security for their properties. A few

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people go missing and/or are assassinated for reporting malpractices of the state and its international partners or trying to upset the status quo (Fieldwork, August to October 2011;

Anonymous Interviews, October 2010).

Political Chaos and Instability

Haitian class conflicts are highly racialized. The political system marginalizes Blacks, and pacts of convenience between the mulatres and élite noirs continued under the Préval’s regime (2006-2011) (Dupuy 2007; Fatton 2007; Maguire 2006; Shamsie 2006). In April

2008, protests against the raising of food prices led to food riots in Pétion-Ville and Centre-

Ville because many of the poor had resorted to eating mud pies (Field work 2008). An intense racial class war exists in the country. During the riots, GaMa Technologies was destroyed, and its owner, a successful (dark-skinned) Haitian, Mathias Pierre, of humble origins, was victim to vandalism and looting because the masses could not fathom that such a

Black Haitian could be a rich businessman (Field work 2011; Pierre 2011).127

Chaos and Instability in the Post-earthquake Period

Fraudulent elections, riots, and tire burning were commonplace, and frustrations because of the slow rebuilding process were unleashed against the U.N. and international organizations. Haitian-Canadian academic Franklin Midy (2010, 25–29; Key note address at

gang retirees have also formed groupuscules (cliques) where they carry out local projects funded by international NGOs. Viva Rios, a Brazilian NGO, has a former tet du pon (gang boss) managing its project “Honor and Respect for Bel Air” (Interview at INURED, 5 October 2010). 127 There is a growing Black business class that is different from the traditional set but little is known about them. See more on the webite of the Digicel’s annual entrepreneur awards at http://www.digicelhaitientrepreneur.com (accessed 17 September 2012).

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Congress meeting, Concordia University June 2010) argued that the Haitian state’s neglect of a development plan would antagonize the masses and result in civil unrest. Haitians are upset with the crimes allegedly perpetrated by the Mission des Nations Unies pour la Stabilisation en Haiti’s (MINUSTAH, UN military force), whose troops allegedly emptied waste into local rivers, exposing the incompetence of Préval’s regime in managing reconstruction. In 2011,

MINUSTAH forces in the south of the country were accused of the rape of women and underage boys (Amnesty Haiti Annual Report: 2012; Harvard School of Public Health 2011).

During the 2010 election, Préval’s government (2006-2011) backed Jude Célestin,

Inité candidate (Préval’s son-in-law) who won in the second round of votes. However, the people protested the fraudulent ballot-stuffing, burning tires in the streets, and Célestin eventually withdrew his candidacy. In January 2011, ousted dictator Jean-Claude Duvalier returned to the country for unclear reasons, and was arrested on arrival then released

(Amnesty Annual Report 2012). A couple of months later, former president Bertrand Aristide returned to his luxurious Tabarre residence near the U.S. embassy (ibid; Field Work 2011).

Finally, in April 2011, former musician Michel “Sweet Micky” Martelly (former kompa musician) was elected president in the final run-off vote. After many delays, Dr. Gary

Conille, long term U.N. staff person and former aide to former U.S. President Clinton, was confirmed prime minister in October 2011. Only four months in office, Conille resigned and

Laurent Lamothe was confirmed as prime minister on 16 May 2012.

Haitian activists claim that international organizations are hiding in Pétion-Ville and

Peguy Ville, away from the poor in the downtown core (Interviews, Robert Pressoir and staff persons of Remember the Children, Delmas 3, 3 October 2010). Haitians complain that the

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state and the international community are misusing resources—or, as Haitians say, “Ils font leur beurre” (Whites are making money from the foreign aid business) (Castor Interview, 11

October 2010; St.Gilles Interview, 7 October 2010; Pressoir Interview, 3 October 2010. Bill

Clinton heads up the Interim Haiti Recovery Commission (IHRC) and American involvement is strong in the reconstruction process (Fieldwork, August–October 2011).

However, aid organizations such as USAID have developed a reputation among Haitians as fostering clientelism in their funding of problematic institutions (Three anonymous interviews, 2 and 5 October 2010).

Oppressive Elite Politics

Political control throughout the country’s history has continuously switched back and forth between elites noirs (educated Blacks) and wealthy blancs and mulatres, each engaged in protecting their own interests (Fatton 2002, 13;2007, 110). Elites noirs like Faustin

Soulouque, François Duvalier, Jean-Claude Duvalier, and Jean-Bertrand Aristide all used an adapted version of Noiriste politics to justify their power, claiming that they had the right to rule because they were dark-skinned Blacks and that they would rule in favour of Blacks. But they all ended up applying brutality through informal armies directed against the poor

(Rotberg 1997, 139). Hence, because these elites used the state resources to enrich themselves, their Black liberation discourses no longer resonated with the masses (Castor

2006).

Haiti’s early, inspiring revolution has thus led to a vicious downward spiral of cruel dictatorships and personalist politics. Local elites have carried out continual repression of moun andeyo for their own political ambitions. In these limited political spaces, moun

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andeyo have resisted and formed social support groups, such as cooperatives, where the poor come together and pool resources and lend support to one another. Haiti’s motto, L’union fait la Force (Unity is Strength), reflects Haitian’s awareness that they can achieve change through collaboration. Despite their neglect by the state, marginalized groups have exhibited democratic traditions by organizing in their own communities.

Two centuries of political neglect of the poor’s needs for basic welfare services has thus contributed to the rich development of cooperative and collective groups. Since 1937,

Haitians have been organizing local monies, creating vibrant cooperatives to meet their collective interests. Haitians excluded from conventional banks organized these cooperative groups—Caisses populaires and cooperatives inspired by African concepts of kombit—long before the concept of microfinance was fashionable. By the time donor-funded micro loan projects came to Haiti in the 1990s, Haitians were already familiar with micro lending. The persons running micro loan programs understand the realities of the clients’ they serve—to the benefit of Haiti’s poor. As we will see, even foreign-run microfinance retailers have adapted programs around local systems (Soman et al. 2012, 50). These deliberate efforts to hire local people from the same background as their clients have managed to mitigate the most harmful consequences of a class/race-based system of political power that has socially and economically excluded the masses. Moreover, these efforts have led to inclusive micro lending that fits readily with the local culture.

Conclusion

Caribbean political history reveals that the slavery and colonization produced a colour-coded hierarchy based on race and class. Plantation economics divided people by race

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and favoured offspring of the white planters, who are today’s political and business elites. An independence era that promised to restore humanity to the local people replicated the racial and class biases of the colonial times. Mixed-race persons (usually light-skinned) have inherited power and status from their forefathers, and educated Blacks have tested the system to some extent, but many have conformed to it. Slave and colonial legacies have ordered identities in modern day Caribbean society.

Jamaica’s legacy of democratic tradition, relatively strong trade unions, private property laws, and cooperative traditions would seem to be conducive to economic development. Moreover, Jamaica’s motto “Out of many, one people” signals a strong sense of national identity (Thomas 2004, 90). However, Jamaican society is deeply divided along class lines and to some extent by colour too. Class politics among Afro-Jamaicans continues to unashamedly play out in modern day politics. Years of Big Men, usually brownings using power to control poor blacks in the ghettos has resulted in the breakdown of trust (Fieldwork

2009). Jamaica’s class-based clientelistic politics has left hustlas downtown unsure about credit programs. Hustlas view the privileged brownings running micro economic development programs in the slums with suspicion.

Guyana’s colonial masters divided the two dominant racial groups, Indians and

Blacks, for their own profit motives. At independence, creole elites replicated the system of the British colonizers and organized ethnic political parties. Afro Forbes Burnham privileged

Afro-Guyanese with cash and jobs, and Indo Cheddi Jagan’s rule favoured rural East Indians with land. In 1992, Jagan’s return brought back large Indian investors from the diaspora

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(Kaeietur New 11 December 2011). For the past 20 years and counting, the pendulum has swung in favour of Indo-Guyanese to the detriment of Black slum dwellers.

Former President Jagdeo’s Indo-centric regime—having a questionable human rights record and alleged links to criminal drug lords—has limited social development (Amnesty

Report 2010). Cultural narratives degrade Afro-Guyanese because under the Indian-run political environment such views are deemed acceptable. Indian-dominated politics and banking leaves micro lenders in a questionable position. Micro lenders accept the principles of helping the poor access finance; yet they are constrained from doing so in a fair manner because of the racialized political environment. Understandably, Afro-Guyanese, who have come to expect race discrimination, do not trust Indo-Guyanese micro bankers.

Haiti’s race and class politics operate within an undemocratic and weak state with interference from American aid and political leaders, particularly since the reconstruction process in 2010. Haiti represents a departure from the other two cases when it comes to organizing from below.128 Since Haiti’s impressive revolution in 1804, the state has continually engaged in violence against its population. Predatory elites and external forces have colluded and applied brutal actions against the moun andeyo, which has resulted in underdevelopment. Having experienced years of oppressive regimes, the moun andeyo have had to turn inwards to develop their own self-help groups outside of the hostile state. An authoritarian political history would not seem to augur well for a vibrant microfinance sector; yet, Haitians have managed to sustain cooperative movements under harsh political

128 Haiti would fit Milliken and Krause’s description of a weak state (2002).

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environments. The microfinance leaders I met with acknowledge the corrupt and exclusionary nature of political and business elites and have framed micro lending in such a way as to protect it from exclusionary tendencies of Haiti’s politics.

All three distinct contexts have a history of racial intermingling and the offspring of these relations have created complex race relations. These societies are classed and racially tiered, with the minority beneficiaries of the planters carving out power for themselves while the masses remain in lower positions. As in the past, today’s allocation of financial resources rests with the whitened elites, and the poor (dark-skinned) Afro-Caribbean masses are the recipients of these hand-outs. As we shall see in chapters three and four, micro-lenders in these latter countries—educated Afro-Jamaicans (and many brownings) and Indo-Guyanese men—are detached from the people they are expected to work with. Microfinance in some contexts hold the potential to alleviate poverty and inequality, as in the case of Haiti, but the other two cases of Jamaica and Guyana show that racial and class biases can corrupt the allocation of micro and small loans.

The political histories of Jamaica and Guyana suggest that elites have a political agenda when they confer monies on the urban poor. In these contexts, the skepticism concerning the empowerment of today’s micro lending is understandable. Guyanese and

Jamaican citizens who live in the slums do not trust micro banking and its people. The political histories of both Anglophone cases in this study explain the divisive racial and class politics that have led to distrust and the malfunctioning microfinance programs that exist in both countries. Yet Haiti’s political legacy of authoritarianism and its economic apartheid have inspired excluded people to organize on their own. This inner strength to organize into

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groups without any support has influenced lenders to regard microfinance as a political tool for the poor to counteract the economic and political exclusions in the society. This use of microfinance has been possible because its staff persons share the same class origin of the people they serve. These staff persons also understand first-hand the social conflicts and political history and they have set up financial systems for the poor using local knowledge systems that are beyond the reach of elites.

Chapter 3 The Jamaica Case: Exclusionary Micro Lending in the Slums

It takes a revolution to make a solution. Never make a politician grant you a favour They will always want to control you forever. So if a fire make it bu’n And if a blood make it run. Rasta there on top, can’t you see.

Bob Marley, “Revolution,” Natty Dread Album129

Introduction

Reggae star Bob Marley’s song “Revolution” (quoted above) refers to the consequence of political handouts: that is, political control of the urban poor. As stated in chapter 1, the Jamaican case challenges the assumption that microfinance is free from partisan or class-based politics. Some microfinance lenders, including informal ones, exclude eligible poor business people because of partisan and social class/racial bias. Embedded clientelist practices in micro lending programs inhibit any potential social empowerment could provide.130 This case shows that the dispensing of micro loans fails to garner the trust of poor clients.

Jamaica’s economy was hit hard by the U.S. recession of 2009. Reduced tourism and remittance payments resulted in a decline in the country’s two major foreign exchange earnings.131 Unemployment in Jamaica is very high, evidenced in the riots protesting the

129 Carol Cooper’s (1993, 120) use of the Bob Marley song emphasizes the concern with clientelistic practices that politicians have over the poor. 130 All of the mainstream Jamaican microfinance lenders I met with subscribe to the financial and social empowerment aspects of microfinance. 131 In the ESSJ (2007) there was a decline in remittances in 2006 for the 26% of the population that receive remittances from family overseas (ESSJ 2007, chapter 2).

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extradition of drug-lord Dudus to the U.S. At the time of my fieldwork, the Golding-led administration directed millions of Jamaican dollars towards micro-enterprise development to alleviate poverty.132 In December 2011, however, the People’s National Party (PNP) led by Portia Simpson-Miller won the election, and it is currently unclear whether policies supporting micro and small entrepreneurs will continue. While lenders who access these subsidies are supposed to lend to poor entrepreneurs (IDB 2002; McFarlane 1997),133 the funds do not reach them. Few policy makers at Jamaica House (National State Offices) are aware that micro business people are not able to access micro loans—even from microfinance retailers (lenders).134 And policy responses that do address this failure do not consider that personal prejudices in the allocation of micro-credit may account for it.

Micro banking is designed to create access to finance for excluded borrowers, those who are labelled “unbankable.” The promise of micro-credit was to achieve a double bottom line: first, the financial sustainability of the lending institution itself, and second, the social benefit of providing loans to poor business people. Because the latter is missing in commercial banks, MFIs have tried to resolve this issue through micro-credit. But in some parts of the world, managers have lost sight of the double mission—in particular, to socially empower the poor. Managers and staff, as in the Jamaica case, focus on profitability, using arbitrary guidelines to pick and choose whom they bank with.

132 Minister of Finance Audley Shaw announced an additional USD $11.6 million for micro enterprise at the JAMFA meeting, 28 October 2009. 133 The Small Business Association of Jamaica (SBAJ) argues that financing of the microfinance sector is “joke money” (too small) given that 400,000 people work in the informal sector. See Klein and Tokman’s report (1993) and IDB (2002) about the informal sector and regulation in Jamaica.

134 This finding corresponds with earlier empirical research on the subject (Ulysse 2007; Honig 2000; 1998).

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As of 2009, only 10% of all Jamaican micro entrepreneurs have access to microfinance, despite the fact that this small market boasts at least forty micro lenders.135

Government policy makers are fully aware of the changes needed to make microfinance inclusive. And most micro lenders will say they believe in the guiding principle that banking reaches those persons excluded from finance. Yet, incorrect assumptions and personal biases reveal that loans fail to reach residents in the slums.

One illustrative example comes from a member of the political elite hand-picked by the Office of the Prime Minister (OPM), whom I met with in his New Kingston office (in an expensive retail area). This official, who argued for increased capitalization of microfinance retailers to improve access to loans on the part of the urban poor, was closely related to one of the managers of a well-known MFI (Anonymous Interview, 1 April 2009)—a personal relationship that could explain the bias of his analysis. Like others of his uptown background, this official dismissed the idea that class-entrenched biases and clientelist politics obstructed people’s access to micro-credit. Instead, he assumed, without any empirical data, that more capital would improve their access.

The Jamaican government’s seemingly well-intentioned support for the economic development sector is contradictory (Bowen 2005, 2007). On the one hand, political elites claim micro lenders (those not directly involved in politics) are best suited to make micro loans. On the other hand, they provide state lending agencies with funds for micro-credit, thus becoming directly involved. Elected officials also allocate Constituency Development

135 Johnson’s report (2008) finds that 40,000 borrowers access microfinance.

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Funds (CDF) to lenders to make loans in their local area. Politicians (and micro bankers) assume that hustlas, who reside in slums, do not understand the dealings at Jamaican House.

However, most of the hustlas I met with know that the CDF funds allocated to elected officials to support certain microfinance programs.136

These scenarios contrast sharply with the global image of microfinance as being a non-political tool to help the economically-active poor. In this chapter, I argue that 41% (n =

96) of the hustlas I interviewed are either excluded from access to loans because of class bias of the microfinance lenders or self-exclude to avoid clientelist practices of Dons and politicians.137 Hustlas who opt out of loan programs turn to “Partner” (informal banks). They choose this alternative source for loans in order to resist the power of “Big Men”—the politicians or Dons attempting to control them. In this way, they assert their own financial independence through resources they trust.

This chapter demonstrates the exclusionary nature of micro banking in the Jamaica case, where hustlas from marginalized urban communities, who seek micro loans, cannot obtain them. Stakeholders interviewed (n = 74) were not surprised that micro-credit fails to reach the bulk of the entrepreneurial poor, but they were surprised to hear that many poor business people do not embrace micro-credit (Wenner Discussion, 9 November 2010;

Anonymous OPM Interview, 23 September 2009; Taylor-Spence Interview, 16 July 2009).

136 The latest microfinance index ranking which placed Jamaica last in terms of performance and outreach— nowhere in this report was there mention that certain bankers are colluding with politicians, which complicates the micro lending. See Economist Intelligence Unit, 2008 Microscope on the Microfinance Business Environment in Latin America and the Caribbean. October 2008, 39. 137 Refer to chapter 1 for the criteria requirements of micro business people in this study.

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The hustlas who reject micro-credit do so because they view it as a tool misused by staff persons, who attach their own inherent class biases or partisan politics to the loans. Many uptown-based lenders assume that hustlas downtown thrive on handouts connected to partisan politics. However, only 21% (n = 49) of the hustlas I interviewed were politically active.

This chapter reveals that a significant number (40%, n = 93) of lenders have important connections to political figures, and these lenders act in an explicitly political way

(binding themselves to specific politicians) by taking referrals of clients from politicians.

Such connections between bankers and politicians make (mostly apolitical) hustlas suspicious of micro-credit.138 The following section describes the class politics among microfinance managers. Because skin privilege frames the discussion of class in this context, throughout this section I highlight the skin colour of individuals. Next, I compare the political tendencies of lenders with the types of perceived discrimination business people feel. In the third section, I analyze the informal politics (also shrouded in class) of Dons and politicians (mis)using micro-credit for their own political ends. In the final section, I show that the coupling of class biases and clientelistic practices discourages micro business people from taking micro loans. Instead, hustlas turn to local community banks to avoid manipulative managers.

138 Stone (1996, 96) argues that wealthy Jamaicans have been viewed suspiciously by the poor as not wanting the ‘small man’ to move out of poverty.

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Staging the Context: Biased Lending Practices

Financial institutions, including commercial banks, are supervised by the Central

Bank of Jamaica and require licensing from the Ministry of Finance. Institutions that are not classed as “banks” (such as, NGOs and private financial companies) are regulated by the

Moneylending Act. Many microfinance organizations are staffed with highly educated managers (usually with university degrees) and the institutions themselves have significant donor funds. Closer inspection, however, reveals that of the 412,600 owner accounts

(entrepreneurs in the informal sector) only 10% have micro loans despite the saturation of microfinance retailers (Perkins Email from STATIN, 28 October 2009; STATIN 2008;

Johnson 2008).139

State policy makers have become increasingly concerned over this small number of entrepreneurial people accessing micro loans from unregulated MFIs. Reports often analyze administrative bottlenecks but fail to explain why people go to unregulated financial providers for loans (Tennant 2008; UWI 2006; Holden 2005). The Caribbean Capacity

Project I (Carib Cap I) at the IDB, which focuses on developing the capacity of staff persons, makes no mention of internal politics affecting access to financial services.140 However, I argue that, while technical know-how can affect the performance of retailers, these challenges are not the only issues limiting outreach to the economically active poor in the slums. The technical issues that donors and investors focus on are only a distraction from what is really going on; that is, class and racial bias on the part of certain micro lenders.

139 Hope Perkins of STATIN defined the term “own account worker” as micro and small self-employed unregistered businesses in the informal sector (Email October 2009). 140 A call for proposal for a follow on to Carib-Cap II was released in March 2012 requesting that consulting firms increase the skills of staff persons.

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This case included interviews of 307 Jamaicans, or 67% of the total sample size (see

Table 1.3 in chapter 1). The bulk of interviews were with 233 hustlas, of which 64% (n =

177) were women (See Table 1.2 in chapter 1). Micro lenders accounted for 32 persons, and at least 42 stakeholders were interviewed (civil society experts, donors, academics, policy makers, business and religious leaders).141 This case includes the top 23 microfinance organizations, which cumulatively reached 58,589 clients (as of August 2009).142 Micro bankers are educated Afro-Jamaicans (75%, n = 24) with an average age of 51 years, and nearly all lenders (96%, n=30 out of 32) have an upper class social and economic background—that is, an uptown background/residence—and a tertiary education that, collectively, sets them apart from the poorer classes.143 Table 3.1, below, illustrates the breakdown of hustla interviewees by community and political affiliation. It also shows the numbers of micro bankers and stakeholders interviewed. Most managers in microfinance have limited first-hand knowledge of the slum communities where their respective programs hold the potential to flourish.144 Less than 24% (n = 8 out of 32) of the lenders in this case had lived in the slums.

141 Refer to the methodology section of chapter 1 for a definition of stakeholders. 142 Jamaica Survey of Living Conditions (2008) cites 12 micro/small enterprise lenders but I speculate that there are at least 40 lenders in Kingston. 143 A few slums are located in uptown areas where the elites live—Grant’s Pen is an example—most of the poor hustlas live downtown. 144 I do not count those who claim to venture downtown to attend a gallery, shop at a downtown market, or partake in a dancehall “passa passa” or enjoy “Old Hits” on Sundays at Raetown as lived-experience.

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Table 3.1 Number of Interviews/Sample Size for Kingston, Jamaica

PNP Communities JLP Communities

Maxfield Whitfield Arnett PNP Rose Denham Tivoli JLP Park Town Gardens Totals town Town Gardens Totals Total

Total Focus Groups 13 0 20 33 14 14 16 44 77

Total Individual Interviews 22 29 33 84 31 15 26 72 156

Total Hustlas 35 29 53 117 45 29 42 116 233

Microfinance Lenders 32

Stakeholders 42

Total Elites 74

TOTAL SAMPLE 307

Most micro lenders (93%, n = 30 out of 32) justified that the urban poor’s lack of access to finance is due to internal “fragmentation” among lenders. No one cited identity bias or politics of any kind as a factor in exclusion. According to most lenders, fragmentation among business networks such as the Small Business Association of Jamaica (SBAJ), the

Small Business Development Agency, the Micro Small Medium Enterprise (MSME)

Alliance, the Private Sector Organization of Jamaica (PSOJ),145 and the Jamaican Chamber of Commerce (JCC) has led to overlap and duplication. A few retailers, such as the National

Growth Microfinance Bank and Micro Enterprise Financing Limited (MEFL) were relatively

145 The President of the PSOJ (2009) is Joseph Matalon, of one of the island’s richest families. He is also Chairman of the Development Bank of Jamaica and a board member of MicroCredit Limited.

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closed and it was difficult for me to speak to them.146 Internal tensions among microfinance managers indicate competition, ego, and personality clashes that may affect efficiency, but they do not explain exclusionary micro lending (Gray Interview, 10 July 2009).

The state’s Development Bank of Jamaica (DBJ), a wholesaler in microfinance, issues Approved Financial Institution (AFI) status to lenders, and, as of October 2009, had done so for five MFIs (Lewars Interview 8 March 2009; ESSJ 2008). These five micro lenders are considered the “mainstream” MFIs. Mainstream institutions have managers who are able to secure grants, are well informed in “development program speak,” and are able to attract capital from donor agencies. See Table 3.2 (see later) for details on the mainstream micro lenders (a mix of public and private institutions).

Internal schisms have arisen among micro lenders over the right to serve the urban poor. Mainstream micro lenders, who are better educated and further removed socially from the clients they serve, feel that they are better able to meet the needs of slum dwellers. As shown in Figure 3.1, the majority of micro lenders (75%, n = 24) are Afro-Jamaicans. Even dark-skinned Afro-Jamaican micro bankers are referred to by hustlas downtown as

“brownings” when they clearly are not.147Private financial companies (also referred to as moneylenders) claim that mainstream lenders shun them as loan sharks as a way to fight over this market (JAMFA event, 28 October 2009).148 These moneylenders are moving into the hard-to-reach markets where mainstream lenders are reluctant to go. To contest these

146 Local researchers (including the PIOJ staff) who write the microfinance section of the ESSJ (annual government survey) found difficulties accessing information from these two groups. 147 Refer to chapter 2 for explanation of terms. 148 Speech by Raymond Gabbidon, Executive Director of JAMFA, and Worldnet’s Hurshel Cyrus. Knutsford Hotel, New Kingston. See JAMFA’s website: http://www.jamfa.com/page/1_about-us.html

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accusations that they are loan sharks, these moneylenders have organized under the Jamaica

Microfinancing Association (JAMFA) and lowered interest rates as a sign of support for the poor during the recession

(Jamaica Gleaner 12 April

2009). Even with positive efforts to lower rates for consumers, an IDB specialist argued that “most private finance companies are questionable,” (inferring to me they are involved in money laundering) (Anonymous Discussion, 9 November 2010).

These internal schisms highlight divisions between two types of lenders, which inevitably play out in the marketplace. The split between well-educated mainstream lenders and moneylenders who are less educated and who often have humble class backgrounds has led to the development of two separate networks, and it is the latter—the private moneylenders who do not subscribe to the philosophy of micro lending—that reach entrepreneurs in the ghettos. When donors (such as the IDB) choose sides (and subsidizes) in favour of mainstream lenders in the Caribbean Microfinance Alliance (CMFA), the donor gives tacit approval to these lenders over private finance companies who may be less political.149

149 The IDB’s supports a regional network: the Caribbean Microfinance Alliance (CMA) to replace the defunct Caribbean Microfinance Network (CMN) (Emails, IDB staff person, 23 November 2010).

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Jamaican Universe of Microfinance

Historically, Jamaican commercial banks have catered to the business elite and foreign interests and ignored the entrepreneurial poor. 150 Since the 2000s, many microfinance lenders emerged in Kingston to reach the economically active poor excluded by formal banks. Lenders in Kingston include commercial banks, wholesalers, credit unions, foundations, NGOs, specialized microfinance agencies, and private financial companies.

Informal lenders such as Dons and Partner bankers all participate in making loans to the borrowers in the downtown slums. My aim in this section of the chapter is to examine the perception shared by Jamaican entrepreneurs that micro lenders are privileged individuals who are biased and detached from their reality.

In the late 1980s, Jamaica’s state-owned banks—such as Workers Savings and Loans

Bank,151 Solidarity,152 and the ASSIST program—made loans to the entrepreneurial poor; however, these programs, used by politicians to reward party loyalists, have been disbanded.153 It is commonly accepted among Jamaicans that state-owned microfinance programs inevitably fail. However, MIDA, created under Manley’s PNP party, and SSF, started by Seaga’s JLP, are two political microfinance agencies still operating in Kingston.

Ffrench (2008) suggests that most clients perceive MIDA to be political. In interviews,

150 Only 2% of the hustlas interviewed used a commercial bank for savings: National Commercial Bank (NCB), is owned by Jamaican-Canadian, Michael Lee Chin. See http://www.jncb.com/bus_sol/products.asp 151 Worker’s Bank established in 1997 (defunct by 1999) as noted in Frontier Finance International’s report (1999) and Richfield and Pace Investments report (1994). 152 Solidarity program was a project of the HEART training program managed by Carla Vendryes (Edward Seaga’s wife). See Seaga’s article: http://www.jamaica-gleaner.com/gleaner/20080615/focus/focus3.html 153 Workers Savings and Loans Bank was merged into the Island Victoria Bank Limited and Eagle Commercial Bank, to form the Union Bank of Jamaica Limited (UBJ) and then acquired by Trinidadian-owned RBTT Bank Jamaica Limited. By 2000, FINSAC was a majority shareholder and JNBS purchased a micro-credit portfolio from FINSAC. Interview with Basil Naar of the CCCUL (he was formerly with Workers) 27 May 2009. Visit: http://www.boj.org.jm/supervised_deposit.php and http://www.jnsbl.com/?content/about/homepage

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hustlas stated that MIDA and SSF favoured party followers, and that hustlas who are not politically active are rejected. A Maxfield Park business person in a PNP stronghold said she was excluded from SSF because microfinance managers preferred to give loans to their “own kind” (Big Reds Interview, 31 March).

In 2009, MIDA and SSF are both led by non-Blacks: Chinese-Jamaican Vivian Chin and Indo-Jamaican Carmen Lowers, respectively. The racial and class bias in micro lending programs is thus reinforced by the presence of non-Black and educated managers of two institutions perceived to be political. In February 2009, the JLP-led state awarded the sum of

USD $1,744,186 to another state agency, the Jamaican Business Development Agency

(JBDC), run by a Harvard-educated browning woman, Valerie Veira to pilot micro and small loans. JBDC, which claims to be autonomous, is in fact accountable to white-Jamaican Karl

Samuda, the then-minister of Industry Investment and Commerce (MIIC) at the time of this research.154 Even though state leaders know that state-owned microfinance programs are not sustainable, leaders continue to invest in new government agencies to make business loans

(Campbell Interview, 28 May 2009; Naar Interview, 27 May 2009; Bennett Interview, 16

March 2009; Chin Mook Interview, 16 March 2009).

In 1981, Prime Minister Edward Seaga’s (JLP) close relationship to the U.S. led to increased American presence in the country, which assisted civil society organizations to secure USAID funding for the quasi-state agency, the National Development Foundation of

Jamaica (NDFJ). NDFJ has received donor funds despite a study showing it to have bad

154 Samuda’s picture was in the main lobby of the JBDC office at South Camp Road in 2009.

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governance (Richfield and Pace Investment Limited 1994)—making it another example of a poorly run state agency.

In 1983, a Jamaican NGO called Credit Organization for Pre-Micro Enterprises

(COPE) accessed Canadian International Development Agency (CIDA) funds through

Canada’s Save the Children. COPE became one of the first microfinance NGOs (Devon Dick

Interview, 7 April 2009; Bennett Interview, 16 March 2009). In 2009, COPE led by an Afro-

Jamaican Horace Bennett, creatively outsourced part of its portfolio to a community-based organization called Hope for Children Development Corporation (HCDC) because many of its loan officers (who are educated and not from the slums) would not work in slum neighbourhoods (Bennett Interview, 16 March 2009; Troupe Interview, 6 March 2009). This type of innovation shows that an MFI can reach viable business people in hard-to-reach garrisons through a community-based partner. Unfortunately, COPE has limited funding to expand this methodology.

In the 2000s, the Jamaican microfinance sector expanded in terms of the number of lending organizations, including non-profit organizations making micro loans to the urban poor in downtown Kingston (see Table 3.2, below). To respond to the growing demands, funds were channeled through wholesaler organizations to credible MFIs (ESSJ 2007, ch. 13;

Webber 2000, 2–7). As of November 2009, there were four major wholesalers (firms that lend to MFIs) in the sector: the DBJ (a state entity); MIDA (state-owned) (MIDA 2006);155

155 MIDA receives funds from the National Insurance Small Enterprise Credit Facility.

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Development Options Limited (DOL) (a private firm);156and Pan Caribbean Financial

Services (a private firm) (April to August 2009 Interviews). In this section I describe the major microfinance lenders, highlighting those that access state funds and those that are perceived as politicized. Table 3.2 (below) is an overview of the microfinance enterprises: mainstream, state-owned, member-owned, private moneylenders, and informal lenders.

Table 3.2 Major Micro Lenders in Kingston (2009)157

Type Name/Date Status/Affiliation # of Slums in which Active Subsidies State Interest Started Clients (from study) Funds Rate / year

JNSBLL AFI – Bank 18,203 Tivoli, Denham Town, Yes Yes 60-75% Arnett Gardens, Maxfield Park

Access, AFI – Private 8,300 Tivoli Gardens, No No 60-75%

2000 Company Rosetown

MCL, 2003 AFI – NGO, 2,261 Denham Town Yes No NA American investor

Nation AFI – Private 1,200 Denham Town, Tivoli No Yes 60-75% Mainstream Growth, company Gardens 2007

MEFL, NGO, CIDA/ Scotia 3,007 Arnett Gardens, Yes No 54-64% 2003 Bank Denham Town

COPE, 1983 NGO 1,100 Whitfield Town, Rose Yes No 31.5% Town, Arnett Gardens

JBDC State 59 Arnett Gardens, No Yes NA Denham Town, Tivoli

Gardens State MIDA, State (Manley) 3,000 Arnett Gardens, No Yes NA

1990s Maxfield owned

156 Owner of DOL was head of Manley’s MIDA and is active in the PNP and manages the GOJ/GON microenterprise loan program and GOJ/MicroFin project and is a government-appointed wholesale agent that administers the GOJ/TDB/PCF MSME Credit Scheme. (See The Gleaner, http://www.jamaica- gleaner.com/gleaner/20060530/news/news2.html ) 157 Commercial banks such as NCB, BNSJ were interviewed but their data on loans were not available.

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SSF, 1980s State (Seaga) 204 Tivoli Gardens, No Yes NA Rosetown

NDFJ, Private foundation 150158 Arnett Gardens, Yes Yes 60-75% 1980s Denham Town, Tivoli Gardens

COKCU AFI – Credit union NA Arnett Gardens Yes Yes 35%159

CCCUL, AFI – Credit union 664 Arnett Gardens Yes Yes 40-50% owned Member Member 1971

First Union Private company 7,500 Tivoli Gardens, No Yes 50-60%

s Maxfield Park, Denham Town

Kris an Private company 13,000 Arnett Gardens, No No 25-60% Charles, Maxfield Park, Denham Moneylender 1991 Town, Whitfield Town

Partner Informal Million All No No <10%

Dons/ Area Informal Unknow Tivoli Gardens, No No <20% Leaders n Rosetown, Denham, Informal Arnett Gardens

Note: Data was provided to me in follow-up surveys to the heads of the institutions in August 2009.

Wholesales have a tendency to favour certain microfinance lenders, and these relationships are based on personal contacts. For example,interviewees reported that DOL is run by an active and high-ranking PNP member who is light-skinned and foreign-educated

(April–October 2009 Interviews, dates and names withheld on purpose). Although wholesalers claim that they analyze the market to target the best lenders, the fact is that they do so with inherent biases. Wholesalers often choose mainstream MFIs (where there are connections). Most private financial companies “moneylenders” I met with (my own participant observation) were run by people who seemed less educated than mainstream lenders. Yet, their loans were reaching large numbers of people in the slums. In fact, it was

158 In the ESSJ 2008, NDFJ reported 191 loans granted, which was a drop from 431 in 2007. 159 Focus on AIR’s Livity program in Arnett Gardens, March 2009.

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through the entrepreneurs in the slums that I learned the importance of these private financial companies. (Field work 2009; Turner Interview, 1 June 2009; Campbell Interview, 28 May

2009; Hutchinson Interviews, 12 May 2009; Focus Group Maxfield Park, 20 March 2009).160

The next section examines the political links of the various micro lenders. Micro

Credit Limited (MCL), one of the mainstream lenders and a small private organization located downtown, started microfinance programs in 2003 for women’s groups. MCL is owned by an American investor, Michael Rauenhorst (formerly of Deutche Bank), and is run by Mitzian Turner, a young dark-skinned Afro-Jamaican. The board chairman of MCL is

Joseph Matalon, a rich white-Jamaican whose family is reportedly closely connected to the

PNP (Panton 1993). This fact might explain why some skeptics consider the institution to be connected to the PNP (at the time) and why the organization accesses capital externally.161

The organization has had to work through certain Don-controlled structures (e.g., in Spanish

Town) to carry out activities (Observed an interview session with Micro Rate, September

2009). Table 3.3 outlines (see below) the perceived political affiliations of select lenders according to information obtained from hustlas, managers, the media, and stakeholders.

160 One exception is Lloyd Campbell of First Union who has accessed funds from a wholesale retailer, DOL. 161 Matalon is also the Chairman of the Development Bank of Jamaica (DBJ) and the Private Sector Organization of Jamaica (PSOJ) as of October 2009.

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Table 3.3 Perceptions of the Political Affiliations of Select Microfinance Actors (random ordering)

Microfinance Actor Political Party Affiliation

Jamaican National Small Business Limited (JNSBLL) Jamaican Labor Party (JLP)/Mixed

Access Microfinance (ACCESS ) JLP

Nation Growth Microfinance Bank (Aubyn Hill) JLP

Credit Organization for Pre-Microenterprises (COPE) None

Jamaica Business Development Agency (JBDC) JLP/State

Self-Start Fund (by Seaga) JLP

Development Options Limited (DOL) People's National Party (PNP)

Micro Investment Development Agency (by Manley) PNP

Micro Enterprise Financing Limited (MEFL) PNP

Churches Cooperative and Credit Union Limited (CCCUL, General Manager Basal Naar) PNP

First Union Company None

Kris An Charles Company None

Pan Caribbean Financial Services (PCFS) None

City of Kingston Credit Union (COKCU) PNP/Mixed

Source: Interviews, Focus groups, Jamaica Observer, The Gleaner, Sunday Herald

In 2003, MEFL, an NGO, was funded by CIDA to initiate a program to pilot group loans for poor businesswomen (Anonymous discussions, senior staff persons, November

2008 and July 2009). Persons interviewed (who asked not to be named) speculate that MEFL is connected to the PNP because long-standing board member Morin Seymour was once closely affiliated to the PNP and its main areas of operations were in PNP strongholds. CIDA funding thus occurred under a PNP mandate. In interviews, it was revealed to me that MEFL experienced financial losses because politically referred clients did not repay loans

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(Anonymous Interview, 5 March 2009; Anonymous Interview, 12 May 2009).162 It is unclear whether CIDA or the Bank of Nova Scotia Jamaica, which provided loan capital to MEFL, were aware of this (CIDA Interview, 10 July 2009).

A new entrant, Nation Growth Microfinance Bank, is located in the exclusive area of

New Kingston and has inherited a number of MEFL staff persons, such as its CEO Curven

Whyte, who is dark-skinned. Former director of MEFL, Debra Williams, assisted Nation

Growth in its startup phase (Interview, April 2009). This staff turn-over at Nation Growth and MEFL explains the tension between the two banks. Nation Growth was set up by former banker and investment analyst Aubyn Hill, an Afro-Jamaican who is an active JLP member.163 Nation Growth is thus perceived as a politicized bank (see Table 3.3) (see

Sunday Herald, The Jamaica Observer during 2009 period). In 2009, Aubyn Hill was a highly paid consultant to the then-Golding administration, a fact that connects Nation Growth directly to the JLP state.164

Jamaica’s largest micro lender is the Jamaica National Small Business Loans Limited

(JNSBLL), a subsidiary of Jamaica National Building Society (JNBS), with over 18,000 microfinance clients in 2009 (see Table 3.2). JNBS is today headed by an Afro-Jamaican,

162 Political candidate, Trevor Munroe, apparently referred constituents for loans to MEFL, and none of those loans issued were ever repaid (Field work 2009). 163 Survey information submitted in August 2009. More information on Nation Growth can be found on their website (http://www.nationgrowth.com/). An article in the Jamaica Observer, titled “Nation Growth to aid small businesses” (Edwards on 26 March 2008) explains the mission and background of the newly launched Nation Growth Bank. See also: The Gleaner (http://www.jamaica- gleaner.com/gleaner/20080320/business/business13.html) 164 Hill’s firm Corporate Strategies Limited received JMD 27 million from the JLP government for consulting services to privatize the sugar sector, which became a controversial issue in 2009. See more in the leading newspapers: The Sunday Herald (http://www.sunheraldja.com/2009/10/27m-for-aubyn-hill/) and The Jamaica Observer (http://www.jamaicaobserver.com/news/Aubyn-Hill-s-contract-to-be-reviewed)

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Earl Jarrett; and the CEO of the JNSBLL is also an Afro-Jamaican, Frank Whylie. Yet the business people I interviewed referred to these highly educated Afro-Jamaicans at JNSB as brownings; this mislabelling signals that hustlas regard this group of educated Afro-

Jamaicans as belonging to the upper class.

JNSBLL’s founder, Oliver Clarke, is Chinese-Jamaican and he is also editor of The

Gleaner, a newspaper often criticized for its rightward leanings. JNSBLL politics is perceived as mixed because leaders within the institution are identified with one of the two political parties, but not consistently (see Table 3.3). However, many are convinced that

JNSBLL is linked to the JLP (a fact that cannot be determined). Coincidentally, JNSBLL established one of the first branch offices in the JLP stronghold of West Kingston (but not in

Arnett Gardens, a PNP mother garrison). These branch offices reach two slums that are included in this study, which may explain why borrowers perceive the JNSBLL as linked to the JLP.165 Yet, JNSBLL is also a recipient of constituency development funds from a PNP politician, despite the institution’s effort to downplay this relationship. I cannot confirm political connections between JNSBLL and the two major parties; however, some of the people I interviewed indicated they are quite certain of political influence in JNSBLL.

Access Financial Services (ACCESS) is a private finance company led by Marcus

James, a young rich Afro-Jamaican. U.S.-educated James is the son of KLAS FM 89 radio station owner, Neville James, and a high-profile JLP member. ACCESS is capitalized by

Mayberry Investments, a well-known investment house, and it was listed on the Junior

165 JNSBLL’s Tivoli branch is located at Justin’s Place, also known as Passa Passa Plaza, off Spanish Town Road. A private finance retailer, First Union Financial Services Limited, is located in the same building, above JNSBLL. A visit to Justin’s Place to observe operations at both retailers took place on 27 May 2009.

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Jamaican Stock Exchange as of October 14, 2009.166 In my interviews, people identified

ACCESS as linked to the JLP because of the owners of the firm. This political connection creates the perception that ACCESS lends only to people in JLP-controlled neighbourhoods.

At the time of this fieldwork, ACCESS was active in JLP areas of West Kingston and less so in other slums.167

Moneylenders were not initially included in my early interviews because they are excluded from mainstream referral system. Hustlas informed me that private financial companies (e.g., Kris An Charles, First Union, OBF, Orion, WorldNet, and Michael

Financial Investment) had been making micro loans, especially in the downtown slums, long before the mainstream institutions (Focus group Arnett Gardens, 16 May 2009; Focus group

Maxfield Park, 20 March 2009). Business persons in Maxfield Park, Whitfield, and Rose

Town—slum areas with low microfinance penetration—constantly referred to these private firms. Business people identify with these companies because the people who run them are not far removed from the class backgrounds of the people they serve.

Private financial companies reach significant numbers of business people in the slums, cumulatively reaching more than 20,000 clients, and are not viewed as political

(JAMFA meeting, 28 October 2009).168 These private companies (moneylenders), such as

Kris An Charles and First Union, were started by lower middle class dark-skinned Afro-

166 Mayberry Investments Limited holds 49% and Marcus James 51% of the company’s shares, 30 September 2009. See Access’s website http://www.accessfinanceonline.com 167 In my study, only JLP political strongholds named Access Financial as being involved in their community.

168Many of the moneylenders (see Table 3.2) (represented by JAMFA) are cumulatively reaching more than 25,000 poor clients.

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Jamaicans who did not have foreign university degrees. Kris An Charles is owned by Trevor and Judith Hutchinson, a couple who mortgaged their house in 1990 (when Trevor was made redundant by the Bank of Jamaica) to start a micro lending business in Cross Roads (a transportation hub close to the downtown areas) (Hutchinsons Interviews, 12 May 2009). The

First Union Financial Company Limited is owned by Lloyd Campbell, a dark-skinned Afro-

Jamaican from a modest social background (Campbell Interview, 28 May 2009) who used to clean offices in Toronto, Canada. First Union has offices in New Kingston and in Justin’s

Plaza in Denham Town (opposite Tivoli Gardens)—JLP strongholds.

Political affiliation is perceived even among the large member-owned institutions, the country’s longest running bankers to the poor. As discussed in chapter 2, Jamaica’s credit unions were formed in the pre-independence period in 1942 by various church groups (e.g., the Roman Catholic Church).169 As of 2002, the Jamaica Association of Cooperative and

Credit Unions (JACCUL) had 49 member credit unions with a membership of 560,310

(Whyte 2001). The most important credit unions in Kingston making micro loans are the

Churches Cooperative and Credit Union Limited (CCCUL) 170 and the City of Kingston

Credit Union (COKCU) and both have branches in the PNP stronghold of Arnett Gardens, a slum in the study (Naar Interview, 27 May 2009).

CCCUL’s managing director, Basil Naar, is a light-skinned Jamaican from Arnett

Gardens. This personal connection to Arnett Gardens taints CCCUL as a PNP banking

169 CUs are governed by the Credit Union Regulation Act 2000 and jurisdiction over these societies falls under the Ministry of Agriculture, Youth, and Cooperatives and not the Bank of Jamaica. 170 More information on CCCUL’s micro loan products can be found on their website ( http://www.churchescreditunion.com/dynaweb.dti?dynasection=loans&dynapage=micro_loans ).

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partner (see Table 3.3). The other credit union, COKCU grew out of the Catholic Church’s

Social Action Center of only 200 members. By 2009, COKCU had more than 200,000 members (McLaughlin Interview, 19 March 2009). Some of the business people I met with associate COKCU with the PNP, but I was unable to confirm this. In April 2009, COKCU collaborated with a local NGO, Agency for Inner City Renewal (AIR), to launch micro-credit activities in Trench Town.171 For some, this affiliation has branded COKCU with the PNP because it is operational in PNP strongholds of Arnett Gardens and the upper part of Rose

Town, but not active in the lower part of Rosetown, a JLP stronghold as of December 2009.

Where a microfinance lender operates thus affects people’s perceptions of the intentions of the lender.

Despite the variety of micro lenders most poor Jamaicans access financing through informal lenders as well as private finance companies. However, an important lender, Dons, are also part of the microfinance universe (Ulysse 2007, 166; Tafari-Ama 2006, 198;

Robotham 2003, 217)—although the exact number of borrowers they serve is unknown. As outlined in the previous chapter, Dons are the “new patrons” for many of the Kingston poor, no longer taking orders from politicians because they have lucrative (usually illegal) enterprises (Bronfman 2007, 64; Hope 2006, 93; Rapley 2006, 95; Harriott 2003; Robotham

2003, 217; Sives 2002, 2003). Another important lender to the poor and excluded people are informal banks, like Partner (Besson 1996, 269; Harrison 1988, 113). Partner banks are organized by women “banker ladies” who reach remarkably large numbers of people

171 AIR’s founder, Dr. Henley Morgan (an outsider to Trench Town has a high-profile PNP brother). Interviews with Henley and his staff persons Otis Whyte (resident) and Richard Lambie (Jamaican-Canadian) on the LIVITY Economic Advancement Program from April to August 2009. See Gereffi’s Jamaica Gleaner article (2008) about AIR’s founder, Henley Morgan.

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(estimated at one million). Yet, the implications of these banks for microfinance are seldom analyzed (Rutherford 2000; Handa and Kirton 1999; Katzin 1959, 436).

Managers and Downtown Clients

Most micro lenders (with the exception of Dons and Partner “banker ladies”) lack first-hand knowledge of the urban poor. In fact, the senior microfinance managers I interviewed reinforced negative stereotypes. They characterized the slums, like this:

“downtown is war,” adding that “most people down there don’t want to work for anything.”

This section highlights the class backgrounds and partisan politics of microfinance lenders and its implications for micro lending. In chapter 2, I argued that class is entrenched in

Jamaican society and I show in this chapter how this is particularly so in Kingston, as expressed in the economic division between the uptown-based lenders and downtown hustlas. Knowing the identities of those persons who manage the microfinance sector is of particular significance in understanding Jamaican microfinance.

In interviews, 99% (n = 231) of the hustlas interviewed were very dark-skinned

Blacks who demonstrated distrust towards the highly educated and uptown-based lenders

(see Figure 3.1 earlier).172 A sharp class division makes it hard for residents of either side

(uptown or downtown) to feel comfortable in the social and geographic space of the other regardless of skin colour (Gray 2004, 17). A class divide, rather than a strictly racial/cultural divide, is prevalent, which was illustrated to me by a dark-skinned Afro-Jamaican at the

172Only two persons among the Jamaican interviewees were of East Indian heritage; persons belonging to this background are also referred to as Indian-Jamaican. When speaking about micro business persons or hustlas I am referring to Jamaicans of African heritage. It is of crucial importance to recognize that hustlas usually have very dark complexion. Tafari-Ama (2006, 282—283) offers a helpful definition of Black Jamaicans.

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Planning Institute of Jamaica (PIOJ): she admitted to me that she would never work in the garrisons—that is, the slums—because she was “afraid of the place (and people).”

Furthermore, she confided, “You are going to places that many Jamaicans never go all their lives.” Hence, middle-class Afro-Jamaicans avoid the slums. Another microfinance expert

(who cannot be named) claimed she does not go downtown even though she is active in designing loan programs for the poor. Similarly, downtown residents who come uptown to the historical landmark

Devon House are uneasy in this setting.

Both sides appear to have limited knowledge of the other. As shown in Figure 3.2 (see above), a significant number of lenders (35%, n = 11) are located in the exclusive commercial district of New Kingston near Knutsford Boulevard, far from the vast majority of hustlas.

The uptown and downtown divide marks a clear geographical separation, and reinforces distrust between the microfinance lenders and hustlas (Gray 2004, 313). A CEO at a mainstream micro bank justified his (uptown) location: “A New Kingston office is prestige for them (hustlas) to come here (uptown) and to sit in the AC (air conditioning) and relax at the bank” (Anonymous Interview, 9 March 2009). My own findings to the contrary suggest

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that hustlas want convenience, and the cost and time of traveling outside of their area by robo’ taxi are not desirable. Micro lenders (41%, n=13) such as private finance companies and member-owned institutions are located closer to downtown (in the mid-town area, near

Cross Roads) are embraced more readily by the hustlas I interviewed.

In Kingston, social class is the predominant source of division. It is understandable that the microfinance sector would be organized according to class interests. Even though the majority of individuals running MFIs are Afro-Jamaican and female (77%, examined in chapter 6), poor Jamaicans either (mis)label them as brownings or did not trust them to provide assistance. Slum residents viewed educated Afro-Jamaicans who were not fair- skinned as brownings because of their middle-class status, which, again, illustrates how these class-laden issues affect the unfolding of micro lending in downtown Kingston. As described above, there are perceived (and real) political affiliations among microfinance lenders.173 In fact, peers in the industry were eager to “out” those persons perceived to be political but I also verified this information to it down in the national newspapers, The Gleaner and the

Jamaica Observer. During one interview, for example, one micro-credit expert had a training manual for the PNP on the office desk (Interview, details withheld on purpose).

Lenders around the globe know that for loans programs to succeed, they should be free of politics (Rhyne and Otero 2006, 19). Yet, as shown in Figure 3.3, most microfinance managers (64%, n = 20 out of 32) believe that party politics exists in micro banking. In fact, a significant number of the staff (40%, n = 13 out of 32) who I interviewed identified

173 Although microfinance staff members were reluctant to admit their political party to me in interviews, it was easy for me in a small society like Kingston to learn of people’s political activism in national newspapers and through direct conversations with business people.

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themselves with one of the two political parties, revealing clearly that partisan politics does have an impact on micro lending. Party loyalty of micro bankers creates tensions within the sector when neutral managers do not want party politics to operate in the sector (Interviews, April to September 2009).174

Politics can help or hinder a micro lender depending on whether their party is in power. As mentioned earlier, partisan micro lenders (e.g. MIDA and SSF) have poor repayment rates because of the perception that they are political entities. Conversely, one microfinance executive believed that his company did not experience growth because his party affiliation was not with the JLP (current government in power). Again, one senior manager attributed the success of his organization to his political contacts in the previous

PNP government. In contrast, another lender applauded the JLP because of his ties to that party. A firm with ties to the PNP (opposition party) said they had several (arbitrary) financial audits by the JLP government. Yet critics (who cannot be named) retorted that, “X

174 Based on my own findings, I found that out of the 32 microfinance lenders, 29% were PNP, and 11% were JLP.

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got all that money from being attached to the PNP, and X’s activism in the PNP explains why

X feels threatened by the new government” (Four Anonymous, Interviews, dates withheld).

Certain microfinance firms grew under a particular party’s favour, and when their party was no longer in government, the survival of the firm became uncertain.

Learning from Hustlas in Six Political Slums

Small loan place need to know wi. Wi know to look wi pickney and deal wid money. Dem nah know wi [. . .] Nuff person inna di bank tink dem betta dan lowa class.

(Translation: Microfinance institutions should be aware that they can take care of their children and manage our finances. They [microfinance persons] don’t know us. Many bankers think that they are better than the poor). (Gem, a 48-year-old cake seller from Maxfield Park)

This section examines the political activism among hustlas in six political strongholds in the western part of downtown Kingston: Maxfield Park, Whitfield Town, Arnett Gardens,

Rose Town, Denham

Town, and Tivoli

Gardens (see Figure 3.4 for the location of slums). It then reviews the skepticism of these poor residents about micro loans. In the Figure 3.4: Map of Downtown Kingston (Duncan-Waite and Woolcock quotation that opens 2008, 15)

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this section, Gem suggests that microfinance staff members underestimate the hustlas’ abilities because these educated microfinance staff persons have no grasp of their (the poor’s) lived realities.175

The Jamaican case reviews six communities, known as garrisons: three controlled by the PNP and three by the JLP (see Appendix 3.1).176 According to Sives (2002), “[N]o significant social, political, economic or cultural development can occur within a garrison without tacit approval of the leadership of the dominant party.” Maxfield Park is an exception: with multiple informal leaders competing for control and power over the community, this slum experiences regular violence.177 See Appendix 3.1 for details on slum communities.178

Generalized Findings

Across the communities, 61% (n = 142, out of 233) of hustlas interviewed cannot access a micro loan.179 In this case, the average hustla is female and middle-aged (at 45) and

77% (n = 179) are hopeful about the potential of microfinance. This study corroborates that most businesses in the informal sector are sole proprietorships (83%, n=233). About half of the proprietors have seven years of experience (Nicholson Interview, October 2009; UWI

2006).180 The typical micro entrepreneur owns a very small grocery shop selling dry

175 Book-keeping is valued in uptown Jamaica, and the “head records” (numbers kept in the head) people use downtown are viewed as indicative of lack of expertise. See Portfolios of the Poor, Collins et al. (2009) for a contrary response, that the poor keep accurate accounting in their heads. 176 Communities in this study fit the definition of “garrison,” i.e., they are strongholds controlled by a political party (Figueroa and Sives 2003; Harriott 2003; Munroe 1999; Stone 1994, 1986, 1980). 177 Harriott (2003) makes distinctions between the “hard” (strong) and “soft” (weaker) garrisons. 178 My data was also cross-checked with data at the Jamaica Elections Office at Duke Street, downtown Kingston, July 2009.

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foodstuffs, such as flour and rice, in the front of her home, and her gross sales amount to

USD $840 a month.181 Many women hustlas (52%, n = 121) have a visiting partner who contribute to the household (PIOJ 2004; Dancehall Queen 1997; World Bank 1993; Miller

1991; Massiah 1983).182

Despite working full-time, hustlas live in crowded sub-standard housing, use utilities illegally to meet basic necessities, and often “capture” housing (squat), as seen in Maxfield

Park, “Zimbabwe” (Arnett Gardens), and lower Rosetown.183 In these areas, people live in unsafe and unfinished dwellings, many without indoor plumbing; in Frog City (in Maxfield

Park), for example, which is a zinc complex “tenement yard,” people use communal standpipes and latrines (Fieldwork 2009; Gray 2004, 104).184 West Kingston’s Lizard’s

Town, Denham Town, and Mid Town have derelict housing. However, the housing in Bumbs and Belgium (Tivoli Gardens) was in relatively good condition, with only 8% (n = 3) of hustlas interviewed were squatting.

Most of the hustlas interviewed turned to self-employment to survive and to “take care of pickney” (children) after becoming redundant in their low-paying jobs—usually in factories or in the retail sector, working for Chinese or Lebanese-owned shops. Others

179 Honig (1998, 319) interviewed 254 Jamaican micro entrepreneurs and found that less than 4% had micro- credit. 180 See “Survey of family-owned and women-owned businesses” (UWI 2006). 181 It is estimated that hustlas’ profits are no more than 15% for sale of imported food items. 182 “Visiting relationships” are arrangements where the man contributes to the household when he can. 183 In April 2009, JLP’s Minister of Water and Housing, Horace Chang, reported that nearly a one million (or a third of) Jamaicans are squatting in tenement yards, and have no legal title. Jamaica Observer, 16 April 16 2009 (Vol. 15, No. 108). 184 With poor sanitary conditions, people “parachute” their waste (people defecate in plastic bags, tie the bags, and throw them as far as possible). See SDC community profiles, 2007/8.

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worked as unskilled casual laborers, shifting from one job to the next. Many more people stated they had no employment options and were chronically unemployed.185 According to the STATIN Labour Force Report (2008), national unemployment rates for women (14.2%) are higher than for men (9.2%).186 However, the Social Development Commission (SDC) report (2007/2008) disaggregates data by locality and finds that young males in the ghettos experience higher rates of unemployment than any other group (SDC Interviews 2009; Miller

1991, 79).187 In Maxfield Park, at least 90% (n = 32) of the young men were unemployed

(Brown STATIN, 28 October 2009; SDC 2008, 7).188 (This information will be important when discussing gender issues in the slums of Kingston in chapter 6).

Many community groups and microfinance lenders reside in the PNP part of Arnett

Gardens and the JLP stronghold, Tivoli Gardens. Trench Town, the PNP Arnett Gardens, and the JLP’s Lower Rosetown are politically represented by PNP MP, Dr. Omar Davies. This area is susceptible to conflicts because of the competing factions of JLP members living in the stronghold of Rema (Harriott, Meeting, 26 February 2009). Arnett Garden’s Texas area has become a hub for several Christian and evangelical churches and NGOs. Yet, Lower

Rosetown (a JLP stronghold), which has a vibrant local community led by activist elders such as the late Michael Black, has no micro lending offices in the community because it is

185 Walking around Kingston, one can see graffiti painted on buildings: “bad slave.” People explained that “bad slave” is someone who may resist, either quietly or openly, harassment and low wages (Gray 2004). 186 The national unemployment rate is 11.4% (R. Smith 2009). Martin Brown, STATIN, confirms that this unemployment rate is based on national figures, and that it is possible that unemployment rates for men located in certain areas can be higher than for women (Discussion, 28 October 2009). 187 SDC officers, most of whom are UWI-trained, attest that their data is used by STATIN and PIOJ researchers (28 October 2009). 188 Information collected from Community Development Council (CDC), locally based group, 2007/8.

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in a PNP-dominated area. This reflects the politicized nature of microfinance—the PNP provides loans only where it has support.

Political borders have pernicious consequences for microfinance: for example, in lower Rosetown (JLP area) hustlas cannot visit the micro loan programs provided to those living in their own constituency (Trench Town) because the administration of these programs is located in Texas, a PNP stronghold (Focus group in Rosetown, 10 June 2009). Citizens in this area must leave their constituency to seek out services in Denham Town, a JLP area.

Residents of Denham Town and Mid Town argue that they do not receive the same benefits as those in Tivoli Gardens, a favoured garrison of the JLP (Harriott UWI, Interviews, 29

September and 26 February 2009).189 As a result, citizens of Denham Town have worked hard to support their area as a hub of entrepreneurial activity, and this community, from my own observations, has a disproportionate number of self-employed persons (who are not party activists) (Anonymous Civil Society Expert Interview, 29 September 2009; McKenzie

Interview, 12 March 2009). Business people in Denham Town are less inclined to be party campaigners compared with Tivoli Gardens because, unlike the latter, they do not receive political hand-outs.

Maxfield Park, a PNP stronghold, has limited civil society representation in the community, which is believed to be because the elected politician, Peter Philips, wants it this way (Anonymous Interviews, no date given on purpose) and community leaders follow his

189 Community development experts at SDC and JSIF agree with residents in Denham Town who claim that they are treated as second-class citizens compared to citizens in Tivoli Gardens. Harriott said to me, “Denham Town falls into the category of a soft garrison or satellite and the resources to this community will be limited.” 29 September 2009.

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unstated orders. Appendix 3.1 illustrates the level of depravity in Philips’ constituency of

Maxfield Park with the low level of civil society actors (Interviews with SDC experts).

According to interviews, this PNP politician has stifled community activism to control residents (details withheld on purpose). However, one of my findings was that the Maxfield

Park had the most politically complacent hustlas (people who campaign for a MP) because people understand they can only access services (e.g. microfinance) from their political representative. In Whitfield Town and Maxfield Park, police jeeps are a regular sight.

Policemen enter communities in a manner that is disrespectful, often exceptionally so, in search of “yute” (youth) or “gunmen” (Robotham 2003, 225). While working in the area, I witnessed police in riot gear searching for the gunmen. The absence of civil society organizations combined with regular police harassment enhances the politicians’ power because residents see him as the only person able to offer goods to them.

In Maxfield Park and Whitfield Town, gangs fight each other, as well as external gangs, for the control of particular sub-communities or perceived turfs (Rapley 2006; Blake

2004).190 In JLP-controlled West Kingston, however, there is less crime than in the other slums in the Denham Town area. People interviewed said that Dons (like Dudus) mete out punishments to those involved in crimes and rapes in their community. In Denham Town

(West Kingston), 85% of the people interviewed said they felt safe in their community (SDC

Report on Denham Town 2007), whereas in Maxfield Park, most residents (86%) said they feared violence. All the Tivolites I spoke to claimed that police harassment was a problem

190 In the past, “rude bwoys” were used by political leaders. The “bwoys” used guns to execute the force believed necessary to turn the vote towards the leaders in question. Today, many of the youth gangs are part of larger criminal organizations (Harriott 2008).

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(SDC Report on Tivoli Gardens 2007; Gray 2004, 218). These varied experiences explain the level of informal politics that control the lives of people downtown (see Appendix 3.1 for a description of levels of violence by community). Often self-employment is a way people can carve out their own autonomy.

Party Politics and Self-Exclusion from Micro Loans

The legacy of clientelism in current politics is driven by political elites (See chapter

2). In this case study, the microfinance lenders as well as stakeholders I interviewed stated that the “garrison politics” phenomenon is unique to the downtown. A senior manager in a microfinance program said, “Politics consumes persons in the ghettos and this is all they want to do.” There is a prevailing view by Jamaicans that citizens who live south of Cross

Roads are all branded partisan (Figueroa and Sives 2003, 63). Yet, what they fail to say is that politicians from uptown are often the patrons, interfering in loan programs. For slum dwellers, being aligned with one of the two political parties—JLP and PNP—is what defines them to the outside world (their “political tribe”), and a person’s political party is assumed because of an address (Duncan-Waite and Woolcock 2008, 4; PIOJ 1997).

Middle and upper class people in politics and the microfinance industry assume that all hustlas expect entitlements from politicians and informal leaders (Gray 2004, 96).

However, this case study found such assumptions to be questionable. I found that 79% (n =

184) of the hustlas interviewed claimed they were not politically active and hotly contested

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the assumption that they were.191 “Ionie,” a 43-year-old mother of six and a sweety (candy) and fruit seller, complained, “Some people inna ‘ere get loan and ‘aff no plan. Some people jus’ get tings and others (who have a business) don’t” (Interview, February 2009, details withheld on purpose). Ionie was one of the many hustlas interviewed who are frustrated because political activists in her community access microfinance only because of politics and not because of their business.

Hustlas in this case study viewed politics as “negative.” Politics is defined as

“politricks” (likely a Rastafari term that refers to the practice of clientelism), in which Big

Men use rewards to induce the poor into working and voting for them (Tafari-Ama 2006,

190; Robotham 2000, 17). An important finding was that only 21% (n = 49 out of 233) of hustlas interviewed were politically active. Those 49 who were political received state subsidies (e.g., school fees, medical support, cash allowances, housing) and were likely to get a referral for a loan by a politician.192 Moreover, hustlas from party strongholds such as the

PNP-controlled Arnett Gardens and JLP’s Denham Town had the lowest voting levels (less than 75%), which shows that they were less inclined to campaign for MPs. They were less interested in politics and focused on running their enterprises. In stark contrast, residents in

Maxfield Park and Whitfield Town, areas troubled by gang violence (SDC 2008), were far more inclined to engage in political activities. I explain this phenomenon below.

191 Political activism is defined as downtown residents campaigning and working for politicians with an understanding that they will receive a favour later, or be paid for their work. 192 Of that number 89% (n=39) were women.

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To follow up on the concepts of “political activism” and “party followers,” I asked hustlas: Are you politically active? Do you campaign for a MP? I found that every single hustla (n = 29) in Denham Town was anti-partisan (meaning that they did not prioritize politics and political campaigning). Data from interviews (see earlier Figure 3.5) showed that hustlas in Arnett

Gardens (88%) and

Denham Town (100%), as well as Lower

Rosetown (81%), were the most averse to partisan politics and less likely to accept clientelistic practices.

Business people with anti-partisan feelings, like the ones in Arnett Gardens, Denham Town, and Lower Rose town, viewed politics as a risk to their livelihoods.

Denham Town business people referred to party followers as “dem people who do ray ray af nuttin a gwwan” (Translation: Party followers campaigning do not have serious businesses). Community experts said that business people in Denham Town exhibited

“pride” and others called it “cockiness” because they were not dependent on handouts

(Shakes Interview, 30 September 2009; McKenzie Interview, 29 September 2009). Citizens of Arnett Gardens, a slum that has had long experience with drug wars and internal conflicts related to partisan politics, had become frustrated, with 88% (n = 47) reporting an anti-

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partisan attitude.

Residents turned towards self- employment as a way to reject party politics

(SDC Interviews, 25

September 2009).

An important consequence of this was that a significant proportion of hustlas (who are not political) refused to seek loans (41%, n = 96) from microfinance programs they deemed political. I found that many hard-working business people self-excluded themselves.193 It is when hustlas (n = 233) were asked, “Did you have a hard time accessing a micro loan?” that the concept of self-exclusion came up. Some hustlas

(who wanted a loan) would make a conscious decision to self-exclude themselves because of the internal biases they perceived in the lender. As highlighted in Figure 3.6 shows hustla self-exclusion, 41% (n = 96) of hustlas interviewed stated they “nah bodda wit dat” (do not bother with that).

At first, I assumed that “nah bodda with dat” meant that people did not try for a loan.

But I learned that it meant that these qualified people made calculated decisions to opt out of

193 Having run a village bank in West Africa, I screened loan application from business people, and very aware of people’s eligibility for a loan.

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microfinance programs because they saw them as political projects. In other words, they excluded themselves from micro loans because of the (perceived) racial, class, and partisan politics in these programs.194

Most hustlas interviewed were not political and could not access a micro loan. Table

3.4 (below) shows that most business people (61%, n = 142 out of 233) interviewed (across six communities) either do not have or never had a micro loan. A significant number of them

(41%, n = 96) self-exclude or opt out of untrustworthy lending programs. Of the total 32%

(n = 75) of those who did have a micro loan, 59% (n = 44) received one because of a

(perhaps perceived) referral by a politician as the reason they got a loan. Borrowers thus see politicians as helping them. In a context in which most lending programs are run by women

(73% of the sector’s staff are female, see chapter 6), only 11% (n = 10) of male hustlas interviewed obtained a micro loan compared to 45% (n = 65) of women. Increasingly, women are using political referrals to get loans.

Table 3.4 Political Referrals for Micro Loans by Gender

Number of hustlas in study 233

Number of women interviewed 144 62%

Number of men interviewed 89 38%

All hustlas with loan 75 32%

Hustlas with no loan 142 61%

Hustlas who Self-Exclude 96 41%

Women with micro loan 65 45%

194 See criteria in chapter 1. Hustlas selected for this study had to have a desire for a micro loan or already participate in micro loan programs.

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Men with micro loan 10 11%

Political referrals for a micro loan 44 59%

Women with political referral 39 60%

Men with political referral 5 51%

A majority of the hustlas (n = 158) I interviewed felt that they were discriminated against. Despite the variety of retailers making micro loans in Kingston, qualified business people were not accessing micro loans (even when they wanted these loans). I therefore asked why hustlas were having a hard time getting access to microfinance.195 Hustlas (n =

45) in Rosetown were not convinced that lenders would select lower class persons like themselves. A stakeholder suggested that: “Pinpointing exactly how politics dominates credit is valuable to unearthing why poor people have a hard time accessing something (like microfinance) that is supposed to be helping them” (Interview, 11 March 2009, details withheld by request).

Discrimination in Microfinance

Hustlas accept that some degree of screening must be conducted in lending programs, but 68% (n = 158 out of 233) of the hustlas interviewed believe that they are excluded by microfinance managers from accessing loans because of neighbourhood (“area”) and social class (“where they come from”). A community leader from West Kingston said that “all men are lumped together as bad and criminal” (Interview, 29 September 2009). The stigma of who is “bad” is far more severe for men (Gray 2004, 103–104). Ironically, the very target

195 Access to microfinance was such an issue in 2009 that the Development Office and the IDB requested that I share my field findings.

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group of the most marginalized (e.g., Black men from the ghettos) feel that micro lenders discriminate against them.

Female hustlas vouched to me that staff persons perceive “Man fram inna di ghetto as gunman or tief” (Translation: Businessmen from the ghettos seen as assassins and thieves). In the male-only focus groups, male respondents expressed the belief that they were discriminated against because they are viewed as bad people, bandits. A young male street vendor from Whitfield Town said, “It is an area ting and where yuh live. See man as a gang and gun ting. Dats how dem [loan places] luk pon it” (Translation: The area where a person lives stereotypes them. Men are seen as gangsters. That is how MFIs see them). Both location and social status, they argued, are regarded by lenders as aspects of character and used to Explanation for why a hustla stigmatize them and to exclude them from cannot get a micro loan? “Area where you live—eyebrow go loans. Yet, these managers were given up, dey luk at yuh, den di body language start and a long story wid a subsidized funds to provide micro-credit to whole heap a paper work to break 196 your spirit. Yuh know yuh nat the financially marginalized in the slums. gettin’ dem money.”

Owner of a seamstress shop, Arnett Residents in the PNP and JLP Gardens shantytowns cannot get jobs because of where they live. Hustlas from PNP and JLP strongholds told me: “[. . .] yuh come fram 11, 12, 13,

14, yuh can’t get dem money” ([. . .] you will not get a loan).197 In Denham Town, Puncy, a

196 About 42% (n=32) of the microfinance managers disagreed that discrimination may be taking place against certain hustlas. Gray (2004, 103) argues that urban areas are segregated and a sub-culture referred to as “badness-honour” develops among people excluded from general society. 197 These numbers are area codes that refer to a garrison community in downtown Kingston.

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54-year-old business woman, believes that before she even applies for a loan the workers have already “stereotype that wi won’t pay back.” Even though most lenders (99%, n = 73) acknowledged systemic discrimination against slum dwellers, they themselves do not hire people from the downtown areas. Others less overtly set qualifications that are out of reach for most persons living in the slum. A senior microfinance professional (non-Black) advanced this personal justification for such exclusion: “Persons from downtown may collude with one another against the program. I can’t work with them.” (Anonymous

Interview, 15 April 2009). An assumption here on the part of micro lenders who practice such exclusion is that ghetto residents will collectively thwart the effectiveness of the program by failing to make borrowers repay loans or, if hired, by working together against the program.

As discussed in the first section, some microfinance managers simply do not trust people from these marginalized areas. Employment requirements for entry-level positions such as loan officers are made so difficult that slum residents cannot qualify. For example, a leading micro lender, JNSBLL, requires that a loan officer own a car and possess both a university degree and advanced computer skills (Webber Interview, 13 March 2009; Whylie

Interview, 24 February 2009). These are requirements that the poor cannot in most cases meet. Loan officers do not come from the slums, and they bring prejudices with them in their professional interactions with these communities. A JNSBLL client from Tivoli rightfully asked, “How does a young gyal fram uptown know [about] life ’ere?” Thus, this lack of trust works both ways.

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Middle-class Jamaicans are hesitant to discuss race, but people downtown—that is,

those who live in the slums—debate race and class politics continually. Very dark skin

colour or kinky hair appear to be a reason for discrimination. Comments such as “If I had

pretty hair [. . .] ” or “[. . .] a nice colour (meaning lighter-skin), I would get a loan” were

common.198 All male hustlas interviewed in Maxfield Park (100%, n = 35) and Whitfield

Town (100%, n = 29) also felt their gender affected their access to micro-credit. Table 3.5

documents discrimination based on social class (reflected in neighbourhood of residence,

language, and education), race (including hair and skin colour), and gender.

Table 3.5 Types of Discrimination by Slum as Expressed by Interviewees

Maxfield Whitfield Arnett Denham Rosetown Tivoli Total Park Town Gardens Town Gardens

In-depth interviews 22 29 33 15 31 26 156

Class (e.g., location, 9 8 13 6 16 14 66 patois, education)

Race (e.g., race, hair, 6 12 3 0 2 1 24 skin colour)

Gender 3 4 5 0 1 3 16

Anti-male 100% 100% 83% 60% 73% 57% 75% Discrimination %

Discrimination % 82% 83% 64% 40% 61% 69% 68%

Micro-credit elsewhere is usually introduced to empower marginalized people, often

persons with limited or no formal education; yet microfinance managers blame clients for

198 Hustlas in these two slums argued that microfinance managers were not Black and some countered “as Black as me” (because of their lighter skin complexion). 99% (n=233) of the hustlas I met with were very dark- skinned Afro-Jamaicans.

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low education levels. An MP representing an urban slum in the study remarked to me,

“People downtown cannot navigate MFIs with standard English because they simply lack education and use patois.”199 Hustlas from Arnett Gardens stated in a focus group that males tend to speak in patois (Jamaican English) more frequently than their female counterparts, who “put on” a twang as needed. Stakeholders interviewed argued that the claimed significance of determined language variation or jargon is in fact a ploy to exclude some hustlas (Gray 2004, 93).

Big Men Interference in Microfinance

In this section of the chapter, I demonstrate that partisan politics is not just external to microfinance but operates inside it. Clientelism, where Big Men reward poor people financially, remains part of the current politics in a hustla’s environment. These rewards, which include micro loans, provide important welfare assistance (Tafari-Ama 2006, 189).

This type of informal politics involving the expectation of political support/loyalty in exchange for a loan is the reason hustlas exclude themselves from politicized microfinance programs controlled by Dons and politicians. Big Men—especially Dons—make loans with severe consequences for non-payment (Discussions Harriott, April–August 2009). Hustlas discover that if they participate in micro banking, they become beholden—or, to use their expression, “binded”—to the Big Men, a situation that can be life-threatening. Don involvement in micro lending is seen by hustlas to be a dangerous collusion, and for this reason citizens would prefer to “hustle” on their own, without inputs from anybody.

199Again there appeared a bias for formal bookkeeping as opposed to counting in one’s head, which Collins et al. (2009) find that the poor do with accuracy.

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MPs interfere with the allocation of microfinance resources through the (mis)use of state resources to influence MFIs to lend to constituents based on a political referral. Hustlas are aware of the ties between MPs and the microfinance lenders. Citizens in the downtown slums recognize lenders and see them involved in partisan activism by listening to the radio, attending weekly community meetings, reading newspapers, watching the news on television, and going to micro banking events in the community. At a public micro-credit event, an invited higgler recognized a microfinance leader immediately as a member of the

PNP. 200 While some managers do not recognize the negative impact their partisan politics have in microfinance, other lenders do, and these are opposed to colleagues being active in partisan politics (Anonymous Interviews, 13 March and 8 May 2009). But the fact that certain micro lenders are allied with a political party is no secret in the community.

Yet donors (such as the IDB) continue to endow politically active persons running microfinance organizations, and these actions replicate the clientelistic Big Man politics in microfinance. Certain micro lenders who work downtown do so in ways that support their own political interests. As mentioned before, hustlas, especially those who are anti-partisan, such as in Denham Town and Arnett Gardens, recognize this behaviour, and they will withdraw from such programs. The message to hustlas is that the micro banker is political. In my interviews, hustlas (in the six slums) categorized microfinance lenders by political party according to where they worked or who was leading the institution.201

200 I witnessed this recognition happen at a few events where a hustla would whisper to me where they had met, and it was usually at a political gathering. 201 See my first section, and the description of micro lenders, for perhaps why there are such perceived connections on the part of hustlas.

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Several of the micro lenders I interviewed recounted stories in which politicians referred constituents for micro loans that resulted in loan defaults. Most citizens regard loans that are given through political referrals not as funds that are repaid with interest but as monetary entitlements. It becomes morally hazardous for retailers when an MP’s involvement is known (that is, when people do not repay these loans); understandably, then, retailers do not openly admit their collaboration with politicians.202 Once a microfinance organization has accepted political referrals/funds from a politician or is publicly identified with one of the major parties, hustlas view the organization as politicized. A CIDA manager said, “There are political aspects, very much so, in the microfinance industry, and understanding how people (microfinance managers/staff) connect to each other can explain partisanship in the sector” (CIDA meeting, 10 July 2009). As this statement shows, donors are aware of the alliances between micro bankers and politicians, but they did not appear too concerned.

Client referrals from a politician pose a risk for lenders. One microfinance staff person at a leading retailer recounted a politician’s referral to their institution: “People come and say my MP sent me. And once persons were approved for the loans, all loans were written off as not a single person repaid the loan” (Anonymous Interview). It is thus understandable that bankers would not want to highlight this relationship. In effect, lenders tolerate capitalization from politicians as long as they believe hustlas are not aware of this relationship.

202 The banking term “moral hazard” refers to loss of profits when neutrality is compromised, e.g., political interference.

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Politicians see the value of allocating financial resources to micro loan projects in the communities they represent (Kah, Olds, Kah 2005, 25). The Constituency Development Fund

(CDF), valued at USD $233,000, was part of the former prime minister Bruce Golding’s manifesto during his campaign to assist MPs in carrying out development projects (Francis and Two Managers Interviews, 22 July 2009).203 Community experts at the Social

Development Commission (SDC) and Jamaican Social Investment Fund (JSIF) question why resources are siphoned off budgets of existing social agencies and directed towards politicians (SDC Interviews, September and October 2009; Shaw Interview, 2 April 2009;

Jamaica Observer, 26 October 2010).204

Political elites who invest in local banks do so with the sole purpose of controlling citizens located in the garrisons. A local academic (who will not be named) who consults at

Jamaica House confirmed that the “CDF is operational in microfinance and it is wired [set up] to channel funds to politicians from the very beginning.” The person continued, “I know this for a fact. Anyways, this is no secret.” In other words, politicians want to channel money as cash payments, which they call “micro loans,” to constituents through the banks. This arrangement enables the politicians, especially those representing garrisons, to demonstrate that they are helping activists through referrals and at the same time to show critics that they are legitimately lending to the poor.

203 The CDF program staff at the Office of the Prime Minister (OPM) confirmed that under the rubric “Economic Enablement and Social and Human Development” politicians use CDF to capitalize micro loan programs. Senior CDF managers confirmed that CDF is now JMD $20 million per MP, 5 October 2009. See Arthur Hall’s article in The Gleaner on 25 September 2009. 204 CDF monies earmarked for local development duplicates the work of agencies like the Social Development Commission (SDC) and Jamaica Social Investment Fund (JSIF) already active in the ghettos. See more in the Jamaica Observer, “Bad News: Parallel Institutions Competing with the SDC.” 26 October 2010. See more at: http://www.jamaicaobserver.com/news/Bad-news--Parallel-institutions-competing-with-the-SDC_8089335

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Politicians approach bankers they know, and whom they assume share the same party interests, to work with them to make micro loans available to their constituents. In theory, such a relationship, where cash-strapped lenders can access more capital for microfinance, does not seem problematic. However, given Jamaica’s history (see Chapter 2) of Big Men conferring monies to the urban poor for political favours, it would seem that politicians have simply found a new medium to replicate the old system. The slum communities I worked in are all strongholds of either one of the two major parties, and the politicized nature of these constituencies is such that certain loan programs are complicit in the perpetuation of clientelist politics. Some bankers take capital from elected officials hoping that this information is not open to the public, but politicians are less discreet because they want assurances that their party followers benefit from the money.

More than half of the hustlas getting a loan, (19%, n = 44) said they received the loans due to their political activism. While the relationship between politicians and micro bankers is well-known in the garrisons,many senior officials at Jamaica House managing development policy appeared unaware that the CDF is directed to small business lending

(Anonymous Interviews at OPM, 22 July 2009, Names withheld on purpose). Indeed, at my initial contact with officials in the development office at Jamaica House, no one could confirm CDF activity in microfinance. Citizens, hustlas in particular, were the first people who brought to my attention the use of CDF in microfinance when they expressed concern that the fund was being used to reward party followers. Key informants (in the slums), advised me to look for a CDF office at Jamaica House, where I found, unbeknownst to the development experts there, an entire program dedicated to CDF. Through my meeting with

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the CDF team, I was able to discover which politicians endowed micro lenders. Table 3.6 summarized the four elected representatives who channel the CDF to selected micro lenders.

Table 3.6 Constituency Development Funds (CDF): Political Parties and Micro Lenders (2009)

Community MP and Political Party Micro Lender

Arnett Gardens Omar Davies, PNP JNSBLL

St. Andrew Western205 George Hylton, PNP CCCUL

Whitfield Town Portia Simpson-Miller, PNP (now PM) JBDC

Maxfield Park Peter Philips, PNP JNSBLL

Politicians have the power to blacklist citizens who do not campaign for them. “Rasta

Lady,” a pudding seller, reported that the requirement to receive loans is party activism and that the local politician penalizes citizens who are not active (e.g., go to rallies) by not referring them for a loan. In Maxfield Park, party activist and business woman “Peta-Gaye,” who is a 26-year-old grocery shop owner, claimed that her political representative referred her to the bank where she now holds a micro loan (Focus group, 20 March 2010). In Arnett

Gardens, “X,” a 39-year-old single mother and owner of a haberdashery shop, is convinced that her party connections helped her receive two micro loans (Interview, 16 May 2009). “X” learned about the microfinance program at party meetings, where she was able to ask the MP for a referral (Interview, 16 May 2009).206 In Upper Rosetown, “Colonel” (a former gunman to a politician) said he accessed microfinance because of his relationship with the political

205 St. Andrew Western is a PNP constituency where CCCUL plans to be active because of a personal contact with the MP, and this MP provides CDF to CCCUL. 206 I decided to omit the location of these people and to slightly modify the aliases of these persons to protect the subjects.

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liaison person (Interview, 13 May 2009). “Dragon,” who owns a small grocery shop, claims that she can access finance from her party leader (Interview, 1 May 2009). Aside from these few persons, most hustlas in this case were not party activists. To me, party activists seemed to access credit more easily than those who were less politically active.

When microfinance is dispensed by politicians (e.g., via CDF), its neutrality is compromised, corrupting the goal of that sector to ensure fair, inclusive, and equitable development finance programs. One micro lender said, “At a party fundraiser, the PNP candidate [who has access to CDF] asked us [the retailer cannot be named] to become their bank in the community. This is a great opportunity.” This microfinance director grew up in a

PNP constituency. Another MP (who cannot be named) said he gave a major micro lender,

JNSBLL the sum of USD $81,395 from the CDF, justifying it as follows: “I am tired of giving people J$5,000 [USD $58] and then the same people show up asking for money again the next day.” It is not clear from this politician’s response how giving funds to an MFI will resolve this issue. Not all micro lenders have access to these funds, because politicians provide funding selectively to the microfinance lenders they feel best serve their interests.

Nevertheless, citizens see micro lenders who accept these funds as aligned with the politicians from whom they received the funds.

Critics of the CDF program suggest that it functions as patronage, or “pork barrel politics,” giving politicians the power to allocate state resources (i.e., micro-credit) where they see fit (Anonymous interviews, between August to October 2009).207 One MP asked a

207 A CDF manager claims that there is “financial jealousy” between the competing state agencies over the limited resources (Interview, 22 July 2009) whereas state social officers see the CDF fund as politicized.

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politically active private firm to carry out economic development planning (Anonymous

Interview, 13 March 2009). Within the government, employees perceive CDF in microfinance as clientelist politics because both politicians (and party activists) can manipulate the system to use the funds for purposes of obtaining political support

(Anonymous Interview, 29 July 2009).208

Dons: Important Micro Bankers in the Kingston’s Slums

In certain downtown communities, local bosses (Dons), in a power structure parallel to the state, control the community. Dons have informal power in slum communities, and although they are not officially considered part of the micro lending landscape, they have become a type of informal micro lender of considerable importance because they provide low cost loans to the poor and use their informal power to ensure that borrowers repay loans

Anonymous Interview, 29 September 2009).

Microfinance lenders in turn benefit from this informal power because the fear of

Dons ensures that clients repay their loans. However, Don presence in micro banking compromises the social empowerment aspect of the original intent of microfinance, which was to not only assist the poor economically but to improve of the quality of life. Lenders use the Don-Controlled structure in slums, where fear controls people, to ensure excellent portfolio performance by allying with the Dons (whose influence is widespread). In doing so, they go against the very social mission of the micro-credit movement.

208 Confidentiality is required for certain Jamaicans who fear retribution: One person remarked candidly, “Where do you live? Toronto. Well, I have to live here.”

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Informal power stems from a number of factors. Unlike politicians, Dons, who grow up in these slum communities, know what motivates poor people and can use this to ensure their compliance. Dons are very aware that hustlas, through selling in the informal sector, struggle to survive financially, and that there is no money for downtown businesses (and consumption). By making micro loans available to residents, Dons increase both their own popularity and their power. Several hustlas and stakeholders told me that for Dons, making micro loans is another way for them to launder earnings: to “wash dirty money” from the illicit drugs and weapons trade (McKenzie Interview, 29 September 2009; “Ms. Fatty”

Interview, 15 July 2009; “Browning” Interview, 7 May 2009; “Novlette” Interview, 30

March 2009; Webber Interview, 13 March 2009). Recipients pay back Don-issued loans

(usually no paperwork and flexible terms) because people know the consequences should they default (Anonymous Tivoli Interview, 29 September 2009; McKenzie Interview, 29

September 2009).209

Micro lenders traverse dangerous social territory when they use unethical practices

(e.g., Dons in the Jamaica case) to advance their own businesses (Turner Interview, 1 June

2009; Troupe Interview, 31 March 2009; Bennett Interview, 16 March 2009; Rahman 1999,

70). In my case study, I found that some micro lenders (such as JNSBLL, COKCU) lend to former/current criminals or gang members, complicating access for citizens who do not want to be involved with criminals.210 A microfinance officer stated that when ordinary people see

209 I carried out follow-up interviews (September and October 2009) informally with civil society experts at SDC who work in downtown Kingston to verify these findings. 210 On several occasions, research assistants of mine were hesitant to attend interviews of a certain microfinance client because they knew the subject as a gangster. Aliases such as “Colonel” or “Shotta” sometimes refers to an area leader, gunman or gang leader.

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a “Badman” (gangster) paying back his loan on time, a message is sent to other clients to do the same. One micro-credit project that works with Don(s) in the area does so to ensure their staff has “zero problems.” At a field agent training in a slum community, the director boasted, “A Don’s support means that the project would be free from defaulting clients

(Training for credit officers, 7 March 2009).” An alliance with the Don structure assures the microfinance project that clients will not default on loans. However, this link between micro lenders and the criminal underworld shows that the current form of lending to the poor in

Jamaica is operating in a negative fashion. To non-political hustlas, this seeming collusion with Dons makes micro-credit less trustworthy.

One project in a downtown community reported that when their computers were stolen by youth, the Don made sure all the items were returned and offered to have his men break the thief’s legs (Morgan Interview, 27 March 2009). This form of justice—“jungle justice”—is a phenomenon known in several downtown communities (Hutchinson Interview,

29 September 2009; Stultz Interview, 1 March 2009; Duncan-Waite and Woolcock 2008, 27;

Robotham 2003, 216). However, choosing to not work with informal leaders creates limits to the work an outsider can do in these controlled communities (Anonymous Discussions at

JSIF and SDC, August 2009; Morgan Interview, 25 March 2009). Microfinance organizations say that being forced to go through Dons and informal bosses further marginalizes poor business people, subjugating them to an undemocratic order (Interviews with Community leaders and Civil Society Experts, SDC field staff; Robotham 2003, 216;

Charles 2002).

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I determined that while those at the organizational top of these institutions may or may not agree with donships, frontline staff nonetheless use the informal system to do their professional work effectively and to reach determined economic targets or bonuses (Rogaly

1996, 106). One manager, confirming that his program made micro loans available to projects owned by Dons, made no apologies for this fact (CAPRI event, 26 October 2009).211

Microfinance lenders operating in the slums will work through the informal political structure because they recognize the Dons’ power to make borrowers repay their loans.

Certain microfinance lenders, aware of oppressive social conditions in the garrisons, use informal politics for their own interests: for example, to get personal bonuses. One senior microfinance manager stated, “Our program is fine in Tivoli Gardens because of the Don.”

Another loan staff reported, “Dons can make people repay their loans.” Staff persons thus benefit from the people’s fear of the Don. A young hustla in Tivoli Gardens recounted that a loan officer warned her, “I hope that nothing will happen to you if the Don finds out about this [unpaid loan]” (Anonymous Bar owner Interview, July 2009). Microfinance staff persons use such statements to scare hustlas because they want their loans repaid on time; and while hustlas are aware of this motivation, they usually do not realize that these staff persons also need loans repaid to get their bonuses.

Not only microfinance lenders, but some clients also use donships to ensure discipline. MCL (a micro lender) reported that clients in Spanish Town go directly to the Don

(not the MFI) if a member of a group loan defaults on a loan because they see the Don

211 At a CAPRI seminar (26 October 2009), a microfinance leader stated that his organization had to work with the various Dons in his communities because of the local context. Another micro banker objected to working through Dons and felt that such activity further marginalized the poor.

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capable of forcing the defaulting person to honour his/her debt (Interview, 28 September

2009). In the example above, the microfinance staff person stated, “We have no control over this. Clients will go to the Don [to resolve conflicts].” An international consultant from

MicroRate (a U.S.-based firm), on evaluating a micro lender, commented that donship is good for repayment (Meeting, 28 September 2009). The support from the Don, who was able to ensure that people repay loans, thus resulted in a positive rating for the lender.212 Informal politics is so entrenched in some places that clients, especially political ones, see the Big

Man as the only person to fix any issue (Duncan-Waite and Woolcock 2008, 28-29). And, lenders tap into informal systems to make sure that their institutions attain high repayment rates.

Black Women’s Agency in Partner Banks

In a context of political interference in loan programs for the poor, smll business people seek greater autonomy through informal banks (known as rotating savings and credit associations [ROSCAs] to provide financial services for people excluded from conventional banks (Anderson et al. 2009; Rutherford 2000; Handa and Kirton 1999; Ardener and Burman

1996; Rogaly 1996; Geertz 1962). The informal banks in the Caribbean are a valued African tradition, rooted in the local saving systems “susus” and “tontines” brought by slaves to the

Americas. Yet little has been written on this institution (McKenzie Interview, 12 July 2009;

Stultz Interview, 25 March 2009; Stewart Interview, 16 March 2009; Handa and Kirton

1999; Besson 1996). This final section examines Jamaican women’s agency in forming

212 Information revealed during a consulting assignment to a microfinance retailer, which was being appraised by Micro Rate, an American firm, 28 September 2009.

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community banks in response to politicized loan programs. Though some hustlas use political referrals to get access to microfinance, the majority of them are non-political.

Jamaican Partner (also referred to as “Partna”) is where poor people, particularly women, pool money. This activity, organized by women, evidences agency within contexts of oppression, and therefore has political implications. However, the literature ignores the political implications of this mobilization of capital by poor (usually uneducated) women

(Collins et al. 2009). Partner banks are so popular among hustlas that the large retailers, such as BNSJ and JNBSLL, have replicated the system, now offering a product called the “partner plan” (Handa and Kirton 1999).

People create informal banks to meet their cash flow needs; but in the Jamaica case, when they take hold of each other’s wealth and rotate these funds among themselves, they are also resisting political efforts (Gray 2003a, 15). As mentioned earlier in this chapter, 41%

(n = 96) of hustlas self-exclude or opt out of loan programs that they view as political.

Certain microfinance programs are perceived as engaging in attempts to exercise political control over borrowers—that is, taking the loan involves a commitment to actively support a particular political party. Jamaicans, refusing to become in involved in politics through business loans, exercise political resistance by participating in informal community-owned banks.

Local banking programs reduce the need for compliance of business people with patrons demands (Shakes Interview, 30 September 2009; Hutchinson Interview, 29 July

2009; Scott 1977, 1972). As noted earlier, 94% (n = 220) of hustlas in Don-dominated communities said that material rewards given by Dons came with consequences. Believing

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lending to be politicized (misused by lenders), these hustlas view it as a deceitful economic system—a “fraud ting”—in which micro lenders are not to be trusted.

Contrary to public opinion, the data in this case shows that hustlas avoid manipulation by microfinance managers, politicians, and Dons in microfinance, and many persons exclude themselves if they perceive that these loans are linked to partisan politics. Scott (19771;

1972) suggests that compliance within a patron-client relationship depends on how important the patron’s services are to the client. Hustlas actively resist this type of relationship, and, because of the critical importance of loans to survival, turn to Partner banks to meet their livelihood needs. Micro business persons interviewed stated that “Partna is fi wi, and bank is fi di big man uptown”—that is, the Partner bank is for the poor (us) and formal banks are for the rich. At least 82% (n = 191 out of 233) of the hustlas I interviewed “throw partna”

(participate in Partner).213

Informal banks are popular among people around the world because of the low transaction costs, easy access to money, and lack of formalities (Collins et al. 2009, 53;

Rutherford 2000, 32; Handa and Kirton 1999). In the Jamaica interviews, 57% (n = 133) of entrepreneurs regarded Partner as the financial model that best meets their needs, that has “no rigmarole” (paper work), that is trustworthy, and that provides easy access. While the formalized microfinance programs lack “embeddedness” with people, Partner is there for the hustlas when nobody else is.

213 Handa and Kirton (1999) surveyed one thousand people in Kingston, and found that 75% of the people in partna were Black women between the ages of 26 and 35; most clients threw Partner for an average of nine years.

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Can’t say nuff ’bout it [partner banks]. Yuh see dat fridge [. . .] partna. Yuh see dat hair blower [. . .] partna. Yuh see dat T.V. [. . .] Partna, partna, partna buy mi all disya.

(I cannot say enough about Partner banks. By joining a partner bank, I was able to buy a fridge, hair-dryer and T.V. Partner helped me save and buy all these items). Marcia, a 34-year-old home-based hairdresser, Trench Town

Miss Paddy—an elderly lady slum-dweller who owns a cook shop that serves fried chicken, rice, and peas—has never held a bank account at a commercial bank or credit union.

She is one of the thousands of Jamaican hustlas living in tenement yards downtown who do not have the birth certificate required to open a bank account. People like Miss Paddy turn to the local “banka lady” (informal banker), women who run local financial banks where unbankable hustlas can get access to money.214 For Miss Paddy, “partna” means inclusive finance.

People engage in Partner banks because they trust the women who run them (Besson

1996). Partner is embedded in the traditions and emotions of the urban poor and it allows people to launch their micro enterprises through access to a lump sum of cash needed for their big ticket purchases, like a fridge or stove. Partna generally involves a group of people who know each other well and who pool their money (Three Banker Ladies Interviews,

March–July 2009; Klak and Hey 1992; Katzin 1959, 439). Several variants of the partna bank exist, and although most are saving plans, some include lending features. The Banker ladies also called “Banka ladies” interviewed were three single mothers with limited schooling who managed these banks with at least one hundred clients. In Table 3.7, two of

214 Banka ladies are also referred to as “champions” (Frontier Finance International, 1999)

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the banka ladies, Nicki and Charm, had loans but Carlyn never had a micro loan because she felt that microfinance was led by MPs who excluded her because she refused to vote.

Table 3.7 Synopsis of the Interviews with Three Banker Ladies in the Slums

Banker: Location and Bio Data Type of Plans Experience

“Nicki,” 30 years old; Tel Her mother was a 1. Daily partna: A daily deposit of USD$2.30 for Aviv (JLP area); banker for 10 higgler and Partner three months. 2. Weekly partner: A weekly deposit years banker. of $23 for six weeks. 3. Kid’s partner: A deposit of 50 cents every day for four months.

“Charm,” 38 years old; Arnett She is a high school 1. Daily Partner: Fixed deposit daily for three Gardens (PNP area); banker dropout. months. 2. Two weekly partners (includes diaspora for 10 years members): Contribute $11 weekly for six months.

“Carlyn” 39 years old; She is well known in All weekly plans, 32-week cycle. Best clients are Maxfield Park (PNP area); the community for not young males. banker for 20 years voting.

Source: Interviews, from March to July 2009.

The Banka lady decides who gets access to the lump sum first, and she assesses the person’s risks for defaulting, as a trained loans officer would do. In some partna systems, people draw lots to determine the order for obtaining a loan (Three Banker Ladies Interview,

March to July 2009; Rutherford 2000; Handa and Kirton 1999; Geertz 1962). Each person’s contribution to the partna is called a “hand” and it is “thrown” for a designated period of time; the pooled money is called a “draw.” Peer dynamics ensure people comply with payment rules, and social sanctions are applied in the case of default.

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Micro lenders argue that the practice of group loans is not successful in this context.

Yet Jamaicans join informal banks (group banking). Gray (2004, 83) asserts that people in the slums are very close and intent on helping one another.

Figure 3.7 presents

Partner as the lending model that most people (57%, n

= 133 out of 233) claim meets their needs. The banker ladies interviewed claim that repayment rates are high (usually 100%) because people trust these systems (Interviews, March to July 2009). Black women’s agency in resisting lending arrangements that control them politically are possible through alternative sources of financing.

Conclusion

Many Jamaicans are quick to say, “Politics is in almost every aspect of Jamaican life.” If politics is embedded in everyday life, and it is assumed to be prevalent in political strongholds, how can a public resource such as microfinance remain, as the managers would like to argue it is, free of clientelistic politics? Contrary to the views of most donors and experts alike, politics is deeply embedded in microfinance. The fact that microfinance

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managers claim that class bias does not interfere in micro lending is what makes the case so intriguing. Micro-credit’s reputation of inclusive finance is compromised by the class and race biases of microfinance managers and the clientelist practices of Big Men. And hustlas resist being controlled by politicized lenders, where party affiliations seemingly influence where microfinance operates and who gets it. The (perceived) act of micro bankers colluding with Dons or politicians is a violation of the supposed role of microfinance in helping poor entrepreneurs self-develop—not only economically but also socially.

The fact that people’s lives downtown are entangled in informal politics is not new.

But when informal politics emerges in microfinance programs, this negatively complicates the lives of the poor. Most hustlas are not partisan and nor do they want charity from Big

Men. They seek to avoid the manipulative component of loan programs and they turn to

Partner not only to cope with their financial requirements, but as a political act of resisting the grasp of Big Men (Raeymaekers 2009; Harrison 1988).

Exclusionary microfinance is taking place in the Jamaica case because politically inclined class-identified managers discriminate against certain hustlas over their class

(location, language/education), race (skin colour, hair), and gender (anti-male bias). Yet it is the apparent, the collusion of MFIs with questionable actors that lead many eligible business people to to avoid certain financial programs. The informal politics that is a component of microfinance blocks the potential for social empowerment. In spite of these challenges, however, the female hustlas’ tenacity in working independently, their enthusiasm for Partner banks, and their rejection of politicized sources of financing are what makes their story so compelling.

Chapter 4 The Guyana Case: Racial Exclusion in Micro Banking

“Traditional difficulties are multiplied in heterogeneous societies where ethnic, cultural, political and gender discrimination play a role in distorting the pattern of financing.” (Thomas 1993, 5)

Introduction

Race politics in Guyana arose out of the enslavement period and was manifested in the independence era. Since independence, control of resources has swung back and forth between the two dominant ethnic groups: Afros and Indos (Gibson 2006, 372; In the Sky’s

Wild Noise film 1983; Rodney 1981, 174).215 Nowhere in the country is race not an issue. It is the issue that divides the populace. Although the micro lenders I met with stated that they adhere to the principles of microfinance to create access to finance for excluded people,

Guyanese economist C.Y. Thomas, in his quote above, argues that in an ethnically diverse country, the likelihood of lending being discriminatory against certain identities is high.

Micro lenders in Guyana operate under a racialized political environment. For the past twenty years, the East Indian (hereafter Indian or Indo) political leaders of the People’s

Progressive Party (PPP) have dominated the national stage, and a policy bias excludes Afro-

Guyanese from economic resources.

The political ascendancy of Indo-Guyanese has enabled this racial group’s power and control over economic resources, and the systemic discrimination against Afro-Guyanese people denies them access to social and finance services (Gibson 2005, 8; In the Sky’s Wild

Noise flim 1983). PPP’s president Bharrat Jagdeo (2006-2011), privileged the rural Indian

215 Gibson (2005, 11) makes a compelling point that the major population shift has been the decrease in the number of (self-designated) Blacks and the increase in the mixed-race category since 1993 because Afro- Guyanese citizens choose the “mixed race” racial category due to the “dehumanizing” treatment of Blacks.

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political constituency and alienated Black hucksters in urban areas (Benschop Interview, 7

May 2007; Currie Interview, 3 May 2010; Philips Interview, 30 April 2010; Garner 2008,

102).216 Williams, Cummings, and Marshall (2007, 106) find that Afro-Guyanese are systematically left out of economic programs and experience a high level of stress over not having enough money to live on. Indeed, hucksters interviewed in this case claim that they are under “pressure” and “stress” because deliberate government programming discriminates against them as a people.

Although it is widely agreed that a racialized hierarchy dominated by Indo-Guyanese favours Indos and limits Black people’s access to economic resources (Williams, Cummings and Marshall 2007, 106; Hintzen 1989, 23), a report by McGarrell (2010) examining micro/small businesses in Guyana makes no mention of the blatant discrimination against

Afro-Guyanese business people. In addition, most (70%, n = 8) micro bankers (mainly

Indians) fail to see race discrimination as relevant in microfinance. However, all Black hucksters (n = 17) interviewed in an urban slum of Allbouystown said they are discriminated against because of their race and ethnicity (Interviews April 2008; Garner 2008, 204).

Microfinance in Guyana thus exists within a racially polarized political environment, where the Indo-led authoritarian state, the PPP, siphons economic resources away from the

Afro-Guyanese and allocates resources to the Indian base (Gibson 2006, 377). I argue that in such a context, where there is no power-sharing, cultural narratives subjugate and disadvantage Black hucksters and prevent them from accessing micro loans. Findings show

216 Owning land is important to the Indian electorate, and the PPP state has introduced subsidized interest rates on mortgages.

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that micro lenders (most of whom are Indos) discriminate racially against Afros hucksters, and that these attitudes support the state’s policy of economic exclusion. In response, Afro hucksters, like their Jamaican counterparts, when marginalized by microfinance managers, rely on community banks to meet their financial needs (Besson 1996, 264).

For decades, racial bias has structured politics, allowing Indian political elites to

“justify” their inherent biases.217 Indo-Guyanese point out that when former Afro-Guyanese president Forbes Burnham of the People’s National Congress (PNC) was in power (1980–

1985), he pursued policies that provided benefits to Blacks. However, Burnham’s undemocratic regime only assisted certain Afro-Guyanese, and his policies excluded most of the urban poor (Afros), who then turned to huckstering (self-employment). During these years, Afro-Guyanese contributed to vibrant local markets under this repressive state (St.

Pierre 1999, 70). In 1986, the new president Desmond Hoyte (1985-1992), did focus on micro and small enterprise development (Currie Interview, 3 May 2010; Persaud Interview,

19 April 2009; Garner 2008, 204), to support small businesses that assisted Afro and Indo

Guyanese alike. But in 1992 Cheddi Jagan’s Indian PPP came into power, and he diverted patronage to the Indo-Guyanese voting base in the rural areas and big business. Policy- making since the PPP came to power has moved away from supporting poor business owners

(Kissoon Interview, 7 May 2010; Pimp Juice Interview, 27 April 2010; Bourda market vendor Interview, 22 April 2010).

217 Barrow-Giles (2002, 209) doubts that the government is concerned about the poor given the rigged elections and racial politics of Indian political elites.

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Most of the Indo-Guyanese stakeholders and micro lenders (those who claim to support the promise of microfinance) interviewed in this case study (75%, n = 16) made negative and/or racist comments about Black business people. A widespread cultural myth is that Afro-Guyanese are not business-minded. While rich Indian business families such as the

Gafoors or the Beharis are given as examples of self-sacrificing and hard-working Indians, no equivalent Afro-Guyanese business person is ever named (Scott Interview, 13 May 2010;

Kissoon and Benschop Interviews, 6 May 2010; Bristol Interview, 4 May 2010).

Guyanese Indians’ racist comments about Afro-Guyanese appear to be generally accepted. A booklet titled Rebirth of the Blackman by Accabre Nkofi (no date), given to me by an Indo businessman and in circulation in Georgetown in 2010, reinforces racist views and sets up binaries: Afros as “bad” and Indos as “good” (Samaroo Interview, 14 May 2010).

The 2009 collapse of Globe Trust, owned by rich Afro-Guyanese investors, further reinforced the stereotype of Blacks as inferior in finance and business.218 However,

University of Guyana’s Freddie Kissoon (2010a), in an article in the national newspaper,

Kaieteur News, challenges the position that Indos are more culturally apt for business than

Afros. Kissoon’s position, taken by many Afro-Guyanese stakeholders (civil society experts, community activists, business people, academics) (n = 40), blames the former Burnham regime for the public perception that Blacks are non-entrepreneurial, corrupt, and reliant on state hand-outs.

218 Globe Trust, an investment company founded by an Afro-Guyanese, was liquidated in October 2009. See more on the fall of Globe Trust in the Stabroek paper: http://www.stabroeknews.com/2010/stories/05/05/liquidator-signals-%E2%80%98beginning-of- end%E2%80%99-for-globe-trust/

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The first section of this chapter discusses the background of Indian domination in microfinance. The next section gives a race analysis of the attitudes of the micro lenders.

Findings for this case are based on a relatively small sample size of 79 interviews conducted in November 2008, and April and May 2010. (Table 1.2 in chapter 1 provides a breakdown of interviews for Guyana). In the third section, I analyze the perspectives of 29 hucksters

(mostly Afro-Guyanese) in the slum community of Allbouystown, Georgetown (See

Appendix 2.1). The last section examines the organization of informal banks, such as Box hand and Penny Bank, by hucksters. These banks provide a morale booster, tapping into community-owned resources when people are denied access to economic resources.

In the 2006 IDB Report, Guyanese micro entrepreneurs accounted for 58,327 of the registered businesses in the country (Navagas and Tejerina 2006). Yet as of May 2010, microfinance reached about 10% (about 6,000) micro enterprises (Fieldwork, April and May

2010; Navajas and Tejerina 2006). Like Jamaica’s case, Guyana’s industry lacks agreement on the definition of “micro” and “small” businesses.219 Since 1988, the national association,

Guyana’s Small Business Association (GSBA) has been headed by an Afro-Muslim. The organization is weak, and as of May 2010 had a membership of only 215 people. Those close to the industry (who ask not to be named) suggest that GBSA is under-funded and lacks political support from the Indian-led government because of its Black (Muslim) leadership.220 Unlike the Private Sector Commission, made up of rich businessmen of

Indian, Portuguese, and Chinese, the state reluctantly created a Small Business Council in

219 Refer to chapter 1 for the definition. 220 See the Stabroek article (2010) for more information on the GBSA at http://www.stabroeknews.com/2010/business/05/14/whither-the-guyana-small-business-association/

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2010 made up of technocrats with no private-sector experience (Anonymous Interview, 5

May 2010).

In a report commissioned by the government on micro and small business (McGarrell

2010) there is no mention of the influence of racial bias on the allocation of resources.

Instead, the report finds that micro and small enterprise is a high priority for the state, although there is no evidence of significant state support. In fact, the Small Business Act No.

2 of 2004 was delayed for six years and the GSBA remains a weak association. In the 2010 budget, the Indian-led state allocated about USD $75,000 to the entire small business sector.

In previous years, the allocation was GYD $1.5 million (USD $7,500) (Anonymous

Interview with a government official). Since coming to power in 1992 the Indian-led PPP administration has disproportionately spent funds in the Indian-dominated agricultural sector, neglecting urban micro and small business sectors where Blacks are active (Garner 2009,

125). This neglect of small business development continues to be the case in 2010 (Field work 2010).

Indo-Guyanese Domination of Micro Banking

Banking in Guyana originated in the colonial era to help the white planters. Banks such as the Colonial Bank (later changed to Barclays, UK) and the British Guiana Bank

(BGB)221 catered to English planters and later to the “whitened” indentured laborers, such as the Portuguese and Chinese, who became merchants. Conventional banks refused to lend to the Afro and Indo populations (Duncan 1990, 17-39; Rodney 1981, 33; Daly 1974, 166;

221 In 1914, the BGB became the foreign owned bank, Royal Bank of Canada.

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Smith 1964, 78). In 1828, the first bank to assist slaves, the Port Office Savings Bank, was set up (Daly 1974, 166), but it could not meet the demand. By independence, banking was a contentious issue because while the whitened business elites had access to finance, the majority of citizens, East Indian and African Guyanese, did not (Smith 1964).

On the plantations, slaves had begun cooperative-like banking activities, drawing on traditions they brought with them from Africa (St. Pierre 1999, 69). These African collective banking systems, called “Susus,” have a long tradition and slaves used them to support trade amongst themselves. Today, Afro-Guyanese (and some Indos) continue to participate in informal systems derived from Susus—the Box hand and Penny Bank systems. Unlike the

Jamaican and Haitian cases, the current formal micro lending landscape in Guyana lacks any cooperative models in microfinance (Navajas and Tejerina 2006; Sookdeo 1997). One of the reasons for this, as will be explained below, lies in Burnham’s misuse of cooperative banks for personal interests, which had a negative impact on this type of banking for the entrepreneurial poor. However, this was not always the case. As Guyanese agitated for self- governance, the colonial state made financing available to the masses. In 1954, the British

Commissioner set up a legal framework for the British Guiana Credit Cooperatives to provide micro and small loans to the poor (Jabar Interview, 7 May 2010; Smith 1964, 78–

81). Cooperative banks appeared to meet the needs for the Afro-Guyanese and Indo-

Guyanese, who were excluded by British banks.

As part of former president Burnham’s (1962-1985) socialist plans, he nationalized banks and formed them into cooperative banks. Burnham understood correctly that banks excluded the poor, particularly Afro-Guyanese. In the 1970s, Burnham set up a member-

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owned bank, the Guyana Co-operative Agricultural Bank (later the Guyana Cooperative

Agricultural and Industrial Development Bank [GAIBANK]) to reach Afro-Guyanese engaged in small-scale agricultural production and trade. Through the 1980s and 1990s,

GAIBANK (later called Guyana National Cooperative Bank under Jagan in 1992) was a pioneer micro lender for excluded Afro and Indo business persons (Sookdeo 1997).

Unfortunately, due to its political connection, GAIBANK loans were never repaid by borrowers and the institution folded. In 2011, credit from rural cooperatives such as Thrift and Credit Cooperative in the Essequibo Islands, are still popular because of their low costs.

Yet, urban-based credit unions—such as National Cooperative Credit Union Limited,

Guyana Defense Force Credit Union, Transport Amalgamated Credit Union, and the City of

Georgetown Credit Union—do not offer micro loans (Jabar Interview, 7 May 2010; Beaton

Interview, 30 April 2010). Still today there is a stigma attached to cooperative banks.

Following the Burnham dictatorship (1962-1985), President Hoyte formulated policies for the micro and small businesses. Several micro lending programs emerged: the

Small Business Credit Initiative; Commonwealth Youth Credit; Mothers Development

Window; and to Women’s Affairs Bureau Revolving Loan Fund (Long 1990).222 All of these programs had a special focus on poor women with a goal of reducing poverty; however, within a few years these organizations were defunct due to mismanagement. With the regime change in 1992, the Indo-led PPP state under Cheddi Jagan licensed Indian-run banks such as

Guyana Bank for Trade and Industry (GBTI) and the Demerara Bank. In the 1990s, the local

222 The Small Business Credit Initiative (SBCI) closed down in 1997 due to management issues (Navajas and Tejerina 2003, 2).

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banking sector was increasingly Indian bankers who catered to the Indian merchant class.

Indeed, Hoyte’s establishment of microfinance was through an Indian-led Initiative for

Private Enterprise Development (IPED) (Long 1990). IPED’s founder was Yesu Persaud, an

Indian, is also owner of Demerara Distillery Limited (DDL) and the Demerara Bank. During the period of the Hoyte regime (1985-1992), Persaud secured a $2.8M grant from USAID and the Pan American Development Foundation (PADF) to start microfinance activities

(Sookdeo 1997; Duncan 1990, 27-28).

As of May 2010, Guyana’s three main specialized micro lenders reached about 10% of the demand for micro-credit. These three retailers: IPED, Small Business Development

Trust (SBDT), and Microfin. IPED’s founder, Yesu Persaud, remains its chairman, and the

CEO Ramesh Persaud (2010–present), is also Indo-Guyanese (past directors were all non-

Blacks) (Interview, 17 November 2008). IPED clients, many of whom are Indian, move onto larger loans from Persaud’s commercial bank, the Demerara Bank (Chin Interview, 17

November 2008). Both of the senior managers I met with at the Demerara Bank reinforced the fact for me that bankers are Indian.223 IPED’s loan portfolio, valued at USD $7,073, 455, allocated an average loan size of USD $1,236 (Completed Survey, 6 May 2010). As shown in

Table 4.1, IPED has the largest outreach to clients; yet IPED does not disaggregate loans allocated by race and it only reaches 22% female borrowers (see Table 4.1 below).

223 Participant observation at Demerara Bank confirmed that most staff are Indian and other non-Blacks because not one Afro-Guyanese worked on the Administrative (second floor) division at the time of my visit. As of 2010, both of Persaud’s banks are led by Indo-Guyanese: Pravinchandra Dave (Demerara Bank) and Ramesh Persaud (IPED).

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Table 4.1 Guyana’s Micro/Small Business Lenders (2010) # of Clients Female Active in Donor State Funds

Type Name/Inception Clients % Allbouystown Subsidies

IPED, 1986 4971 22% Y Y Y

SBDT, 1994 200 68% N Y Y Microfinance Microfinance Microfin, 2007 429 57% Y Y N

Republic, 2008/9 NA >75% N Y N

Scotia Bank, 1993 NA NA N N N

Commercial Commercial GBTI, 1992 NA NA N N Y

Demerara, 1992 NA NA N N NA

Box hand >1000 >80% Y N N

Informal Penny Bank >500 >70% Y N N

Sources: Survey completed 6 May 2010 by IPED and 12 May 2010 by Microfin. Mohammed Interview, 23 April 2010; Zaman and Williams Interviews, 23 April 2010.

Rich Indo-Guyanese own two major MFIs. Since SBDT’s inception in 1994, Sataur

Gafoor of Gafsons Industries Limited and Gafoors Stores Limited has had Indo leadership

(Kaieteur news 11 December 2011; Ali Interview, 23 April 2010). SBDT is run by Indian- born Manjula Brijmohan (married to an Indo-Guyanese), who was vice-president of

President Jagdeo’s budget committee (Interview, 15 April 2010; SBDT Annual Report

2006). Moreover, SBDT has received significant funds from the Agricultural Minister,

Indian-Guyanese Robert M. Persaud (Government of Guyana, Agriculture, website accessed

11 March 2011) even though they reach a very small number of borrowers (Refer to Table

4.1). In fact, its Indian male-dominated board (with the exception of the Indian female, an employee) is a composition that fits comfortably with the rhetoric of the Indian-run state

(Annual Report 2006, 2). A competing microfinance manager explained to me, “When money is to be had, this brings out the party colours” (Anonymous Senior-Level Banker

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Interview, 16 April 2010). In other words, certain lenders use their Indian cultural ties to connect to acquire support from the political elites. The potentially disempowering impact of this practice of accessing state funds through cultural ties is not seen as a problem because these lenders are not concerned with the possibility that their collusion with an authoritarian state might brand them as racist.

The two Indian owned microfinance retailers (IPED and SBDT) I met appeared to have a close relationship to the PPP government. In fact, one director stated, “They [Afros] complain about the coolie man [Indo-Guyanese] government but it does more than any other government before” (Interview, April 2010 for confidentiality). The insinuation here is that the Afro-Guyanese politicians of the past—for example, Burnham or Hoyte—did not advance the cause of the Afro-Guyanese. This comment is worrisome given the racial tension in the country. Despite this intimate association with the Indian leaders, this director refused to accept that the relationship could be perceived by others as racial bias.

Racism in microfinance is deemed to be a non-issue by Indian lenders I met (Field work, 2010). As long as senior management denies that racial bias against Afro-Guyanese affects micro lending, it is doubtful that programming can counteract exclusion in microfinance. Like the Jamaica case, I found that micro bankers were aware of the exclusionary tendencies against marginalized groups in the slum, however, they ignored that their ingrained prejudices excluded a racial group. During my visit one these retailers, the seven staff persons (out of the nine) present were all Indo-Guyanese, and in a poster of delinquent clients were Indians as well as those waiting in the client area (Visit, 15 April

2010). During an interview, 43-year-old Penny, an Afro huckster, stated that she had a hard

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time getting a micro loan: “Indians get through…when I went down to Brickdam [referring to the SBDT office] and…I had a hard time there, dey lef’ you jus’ so” (Interview, 20 April

2010). Here, she comments on the fact that Indians are served first and that she was left waiting by the Indian staff until she felt obligated to leave.

Trinidad’s commercial bank, Development Financing Limited South America

(DFLSA), owns the newest microfinance lender, Microfin (see Table 4.1). DFLSA bought

Scotia Enterprise’s micro and small business portfolio in 2005. In 2007, Microfin launched its services, and as of May 2010 its average loan size was USD $1,576 and its loan portfolio was valued at USD $723,493. My findings revealed that Microfin, led by an Afro-Guyanese

Lindel Harlequin, had the most diverse staffing (whites, mixed-race, Afros, and Indos). The organization’s human resources data shows that of its staff, 60% are Afros and mixed-race and 40% are Indos (Completed Survey, May 2010).224 Microfin’s senior manager spoke openly on the topic of race and microfinance (unlike the Indian-run MFIs). Microfin, through its research on ethnicity and financing, found that Indos receive larger loans than Blacks.

IPED’s staff explained that Afros and Indos have different family and cultural make- ups, which may explain the difference in the sizes of loans they access (Interview, 19 April

2010; Harlequin Interview, 16 April 2010). Indian Guyanese tap into what is called a “buddy system” (Indo-Guyanese local term for a male relative as a cousin or uncle) for funds under

USD $1,500. Afro-Guyanese usually have less disposable income within families and seek loans under USD $500 (Persaud Interview 19 April 2010). This seems to suggest a lack of

224 Ahmed (2008, 152) found that Grameen Bank did not share specific disaggregated data with her.

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family networks being the reason that Afro-Guyanese are not considered (that is, are penalized) for these loans. In some ways, one can argue that Afro-Guyanese who do not have an extensive family network may merit higher loans for business but this does not happen.

Interview findings show that Indian bankers do not value Afro-Guyanese as entrepreneurs. Bankers, most of whom are Indian, have a set of preconceived notions of the characteristics of a creditworthy client, and Afro-Guyanese are deemed a bad risk regardless of their education, profession, or economic status. Even well-educated Afro-Guyanese have a hard time getting a loan from a bank simply because they are Black (Scott Interview, 13 May

2010; Thomas Interview, 7 May 2010; Garner 2008, 204; Dow 2003, 4). A dichotomy of

“them” versus “us” is set up when bankers review a client for a loan. An Afro-Guyanese male expert at an international agency argued,

“In this society, certain men [Indo-Guyanese] don’t want us [Afro- Guyanese] above them or equal to them in any way. They [Indians] want to keep us out. So we get the royal runaround when we go to the banks” (Anonymous Interview, 22 April 2010).

Black people, then, regardless of their class, find getting a loan from a bank difficult. This challenge is compounded for Blacks who live in the slums. Afro-Guyanese hucksters are less likely to get a loan than their Indo counterparts, and the loans they do qualify for are very small (Scott Interview, 13 May 2010; Thomas Interview, 7 May 2010). Racial bias is embedded in the analysis of portfolios, with the result that it is not only unlikely that an Afro-

Guyanese will obtain a loan, but if they do, it will be for much less than requested.

Afro-Guyanese are aware of the stigma against them in most banks. In Allbouystown, an Afro fruit seller, Rastaman, aware of the racial bias in micro lending programs, stated,

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IPED is der people, if yuh coolie (East Indian) you get bigga loan and easy [. . .] Blackmon (Black person) gets pushed round [in the bank]” (Translation: IPED is made up of Indians and it is an Indian- run bank. If you are of Indo-Guyanese descent, you can easily qualify for larger sized loans. An Afro-Guyanese loan applicant is not assisted by people at the bank and they get re-directed for loan support.) (Interview, 20 April 2010).

Rastaman Franco’s words reveal that Black hucksters perceive that local banks are biased against them and favour Indians. In fact, most stakeholders (82%, n = 41) interviewed argued that micro bankers, many of whom are Indian, are limited in their capacity to stay neutral because they cannot “go against the grain”: that is, they must support the Indian policies that exclude Afro-Guyanese (Anonymous Interview, 29 April 2010; Ramharack 2005).

This ingrained cultural prejudice of Indian Guyanese to support their own kind makes

Afro-Guyanese stakeholders skeptical of micro bankers who claim to help empower the poor—because to do so would mean they’re going against a racialized policy that excludes

Afros. This policy runs against the original intention of microfinance, which is to create inclusive finance. Most hucksters, 90% (n = 26 out of 29), who are mainly Afros/Mixed-race with Black (and a few poor Indos), believed that indigenous banks led by Indo-Guyanese prefer Indian clients (Fieldwork, March, April and May 2010; Focus Group with hucksters,

28 April 2010). Afro hucksters referred to these banks as being “Indianized.” As I demonstrate in the discussion below, race discrimination limits Black people’s access to microfinance.

The Guyanese micro lending sector is quite small (see Table 4.1), and Indo-

Guyanese, as an ethnic group, dominate as staff in these organizations (see Table 4.2).

During my field research, it was noticeable when I was waiting in banks that the majority of

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staff were Indian Guyanese. My findings reveal that most lenders are well-educated, relatively young males with an average age of 45 years, and most (73%, n = 8). I met 11 senior decision-makers at each of the banks that have micro/small financing, and I also interviewed 39 stakeholders to triangulate these findings. I analyzed the ethnicity/race of micro bankers in four commercial banks and three non-bank institutions that specialize in microfinance. Given that race dominates political discourses in Guyana, then, analyzing the race of the micro lenders is important to understanding why Afro-Guyanese feel excluded.

Table 4.2 Ethnic Group of Microfinance Managers (n = 11) Ethnic Group Number Percent

Afro 2 18%

Mixed-race 2 18%

Chinese 2 18%

East Indian/Indo 5 45%

Males 8 73%

Such perspectives are particularly relevant in understanding hucksters’ access to micro-credit since, as shown earlier in Table 4.2 (above), only 2 of the 11 managers interviewed were Afro-Guyanese: 5 of the 11 micro lenders were Indo-Guyanese, and 9 in total were non-Blacks (5 Indos, 2 Chinese, 2 mixed race). Sixty percent (n = 30) of the stakeholders interviewed (of various racial backgrounds) said that microfinance lenders are focused solely on profits, and Indians who run these institutions view Indo clients as able to repay loans (Scott Interview, 13 May 2010; Benschop Interview, 7 May 2010; Beaton

Interview, 30 April 2010). A senior Indian manager was of the opinion that Indos had a moral pressure to repay loans (though there is no evidence to substantiate this point).

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The UNDP project Empretec is a leading micro and small business training organization and they focus on making training inclusive of marginalized business groups, namely Afro-Guyanese. Its manager, an Afro-Guyanese, confirmed that racism affects lending patterns and that microfinance leaders fail to address systemic discrimination

(Sempler Interview, 16 April 2010). For the most part, then, microfinance managers do not analyze the racial bias that limits the performance of Black entrepreneurs.

In this case study, most bankers 90% (n = 11) interviewed said they do not hire loan officers from the marginalized slum communities, but that they hire people based on credentials. The banking managers’ conviction that race and people’s location were not criteria for hiring was perplexing given that these two factors were important determinants in allocating micro loans. In Guyana, “normal” hiring practices—that is, those according to

Indo-Guyanese standards—focus entirely on education and are not appropriate to micro lenders’ unique mission of reaching marginalized people. In order to fulfill the original intention of microfinance, which is to ensure inclusiveness, it is essential to hire individuals who are Black or who understand the experience of those in the slums. Instead, “qualified”

Indian loan officers (not from the slums) are hired.

The type of clients accessing microfinance is affected by the racial staffing composition in micro loan programs. Afro-Guyanese are less likely to obtain loans because

Indian loans officers do not go to the slums. Thus, hiring the most technically qualified staff person does not produce a more equitable and inclusive policy. As demonstrated through the following words of an Indo-Guyanese lender: “A set of people [Afros] are not business- oriented by culture. And these people [Afros] have a ‘seize mentality’ [to take and never to

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tell a word, a code of silence] and you can never find them.” (Emphasis added) (Anonymous

Interview). Blatant comments such as these degrade Afro-Guyanese, and hucksters, as a result of such biases, view lenders as racially prejudiced in the allocation of micro-credit.

Similar to the Jamaican case, Indian lenders were not interested in working in the slums— such as Allbouystown, Buxton, or Tiger Bay—where many Black micro-entrepreneurs live.

Narratives against Afro-Guyanese Business People

Findings cannot pinpoint a particular discriminatory micro-lending policy resulting from racist views against Afro-Guyanese. Hence, proving racial bias is usually difficult to prove. However, the attitudes of senior management, which is dominated by people of Indo-

Guyanese background, reflect firmly entrenched racist ideas about Blacks. In this case, 72%

(n = 21) of hucksters interviewed, including poor Indians, said the persons most discriminated against were Afro-Guyanese. Blacks interviewed claim that the current political environment is dangerous for them because they are labelled as the opposition

(Pearson Interview, 3 May 2010; Gibson 2005). The stereotypical views that Indo-Guyanese hold of Blacks as bad business people are common in the banking sector, and the following viewpoint is typical:

Some people [Indos] are more prone to business…they have a natural talent for business. A large part of it is cultural [being East Indian]. Some Blackmon [Afro-Guyanese] don’t want to be rich; they are not dissatisfied with how they are [insinuating low level lifestyle]. You give them a leg up and they shrug their shoulders—a lot of them [Afro-Guyanese] don’t want to get out of the barrel. (Managing Director of an unnamed bank, May 2010).

Ghetto areas, such as Allbouystown or Tiger Bay, contain many African Guyanese engaged in huckstering. These slum communities are often labelled as dangerous because the

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Blacks living there are viewed as “crooks” and “thieves” (Gibson 2005, 37).225 According to those people I interviewed, most Afro-Guyanese are turned down by Indian bank managers for a loan because of race (Bristol Interview, 4 May 2010; Beaton Interview, 30 April 2010;

Philips Interview, 30 April 2010). Comments such as the following indicate anti-Afro sentiment among members of the Indian political elite:

I worked with Blackman [Afro-Guyanese] for fifty years they have a problem, oh yeah … They [Afro-Guyanese] are difficult [. . .] still think slavery affects them [points to her head/brain making a crazy sign gesture]. I consider myself Black but I am also mixed with Indian and Portugee (Portuguese) which may explain why I don’t think like them [Afro-Guyanese]. (Emphasis added) (Anonymous Interview, 21 April 2010).

Cultural narratives in society downgrade and humiliate Blacks. It was hard to find an

Indian banker who sympathized with the biased lending practices against Blacks.

Nevertheless, Indian microfinance managers interviewed claimed that they do not see race as a factor that reduced borrowing opportunities for Afro-Guyanese. Simply put, they define

Afros as inherently incapable of sound business practice and void of moral character (e.g., honesty, willingness to repay). Indian bankers are able to use credit language and practice to persist in their biased lending practices because they argue that microfinance policies were not created to assist Afros living in an oppressive environment:

Race is a problem but microfinance practitioners will not discuss it. In my program, people who do not repay are always them (Afros). This is confidential [information] and I ask that you do not use my name or quote me [. . .] between you and me [referring to me as a person of (partial) Indo- Guyanese descent], it is true they [Afro-Guyanese] don’t repay [micro loans]. No one will say this to you as I have. (Anonymous senior-level micro banker, Interview, date withheld).

225 Residents from Tiger Bay are being relocated as part of a state plan to revitalize the businesses in the downtown core areas and housing schemes, such as Para Faite Harmony and Diamond.

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Racial bias are thus embedded in the everyday operations of microfinance programs.

Most bankers interviewed (7 out of 11) admitted to me that race is a problem, but a

“problem” in the sense that Black borrowers were less likely to repay. A senior Indian banker justified their exclusionary practice: “I see the people who don’t repay [loan defaults] and they were almost always a Blackman (this term refers to women and men).226 They [Afro-

Guyanese] don’t have an honest culture [. . .] they want money but they don’t feel to repay

[loans] like wi Indians. I need [Afro-Guyanese to repay] my money but they don’t pay me back” (Anonymous Male Banker, Interview, date withheld).

It is clear that Indo-Guyanese lenders do not see Blacks as trustworthy customers able to honour a debt and repay accordingly. However, none of the lenders who made such claims could provide me with evidence, despite requests for this information. Afro-Guyanese interviewees branded banks such as the Bank of Baroda, Demerara Bank, or SBDT as

“Indian” because the majority of the micro lenders are of an Indian background (Field work

April and May 2010). My research thus shows that persons of African heritage are disadvantaged as microfinance clients because of their race.

Negative narratives undermine the business acumen of Afro-Guyanese, and biased staff hiring makes it hard for other perspectives to counter the institutional bias. At the same time, a different set of problems arises for Afro bank managers trying to carry out their responsibilities with mostly Indian clients, as they face physical risk from Indian clients.

Racism affect the collection process of loans because Indian clients harass Black staff

226 Term refers to men and women of African-Guyanese descent, and the term appears to be racist, but was widely used.

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persons, and as a result managers are reluctant to hire Black staff even when they are qualified because of this issue.

A senior manager, for example, reported that he had to transfer out a Black male loan officer who was told by Indian clients, “[…expletive...] We fix your boat [drown/kill you] next time you Blackman (Afro) cross over” (Anonymous Interview, 10 April 2010). One

Afro-Guyanese bank manager recalled an experience of being harassed by Indian clients on a site visit: “They cussed me and [the clients asked] asked “Why is dis Blackman [Afro-

Guyanese] here [in their community]? (Moore Interview, 22 April 2010).” Yet a mixed-race banker claimed she never had a bad experience with East Indian clients (Yang Interview, 22

April 2010).227 Programs that focus on Indian clients contribute to fewer Afro-Guyanese staff hirings in banks and this reduces outreach to Blacks because the front-line loan officers are hired to target Indian clients.

Afro Borrowers’ Coping and Resilient Attitudes

Blacks I interviewed recognize that there is racism in microfinance. Given the racially polarized banking environment, all hucksters (n = 29) identified banks with one of the two dominant racial groups. Afro-Guyanese and dougla hucksters (n = 21 out of 29) have difficulty accessing loans from banks. As a consequence, as revealed by this research, these hucksters preferred commercial lenders to the specialized microfinance organizations.

Despite the fact that during the colonial era commercial banks excluded Afro and Indo clients, certain foreign-owned commercial banks, such as Canada’s Bank of Nova Scotia and

227 This would seem to contradict Gibson (2005, 69), who argues that persons of mixed-race background, dougla, are not accepted by Indos, viewed as “half-caste” or “impure,” while they are accepted by Afro- Guyanese.

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Republic Bank of Trinidad and Tobago (RBTT) are the preferred choice of hucksters. banks as “neutral” and non-racist, unlike the indigenous Indian-owned banks (Interview, 13 May

2010).228 Hucksters referred to Demerara Bank, owned by Yesu Persaud, as an “Indian man’s bank.” They see India’s Baroda Bank, though international, as assisting only Indo-

Guyanese. Hucksters were convinced that Scotia Bank and RBTT supported their needs better than locally owned banks—as UG’s Scott clarifies, “International banks like Scotia

Bank treat Blacks better.229 Although I was unable to collect data on the lending practices of international banks, I can confirm that the staff at foreign banks such as Bank of Nova Scotia and RBTT was far more diverse (Field visit, April 2010).

Table 4.3 Perceived Racial Identities of the Main Banks by Hucksters (2010)

Bank Name Race

Guyana Bank for Trade and Industry (GBTI) Indo

Republic Bank None (neutral)

Scotia Bank Guyana None (neutral)

Demerara Bank Indo

Citizens Bank Portuguese

IPED Indo

DLFSA Microfin Afro

SBDT Indo

Bank of Baroda Indo

228 Both of these international banks are led by non-Indo-Guyanese: Amanda St. Aubyn (mixed-race) and John N. Alves (Portuguese descent). 229 During this fieldwork, I could not secure additional proof that Bank of Nova Scotia and RBTT treat Afros better than local banks.

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Canada’s Bank of Nova Scotia earned a positive reputation through its micro loans to

Black communities. In 1993, Scotia Bank piloted a microfinance program called “Scotia

Enterprises” modelled after Grameen’s group. It reached 2,000 Afro clients in Kitty

(Georgetown), Maihcony (West Coast Demerara), and East Bank, and it is my assessment that this program, lending mainly to Black clients, is the reason Afro-Guyanese see Scotia

Bank as supportive (Currie Interview, 3 May 2010). On the other hand, in June 2010, the

GBTI, led by mixed-race CEO John Tracey, signed a partnership with the regime of then- president Jagdeo to carry out the microfinance program, Women of Worth (WOW), but citizens viewed this program as race-based patronage for Indian women, with a token inclusion of Black single mothers (Anonymous Email Discussions, 23–26 November 2010).

Exclusion of Afro-Guyanese from Microfinance

I selected the slum of Allbouystown for this study because it is a microcosm of the country’s pluralist society. Some of the poorest people in Guyana live in Allbouystown, which has a population of 4,883. In a 2002 census, less than a third of (28%) the population

(1,384 people) had attended school (Bureau of Statistics’ Census 2002).230 Civil society is weak in the community because state organs that fund Community Development Councils

(CDCs) and Neighborhood Democratic Councils (NDCs)—locally based groups made up of community leaders who represent the larger community—subvert local leadership by funding elders who adhere to party politics. Little scholarly or policy information is available about these bodies. Despite my efforts to find out more about the CDCs and NDCs, I could only discover that state-run Constituency Development Funds (CDFs) were provided to these two

230 According to the Bureau of Statistics, 2002, Allbouystown is village number 123 in Region 4 .

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groups, and that CDCs and NDCs are made up of party activists or local leaders who will support the party platform.

At the time of this fieldwork, campaigning and funding of political activists were in high gear for the 2011 election. The CDF allocated funds to CDCs and NDCs (of an undisclosed amount) to destabilize and eliminate local opposition (Anonymous Interview, 23

April 2010). Long-time politician of the PPP, Philomena “Fireball” Sahoye Shury, who is in charge of urban renewal in areas where large numbers of Afro-Guyanese live, is skeptical about economic development in these communities (Interviews, 21 April and 4 May 2010).

The claim by critics that CDFs are used to depoliticize opposition groups (Anonymous

Interview, 30 April 2010) was echoed in interviews with Albouystown residents and leaders, who stated that the state agency provided support for certain local persons to contain political opposition. This approach exacerbates conflicts within the community (Anonymous

Interview, 23 April 2010).

My small sample of hucksters in Table 4.4, below, is more or less representative of the slum of Allbouystown, which is made up mainly of Afro-Guyanese, with a minority of

Indo-Guyanese. I interviewed 29 hucksters from Allbouystown, of whom 55% (n = 16) were

Afros and 41% (n = 12) were female (see Table 4.4).231 Most hucksters, including Indos, said racial politics (bias in favour of Indians) was a problem.232 Table 4.4 gives a breakdown of the race of the hucksters I interviewed in Allbouystown.

231 Interviews do not include those I had with business persons in Tiger Bay (another slum in Georgetown), where I met with market vendors. 232 On the television program Spotlight, Rajendra Bisessar finds that in poor communities, Blacks and Indians have had to stand together as political elites push forward the race politics for their own interests. 9 May 2010.

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Table 4.4 Gender and Racial Breakdown of Hucksters Interviewed Who Applied for loans

Ethnicity No. Total % of the Sample

Total Interviews (all hucksters) 29

Indo-Guyanese 9 31%

Indo women 5 17%

Indo men 4 14%

Dougla (mixed) 4 14%

Dougla women 4

Afro-Guyanese 16 55%

Afro women 12 41%

Afro men 4 14%

Females 20 69%

Female-headed household 9 31%

Source: In-depth interviews and focus group with 29 hucksters in Allbouystown.

Black and dougla hucksters consider microfinance programs to be inherently biased against Blacks. Bucky, a mixed-raced, 21-year-old huckster of used clothing stated, “Most people [Indian-Guyanese] get through without a thrill [have no obstacles in microfinance] [. .

.] If he [his or her] hair [is] straight [reference to Indo-Guyanese]. It’s about race, and straight hair can help you” (Interview, 24 April 2010).

In the microfinance industry, managers define the Afro-Guyanese group as less likely to repay loans. In Allbouystown, the community’s diverse ethnic residents shared an understanding of class that crossed racial boundaries of Black, dougla, and Indian (Ceres

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Interview, 2 May 2010).233 Franco, a 49-year-old Rasta fruit seller, aptly explained,

"Government is racialized, and we 'ave to ignore it [...] they [Indian political elites] only separate the nations [different ethnic groups]" (Interview, 20 April 2010). Black, dougla, and

Indian slum dwellers stated that as a group in a marginalized area they are subject to “bad name calling” (Brother Interview, 28 April 2010; Zia Interview, 20 April 2010).

Allbouystown, mostly inhabited by Afro-Guyanese, is defined by its crime, poverty, and violence. Political elites also view it as an opposition stronghold and as a result, state resources are directed away from this community (Local researcher’s notes, 12 May 2010).

In a focus group, Rushal, a pourri (snack) vendor of Afro descent, argued, “Government only luk at big businessman, not wi [Afros]. Government want wi [Afros] t’ stay poor.” There is a strong belief that by keeping Afro-Guyanese poor, the PPP state can control the opposition

(Focus Group, 28 April 2010).

Although business people in Allbouystown were united as a group because of class and location, the hucksters I interviewed, including Indos, were conscious of the race-based privileges set aside for anyone but Afro-Guyanese. This state policy of favouring one ethnic group over another produced violence against Indos by Afros, particularly during election time (Focus Group, 28 April 2010). Hucksters made the point that the PPP state wants them to be in a position of need so as to control them (ibid). Since economic resources and welfare projects from the state do not reach Blacks, they turn to the informal sector in order to survive, usually selling imported items to make a living. Micro business people claimed to

233 UG’s Kadasi Ceres, Head of Government Department, explained that racial tension is less of an issue in Allbouystown because slum residents are stigmatized by the larger society that they bond with each other.

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earn gross sales of about USD $300 a month with about 25% in profits (Interviews with hucksters, April 2010). Most stakeholders interviewed (90%, n = 45 out of 50) said that

Black women were the breadwinners of the family and that as single mothers they had a hardest time accessing microfinance.234

Indo-Guyanese women married to Black men also had a hard time accessing micro loans, and their marital status did not seem to be an advantage in obtaining a loan (Focus group 28 April 2010). Off the record, a bank manager told me that his bank applies a

“married condition” to reduce repayment risks by allocating loans to couples rather than to a single woman.235 This married policy requirement (note this policy does not exist at the

Afro-led Microfin) favours Indians who are more likely to be married than poor Black women (Focus group 28 April 2010; Nettles 1995, 428). Hidden policies such as the

“married condition” in microfinance thus work against Blacks and inter-racial couples.

While Indian-run micro banks do not see Afro-Guyanese as credit worthy, Afro entrepreneurs play a vital role in selling goods from Indian businesses to the slums.

Hucksters also render a variety of services, such as hair-dressing, cosmetology, car repair, cleaning, running salt goods shops, and selling cooked meals and snacks such as pourri, potato balls, and poulari.236 The nine single mothers I interviewed were traders and the heads of their households (see Table 4.4) said they cannot access state services. These traders in

Stabroek “Big Market” or Pennington’s, where they bought goods from the Indian-run

234 Nettles (1995, 438) claims Black women are more likely to be on their own, than Indian women. 235 See Rahman (1999, 68) concerning use of a hidden transcript by Grameen Bank to exclude male clients. 236 Pourri and poulari are Indian vegetarian snacks widely eaten among all races in Guyana.

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wholesale shops on Regent Street. Based on an appraisal of these businesses, most hucksters

I interviewed should have easily qualified for a micro loan.

Most hucksters 83% (n = 25 of a total of 29 interviewed) and 97% (n = 15) of Afros interviewed could not get a loan (See tables 4.4 and 4.5). Black women said they cannot access credit because of their race (not gender).237 Rushal, an Afro single mother and baker, stated, “Microfinance for many is jus’ like lotto only rich people win [. . .] betta you na play”

(Interview, 28 April 2010). Table 4.5 illustrates that only five people had obtained micro loans and three (38%) were Indian males and only one (6%) was an Afro businesswoman.

Afro-Guyanese thus appear to have the hardest time getting a loan compared to Indian

Guyanese and mixed-race persons. It should be noted that the Guyana sample is too small to be statistically significant.

Table 4.5 Micro Loans by Race and Gender (2010)

% by Race of all those who % by Race of Total No. Received Loans Sample

Indo Male 3 38% 10%

Dougla (mixed race) Female 1 25% 3%

Afro Female 1 6% 3%

Total Loans Accessed 5 17%

Hucksters with no Loans 25 83%

Informal Banks and Afro-Guyanese Dignity

Guyana has a long history of informal mobilization of money. In slave times, as mentioned in an earlier section, Africans brought with them West African traditions of susus

237 I also found this to be true of an Indo family living in Tiger Bay, another urban slum.

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(group saving plans), where they mobilized savings on a weekly basis (St. Pierre 1999, 69;

Mintz 1955). Since slave times, then, Afro-Guyanese (and some Indos) have organized financial groups. These traditions have led Black hucksters to use informal credit facilities in response to their exclusion from formal microfinance. Indeed, the political racial bias against

Afro-Guyanese of the last 20 years has reinforced the importance of informal banking systems for marginalized Black people. However, in spite of the entrenched history of these informal banking systems, “Box hand,” a phenomenon widely used among the poor since slavery, has received little scholarly attention (Greaves Interview, 17 November 2008).

In a small city like Georgetown all of the specialized micro lenders are in close proximity; yet, hucksters surprisingly turn to Box hand or Penny Banks to meet their livelihood needs. Racial exclusion from MFIs and feelings of being alienated by the Indian- run micro banks have led entrepreneurs to hide money at home, in old chip tins or under beds

(Fieldwork, April and May 2010). Afro business people, especially single mothers, have no alternative but to use informal banks such as Box hand or Penny Bank (St. Pierre 1999, 69;

Besson 1996, 264). These informal banks serve not only as a necessity for survival, but also as a way to preserve their dignity when the Indian politicians deny them fair access to economic resources.

Box hand and Penny Bank are very much part of the local financing system, and most of the hucksters interviewed (95%, n = 27) highly value these banking systems. People told me that Box hand and Penny Bank restores personal pride to business persons excluded from microfinance. Nee, a 28-year-old mixed-race female who owns a hair and nail salon, stated,

"Box help[ed] me start my business [. . .] [It has been] passed down from generation to

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generation, from grandmother's time and it [Box hand] helps me” (Nee Interview, 26 April

2010). In spite of the local importance of Box hand and Penny Bank, however, the central role informal banks play in micro business was unknown to the pro-poor financial experts to whom I spoke (Lam Interview, 4 May 2010; Moore Interview, 22 April 2010).

Box hand is a daily or weekly plan where the “Boxer” or “Box lady” (person in charge), usually a Black woman, manages the fund for free or charges a flat fee each cycle, usually 6 to 12 weeks (Fieldwork interviews in 2010; Besson 1996, 266). Acceptance by the group is based on the person’s capacity to repay and not on their race or colour. In fact, Box hand members are open about their difficulty in getting loans from the banks, and the Box lady or Boxer makes efforts to include them. Box hand gives poor Afro business people a safe place to lodge their savings. More importantly, it restores their deignity as a people because it provides them access to money when they need it. Penny bank is almost always managed through a formal entity like a church, where residents deposit a fixed weekly payment into a group savings account (usually Wednesdays) and withdraw the entire sum in

December (Fieldwork 2010).

Conclusion

Poor economic growth and biased state politics have forced many poor people (Black and Indian alike) living in marginalized urban areas to become entrepreneurial. Under an

Indian-run state (1992-present), East Indians are more likely to access a micro loan (and to obtain larger loans) to develop their micro enterprises than are Afros (Philips n.d.). Racial bias in microfinance stems from the political history between the two ethnic groups that has been reinforced by political elites.

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For the most part, Indian Guyanese microfinance managers refuse to consciously recognize that racism unfairly affects business and the allocation of resources. Indian- dominated MFIs are, however, consciously focused on “help my own kind.” Because institutions led by Indos prefer Indian clients, they are obliged to hire Indo-Guyanese. A lack of Afro-Guyanese at senior management levels decreases the likelihood that Blacks will be hired on the frontline to target Black clients.

A pervasive cultural narrative denigrates Afro-Guyanese entrepreneurialism, and

Indian managers do not construct programs to resist this racialized discourse. Rather, Indian managers participate in stereotypes that marginalize Afro-Guyanese. The married condition policy in certain microfinance organizations is an example of systemic discrimination against

Blacks, who are penalized for not adhering to an Indian cultural norm. Prejudice (not evidence) explains why micro loans, especially large ones, do not go to Afro-Guyanese.

Hearsay and people’s own biases corrupt the original intention of microfinance, which is to reach those persons marginalized by greater society from accessing financial services.

In the microfinance universe, staff and managers are specifically hired to ensure that their products reach excluded communities. In Guyana this is not the case with MFIs. An international expert explained, “In Kenya, a leading microfinance bank set up operations inside of a Nairobi slum to reach poor business people, and hired staff persons from the community” (Campion, 10 December 2009 survey reply). Yet, in countries where identity divides social groups, micro bankers in Guyana and Jamaica are guided by their own inherent biases, such as race or class respectively, and do not hire frontline staff persons drawn from

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the slum communities with the same ethnic background to counteract perceived (or real) discriminatory practices.

Micro-credit is viewed by local managers as a tool to assist excluded business people; yet lending in the Guyana is exclusionary. Indo-Guyanese microfinance managers are aware of the race discrimination against Afro-Guyanese but feel it is justified because of the many non-entrepreneurial characteristics they attribute to Blacks and they view Blacks as inferior in business. Indian discourses antagonize racial tensions with Afro-Guyanese, as the accepted cultural narratives discriminate against one group of people because of their race and ethnicity. Afro-Guyanese are made to feel inferior because of their race, and microfinance does not aid this group of people. Guyanese Indians who lead microfinance organizations operate within the larger Indo-centric context that condones negative comments against Afro-

Guyanese to deny them equal access to economic resources.

Chapter 5 The Haiti Case: Inclusive Home-Grown Microfinance

Introduction

Ever since Haiti’s fight for independence in 1804, state leaders have oppressed its poorest people. Haitian political scientist Robert Fatton (2002; 2007) has studied the country’s authoritarian regimes led by elites noirs (Black elites) and mulatres (mixed-race) with financial backing by the blancs (local whites) against the moun andeyo (excluded Black masses). Haitian scholar Saint-Gérard (2004, 84) also argues that over the years political elites have misused Black power ideology to victimize the poor Black masses (see chapter 2).

Bad governance and corrupt political and business elites in Port-au-Prince have left millions of people disenfranchised. Forty per cent of the population lives in Port-au-Prince and the metropolitan areas. Forty per cent of the population lives in Port-au-Prince and the metropolitan areas and they have been moving to the bidonvilles (shantytowns) since the

1950s.

Generations born and raised in these quartiers précaires (slums) have retained their

African tradition of kombit (local organizing). The Kreyol word kombit embodies African traditions to regroup people with very little means, and these gwoupmans (Kreyol word for collective groups) have inspired the development of cooperatives and the caisses populaires

(credit unions). Traditions of gwoupmans (Kreyol word for group collectives) and sols

(informal banks) were ways for excluded peoples to organize.238 In spite of an oppressive and undemocratic state, poor Haitians have created their own civil society groups and caisses

238 See Fatton (2002, 52; 2007, 221) for definitions of Kreyol terms: kombit (working together) and gwoupmans (collective groups).

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populaires (credit union) movements—a testimony to the democratic spirit of the uneducated masses (Fatton 2007, 221; Montasse 1983).

In post-earthquake Haiti, the disaster has exposed the deepening vulnerability and poverty between the “haves” and “have-nots” and women disproportionately less better off.

Microfinance appears to be the exceptional development intervention that seems to be assisting these poorest citizens (Zanotti 2010). Local micro bankers interviewed have argued that democracy in Haiti will not be lasting without economic democracy for the Black masses

(Several Interviews, October 2010). As a result, Haitian microfinance lenders have taken on a two-fold mission: to economically support business people and to socially empower them.

These lenders hire socially conscious people who are committed to making microfinance a tool to transform the lives of the marginalized traders in the bidonvilles.

Haitian micro-credit is an urban phenomenon–its main criticism is that it reaches only a small fraction of the 60% of the population who live in rural areas (Clermont and Fleurstin,

Colloque sur la Microfinance, 28–29 September 2010; USAID 2008; Shamsie 2006, 45).239

For most part, the country’s banks have ignored the masses and catered to the business elites.

Yet two million ti machanns, many of whom have come from the countryside require loans.

And, the country’s micro lenders reach at least 25% (500, 000 people) of the demand

239After the earthquake, many displaced people have moved back to the provinces with incentives to do so and others are bring forced to leave the town squares and to move outside of the city (Amnesty Annual Report Haiti 2012; Fieldwork, 2011).

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(Extantus Interview, 14 October 2010; USAID 2008).240 Haiti’s microfinance reach of 25% is much higher than 10% in Jamaica or Guyana, showing that lenders are focused on reaching eligible entrepreneurs. Understandably, the January 2010 earthquake resulted in losses of

USD $60 million and a 52% drop in clients, gravely affecting 40,000 staff and clients

(Vertue USAID Interview, 13 October 2010; Ministère de la Économie, Colloque sur la

Microfinance, 28 September 2010; François Colloque sur la Microfinance, 28 September

2010). Four caisses populaires went bankrupt after the earthquake (Extantus Interview, 14

October 2010; St. Gilles Interview, 7 October 2010; Turcotte Interview, 7 October 2010).

Despite these natural adversities, which exist alongside chronic political instability, Haitian microfinance is home-grown and local people, managers, and clients draw on historical references to influence modern-day microfinance programs.

Socially Conscious Lenders

Big businesses in Haiti are controlled by a few families (such as the Boulos,

Deschamps, and Boujos), who have inherited family businesses. An example is Oliver

Barrau, who relocated back to Haiti from the U.S. to run his family’s company, Alternative

Insurance Company (AIC). His firm offers micro insurance products to the poor masses through Fonkoze, an MFI specialized in group lending. Whitened Haitians such as Barrau see micro entrepreneurs not only as a business opportunity but that these financial services can truly improve their livelihoods. For most Haitians, education has been the vehicle for upward social mobility (Mangones Interview, 11 October 2010; St. Gilles Interview, 7 October 2010;

240 KNFP (2008) reports that micro loans reach 300,000 people, and a USAID report (2008) finds that 245,000 (of which 77% are women) access microfinance. Sony Extantus, representing the caisses populaires, finds that these reports underestimate the number of clients reached by member-owned institutions.

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Anonymous Interview, 4 October 2010; Louis Herns Marcelin Interview, April 2008).

Hence, many commercial banking managers and technical staff are Black (Raymond

Interview, 14 October 2010; Boisson Interview, 11 October 2010; François Interview, 7

October 2010). Haiti’s home-grown microfinance sector is staffed by bankers who have lived experience of the people with whom they work. In addition, these local leaders possess a race and class-consciousness that reveals they understand the experience of the ti machanns.241

Lenders in touch with the people understand that collective systems are home-grown and the urban poor gravitate to these familiar systems.

Extreme poverty, undemocratic regimes, and intense class and race conflicts make the

Haitian case stand out from the Jamaica and Guyana cases. In spite of these social and political challenges, Haitian microfinance managers have managed to resist social biases in the allocation of very small loans to the poor. Many micro lenders are only two generations removed from their clientele, and they develop microfinance programs that fit with the social context of the poor masses. Joseph Similien, who leads Micro Crédit National (MCN) is originally from Carrefour, a poor part of town. He knows firsthand the struggle of the poor.

Sinior Raymond of the Association pour la Coopération avec la Microentreprise (ACME) was raised in Grand’Anse and often went to school with only coffee in his stomach. Both men are examples of Haitians who come from modest economic backgrounds but, through education and self-determination, were able to rise to run microfinance institutions

(Discussions with Similien and Raymond, October 2011).

241 Additional interviews with senior staff persons include Joseph Similien, CEO of Micro Credit National, and Evans Baptiste, Manager of Sogesol—two dark-skinned Haitians (October 2011).

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During my fieldwork, I observed micro lenders, including whitened local elites and foreigners, embrace a political philosophy to fit the reality of their very poor clients. In the locally run microfinance organizations, staff persons speak Kreyol—the national language spoken by the poor—and signs are often in Kreyol (Palme Interview, 30 September 2010;

Field visits, 2008 and 2010). At the leading microfinance organization Fonkoze, for example, staff persons speak Kreyol in their offices as a political statement of their support for the pro- poor stand (St. Giles Interview, 7 October 2010) and policy manuals are written in Kreyol

(Jean-Louis Interview, 3 October 2010; Assignment, April 2008). The American director at

Fonkoze also opted to learn Kreyol as opposed to French in order to relate to her clients, the language of ordinary people (Hastings Interview, 4 October 2010).242

African Legacy of Collective Organizing

Rural Haitians excluded from banking in towns and cities have created their own largely informal banking systems. The country’s legacy of cooperatives, dating back to 1937, provides a way for the poor to come together and save money.243 The informal institutions known locally as sols, or tontines in Francophone Africa, reach millions (Fieldwork, August–

October 2011; Calpas Interview, 30 September 2010; Mystal Interview, 4 October 2010).244

Sols are the most important institutions in providing microfinance to poor Haitians, and a number of different types of these organizations exist, all informal groups locally run by

242 I carried out professional microfinance assignments to Haiti in 2008 and in 2011 and witnessed first-hand microfinance staff speaking Kreyol to clients. 243 Fatton (2002, 52) suggests that cooperative work, through trade unions and churches, inspires new democratic tendencies. 244 Sometimes I shall use the term “sols” when referring to the informal banks.

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women, that allow members to save and borrow money (Jean-Louis Interview, 3 October

2010; Turcotte Interview, 7 October 2010; UNCDF 2003).

In this comparative project, the Haiti case is hopeful. I argue that microfinance operating through the caisses populaires and sols is what makes Haiti’s micro-credit sector inclusive. These systems, inspired by African systems of collectivity known in Kreyol as kombit, have persisted through Haitian history under various repressive states. Micro lenders who run the caisses populaires are not class or race biased; they understand how to make microfinance assist the marginalized poor in a society segregated by class and race. In fact,

Black microfinance lenders, as well as whitened local elites and foreigners, have a socially conscious philosophy of using microfinance as a vehicle to ensure economic democracy

(defined to me as closing the widening economic gap between rich and the moun andeyo) for the masses. In doing this, they take personal risks. The ti machanns recognize these efforts and as a result trust these credit programs.

Most Haitians who cannot qualify for micro loans turn to grass roots cooperative- based organizations (such as caisses populaires) or pool their money through informal banking groups (like sol, also known as tontines) (Extantus Interview, 14 October 2010;

Julien Interview, 12 October 2010; Fleurstin Interview, 6 October 2010; Fatton 2002; Reinert and Voss 1997). Other ways for poor business people to access money when they cannot get a micro loan (or at the loan size they need) include bric-a-brac, plan, and maison d’affaires.

In this chapter, I first discuss the importance of collective and member-owned institutions such as the caisses populaires, which fit with the social context and offer appropriate financial services to the masses. Second, I describe the background of the

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microfinance environment in which the caisses populaires and informal banks dominate.

Third, I provide the study’s findings and viewpoints of the ti machanns in the Bon Repos focus groups (n = 14) and triangulate those view with stakeholder interviews (n = 48). Like the Guyanese sample, this is a relatively small sample (n = 62).245 I argue that Haitian microfinance lenders do not exhibit the class and race bias witnessed in the Jamaica and

Guyana cases because people running programs are socially conscious of local politics and apt for a daring political rhetoric and they incorporate indigenous systems in the development of financial services for the poor masses.

Caisses Populaires: Building on Local Culture and Traditions

Haiti’s financial world is indebted to caisses populaires and cooperatives246 for developing inclusive financing that reaches the economically active masses.247 In the early years, financing was exclusively for the whitened rich elites and elites noirs and ignored the moun andeyo, poor Haitians. Entrepreneurially active poor Haitians have developed their own banking systems based on cooperatives and caisses populaires to meet their financial obligations. Out of respect (for people’s demand for member-owned institutions (MOIs)), the state has elevated cooperative status into the nation’s constitution (in Preamble 4) and Haiti is declared a cooperative republic (Chery and Julien Interviews, 12 October 2010).

245 I interviewed additional microfinance experts and 31 micro-entrepreneurs from Cayes in October 2011. Ideas and comments from these extra interviews reinforce findings from this smaller sample. 246 As noted in chapter 1, all caisses populaires are focused on financial services and have the legal right to collect deposits and make loans. Only some cooperatives are authorized to carry out financial services (many cannot legally collect savings). In addition, many cooperatives also focus on non-financial services and activities, such as housing and education (Emails 3 and 4 August 2011 from Maxon Julien of l’Université d’Quisqueya and Marie Marcelle St. Gilles, CEO of KOTELAM). 247 I recognize that this view may be contested by commercial (non-cooperative) lenders.

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Haiti’s cooperative development, unlike Guyana’s, was successful in terms of reaching to a cross-section of citizens especially those who are low income. Although

President Forbes Burnham’s elite-led state policy renamed the country the Cooperative

Republic of Guyana (see chapter 2), top-down control and excessive political interference limited cooperative development in that country. Instead, the Haitian cooperative movement came out of the grassroots movement, bottom-up, and in certain cases the church was also helpful in mobilizing these cooperatives. The moun andeyo were the ones to bring over

African systems of tontines and sol which would later influence the creation of the caisses populaires. Political elites and educated groups recognized the important role of collective groups and cooperatives in the country’s development, culture and history. The decision to enshrine Haiti as a cooperative republic in the constitution thus emerged as a consequence of a people’s movement (ibid). In interviews, Haitian lenders, including commercial bankers, recognize the vital role MOIs have played in the country’s history (Boisson Interview, 11

October 2010; Chery Interview, 6 October 2010; Clermont Interview, 29 September 2010).

Pooling money is a long-standing cultural tradition that was carried on by slaves when they arrived in Haiti in the 18th century (see chapter 2). In French-speaking West

Africa, Benin (formerly Dahomey) and Togo are countries which Haitians claim as their ancestral lands. The Beninese and Togolese people have strong traditions of tontines.248 The rise of cooperatives and later caisses populaires, particularly those with a Christian focus and engaged in community development, have been lasting because of their fit into the local

248 I lived in Benin as an American Peace Corps volunteer from 1997 to 1999 and worked with tontines. Mayoux (2001, 443) states that tontines in Cameroun predate colonization.

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culture (Turcotte Interview, 7 October 2010). As one ti machanns explained to me, “No one has to tell me what caisses populaires are, I know them from long time ago … before I was even here” (Miveline, Focus Group, Bon Repos, 9 October 2010). This statement by

“Miveline” speaks to the institutional memory “second nature” that poor business people have when it comes to credit unions. They grow up with them and are accustomed to the use of collective banking systems because poor families have been using caisses for generations.

Inaction and lip-service paid by political leaders to the needs of poor entrepreneurs has increased the necessity for informal banking systems which have tapped African traditions of kombit (working together) to meet their livelihood needs. Kombit is a testimony to the spirit of grassroots democracy. It can be argued that these informal gwoupmans and sols led to the creation of cooperatives and caisses populaires. Haitian financial cooperatives were first founded in 1937 in Port-a-Piment du Nord, near Gonaïves (Montasse 1983, 18).

Later caisses populaires opened in La Valée (Jacmel) in 1946 and in Cavaillon (South) and

Sainte Anne in Port-au-Prince in 1951 (François, 28 September 2010) in the times of repressive politics.

People’s organizing in gwoupmans persevered under the oppressive U.S. occupation

(1915–1934). During the violent Duvalier dictatorships (1957–1986) of François “Papa Doc” and Jean-Claude “Baby Doc Duvalier, the masses relied on cooperatives and caisses populaires to meet their needs.”249 Even through the brutal authoritarian regimes of the

Duvaliers’ where they made it illegal for citizens to form associations people continued to do

249 Greene’s book The Comedians (1965) provides insight into the horrors of the Tontons Macoutes terror under François Duvalier. See Marquis (2007), which focuses on the Papa Doc regime.

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so (Maguire 1997, 160). In fact, Haitian cooperative scholar Emmanuel Montasse (1983, 29) found, that between the periods of 1951 to 1983 there was a growth of credit unions because during these years people were deprived of basic services.

Caisses populaires were the pioneers of locally owned micro lending programs that give excluded persons access to financial services (Montasse 1983, 18). As far back as 1953, the Conseil National des Cooperatives (CNC) supervised cooperatives (Young and Mitten

2000, 2). As of November 2011, no parallel legal structure existed for non-legalized microfinance organizations (Raymond Interview, 14 October 2010; Calixte Interview, 6

October 2010; Marcelin Interview, 5 October 2010; Senior government official Interview, 4

October 2010; Discussions at the Colloque sur la Microfinance, 28 September 2010).250

Historical accounts indicate that member-owned institutions were making micro loans to the rural poor long before microfinance was revolutionized as a development tool. The importance of the caisses populaires to people is reflected in the following quotation, taken from an anonymous interview:

“Caisses populaires belong to the Haiti people. These caisses are accessible, grassroots and embedded into people’s hearts, because they focus on people’s community, collectivity, and helping each other out which are very important traits for us [Haitians] especially those of us who are poor” (Anonymous Interview, 2 October 2010).

As this quotation notes (see above), Haitians (including micro lenders) recognize that caisses populaires have a vital place in society because this model accommodates African

250 Despite discussions, no state agency regulates NGOs engaged in micro lending (Fieldwork, October 2011; Governor of Central Bank, Colloque sur la Microfinance, 28 September 2010).

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traditions that most Haitians hold dear. While it is true that significant donor investments have assisted the microfinance sector, the historical development of the caisses populaires and the ingenuity of the Black Haitians working in them have created a model that is reflective of the society. Managers in the caisses populaires have shielded lending from any partisan, race, and class politics (Raymond Discussion 23 August 2011; Turcotte Interview, 7

October 2010; Chery Interview, 6 October 2010; François Interview, 28 September 2010).251

In fact, microfinance managers across the sector, cooperatives and non-cooperatives, are committed to economic democracy. Microfinance is viewed as a tool that is used to correct the market failures and to ensure that poor business people have access to finance (Calixte

Interview, 6 October 2010; Marcelin Interview, 5 October 2010; Hastings, Interview 4

October 2010; Clermont Interview, 29 September 2010).252

The years of the Jean-Bertrand Aristide administration proved difficult for micro lending. In 1991, President Aristide complied with American reform policy demands for economic liberalization, deregulation, and less state oversight during his first term in office

(see chapter 2).253 Neoliberal reforms meant reduced social spending, which exacerbated the already tense political situation. The political environment was unstable, involving random murders and the absence of state authority. In 2000, the caisses populaires sector

251 Turcotte explained to me that NGO administration costs in microfinance averaged 39%, whereas, for the caisses populaires the average was 27%. 252 In Niger (West Africa), a sustainable village banking program managed by local people, Mata Masu Dubara (Women on the Move), was designed by a white, non-banker foreigner who wanted to create a financial service that would be lasting and appropriate for the Sahalian context (Grant and Allen 2001, 215). 253 The year 2000 was an election year, marking the end of Préval’s presidency (1996–2001), and the country returned Aristide to the presidency in 2001.

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experienced a setback of a corruption scandal.254 Unregistered credit union managers, offering high returns on deposits of 10% to 12% per month (thus called the “dix douze” crisis), absconded with USD $250 million dollars in people’s savings (Tucker and Tellis

2005, 118; UNCDF 2003, 154). Despite this horrific experience, the caisses populaires have grown and flourished. The 2000 scandal blemished the governance of certain caisses populaires; yet many Haitian people have confidence in and continue to do business with these lenders because of the historical and cultural connection.

This demand for caisses populaires systems signaled to the state that it needed to invest in projects to strengthen governance inside of the cooperatives and credit union system. Haiti’s government invited the Canadian International Development Agency’s

(CIDA) development partner, the Quebec-based credit union Développement International

Desjardins (DID) (which had a model similar to Haiti’s based on church, school and community) to strengthen the Haitian credit union sector and to create for it a regulatory framework (Turcotte Interview, 7 October 2010; Breton Interview, April 2008).255 Within several years of the scandal, the caisses populaires, through a DID-supported local network

Le Levier,256 provided technical support to more than 340,000 credit union members, of which 41% are women (Extantus Interview, 14 October 2010; Kerlouche and Joseph

254 Girard (2010, 196) notes that the scandal unfolded in 2002, but my fieldwork accounts find that it was in 2000 (under the Aristide regime). See more about the scandal and a reflection after one year: http://www.alterpresse.org/spip.php?article560 255 Member-owned institutions, credit unions, and cooperatives are regulated by Audit, Inspection et Formalité: Les federations de Caisses Populaires (10 July 2002). 256 Le Levier is a technical and financial federation to ensure financial norms and standards of the caisses populaires. Its partner, DID, is charged with developing Le Levier’s technical capacity. As of October 2010, Le Levier had 50 credit unions in its network. See Le Levier website: www.lelevier.ht

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2010).257 The caisses populaires were able to overcome the scandal because the people believe in these MOIs to meet their needs despite the weaknesses in the system.

In the section above, I described the historical evolution of the caisses populaires, which are culturally embedded in the Haitian way of life. In the next section, my overview of the microfinance sector emphasizes that Black Haitians (who come from the masses) have led financial development through a radical and socially conscious approach to ensure that loans reach poor citizens. Even though caisses populaires and sols dominate the micro lending arena (see Table 5.1 in the next section), the non-cooperative lenders have taken cues from them when making micro loans to ti machanns.258

Black Haitians: Leading Microfinance Development

For most of the country’s history, banks have ignored Black Haitians and catered to business interests of les blancs (whites) and mulatres (mixed-race) Haitians. As recently as the 1990s, the commercial banks in the country had fewer than 10,000 clients in a country with a population of millions. In 2010, two international banks in Haiti, Canada’s Scotia

Bank and America’s Citibank, reached 100,000 people or 1% of the population (Wells

2010).259

Financial reform started during the Aristide and Préval administrations in the 1990s

(see chapter 2). At that time, U.S. donors became interested in commercial banks

257 Donors like CIDA recognize the importance of caisses populaires and have awarded $20 million to DID to expand financing to agricultural finance through credit unions in the rural areas (Fieldwork, October 2011). 258 Kerlouche and Joseph (2010) find that there are 11 banks active in microfinance in Haiti. 259 See Wells, Jennifer. “Lovely’s Haiti: Small Loans, Big Trouble.” Toronto Star, 3 December 2010. Retrieved on 4 May 2011 at http://www.thestar.com/haiti/economic/article/901382--lovely-s-haiti-small-loans-big-trouble

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downscaling financial services to the poor and NGOs upscaling (formalizing) business services and microfinance (Discussions Colloque sur la Microfinance, 28 September 2010).

USAID and the World Bank also hired a mulatre, Pierre Marie Boisson, on behalf of the

Association des Professionnels de Banques (APB, Banking Professionals Association) to analyze downscaling 260 in commercial banks (Boisson Interview, 11 October 2010). Donors organized the first microfinance conference in 2002 to support the growth of non-cooperative micro lending institutions (UNCDF 2003, 91). With CIDA’s support to the credit unions,

USAID and the IDB were interested in the non-cooperative side of microfinance.261 Both halves of the microfinance sector credit unions and non-cooperative organizations are focused on the poor Haitian majority, particularly those in the bidonvilles.

Micro-credit outreach has increased in the last two decades because local commercial lenders, more diversified in staffing, understand that they need to reach the masses to grow.

Sergio Navagas, a senior microfinance expert in the Latin American and Caribbean region at the IDB, noted that “In many of the Caribbean islands, people (microfinance managers) often treat microfinance as a social project (charity) and not something that can be commercialized.

However, Haitian micro lenders differ from this norm” (Discussions Colloque sur la

Microfinance, 28 September 2010). Navagas’ comment also supports the argument that microfinance managers in Haiti diverge from the prejudiced mind-set of elites running micro

260 The term “downscaling” is used to refer to occasions when a commercial bank goes down market to reach poorer clients with products while the term “upscaling” refers to those situations where non-bank institutions (e.g. NGOs) formalize operations and transform into financial institutions.

261 USAID, through the private contractor Development Alternative Inc. (DAI), has managed a series of multi- year projects, such as Prêt, FINNET and MSME Haiti. In 2010, USAID and the Bill and Melinda Gates Foundation’s USD $22-million project, Hi-Five, focused on technology innovations in microfinance (Interview with Marie Vertue and Haelee Kim of USAID, 13 October 2010).

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loan programs in other parts of the Caribbean, such as Jamaica and Guyana, who are too removed either by class or race (or both) to relate to the people they serve. A deeply embedded distrust exists between lenders and poor borrowers in Jamaica and Guyana. In sharp contrast, Haitian micro lenders, including educated whitened elites, believe that poor business people are worthy investments, see micro-credit as profitable business, and use credit as a tool to build socially inclusive societies. Borrowers trust microfinance as an institution and they also value the work of the people working inside these institutions.

The Domination of Caisses Populaires and Informal Banks

Haiti’s microfinance sector has three sections: (1) caisses populaires and financial cooperatives, which are regulated by the state; (2) non-cooperatives (commercial banks,

NGOs); and (3) informal banks (Fils-Aimé Interview, 30 October 2010). The caisses populaires are governed by separate legislation from non-cooperatives.262 Of the non- cooperatives, only commercial banks are regulated by the Central Bank.263 Cooperative form of lending along with informal banks dominate in terms of outreach to clients.

In this section, I introduce non-cooperative lenders and highlight the fact that a number of these institutions have adapted to the local culture by introducing either group lending methodologies or informal-type products (such as “Mama Sol”) to connect with the micro entrepreneurs. Non-cooperative institutions have increased and some have adapted

262 State supervision is carried out by the Banque de la République d’Haïti (BRH) and the Ministère d’Economie et de la Finance (MEF) on commercial banks, their subsidiaries, and many cooperative and “caisses populaires.” Credit unions are also managed and supervised by the CNC and regulated by the federation, Le Levier. 263 Law 14 (Novembre 1980) of the Banque de la République d’Haïti (BRH) regulates all banks. See thesis titled “Impacts de la Microfinance sur l’emanicipation des femmes de la commune de Saint-Marc.” Joachim Kerlouche and Nancy Joseph. Quisqueya University, FSEA, June 2010.

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lending techniques reflective of the collective models. However, despite the number of non- cooperative lenders, a great many Haitians do banking at the caisses populaires or Sols, as noted in Table 5.1.

As noted in Table 5.1, the caisses populaires (regulated) and sols dominate the microfinance sector. Informal banks receive no outside institutional support, their activities are carried out informally, and they reach millions of poor Haitians. Caisses populaires, on the other hand, are assisted by various administrative groups, such as the Association

Nationale des Caisses Populaires Haïtiennes (ANACAPH)264 and Le Levier Network, to provide governance and technical support to strengthen the services of MOIs.

Table 5.1: Caisses Populaires and Sol: Major Micro Lenders (November 2010)

Type Name of Micro Lender and Date Haitian- # of Clients Active in Donor Avg. Started run Slums Subsidies Loan Size USD

& & Caisses Populaires, 2007 (50-80 Y 340,000 Y Y

members, Le Levier network)

1200 Cooperatives Caisses Populaires and Cooperatives Y 300,000+ Y N

Caisses Populaires Caisses (non-regulated)

<100

11,198 Y Y Sogesol (Sogebank) 2000

scaled) Micro Credit National (Unibank) 1999 N 10,500 Y Y -

Commercial (Down

Microfinance InstitutionsMicrofinance Kredi Popile (BUH) 1997 N NA N NA

264 See more about ANACAPH: http://www.anacaph.coop/Missionanacaph.php

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MicroCredit Capital (Capital Bank) 2000 N 775 NA Y

Banque Nationale de Credit (BNC) N NA Y NA

State Banks Banque Populaires Haitienne (BPH) 2002 N 444 Y N

FHAF 1981 Y NA Y Y

SOFIHDES 1983 Y NA Y Y

FINCA 1989 Y 8,200 Y Y

GTIH Y 500 Y Y

Fonds d'Espoir 1992 N 4,684 Y Y NGOs and NGOs Associations Fonkoze 1995 Y 55,000 Y Y

ID 1998 Y 4,281 Y Y

ACLAM 1999 Y 5,039 Y Y 100 to ACME 2003 N 21,000 Y Y 500

Sol Y Millions Y N <25

Sabotay Y Informal Banks >Thousands Y N

Source: Most results taken from ANIMH’s report (2008). Results for Le Levier network for the Caisses Populaires, ACME, FINCA, MCN, GTIH and Fonkoze results were gathered during Fieldwork in October 2010.

There are seven commercial banks in Haiti: four are private and three are state- owned. There are also a number of non-cooperative micro lenders: NGOs, commercial bank, and specialized microfinance institutions (see Table 5.1). The Association Nationale des

Institutions de Microfinance d’Haïti (ANIMH) and Konseil Nasyonal des Finansman (KNFP)

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are administrative networks for 25 non-caisses populaires institutions.265 A quasi-state wholesale firm, Fonds de Développement Industriel (FDI), is run by Lhermite François (a dark-skinned Haitian) and makes direct investments to microfinance institutions. Today, each of the major commercial banks has microfinance affiliates. The microfinance lending arms of commercial banks, shown in Table 5.1, arose from the activities of mulatres who, aware of the race and class divide, lobbied their respective commercial banks offer microfinance products. It was no easy task to convince whitened elites to invest in the poor masses

(Boisson Interview 11 October 2010). A few members of this class and racial group were inspired to change the mind-set that divides the society.

Local whitened elites such as Pierre-Marie Boisson and Carl Braun were convinced that reaching the base of the economic pyramid (most marginalized and dark-skinned

Haitians) was good business. The German-owned International Projekt Consult firm provided technical support to Carl Braun’s Unibank to start Micro Credit National in 1999

(Discussions with Joseph, 18 October 2011; Chery Interview, 6 October 2010). Soon after,

Haiti’s largest bank, Société Générale Haïtienne de Banque (Sogebank), was assisted by

U.S.-based ACCION to start Sogebank’s microfinance bank, Sogesol (Boisson Interview, 11

October 2010; Drake and Rhyne 2002). Hence, in 2000 Capital Bank created Micro Crédit

Capital and Banque de l’Union Haïtiennes (BUH) started a micro lending program called

Krédi Popile (People’s Credit) to attract regular people through Kreyol branding (Chowdri and Silva 2004). State-owned Banque Populaire Haitienne (BPH) also started micro lending

265 Two USAID projects, Financial Networks for Entrepreneurial Empowerment (FINNET) and Haiti Micro and Small and Medium Enterprises (Haiti MSME), supported the non-cooperative microfinance sector significantly.

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to the poor in 2002 and its staff is mainly educated Black Haitians (Fieldwork, 2011; 2010 and 2008; Anonymous Interview, 7 October 2010; Tucker and Tellis 2005, 115–116).

Micro Lenders: Inspired by the Collective Spirit of Haitians

State-owned banks followed the commercial bankers in downscaling service, making microfinance products that would reach the low-income consumer. In the past, Haitian state- owned banks misused micro loans for political reasons. For example, the defunct state-owned

Banque de Credit Agricole (BCA) made micro/small loans to farmers that were allocated for political purposes (Fieldwork, August–October 2011; Anonymous Interviews, details withheld on purpose).266 In interviews, community leaders in Cite Soleil and Bel Air stated that during the 2007–2009 period the Ministère des Affaires Sociales et Ministère des

Conditions Feminines also made political micro “loans” to party activists in exchange for political support (Similien Interview, 18 October 2011; Delva Interview, 12 October 2010;

François Interview, 7 October 2010; Anonymous Interviews, 5 October 2010). Loan programs operated by government agencies that employ political criteria in the allocation of loans are not sustainable because clients do not repay them. Furthermore, according to a ti machann I interviewed, local conflicts would ensue among citizens over these handouts

(Focus Groups at Bon Repos, 9 October 2010; Anonymous Interview (in Cité Soleil), 5

October 2010; Peterly Interview, 5 October 2010).

266 BCA shared an office with the MARNDR (Ministry of Agriculture) and its leadership is tied to the political elites at the MARNDR.

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NGOs Adapt to Collective Micro Lending

When NGO-led micro lending emerged in the mid-1980s, the masses were already familiar with cooperative models of microfinance. As early as 1981, Fonds Haïtien d’aide a la Femmes (FHAF), with the assistance of America’s Women’s World Banking, started micro lending to poor women (Anonymous Interview, 6 October 2010) and in 1983, Société

Financière Haitienne de Développement (SOFIHDES), a local MFI run by Black women, started operations. Since the 2010 earthquake, FHAF, under the leadership of Haitian

Francine Celéstin, has lost at least 50% of their loan capital because of defaults (Anonymous

Email, 30 November 2010), and in October 2011, the Clinton Bush Fund awarded FHAF

USD $800, 000 and Wesner Marcélin was appointed the Executive Director (resigned soon after hiring).

By the late 1980s, U.S.-based Catholic Relief Services (CRS) was involved directly in micro lending with USAID funding (Charles Interview, 6 October 2010; Young and

Mitten 2000), but this institution is no longer a direct micro lender (Charles Interview, 6

October 2010). In 1989, America’s John Hatch set up the Foundation for International

Community Assistance (FINCA) in Cayes and discovered that its group-lending model fit well with the Haitian’s predilection for MOIs (Vincent Interview, 14 October 2010). In

October 2010, FINCA in Haiti was led by white foreigners (non-Haitians) who view microfinance as a transformative tool. All of these pioneer microfinance institutions, whether foreign-led or Haitian-led, came into a micro lending environment supportive of cooperative- type financial programs. But the foreign-led organizations learned that to succeed they had to adhere to local culture and hire Black Haitians to manage their activities (Raymond

Interview, 14 October 2010; Calixte Interview, 6 October 2010; Marcelin, 5 October 2010).

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In the 1990s, donors became interested in supporting NGOs to provide financial services to under-served markets. USAID and IDB developed policies (called up-scaling) to assist in the licensing of microfinance NGOs. Donors invested in the formalization of the operations of the country’s largest micro lender, the NGO Fonkoze, whose microfinance bank is Sévis Finansyé Fonkoze (hereafter referred to as Fonkoze) (Anonymous Interview,

30 September 2010).267 Fonkoze was started by Haitian Catholic priest Father Jean Philippe, who hired a white American, Anne Hastings, in 1995 to lead the organization. Fonkoze’s program was modeled on a group lending system, and—as a result of taking note of history, local environment, and culture—the NGO allocated the micro loans to groups of women (St.

Gilles Interview, 7 October 2010; Hastings Interview, 4 October 2010; Zanotti 2010, 766;

Tucker and Tellis 2005, 114) (see Table 5.1 for data on Fonkoze).268 The Catholic liberation theory that inspired the creation of Fonkoze led it to work with the poorest of the poor.

Hastings, with more than 16 years of experience in Haiti, is committed to institutionalizing the local culture and language in the microfinance program and Fonkoze’s staff are expected to be fluent in Kreyol (Hastings Interview, 4 October 2010).

Fonkoze’s pro-Kreyol policy is an example of its mission to reach the masses.

Fonkoze is mainly staffed by dark-skinned Black Haitians, and the offices are generally located in run-down areas, again revealing the NGO’s commitment to make the institution

267 Canada’s Mennonite Economic Development Associates (MEDA) closed down two defunct microfinance programs, Société Haïtienne d'épargne et de Crédit (SHEC) and Ranfosman Ekonomik Kominote Oganize (REKO), and merged their assets into Fonkoze’s portfolio in June 2004 (Email from former REKO and SHEC staff, 2 November 2010). See more about the merger at: http://www.fonkoze.org/docs/newsletters/Fall2004newsletter.pdf 268 In Wells’s Toronto Star (3 December 2010) article, “Lovely’s Haiti: Small Loans, Big Trouble,” she reports that Fonkoze has had years of successive losses and in the pre-earthquake period they wrote off $1.7M.

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accessible to the masses (Fieldwork, March–April 2008).269 Fonkoze has adopted a campaign for social justice and its managers view microfinance as a tool to work towards social equality (St.Gilles Interview, 7 October 2010; Fieldwork, 2008). Although Fonkoze is not a caisse populaire, founding Haitian priests have created an organization that resonates with the masses (Zanotti 2010)—indeed, Fonkoze’s political rhetoric has at times disturbed whitened local elites.

Other small microfinance organizations, such as Initiative du Développement (ID), a

French-supported organization, are committed to changing financial systems. ID, one of the first lenders to work in the bidonvilles (slums), is located in the central part of town in order to reach its clients. I visited ID in April 2008 when it was run by then-director Wesner

Marcélin, a Black Haitian committed to making loans in the slums. In 1999, Action Contre la

Misère (ACLAM) also began microfinance operations with support from the U.S.-based

NGO Freedom from Hunger, combining financial services with skills training and education.

In 2003, Haitian-run Association pour la Coopération avec la Microenterprise (ACME), supported by George Soros’ Open Society organization, developed programs to fit with the local culture. ACME is led by Sinior Raymond, a Black Haitian born in Jérémie,

Grand’Anse, who comes from a modest social background, and its staff is diverse, drawn from the people it serves. These organizations complement the local context in Haiti, as the success of caisses populaires sprang from their commitment to community and to the varied livelihood needs of the people.

269 This observation arises from my work experience involved updating loan policy manuals and market research/training for staff at Fonkoze in March and April 2008.

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Given the caisses populaires’ substantial market share, it is in the state’s interest to regulate these institutions (Vertue Interview, 12 October 2010; Castor Interview, 11 October

2010; Turcotte Interview, 7 October 2010). The World Bank’s CGAP has dedicated resources to develop a legal framework for ANIMH’s (non-cooperative) micro lenders, but as of October 2011, no policy existed to regulate NGOs involved in micro lending

(Fieldwork, October 2011; Colloque sur la microfinance, 28 September 2010).270 There appears to be resistance from policy and perhaps business elites to formalize the microfinance sector. NGO microfinance staff persons who engage in micro loans agitate for pro-poor financial systems and take risks in doing so.

Killings of Pro-Poor Financial Professionals

A number of microfinance agencies use a radical rhetoric (push for economic democracy) when discussing microfinance. Persons working in microfinance who advocate for changing the bias in local business and financial systems take personal risks in doing so.271 Unbeknownst to many, Haitians engaged in micro lending are targets and lose their lives. Some killings include: In 2000, a Fonkoze employee, Amos Jeannott, was kidnapped and murdered. No ransom was requested, only a threat to Fonkoze’s director to close down operations (National Coalition for Haiti Rights website accessed 20 September 2012;

Anonymous Interview). In 2003, Danielle Lustin, former director of Fonds Haïtien d’Aide à la Femme (FHAF) and vice-president of the board of KNFP (a rural microfinance network), was assassinated (Le Nouvelliste; Email, 3 November 2010 and 5 December 2010; I cannot

270 This was the case when I first visited Haiti in March 2008 and in October 2010 the state was still working on a policy for NGOs and non-banks. 271 Unlike the microfinance managers so committed to the work, they do not see the ever present risks but their spouses have told me that they are worried that their partner works in microfinance.

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name the individuals who informed me about these killings). As recent as June 2010,

Michèle César Jumelle, director general at the SOFIHDES (microfinance bank) and her husband Yves Clément (working in economic development) were gunned down and the case remains unsolved.

Unexplained deaths may be a result of personal circumstances, or they may result from the fact that certain individuals recognize the power of microfinance to transform societies and this represents a threat to elite control over commercial financial systems

(Interview details withheld; Le Nouvelliste). As recenty as July 2011, the killing of Guiteau

Toussaint—the head of the board of directors of the National Bank of Credit (BNC) recognized for restructuring the state-owned commercial bank to keep it from bankruptcy— was murdered weeks before he was to launch the first-ever competitive housing mortgage called Kay Pam (My House). Kay Pam was to be the first-even housing loan for ordinary people (Haitian-Truth website accessed 26 July 2012; Field visit August 2011). In isolation these crimes do not mean much but when grouped together, they do suggest that working in micro lending can be a dangerous occupation. The reasons for these murders against professionals working in pro-poor financial services are only speculative because the cases remain unsolved.

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The Diversity of Micro Lenders

Haiti’s micro lending enterprises are largely run by (very dark-skinned) Black

Haitians, and this is particularly so in the caisses populaires and informal banks, which reach millions of poor entrepreneurs. In Haiti, I carried out a total of 48 interviews of banking managers, stakeholders, community experts, officials of government agencies, and members of research organizations (See Appendix 1.1 for a list of sub-elites interviewed in

Haiti). Of the sub-elites interviewed, 17 were directly involved in micro lending at senior levels.272 I was also able to witness that most of the Haitian micro lenders involved in micro lending at the national level were Black (Fieldwork, 2008; 2010; 2011; Colloque sur la

Microfinance, 28-29

September 2010).

(See Figure 5.1 for a map of the extensive penetration of microfinance in the various regional capitals and peri- urban areas).

Figure 5.1: Map of Microfinance Penetration in Haiti. Source: USAID (2010).

272 Additional interviews carried out between August and October 2011 that significantly increase the sample size (but not included here).

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Most of the microfinance managers (65%) I interviewed in Port-au-Prince were educated and male. Except for in American and expatriate-run organizations, such as

Fonkoze and FINCA, Black Haitian micro lenders were relatively young at 38 years

(François Colloque sur la Microfinance, 28 September 2010). Sixty-five percent (n=31) of the microfinance managers interviewed were educated Blacks, 12% (n=6) were mulatres

(mixed race), and 2% (n=10) were Haitian blancs (local whites). About 21% of the people interviewed were foreign-born expatriates working and living in Haiti. (See Appendix 1.1 for a list of the Haitian micro lenders and stakeholders interviewed).

It is evident that the majority of micro lenders are Black Haitians, who either grew up in the poor social conditions faced by microfinance borrowers or have family members who share the socio-economic situation of their clients, and they hire staff familiar with the social groups they work with (Marcelin Interview, 5 October 2010; Hastings Interview, 4 October

2010; Palme Interview, 30 September 2010). The case shows that racial/class bias in microfinance lending can be mitigated when the lenders are conscious of it. However, while

Haitian lenders exhibit sensitivity to the class and racial dimension of staffing, less emphasis has been put on female recruitment, particularly at managerial levels. Hence, Black Haitian women are not well represented at the highest levels (i.e., board and executive) in many microfinance institutions (Participant observation, Colloque sur la Microfinance, 28

September 2010). I will discuss these gender inequities in the next chapter.

The fact that NGOs’ and associations’ managers come from the same social class as borrowers influences how they carry out microfinance services to the poor. American-funded organizations, FINCA and Fonkoze, for example, are able through their managers to adjust

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loan programs to meet the needs of the Black masses. In commercial banks and their subsidiaries, (see Table 5.1), many of the top executives and board members are from the mixed race group belonging to the middle classes (as noted in Table 5.2), but educated Black

Haitians hold senior technical positions in these banks. It is important to note the racial heterogeneity among microfinance managers and the fact that all micro lenders, regardless of race, share a common perspective about why they make loans to the moun andeyo, the poorest of Haitians. Local staff persons have created a homegrown microfinance sector that aims to socially and economically empower the poor—a very different political reality than in other sectors.

In the commercial banks, a growing number of the senior managers and front line staff are dark-skinned Black Haitians (Boisson Interview 11 October 2010; François

Interview, 7 October 2010). This affects the formulation of programs. Rising Black leaders in

MFIs include: the general manager of MCN, Joseph Similien, who is a Black Haitian from

Carrefour, a poor part of the city; also Sinior ACME Raymond raised in humble beginnings and dark-skinned Marie-Marcelle St.Gilles-Gérard of Kotelam, the manager of a large credit union in Port-au-Prince who is originally from Artibonite and who used education to move to a higher social class. Women’s activist Carine Clermont of Groupe d’Appui pour l’Intégration de la Femme du Secteur Informel (GRAIFSI), a dark-skinned Haitian woman is active in rural microfinance. All these emerging leaders in microfinance understand the lived reality of the ti machann.

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Table 5.2 Race/Colour of the Heads and Technical Staff in Haitian MFIs (2011)

Type of Lender Leadership Technical Staff

Member-owned Institutions

Caisses Populaires Black Black

Credit unions (not regulated) Black Black

KOTELAM Black Black

Non-Governmental and Non-Bank Institutions

FINCA Foreign/white Black

Fonkoze Foreign/white Black

GRAIFSI Black Black

GTIH Black Black

FHAF Black Black

ACME Black Black

Initiative du Développement (ID) Foreign/white Black

Commercial Microfinance Banks

Sogesol Mulatre Black

Micro Crédit National Mulatre/Black Black

Banque Populaires Haitienne Black Black

Informal Banks

Sol Black Black

KNFP–community banks Black Black

All stakeholders interviewed (100%, n = 48) found that donor-subsidized American

NGOs (e.g., Fonkoze or FINCA) tend to hire well-educated expatriates or (certain) diaspora and mulatres staff persons who are less connected to the social realities of the ti machanns.

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Yet, I found that once they were hired, these privileged lighter-skinned individuals adapted a

Black social consciousness sympathetic to the marginalized groups, even if this meant betraying their own social group. Black Haitians who dominate as technical staff (and who come from the masses they serve) are locally grounded and have influenced a new way of thinking on the part of diaspora elites and foreigners. At times, this means they take personal risks when they challenge financial systems owned by powerful elite families.273 White and

Black lenders view microfinance as part of a social mission to help the excluded ti machanns.

Informal Banks: Reaching Millions

Haiti’s informal banks, or sols, have a long tradition. Millions of Haitians rely on them to meet their everyday financial needs. Much like Jamaica’s Partner or Guyana’s Box hand, these informal banks are important for poor entrepreneurs and are by far the largest financial network in the country (and in the region). Sols have assisted in Haitian people’s organizing at the local level (see chapter 2 for a historical review).

One of the reasons sols have received little scholarly attention (Fleurstin Interview,

April 2008, 6 October 2010; Marcelin Interview, 5 October 2010) arises from their informal nature: there are few written records of any of them. A number of microfinance experts were not even aware of sols’ extensive market share (which are in the millions, see Table 5.2 above) (Fieldwork, March, April 2008). Poor, usually uneducated, Black women called

Mama Sols collectively organize these banks, providing a place for poor people to store savings and access lump sums of cash.

273 See earlier section where I discuss the unresolved murders of people involved in microfinance.

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Mama Sols will administer groups of a dozen people who make weekly contributions to the fund (about USD $2) and rotate it until all members have borrowed from the fund. Sols may be completely free with no fixed fees, or may apply a flexible or fixed nominal fee

(called frais de cahier or service fees) for the duration of the plan membership (Marcelin

Interview, 5 October 2010). Sols are low cost and trusted by their users because of their grass roots and collective nature, unlike sabotaye (individualized informal banks) (Focus groups,

Bon Repos, 9 October 2010). The sols, along with the caisses populaires, are the organizations that reach the most poor clients, and they have influenced the operations of large commercial bankers like Sogebank, which has created a product called “Mama Sols.”

(Boisson Interview, 11 October 2010; Calpas Interview, 30 September 2010; Louissaint

Interview, April 2008).

Case Study: Ti machanns Embrace Microfinance

Micro lenders target poor black women (ti machanns as well as les Madam Saras274) engaged in petty trading in the urban centers (see Table 5.1 for list of lenders and Figure 5.1 for a map of the major urban centers with active microfinance). Bon Repos, where I carried out my two focus groups, is a very low-income urban area in Port-au-Prince. I also interviewed community leaders in the slums of Cité Soleil and Bel Air, in which a large numbers of micro business people live; but at the time of interviews, these two latter areas were gravely affected by the earthquake reconstruction process (Delva and Emond

Interviews, 12 October 2010; Dieufait and Anonymous Interviews, 5 October 2010;

274 Madam Sara refers to market women who travel regionally to buy and sell goods. These women are seen as a level above the ti machann (Discussion with Customs Officer, 14 October 2010). See N’Zengou-Tayo (1998, 127) who writes about Madam Saras and their business travel to regional countries.

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Fieldwork, April 2008).275 In all three communities, most business people find microfinance useful.

Organisation des Femmes, a local community organization in Bon Repos, claimed that some residents have difficulty accessing micro loans, yet 57% (n = 8 out of 14) of the ti machanns I interviewed had or have a micro loan. I was also able to easily find business people in Port-au-Prince who had micro loans. Unlike in Georgetown, Guyana, and

Kingston, Jamaica, then—where only very few of the business people I met had accessed microfinance despite efforts to do so276—Haitian business people seemed to more easily tap into micro loans.

All interviews were carried out either in March and April 2008 (during food riots) and post-earthquake in September and October 2010. (See Appendices 1.1 and 1.2 for a list of stakeholders and businesspersons interviewed in Haiti). In this case study, 62 Haitians were interviewed, of whom 14 were ti machanns (Focus Groups, Bon Repos, 9 October 2010). As in Jamaica and Guyana, ti machanns sold imported items from the U.S. and China, such as used clothing, household goods, and foodstuffs, yielding small profits of less than 15%

(ibid). The average age of a ti machann was 42 years, and 71% (n = 10) were single (heads of households) mothers often in a placaj (an unmarried relationship) (Gérard 2010, 137).

275 I also carried out informal interviews with ti machann in Bel Air and Cite Soleil in October 2010. During my April and March 2008 trip, I visited these two slums and expected to carry out future research with business people in both slums. However, post-earthquake insecurities prevented me from doing so but I did meet with local leaders from these communities. 276 I recognize this sample size is only suggestive. I complemented this case with my in-depth interviews with a local NGO called Quisqueya for International Development (QiFD) and a CBO, Organisation de Femmes Bon Repos. It should be noted that separate but related work was carried out in Haiti from August to October 2011 which confirm these findings.

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Table 5.3 Interviews in Port-au-Prince, Haiti (n = 62)

Persons Interviewed Number % of Total Interviews

Ti machann focus group session 14 23%

Ti machann who were female 12 85% Female-headed household 10 71% Had or has a micro loan 8 57% Sub-elites Interviewed:

Stakeholders 31 50%

Female Stakeholders 18 37.5%

Microfinance lenders 17 27%

Female Micro Lenders 6 35% Total Sub-elites 48

Race of Sub-elites:

Noirs 31 65% Mulatres 6 12% Haitian Blanc 1 2% Foreigners (all interviews) 10 21% Total Sample Size 62

All ti machanns in the focus groups (100%, n = 14) told me they were grateful to the micro lending programs, especially the caisses populaires.277 The concern among ti machann about microfinance was the high per annum interest rates: 40% and 60% (excluding fees).

Roudy, a male trader from Bon Repos, explained, “Haiti is a miserable place. So much suffering and there are no jobs, and I must do what I can to survive.” Vendors like Roudy

277 I recognize that this sample is small; however, this sample was augmented by other unrelated interviews for UNDP in Port-au-Prince, Jacmel, Leogane, and Cayes that confirmed these findings.

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claimed that many of them were survival traders because there were no formal jobs. More than half (57%, n = 8) of the ti machann interviewed in focus groups had access to micro loans, a figure that was comparatively lower in this community than in the slums of Centre-

Ville (downtown Port-au-Prince) (Milhouse Interview, 5 October 2010; Pierre Interview, 5

October 2010; Calpas Interview, 30 September 2010). Although ti machann complained about the state and economic environment, they did not believe that race or class discrimination on the part of micro lenders affected their personal access to loans.

Generally, the poor feel that the rich, whitened Haitians look down on them. In the focus groups conducted in Bon Repos, all the ti machanns interviewed (n = 14) felt that blancs and mulatres do not want poor Blacks to succeed (Focus Groups, Bon Repos, 9

October 2010). One participant remarked, “They look at you as if you are nothing when they go to their fancy supermarkets” (ibid). As discussed in chapter 2, Haiti remains a society divided by race- and class-based cleavages (Fatton 2007; Voodoo and the Church 1998).

Nicole, a Bon Repos trader, remarked, “Blan’ [rich white people] don’t want me to advance, they don’t want me to grow [economically]; they [whitened elites] have a problem with me going up [moving up the class ladder]. They alone want to be rich and they see trouble for them [whitened elites] when I do better [financially].278

However, despite existing social conflicts, the poor seemed to view microfinance leaders (including whitened ones) differently because they actively work to change these attitudes. In my interviews with the ti machann (100%, n = 14), they made a distinction between those whitened business elites working inside microfinance and those elites outside

278 This quote was translated from Kreyol to French by a QiFD program officer, which I translated into English. The final was reviewed by the same program officer.

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of microfinance. Clients know that Black and whitened microfinance staff persons take personal risks when they advocate for microfinance for them as a way to change the unfair social system. According to the ti machann I met, race and class discrimination does not exist within microfinance because the micro lenders (including mulatres) are working to help them improve their economic situations (Focus groups, Bon Repos).

Micro lenders organize their banks to make ti machanns feel included (such as making Kreyol the working language in the bank or locating offices in these slums). Whereas in the Jamaica case, hustlas were penalized for not being able to speak Standard English, one

Ti machann interviewed remarked on the importance to her that micro lenders in her bank

(ACME) speak to her in Kreyol. Even though ti machanns, especially those living in the bidonvilles (e.g. Cité Soleil, Bel Air), feel marginalized by the whitened elite Haitians, they do not see micro lenders as biased in their allocations. Microfinance lenders, including the whitened ones, are viewed as making efforts to ensure that their methodologies and programs are inclusive of the poor entrepreneurs which whom they work.

Social Inclusion by Microfinance Lenders

Microfinance lenders take careful steps and plan in a way to ensure their loans are structured to be socially inclusive. And the cooperative type lenders like the caisses populaires and sols have been influenced by a tradition of collective organizing and they have systems that are responsive to ti machanns. However, no literature exists documenting this process. Non-banks and commercial banks have adapted their micro lending policies to fit with the collective traditions appreciated by Haitians. For example, Sogesol, a commercial retailer, has piloted an agricultural loans program in the Artibonite Department through

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which a cooperative group issues individual loans (Baptiste Interview, 18 October 2011).

Sogesol (as well as other microfinance lenders) thus values the historical development of collective groups and has adjusted its products to fit the social context. Haitian microfinance managers—both foreign and local—re-work financial services to fit the needs of the poor.

Many of the Haitian microfinance managers interviewed, including mulatres, see microfinance as a tool to ensure economic democracy (Fieldwork, 2008, 2010, 2011). As highlighted in an earlier section of this chapter, microfinance staff persons take personal risks when they call for economic democracy for the poor, as this is considered radical speech.

Although the cases mentioned above remain unsolved, the persons who were killed worked in financial and economic programs for low income citizens. In spite of this, most staff persons continue to advocate for microfinance and believe in the change it can bring to poor business people.

Individuals working in microfinance thus view microfinance as the vehicle through which the economically-active poor, who are left without easy access to financial services, can improve their quality of life (Raymond Interview, 14 October 2010; Boisson Interview,

11 October 2010; Hastings Interview, 4 October 2010; Discussions at the Colloque sur la

Microfinance, 28-29 September 2010). Such perspectives in microfinance can be seen as political: Haitian managers make deliberate efforts to correct the market failures and social biases that favour whitened elites. Many managers come from modest social backgrounds and have watched their parents struggle without any support. They make bold statements that challenge the status quo and support the poorest entrepreneurs. The whitened mulatres also

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embrace a radical rhetoric of economic democracy, and get labelled as traitors in their own social group.

In contrast, Jamaican and Guyanese micro lenders espousing the use of credit to help the poor were unwilling to confront these biases and to program microfinance to oppose class and race-based oppressions. In Haiti, even stakeholders (n = 48)—who are outside of direct micro lending—did not make negative comments about the actors inside the microfinance sector. In 2008, anthropologists carried out a film project, entitled Poto Mitan (2008), following the lives of several businesswomen in the Haitian slums, and discovered that poor women used micro lending (including sols) to create livelihoods when the state failed to provide them with basic services like water, electricity, medical care, and education. In the film, microfinance banks that make small loans to the poor were viewed as partners assisting the marginalized entrepreneurs to make a living.

Haitian microfinance managers are different from those in the other two cases of this study because educated Black Haitians acknowledge Haiti’s systemic class and racial discrimination and develop microfinance programs to ensure that poor Blacks benefit.

Haitians organized amongst themselves financial cooperatives long before donors emerged in the late 1980s to assist in microfinance development. Haiti’s home-grown microfinance industry has absorbed the positive aspects of its historical and cultural traditions (St. Gilles

Interview, 7 October 2010; Chery Interview, 6 October 2010; Marcélin Interview, 5 October

2010). Although microfinance lenders recognize the contributions that donors such as the

IDB and USAID have made to micro enterprise development, they are convinced that these investments succeeded because of the local will reach the ti machann. It appears that the

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combination of socially conscious Black microfinance lenders and persistent collective

African traditions have ensured inclusive lending that is beyond the manipulations of political elites.

Haiti’s inclusive approach to micro lending can be attributed to the racial make-up and social class origins of microfinance managers, the majority of whom are Black Haitians.

Many of the Black Haitians holding technical positions in micro lending were raised in households where mothers participated in cooperatives and sols; they thus understand collective lending and the politics of exclusion against the moun andeyo. To reiterate, none of the ti machann (n = 14) I interviewed in the focus groups felt that party politics was operating inside microfinance. According to my research, only one microfinance expert,

Gabriel Bien-Aimé (deceased) of Fonds d’Espoir, was active in politics, and this was only after he left microfinance (Follow up Fieldwork, October 2011; Anonymous Interview and

Email, 2 November 2010, no details can be shared).

Certainly, the risk of external political interference is increasing. Micro lenders interviewed (51%, n = 48) felt that interference from political actors is on the rise (Raymond

Interview, 14 October 2010; Théodate Interview, 12 October 2010; Hastings Interview, 4

October 2010). However, when lenders protested the state’s interference in the market after former President René Préval cancelled the ti machann’s loan debts in Croix des Brossales market following the 2010 earthquake, the state reimbursed the MFIs for these losses. The leaders in microfinance were aware they had to correct the government’s unilateral involvement to protect the sector from partisan politics. Those caisses populaires under Le

Levier Federation have had no political interference, and members adhere to the norms of the

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federation (Fieldwork, October 2011; Extantus Interview, 14 October 2010; Turcotte

Interview, 7 October 2010; Fleurstin Interview, 6 October 2010).

Conclusion

Micro-banking has had a very long tradition in Haiti. Under repressive regimes, the excluded majority coped by coming together as a group kombit and pooling resources.

Considering the enormous impact sols and cooperatives have on society, reaching millions of

Haitians, it is surprising that political elites have not taken advantage of their extraordinary outreach to people left out of the system. A positive outcome of this is that micro loans and their allocation are less likely to be co-opted by politics. Caisses populaires, cooperative banks, and sols have emerged as major micro lenders because the collective model matches the social and cultural context of the urban poor.

Non-cooperative microfinance institutions (banks and NGOs) are relatively new to the country and have come into an environment where local talent understands that Haiti’s collective banking traditions have a long history and strong foothold. No one in the microfinance sector sees the sector as partisan or biased against the moun andeyo. In this case study, the ti machann in Bon Repos argue that micro lenders, irrespective of their skin colour and class, are working to ensure that they have access to financing even if this means taking risks. Ti machann trust micro lenders and see the people working in microfinance as trying to change a society that is otherwise permeated by racial and class bias.

Since 2010, the reconstruction of Haiti has been viewed by the average citizen as mismanaged. While resentment against foreigners and international aid has increased, however, the microfinance sector appears to be an exception. People see microfinance

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programs as efficient and well-managed (Fieldwork, 2010, 2011; Zanotti 2010). Unlike

Jamaica and Guyana, where microfinance managers and staff members exclude micro business people based on class or race, Haiti, a country rife with racial and class conflict, is characterized by inclusive and nonpolitical microfinancing. This is due to collective MOIs and to socially conscious programming, where the majority of microfinance lenders (dark- skinned or mulatres) prioritize economic democracy when making financial services to the urban poor, especially to those in the bidonvilles.

Chapter 6 Gender, Female Privilege, and Microfinance

Introduction

Women of the global south have made tremendous contributions to the world of small business. Yet commercial banks run by educated rich males have historically exhibited gender bias against women as clients in the allocation of loans, enforcing this with negative stereotypes. In the 1950s, the sexist lens of traditional male bankers around the world prevented entrepreneurial women from accessing financial services (Armendáriz and

Morduch 2007; Drake and Rhyne 2002). While privileging one group over another has always been a part of the lending process, it is assumed that the criteria is based on banking principles. For most part, however, these lenders imparted their own biases in their decision- making processes to include and exclude clients.

Economists from the developing world started to question “generic” banking principles that allowed for internal bias by educated elite males against poor women. By the

1980s, non-bankers had exposed gender biases against women, especially poor ones, in conventional banking systems, leading to a “microfinance revolution” (Khan 2009, 147;

Hulme 2002, 274; Harper 1998, 29; Hashemi et al. 1996, 636).279 Mohammed Yunus created the Grameen Bank to challenge this biased thinking and to give excluded people access to finance (Yunus 2007; Counts 1996). One of the core aims of microfinance was to bring meaningful economic and social empowerment to marginalized business women everywhere

(Mayoux 2001, 438).

279 Goetz and Sengupta (1996,45) argue that Grameen Bank first made loans mainly to male clients (only 39% of their portfolio went to women between 1980–1983) and shifted policy to target female clients (93%) by 1991.

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Most Caribbean women have always worked outside of their homes to increase incomes (Mohammed 2000; Hernandez Angueira 1997). And the structural adjustment programs of the 1970s and the 1980s added further burdens on women making them seek low paid work and now become responsible for social services in the community (Life and

Debt Film 2001; PIOJ/CIDA/UNDP Report on Gender 2000). Because low-income women play a central role in the family unit and also engage in petty commerce at markets,

Caribbean families are described as matrifocal (not matriarchal) because they earned income for the family. Within the larger society, middle-class men wield power in the business and political domains and shape the way society unfolds, revealing a patriarchal structure

(Mullings 2005, 6; Honig 1998a, 318; N’Zengou-Tayo 1998, 118; Miller 1991, 135). Women have long earned incomes, but this has not changed the male dominated power dynamics between men and women. On the surface, it may appear that women are in charge of families; but when men are present, they acquiesce and let the men remain in charge of the households (Fieldwork 2007-2011; Nettles 2007; Kothari 2002; Mohammed 2000, 1998;

Paravisini-Gebert 1997). As a result, privileging women alone for loans can complicate their situation in a family.

Although people are stratified along multiple identities of race, class, and gender throughout the entire Caribbean region, gender issues unfold quite differently in each of the three cases studied here (Freeman 2001; Mohammed 1998). Business people in Jamaica,

Guyana, and Haiti have multiple identities, and the impact of their attitudes is an important variable when examining the role of gender in microfinance allocation (Wane 2002; Hill

Collins 2000). This chapter looks at gender dynamics in micro banking and considers how a gender identity influences the allocation of micro-credit.

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The data upon which this study is based has a strong female voice. I interviewed 256 female subjects (56% of the sample) (see Table 1.2 in chapter 1). This chapter reveals gender bias as another factor producing exclusion in the allocation of microfinance loans.280 Though

I focus on the Jamaica case, I draw on the other two cases for comparative reflections. In the

Jamaica case, female-focused microfinance in slum communities exacerbates conflicts between women and men, as well as between women. Jamaican women dominate as senior managers and staff persons in microfinance organizations and an anti-male bias arises. This male exclusion (a gender bias) in micro banking creates conflicts in poor households. In the

Guyana case, Indo males dominate micro-lending to the detriment of Afro-Guyanese women.

Although the Haitian sample is small, and we must view this data with caution, gender bias does not seem to pose a problem. However, the educated males who run microfinance make loans to poor women with limited or no formal schooling, which may be interpreted as a class bias.

While gender-based bias produces a form of exclusion, this chapter forces a rethinking of gender analysis in context. Educated and middle-class Jamaican women dominate the microfinance sector both as managers and staff and this affects the allocation of loans. Female managers view certain women clients as better investments than men, and this biased thinking excludes poor men in the ghettos and women whose behaviour does not conform to middle-class values (see chapter 3). Middle-class educated staff persons apply

280 A.K. Sen’s (1999) chapter on “missing women” has been helpful in my own thinking about male exclusion in micro lending programs.

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their own class bias, infused with racism, to reject those segments of the poor who are most different from them.

The exclusion of men from microfinance loans in Jamaica has detrimental consequences, even for the women who receive these loans. In Guyana and Haiti, educated males dominate the microfinance industry. Afro-Guyanese (both men and women) are excluded from micro loans as a consequence of educated Indo-Guyanese managers’ racial bias. Similarly, educated Black Haitian males also lend to women rather than poor men. At the same time, these biases based on race and class are compounded by gender identity.

Class/race bias in Jamaica exists alongside gender bias, reinforcing the exclusion of poor males (who need micro loans the most). While in Guyana, the race discrimination of Indo microfinance managers is against Afro-Guyanese. In both of these countries, poor women resist exclusionary microfinance by supporting informal financing arrangements, which give the excluded, both men and women, alternative financing options through local community owned banks. Haiti’s case is exceptional, however. It shows that while educated Black men dominate micro lending, this gender bias does not result in the exclusion of groups who need finance the most (which are women).

Diversity, Gender and Microfinance in the Caribbean Region

In all three countries, female traders and sellers stimulate markets when they travel from the countryside to sell produce in nearby towns and cities (Ulysse 2007; Freeman 2001;

Wong 1996; Keith and Keith 1992; Witter 1989; Harrison 1988; Katzin 1959). Harrison’s

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work (1988) shows that poor Jamaican higglers have long struggled to make a livelihood.281

Women’s entrepreneurial work ethic in trying economic times is what has given women such titles as poto mitan (“pillars of the family” in Haitian Kreyol). The Haitian ti machann,

Jamaican higglers, and Guyanese hucksters have emerged as strong female images (Ulysse

2007, 23; Freeman 2001, 1019; N’Zengou-Tayo 1998, 118; Ardener and Burman 1996). As outlined earlier, Caribbean women not only have financially supported their families within precarious economic and political environments, they also organize local banks to help excluded community members access banking services (Handa and Kirton 1999; Harper

1998, 24).

Caribbean women in this study recognized the ingrained biases against them as females. Nevertheless, they also observe that ethnic, racial, and class biases play a role as well in holding them back in society, since these identities structure a woman’s place in her community (Mullings 2005; Benería 2003). Hence, it is problematic to assume a united sisterhood, a fact recognized by Caribbean scholar L. Paravisini-Gebert (1997, 3), who suggests the importance of understanding how multiple identities function. Examining race, class, and gender and the varying ways identities interact in the Caribbean region can clarify which identity affects people’s access to economic resources in certain contexts (Dow 2003,

4). As presented in previous chapters, in the Jamaican and Guyanese cases, gender is a secondary identity for poor women, who claimed that class or race were more significant than gender in terms of their access to micro loans.

281 I conducted a trip to Panama’s Colon Free Trade Zone and Allbrook Shopping Mall in Panama City, two main places where Jamaican higglers shop to buy their merchandise, based on my interviews with higglers in Trench Town, August 2009.

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The Jamaica case revealed how gender privileges an applicant. In Kingston, micro bankers (most of whom are women) tend to privilege (certain) women over men in the allocation of loans, but they also demonstrate a class bias in their granting of loans to poor women. The fact that educated and middle-class Jamaican women dominate as staff persons in microfinance and make loans to mostly poor female clients increases tensions at the local level between poor women and men (Ulysse 2007, 17).282 Female microfinance lenders are disinclined to provide loans to poor Black males living in the slums because they view them as underperformers at school and cast them as poor providers (PIOJ 2004, 19; Miller 1991,

78–79).283 The exclusion of men combined with the deliberate privileging of women in microfinance results in what Armendáriz and Roome (2008, 2) refer to as a disempowering- effect on poor women entrepreneurs because of the domestic conflicts that ensue. When poor women are singled-out for loans (and men excluded) these same women are vulnerable to domestic violence. The men in their lives are angry as a consequence of being rejected from these financial programs (Maclean 2010, 513-515; Rahman 1999, 72).284

Microfinance allocation in Jamaica also excludes certain types of women who have various baby fathers (those who have had children by different partners) because (female) microfinance lenders make class-based judgments.285 Jamaican managers and staff (most of

282 Rankin (2001, 32) argues in her work on Nepal that micro-credit exacerbates social conflicts in society. Ulysse (2007, 17), writing on Jamaica, speaks to the division between the “Lady” and the “Woman, a polarity that divides rich uptown and poor downtown Jamaican females. 283 Miller’s discussion (1981, 167) was not intent on diminishing female discrimination, but on inserting into the gender discussion the marginalization of a certain group of men—poor Black men in the ghettos. 284 Ahmed (2008) discusses how male exclusion in Bangladesh may in fact hurt women’s empowerment by not including “high-minded” (supportive) men in the process. 285 In the Jamaica case, 37% (n=86 out of 233) of those interviewed had from two to five children, and 20% (n=46 out of 233) had more than five children.

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whom are female) grant loans to women who fit within their own social mores without considering the consequences of their bias may have for other members from the same community. I find that having more women as pro-poor financial managers does not mean greater gender equality. Women whose children have been fathered by different men are stereotyped as promiscuous, labelled as having “loose morals.” These views are in direct conflict with the view of downtown residents, who do not judge each other this way.

Mullings (2005, 8) found that the gender of senior bankers is intertwined with racial and class hierarchies, which certain educated and light-skinned (brownings) are elevated to managerial positions and assume positions of power (ibid). And, they use certain types of poor women they deem fit (or with their morale codes) to assist them with their domestic duties. The Jamaica case shows that educated, middle-class female bankers exclude poor males and certain types of women from access to loans, and select certain ones who conform to their middle-class norms.

Indian male bankers exhibit deep-seated racism against Afro-Guyanese that discourages the allocation of microfinance to them. In interviews, retailers claim women are the bulk of their clients, but this could not be substantiated. However, micro lenders did confirm that Afro-Guyanese received much smaller loans than Indo-Guyanese (see chapter

4). Indian microfinance lenders stereotype Blacks through negative cultural narratives that denigrate the business acumen of Blacks. Afro-Guyanese reported that it is their ethnicity and race—that is, “being a Blackman”—that denies them access to economic resources. And

Afro-Guyanese women feel further marginalized as poor females when dealing with educated Indian male bankers.

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Thus, gender, analyzed within its context, is salient to the Jamaican and Guyanese cases. Most poor Jamaican female hustlas felt discriminated against because of class (see chapter 3) and Afro-Guyanese hucksters also reported racial biases against them by Indian male bankers (see chapter 4). In fact, class and racial identities can be more important factors than gender in decisions about who will be excluded from (or included in) micro-credit programs. Hence, the findings presented in this chapter support the argument that a woman’s Jamaican Men on Gender gender may not be the only identity Prefer a man officer who can deal wid mi. Yuh can say: “Bredrin try and do someting disadvantaging her (Mohanty 1991, 2003,; fi mi.” Men fas a say dey know someone in ’ere. Man (loan officers are) more relax Narayan 1997; Hill Collins 1990). In the and can talk to yuh. Man talk free patois and nah care, woman (loan officers) inna der don’t like patois…inna di office. Jamaican context, gender oppression is Translation: Men want male loan accompanied by class discrimination (see officers. Male loan officers are more approachable and more likely to make you chapter 3), and in the Guyana context, women feel welcome and let you know they know someone from your community. Male officers will talk in Jamaican Patois feel oppressed because of a systemic prejudice (broken English) whereas female loan officers will not speak patois in an office against their African ancestry (see chapter 4). environment.

Gender bias (against men) and class Clifton, 48, Saltfish and crackers vendor, Arnett Gardens (Jamaica) discrimination by educated Jamaican female managers interfere in the fair allocation of microfinance.

In the Haitian case, educated males dominate the retailing of micro loans to very poor preliterate women. However, the context in Haiti has led to a much different picture than in

Jamaica and Guyana of the impact gender identity has on access to resources. Upon closer inspection, Haitians who run microfinance program come from a social class similar to that of the masses, or they know family members with similar class origins and are committed to

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ensuring that financial services are inclusive. In fact, these male managers organize financial services specifically to avoid the racial and class prejudices that pervade Haitian society.

These managers take on a revolutionary and radical rhetoric, wherein micro loans are a tool for economic empowerment of those classes demeaned by the wealthy. As a result, poor female clients view these male lenders as responding to their needs and taking personal risks to advocate for them, and did not report any bias to me (Fieldwork 2010 and 2011). In fact, they felt that these lenders take risks when they help them. Thus, inclusionary lending occurs in Haiti despite the fact the micro loans targeting female ti machann are programs usually administered by men.

Jamaican Microfinance: Excluding Poor Men

Caribbean scholars, such as Barriteau (1998, 189) and Miller (1991, 166), have thoroughly debated the male marginalization thesis with regard to the ubiquitous underperforming Black men living in Kingston’s garrisons.286 Jamaican scholar Anthony

Harriott explains that “there is this idea that poor men can’t be responsible and money will go to the bar; whereas, women are more likely to invest the money…Maybe women are less of a risk” (Interview, 29 September 2009). It is evident that societal expectations are narrow when it comes to the role of poor males; and there is a need to broaden the definition of

“masculinity” in Jamaica so that it includes marginalized males.

Jamaican scholars Errol Miller and the late Barry Chevannes argued that there is a stigma against young males from the ghettos (Interviews, October 2009). However,

286 Discussion about male marginalization merits more investigation. Miller (1991, 166) argues that patriarchs— that is, men of the dominant group—in defending their own interests, punish men from the lower economic strata.

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Caribbean feminists, such as Barriteau (1998), dismiss Miller’s (1991) male marginalization thesis, finding that it discounts female oppression and inequalities. Miller’s thesis takes a class stand by redefining the concept of patriarchal domination, arguing that wealthy males

(usually fair-complexioned) oppress not only women but also disadvantaged males from the downtown ghettos (Miller Interview, 21 October 2009; Chevannes Interview, 22 October

2009).287 It is likely that an anti-male bias against poor males is as prevalent as the inequalities women face in the country.

According to Miller (1991), Black men’s sense of responsibility is questioned, whereas elite male behaviour is not scrutinized. Black men from poor backgrounds, especially the young men in the inner cities, are vilified by the media (Miller Interview, 21

October 2009; Chevannes Interview, 22 October 2009; Hutchinson Interview, 29 July 2009;

Troupe Interview, 31 March 2009). Negative perspectives of poor Black males from the downtown ghettos undoubtedly affect the perspectives of microfinance managers and staff.

One stakeholder who works extensively in peace-building in the inner cities remarked: “It is not [just] any Jamaican male but poor young men from the marginalized areas who are denied fair participation [. . .] yeah [. . .] not the uptown boys. Youth from the ghettos are not the ones [clients] accessing micro loans” (Anonymous Interview, 29 July 2009).

What is apparent is that Jamaica’s context is different from the many countries in the world where the implementation of microfinance has proven successful. Jamaican women tend to be better educated than the men, and many of the female hustlas I interviewed had at

287 Discussions with Jamaican academic Chevannes suggested that feminists like Barriteau did not interpret Miller’s work correctly, as he was in fact interested in the power between social groups (22 October 2009).

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least some high school education, and a few exceptional cases had either at least primary school (some have high school or community college education). Yet Jamaican men, who are less educated and thus should be targeted by microfinance programs, are excluded from them. The failure to understand gender within this particular context—where there is exclusion of men—means that the micro-credit programs intended to help the vulnerable instead exacerbate tensions, leading to violence against women by their male partners (Goetz and Sengupta 1996, 56). Furthermore, the late Chevannes, reported situations in downtown

Kingston in which women who had acquired loans were in physical conflict with each other over the scarce microfinance resources (Ulysse 2007, 150; Freeman 2001, 1031).288 The discretion by powerful female lenders over which of the poor citizens can have loan access, not only aggravates relations between the sexes, but complicates gender relations among women: “rich higglers” versus “poor hustlas.” The educated females who run microfinance institutions thus set up both gendered and classed oppressions.

Most Jamaicans do not dispute that poor people, including males from marginalized areas, are under-represented in schools and later in various professional sectors (Hutchinson

Interview, 29 July 2009; Troupe Interview, 31 March 2009). Generally, inner-city residents face many obstacles in gaining access to social and financial services. Men that I spoke with argued that “being a man fram inna ’ere” (that is, being a Black man from the ghetto)

288 Women within the same economic class and same political stronghold were divided and aggressive women were awarded microfinance, which created local conflicts. In Whitfield Town, “Dragon” (a self-professed area leader and vendor) and “Anonymous” (a cook shop owner) both reported details about their fights with other women over political issues. “Darkening,” a female hustla I interviewed in Zimbabwe (Arnett Gardens), confided that she had fought with knives, icepicks, and acid with other women over money, men, and politics when other women who got loans and gave her a “nasty attitude.” .

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affected them negatively. Almost all microfinance lenders in Jamaica preferred lending to businesswomen. As highlighted in Table 6.1, while men constituted 38% (n = 144) of the sample of hustlas interviewed, only 13% (n=10) of all loan recipients were male applicants.

Women hustlas, on the other hand, constituting 62% (n=144) of the sample, received 87% of all loans. While nearly one-half (45%, n=65 out of 144) of all female applicants were successful in obtaining loans, only 11% (10 out of 89) of male applicants were able to obtain a loan. This data indicates that vital economic resources, designed to assist in the development of the inner cities, are diverted away from poor men.289

Table 6.1 Female/Male Access to Microfinance in Jamaica

Data on Access to Microfinance

Total/% Hustlas interviewed 233 100%

Number/% of women hustlas Interviewed 144 62%

Number/% of men hustlas Interviewed 89 38%

Total Hustlas with Microfinance 75 32%

Loan Recipients by Gender

Number/% of Females of all Female Applicants who Obtained loans (65/144) 65 45%

Number/% of Males of all Male Applicants who Obtained Loans (10/89) 10 11%

Number/% Women with Microfinance Loans of Total Micro Loans (65/75) 65 87%

Number/% Men with Microfinance Loans of Total Micro Loans (10/75) 10 13%

289 In his own work, Yunus (1998, 59) argues that poor women are often more tenacious and resourceful than poor men, and that to reach development goals, it was best that programs focus on women.

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The reasons Jamaican lenders give for not lending to poor males are reminiscent of slave and colonial times. On the plantations, white racists referred to Africans as “lazy.”

Jamaican lenders, mostly educated women, suggest that inner-city men cannot obtain a loan because “Men are lazy” or “Men prefer jobs” (salaried jobs) or “Men want big money fast”

(Fieldwork, February–November 2009).290 Such comments reinforce the stereotypes that civil society activists are trying to combat. This use of racialized name-calling to explain exclusion in micro lending by middle-class, educated staff persons (who are mostly female) exposes the colonial legacy that continues to frame social relations in modern day Jamaica.

A senior microfinance person stated, “I prefer to give loans to women. It is young men between 16 and 30 years old in high crime areas who are so violent” (Anonymous

Interview, details withheld). Another microfinance veteran stated bluntly that even if he is ready to take a risk his financial backers will not: “My investors do not want to take risks with their money and they [poor Black men in the slums] are a great risk” (Interview, 25

March 2009). More than half (52%, n = 17 out of 32) of the microfinance lenders interviewed claimed that they “do not treat men and women fairly” and that a clear preference for women does in fact exist. This finding is again reminiscent of the white colonial masters, who also preferred female slaves more than the males (Miller 1991; Rodney 1981).

Male hustlas are aware that there is an operative bias in microfinance against them in favour of their female counterparts.291 Several businessmen interviewed in the all-male focus groups said that they know that microfinance managers (most of whom are women) do not

290 Some extreme views about men included, “Men are not as intelligent as the women” and “Men have too many baby mothers.” Such stereotypes are often baseless but categorize a heterogeneous group of men. 291 Refer to Chapter 3 for the various discriminatory practices by micro lenders against male hustlas.

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take them seriously as business people. In interviews and the all-male focus group sessions,

100% (n = 89) of the male hustlas indicated they were typecast as tief (Patois word for thief) by staff persons in these agencies. Businessmen were of the opinion that elitist thinking prevails where “women in the loan places follow the letter.” In other words, middle-class and educated female microfinance staff persons are perceived to be uncomfortable working with lower class persons, whom they deem poorly educated.

In 2000 when there were a number of microfinance organizations piloting services, it became apparent that Jamaican men were the minority among borrowers, and programs excluded males (the same issue unfolded in Haiti). Most surprisingly, I found that dress, behaviour, and physical appearance were more important issues with men than with women in interviews. In interviews and the all-male focus group, men stated that they believed they had to take particular care regarding their physical appearances or they would be automatically rejected for a loan (Shortman Interview, 17 April 2009; Captain Interview, 3

September 2009; Anonymous Interview, 3 September 2009; Ras Interview, 3 September

2009; Wayne Interview, 3 September 2009; Focus group, Tivoli Gardens, 25 August 2009;

Arnett Gardens, 22 August 2009).292 One male hustla said, “Yuh need fi wear tie, put on nice cologne, and dress up and den dem talk to yuh” (Tweety bird, Car washer, Focus group 22

August 2010). In other words, men from the ghettos feel they need to wear ties and cologne and adhere to the business attire in order for micro bankers (who are mostly female) to speak

292After four months, I noticed that in the mixed focus groups I had in Kingston, women corrected and mocked the English of male participants and men would withdraw from the discussions (Focus group, Tivoli Gardens 17 July 2009; Focus group, Arnett Gardens 16 May 2009).

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to them. All the other men in the group laughed in response.293 For men, making their appearances acceptable to microfinance staff persons was necessary for them to “get tru” (get through) the approval system for a micro loan (Focus group Arnett Gardens, 22 August 2009;

Troupe Interview, 6 March 2009).

The financial needs of poor entrepreneurial men from the Kingston slums were almost never mentioned by the microfinance retailers interviewed. Comments on why women have an edge in microfinance included, “Women are the breadwinners,” “Women are the natural outputs of the system,” “Women manage money better than men,” “Women are a better credit risk,” and “Women tend to be better at business than men.”294 It seems clear that these biased personal narratives are the reason staff working for microfinance retailers prefer female clients (and see poor men from the ghetto as a high risk).

However, one private, non-mainstream (see chapter 3), finance company does respond to the needs of poor men in the ghetto. Sixty percent of Kris An Charles’s clients are men drawn from the lower strata: men in low-paying and low-status jobs and men who are self-employed (Judith and Trevor Hutchinson Interviews, 12 May 2009). Kris An Charles’s success among poor businessmen results in part from its reputation as an institution that works with men. In Trench Town, Vincent, a 48-year-old businessman, explained, “I like

Kris An Charles’ way of doing business [with me]. Plenty man go in dere. [They] don’t ask heap a question, no ‘fool fool’ question [inappropriate question] and [they are] not ’fraid to lend to wi.” In the focus group sessions, the men approved of how private companies like

293 Humour and laughter often masked the painful experiences these men shared in the focus groups. 294 Rogaly (1996, 106) discusses the reasons microfinance institutions target women exclusively in many countries.

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Kris An Charles took account of specific male needs in Jamaican society and organized policies to assist them: for example, providing private rooms to help them read and write their loan applications.

Women’s greater success in securing loans can be partly explained by the different ways men and women react to the loan process. Jamaican men are less likely to respond to questions they do not find necessary to the loan process and they will end the discussion if they are offended (Focus group, Arnett Gardens, 22 August 2009). Women explained to me that they answer all the questions (and complain later at home). In contrast to men, women are also more likely to ask for help in completing the loan applications; a man will not do this

(Budhan Interview, 24 September 2009; “Flippy” Focus group, 22 August 2009; Campbell

Interview, 28 May 2009; Hutchinsons’ Interview, 12 May 2009; Anonymous Interview

JNSBLL, 25 February 2009; Rahman 1999).

While all of the business persons included in this study had at least some secondary education, businessmen in the all-male focus group sessions admitted that there are many men who cannot complete the application forms. In Arnett Gardens, Dolvin, a 35-year-old businessman with his own painting company, explained: “Some man ’fraid of a paper ting.

‘Im can’t fill out paper. [He can’t complete the paper work on his own]. Man won’t say it

[publicly]. It’s a pride ting—so easiest ting is to go [so as not to feel ashamed or hurt his ego or pride, he opts to leave]” (Focus group, 22 August 2009). “Ras,” a self-employed taxi driver, stated that, “Kris An Charles has a side room at their offices, which is private, and a person can go in there and someone [a loans officer helps them] fill out the form” (Notes from RAs in Whitfield Town and Rosetown, September 2009).

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Male clients want personnel and programs that listen and respond to their gender- specific needs, rather than insisting that men conform to a system largely designed for women. Men interviewed stated to me that “mostly men” go to Kris An Charles and that “a man officer deal wid men betta.”(Translation: Most men go to Kris an Charles (Private finance firm) because they find that male bankers that work there treat them better.) In other words, males felt that male staff persons are better able to meet their needs. In contrast, 86%

(n = 77) of male hustlas interviewed claimed that most loan officers working for mainstream microfinance providers tend to be women, and that these loan officers would not approach them. Men perceive the anti-male bias as a conspiracy against them because they argued that microfinance managers (who are mostly female) prefer women clients.

Females Dominate Jamaican Microfinance

The Global Entrepreneurship Monitor study (Kelley et al. 2010, 17) finds that

Jamaica’s poor women lead the island’s micro enterprises and that females (also known as higglers) are the frontrunners in petty commerce (Witter 1989; Harrison 1988; Katzin 1959).

Despite high levels of female unemployment and a generally patriarchal society, there is a pronounced feminization of university-level education in the country (Mohammed 2000;

Henry-Wilson 1989).295 Women managers and experts are visible in the economy and politics. For example, Portia Simpson-Miller was the country’s first female prime minister

(re-elected again, December 2011), and there are many high-profile leading businesswomen, including Audrey Marks of Paymaster and Thalia Lynn of Island Grill (Jamaica Observer,

295 Jamaica is fortunate to have high literacy rates (ESSJ, 2008); however, males trail behind females (ESSJ 2008; PIOJ 2004, 25; Miller 1991, 78).

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March 2010). Mullings (2005, 1–5) makes a compelling argument that the presence of middle-class Jamaican women as senior managers in banks illustrates that greater gender equality has increased the participation of educated women in the workforce. She finds that this feminization of Caribbean managers has led to their increasing social power overall, which is now accorded to browning women who work in non-traditional roles.

Elite browning (light-skinned) women have moved into what are sometimes called

“old boys’ banking networks” (Mullings 2005). In doing so, such women have become visible in the banks. As these elite women increasingly hold important managerial roles, making inroads into male-dominated jobs, they challenge the gender stereotypes of women both in the home and in the workplace. This increasing female influence in banking, and in the microfinance sector specifically, suggests the emergence of gender inclusiveness. This is a wrong assumption. Poor Jamaicans, especially males from marginalized areas in Kingston,

(who need loans the most) are denied financial services.

In downtown

Kingston, most of the leadership positions in micro banks are women, and most of the borrowers are low-income women.

Many MFIs boast that at least 75% of their clients are women. As indicated by Figure 6.1, 73% of the microfinance lenders are female. Seventy-

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one percent of all the senior staff in wholesale microfinance, 78% loan officers and 58% managers are female. At the highest level of leadership, such as CEOs and managing directors, there is a 52/48 ratio in favour of men. At the financial frontlines, 78% of the loan officers of women, and they earn an average of between USD $9,534 and USD $20,000 a year, excluding bonuses.296

Women on average are better educated and excel more at school than men. The

Planning Institute of Jamaica (PIOJ) data shows that the educational attainments of women are substantially higher than that those of men, particularly at the tertiary levels (ESSJ 2008,

Chapter 22). This may be one finding that explains why women are the preferred clients of university-educated female bankers. Female-focused microfinance programs reveal that loan officers and managers select women clients to protect their own financial incentives (e.g., bonuses). For example, because salaries and bonuses are tied to performance results, staff people (who are females from middle class families and usually university educated) lend to people they feel comfortable with, and do not take risks with those they perceive as different

(Rogaly 1996).

Findings in the Jamaica case revealed that loan officers (males and females) judged unwed mothers as “slack” and not serious about business. One loan officer views women who have had children by different men as a potential risk (Tricia Interview, 3 June 2009;

Baby G Interview, 5 May 2009; Anonymous Interview, April 2009, details withheld on purpose; Ionie Interview, 3 March 2009). In a similar fashion, in the Guyana case (see

296 JNSBLL and Nation Growth pay high salaries for loan officers: In a meeting at JNSBLL, it was confirmed that loan officers earn approximately USD $20,000 per annum (February 2009; Survey August 2009).

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chapter 4), micro lenders follow a “hidden transcript,” in which Indian managers value married status over single-mother status (Anonymous Interview, April 2010, details withheld on purpose).297 This married condition policy favors Indos and excludes Afro-Guyanese, who tend to be involved in visiting (common law) relationships and unmarried unions.

A female hustla I interviewed suggested to me that it was not her gender but rather the slum where she lived (class location) and her unwed status with several baby fathers that inhibited her access to microfinance (Anonymous Interview, 23 July 2009). In the downtown context, single mothers are the norm, and in my work there, it was not viewed as a bad thing.

Yet, women who have children with more than one man said they were labelled by

(educated) staff persons as “slack” (sexually promiscuous) (Focus groups, 20 March and 16

May 2009). A female loan officer explained to me that bonuses are linked to loan portfolio quality (Armendáriz and Morduch 2007, 280), and she saw certain behaviours (e.g. promiscuity) as risks.

Microfinance staff persons would apply their own class biases to apply a definition of

“good character” that does not fit with women living in the downtown slums. A 42-year-old female hustla named “Baby G,” who owned a sewing business and was the single mother of four children all by different men, argued that she was constantly rejected for a micro loan because of her lifestyle (Interviews, 5 May and 25 July 2009). According to Baby G, a young male loan officer “downgraded mi” [insulted me] when he asked, “How many baby fathers do you have?” and “Was the last man any good?” It is clear this loan officer asked personal

297 Rahman (1999) coined the idea of “hidden transcript” when he was analyzing Grameen bank and public policy versus policies that are made behind the scenes.

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questions that were not relevant to a profitable sewing business. From a business standpoint, one could argue that a businesswoman who has multiple partners also has access to other persons to support her loan repayments in case of default. Instead, class-identified managers judged her unmarried lifestyle as immoral because it did not conform to middle-class and uptown values. In the next section, I examine how a highly feminized microfinance sector appears to have harmful consequences for men.298

Gender Bias: Exacerbating Local Conflicts in the Slums

Women-dominated microfinance programs appear positive, but when more closely examined they reveal inequality in their exclusion of poor males.299 Jamaican scholar Tafari-

Ama (2006, 189) argues that allocation of subsidies to certain community members contributes to local conflicts. Microfinance also contributes to internal group conflicts when scarce resources like microfinance go only to certain types of women in a community. When educated female managers select certain female clients with whom to do business, this comes at the exclusion of males, and actually creates a “disempowering effect,” for women because domestic violence increases (Bedford 2009, 49; Big Reds Interview, 31 March 2009; Sico

Interview, 26 May 2009; Marcia Interview, 12 May 2009; Millie Interview, 6 May 2009;

Rahman 1999, 72). Many women knew they were favoured over their male counterparts

(“Mrs. Burrell,” 18 April 2009; “Miss Paddy,” 27 March 2009). However, not all women received loans, given the tier-system in selecting certain kinds of women, ones that conformed to middle-class morale codes (Anonymous consultant Interviews, April 2009).

298 I use the term “highly feminized” to refer to the female domination of the microfinance sector by women as staff as well as clients. 299 Ledgerwood’s Chapter 1 on country context has assisted me in sharpening my view in terms of gender dynamics in microfinance.

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High male unemployment in slums and a system that seemingly prioritizes women in the allocation of resources increase the possibility for social conflict at the local level.300

Female hustlas explained to me that they suffer physical or verbal abuse and quarrels when their male counterparts are excluded from resources, especially in family-owned businesses when a couple works together, as were 18% of the businesses considered in this study. The family enterprises that had received a micro loan (in the past) were successful because male partners agreed to let their female partner navigate the system and apply for the loan.301

These men feel rejected and that their manhood is threatened when lenders would rather do business with their female partners. This leaves women—who need the loan for the family but want to appease their men—in an ambivalent space. Increasingly scholars (Bateman

2010; Bedford 2009; Ahmed 2008; Armendáriz and Roome 2008) criticize micro and small programs for their exclusive focus on women because family units endure the resulting domestic conflict of program biases.

Within the same social class, poor men and women can perceive themselves as pitted against each other in a scramble for scarce resources (Tafari-Ama 2006, 189; Miller 1991,

136). Women micro entrepreneurs interviewed in this study believed that micro-credit allocated exclusively to them complicated their personal lives unjustifiably, claiming that the deep frustration felt by the men they lived with has serious consequences for them (Focus groups, 2009; Rahman 1999, 72). Faye, a 49-year-old vendor from Maxfield Park, argued that “Yuh can’t leave mi man down like that. We is all di same inna ’ere” (Translation: You

300 The local data from the SDC is most helpful when looking at unemployment rates in the slums, as certain urban areas have very high unemployment rates compared to national averages. 301 Women clients would also hand over micro-credit to their male partners as needed (Goetz and Sengupta 1996, 53).

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cannot leave my man down like that. We are all the same in here (in the slum) (Interview, 20

March 2009). In other words, what I learned was that many women did not feel it was reasonable to exclude men from microfinance programs. Men and women of the same class grouping are in this struggle together. Female entrepreneurs like Faye felt that programs that reject men (e.g., their husbands, brothers, and sons) who belonged to the same social class were an affront to them as a family. Generally, female hustlas were not supportive of programs that focused only on women because they believed that their sons and husbands deserved the opportunity for financial success.

Clear evidence that the bias in microfinance lending contributes to domestic violence became apparent during an all-male focus group, when a young man who owns a barber shop in Trench Town recounted that he used to “punch up” his baby’s mother (a visiting relationship) because of the tension over finances, including a time when she got a loan.302

Frustrated over his social situation, he explained, “When a mon cyant be a mon, he cyant do nuttin.” In other words, this subject felt that a man who cannot earn a living and provide for his family is not a man. Bedford (2009, 62) found that in LAC region there were “wounded masculinities” that has a negative impact on women and families. Men who are chronically unemployed feel societal pressure to make a respectable living and to provide adequately for their families, and when a Jamaican man is unable to carry out these functions, he is perceived as a social failure. Aware of this perception, he releases his anger on women.

Ahmed (2008, 122) also found in a study on microfinance and masculinity in Bangladesh

302 Miller (1981, 96) explains that marginalizing poor males results in domestic crimes against women.

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that the exclusion of men from lending programs exacerbates violence in the household.303

Women in most places want their men to succeed because it contributes to the well-being of the family.

In a Tivoli Gardens focus group, 21% (n = 19) of businessmen expressed the belief that their women obtained the loans because the male loans officer wanted or had sex with his woman (Focus group, 25 August 2009). Some businessmen had the perception that the their partners were in a position to trade sex for loan payments (highly unlikely given that most staff persons are women).304 This attribution of their women’s success in obtaining a micro loan to sexual promiscuity signaled to me the need for men to save face: it was psychological compensation for their own humiliation for failing to obtain a loan

(Vonderlack-Navarro 2010, 136).

Guyana’s Microfinance: Race Structuring and a Women’s Place

In Guyana, Black female hucksters have a long tradition in micro enterprise, including leading informal banks like Box hand (Besson 1996). Women were also pioneers in the village movements. All of these activities are testimonies to an entrepreneurial spirit of

Afro-Guyanese. Yet, Blacks are negatively stereotyped by Indian males as lazy (Kissoon

2010a and b; Gibson 2006). Over the years, subsidized micro-credit projects (discussed in chapter 4) have had a female focus, but these programs failed. Indian male managers running these programs see loans (especially large ones) as bad risks when allocated to Afro-

303 Ahmed (2008, 145) makes a compelling argument that MFIs need to understand the varieties of masculinities and that excluding supportive males can have a negative impact on female clients. 304 A “baby mother” is a woman who is a single parent (child’s mother), and she may or may not be in a visiting (unmarried) relationship with a man.

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Guyanese. Indo managers treated micro loans to Afros as charitable projects because they do not believe women’s micro enterprises can be sustainable. Former president Jagdeo’s program for single mothers, Women of Worth (WOW) was viewed with skepticism by Afro-

Guyanese because they see it as a stigma against them (Benschop Interview, 7 May 2010;

Bristol Interview, 4 May 2010; Senior official at the Ministry of Finance Interview, 15 April

2010).305 It is too early to tell but skeptics of WOW believe that most loans will go to widowed Indian women.

Guyana’s case suggests (although it is a small sample) that race is more important than gender in accounting for the discriminatory allocation of credit. Hucksters argued that it is their racial and ethnic identity (Afro-Guyanese) and not their gender that excludes them from microfinance. The salience of race as an identity over gender is further illustrated by the fact that women’s organizations such as Red Thread,306 Women across Borders, and

Caribbean Association for Feminist Research and Action (CAFRA), rather than being unified over gender-based oppressions, are deeply divided by race, class and politics (Benn

Interview, 7 May 2010; Seaforth Cordis Interview, 30 April 2010; Andaiye and Marcus

Interviews, 1 November 2008). The women’s organization Red Thread was labelled as a political and leftist organization, alienating those women who did not feel comfortable with the group’s left politics (Nettles 2007, 58). Although feminist organizations should, theoretically, be able to unite women suffering domestic violence across racial backgrounds, the women stakeholders I met appeared separated by their multiple identities of race, class,

305 WOW selects women with incomes less than USD $195 a month. See more at: http://www.microcapital.org/microcapital-brief-women-of-worth-wow-mircofinance-scheme-in-guyana-to- help-single-mothers-access-loans-expands-to-essequibo/ 306See Nettles (2004) and Trotz (2004, 9–16) for details about Red Thread.

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politics, religion, and urban/rural residency (Benn Interview, 7 May 2010; Seaforth Cordis

Interview, 30 April 2010).

Thus, an Indo-centric micro banking sector discriminates against Afro-Guyanese men and women because of their race and ethnicity, not because of gender. As shown in Table

6.2, although the numbers for the Guyanese sample are extremely small, they suggest that

Blacks are excluded from the possibility of obtaining loans. Table 6.2 shows that 30% of the men who applied for loans received them, versus 11% of the women. Among the five people who obtained loans, three of those were Indo-Guyanese males; however, not a single Afro-

Guyanese male obtained a loan, despite the fact that only 4 of the 29 loan applicants were

Afro men.307 Two women obtained loans: one Afro and one Indo. The fact that financing is largely managed by Indo males managers likely explains why Indo males are more likely to access credit, and why only one Afro woman got a loan (and a very small one) when accepted as a client. Although the numbers are very small, they do suggest that in the

Guyanese case, being female is negatively correlated with obtaining a micro loan and that being black and male might also be particularly disadvantageous.

The Guyana case provides only impressions of what may be happening in the sector.

As noted earlier, the undisclosed married condition policy penalizes Afro-Guyanese, who are less likely to be married. In one interview, an Indo-Guyanese manager (name withheld) explained to me that the married condition policy helps to ensure repayment of micro loans

307 It might be argued that this low success rate stemmed from the fact that few Afro men applied for loans— perhaps because they did not think they had a chance

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by both parties (as discussed in chapter 4). Indian managers were not able to explain how this policy may disqualify Black families.

Table 6.2 An Analysis of Micro Loans by Gender and Race in Allbouystown

Number of Hucksters who Applied for Loans 29 100%

Number/% of women hucksters 19 66%

Number/% of male hucksters 10 34%

Number/% of hucksters with a loan 5 17%

Loan Recipients by Gender and Race

Number/ % of Females of all Female Applicants who obtained loans (1 Indo, 1 Black) (2/19) 2 11%

Number/ % of Male Applicants with Micro loans (all Indos) (3/10) 3 30%

Number/ % of Women with Micro Loans 2/5 2 40%

Number / % of Men with Micro Loans 3/5 3 60%

Number/ % of Afro women with a loan /of all women applicants 1 5%

In one interview, Sita, an Indo-Guyanese female vendor, argued that the married requirement works for Indian couples. Sita is married to an Afro-Guyanese man but was unable to access a micro loan. In her view, being married to a Black man (Afro-Guyanese) is a disadvantage for successfully obtaining a micro loan (Focus group, Allbouystown, 28 April

2010). On one hand, the married condition policy works for poor couples. On the other hand, the requirement may not work for Blacks: a Black food vendor, Rhea, explained that being married to an Indo-Guyanese man did not ensure her access to microfinance (Interview, 27

April 2010). These two cases suggest that racial bias combined with the “married policy” work to exclude Black people. Interracial marriages did not succeed in getting loans.

Although it would require a larger sample to verify this, the “married condition” policy

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seems to give priority to Indian unions but not to black or mixed racial married couples

(Alonze Beaton Interview, 30 April 2010; Phillips Interview, 30 April 2010; Anonymous

Interview, 17 April 2010).

Indian bias in micro banking is based more on race than on gender. Black business people who access finance receive very small loans because Indian staff do not trust them to repay the loans (Alonze Beaton Interview, 30 April 2010; Focus group, Allbouystown, 28

April 2010; Anonymous Interview, 1 November 2008). As mentioned in chapter 4, two male micro lenders (one Indo; one Afro) confirmed that Black hucksters get smaller loans than

Indos, but each had a different explanation as to why. The Indo lender (who does not track loans by race) explained that Indians have a family network (buddy system) to tap into for small loans and felt that Indians are “honest” and demonstrate a “willingness to repay loans”

(Persaud Interview, 19 April 2010).

Microfin, which tracks loan sizes by race and is run by an Afro-Guyanese, discovered that large loans go to Indo-Guyanese because Indians do not apply for small loans. He too found that Indians, instead, have relatives to assist them with very small loans, whereas Afros do not. However, Microfin data also suggests that a systemic bias against Black businesses, may exist which may be due to an ingrained cultural bias, and has little to do with the needs of borrowers (Harlequin Interview, 16 April 2010). This is illustrated through Black female hucksters’ claims that Indo lenders were more likely to deny them access to loans or to larger loan sizes (“Nee” Interview, 26 April 2010; “Big Mama” Interview, 20 April 2010; “Franco”

Interview, 20 April 2010).

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Haiti: Complications of Female Privilege

Haitian women are revered as the poto mitan because of their work in the informal sector to support their families. The USAID report (2008) found that 77% of the Haitian microfinance clients are women (Colloque sur la Microfinance, 28–29 September 2010).

Female ti machann access micro loans from lenders, who are predominantly educated males.

The picture in Haiti resembles that of many micro-credit programs in other parts of the world, where poor women receive loans from educated male managers (Mangones Interview,

11 October 2010; USAID Report 2008; Ahmed 2008; Rankin 2001; Rahman 1999).308 This set up does not seem to be problematic.

Haitian lenders argue that women create demand, and are more entrepreneurial as well as self-driven to repay loans than men (St. Gilles Interview, 7 October 2010; Marcelin

Interview, 5 October 2010). Favouring women as clients appears to have positive consequences for social development because of women’s central role in family duties

(Yunus, 2007; Rutherford 2000; Rogaly 1996). However, the increased debt that women shoulder has increased pressure on them and allowed male partners to reduce their financial responsibilities in some communities (Vonderlack-Navarro 2010, 124; Bedford 2009, 47;

Ahmed 2008, 124; Goetz and Sengupta 1996, 56). This increases burdens on females because men see their female partners benefiting from micro loan programs, and feel less inclined to take up their share of the work. As in the Jamaican case, microfinance lending that favours women creates a different set of challenges for Haitian families.

308 Ahmed (2008) tried to access data on the number of male employees at Grameen but was unable to get this information.

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Unlike the Jamaica case, where the exclusion of men from loans created anger,

Haitian men did not seem upset that women received more loans than they did. Haitian men reportedly renege on their financial commitments to their families, thus increasing financial burdens not only on women, but on children who get drawn into the work too (Dieufait

Interview, 5 October 2010; Calpas Interview, 30 September 2010; Vonderlack-Navarro 2010,

128; Rahman 1999, 72). Women responsible for the family’s financial welfare and for the repayment of loans will depend on the labor of their children working in the family business.

Thus, once again, microfinance that targets one gender over another has a negative impact on the women it tries to help. With males excluded from access to loans, there is now a commensurate burden on women to repay debts by themselves (Fieldwork, October 2011;

Mangones Interview, 11 October 2010; Vonderlack-Navarro 2010, 132).

Consideration of how gender relations operate within a particular context is vital to understanding a bias in allocation of financing. In all three cases, the gender of the lenders was not the main factor influencing loan allocation and the impact on borrowers. In order to understand each situation, we must consider other biases, particularly those of class and race.

For example, Jamaican lenders (most of whom are female) hold clear class biases. They allocated microfinance disproportionately to a certain type of women—excluding women with a lower-class life style and men whose speech, illiteracy, and personal style violated middle-class sensibilities. These choices negatively affected household relations.

In the Guyana case, while it is true that more Indo men than Indo women received loans, the Indian credit agents and managers (most of whom were male) excluded poor Afro-

Guyanese clients, both men and women. Hence, the gender dynamic is only one factor in a

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complex interplay of identities interfering with fair lending processes. In Haiti, male-run microfinance organizations appear to be offering inclusive financial services to largely poor women clients. Furthermore, the male lenders who self-identify with the poor ti machann have not used their social class to harm relations at the household level; rather they have used their own personal experience to assist poor women’s access to financing. However, there is a possibility that emphasizing loans to women may enable male partners to withdraw from contributing to the household.

Microfinance for Haitian women appears to be a mixed blessing: women can access loans yet there may be extra burdens placed on women. Ti machann explained that small business financing has given them independence, voice in financial decisions in the household and more respect from men (Focus groups, 9 October 2009). While all women stated that loans contributed to increased incomes, a few ti machanns (30%, n = 4) interviewed admitted they gave their loans to their male partner/husband to either leverage his business activities or to keep the peace (Fieldwork, 2011 and 2008; Jean-Louis Interview,

3 October 2010; Molyneux 2001, 181). Moreover, female borrowers mentioned in the focus group that post-earthquake problems and debt have increased burdens for them. These financial burdens have created mental and physical stresses because their male counterparts, who are excluded from the programs, do not assist them to repay these loans (Focus group, 9

October 2009).

Three Microfinance Cases: Rethinking Gender in Context

It is assumed that microfinance caters to mostly female clients, but this is not clear in the Guyana case as the largest lender only reaches 22% female clients (See Table 4.1 in

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chapter 4). Nor are female focused loans always a positive development intervention. As noted in Table 6.3 (see below), when micro lending operates in an exclusionary manner to favour clients based on class, race, or gender, these biases may contribute to inequalities if the lender does not program appropriately for the social context—as they do in the Haiti case

(Molyneux 2002, 182). Even in Guyana, where race affects female hucksters’ ability to get a micro loan, so too does their gender. Women generally have less access to microfinance than men, while Indo males are likely to get microfinance (and larger-sized loans).309

In Jamaica and Haiti, the gender-based issues differ accordingly. Jamaican women dominate microfinance both as clients and as staff persons, and this leaves poor young males and certain women marginalized. In contrast, Haitian lenders who are mostly men prefer lending to female clients, which in time may be an issue (Extantus Interview 14 October

2010; St. Gilles Interview, 7 October 2010; Palme Interview, 30 September 2010). A 2007 issue of a periodical published by the Canadian Mission in Port-au-Prince (Magazine de la

Cooperation Canadienne en Haiti July 2007) stated that only 19% of the managers in the credit union sector were female, and 47% of the clients were female. Despite the fact that the number of women staff persons is low, the caisses populaires remain gender balanced in terms of their outreach.

309 Trotz (2004, 5–7) contends that gender analysis is needed when analyzing the race politics (e.g., the 1960s race riots, the violence after the 2001 election).

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Table 6.3 Gender Analysis of Microfinance in the Three Cases310

Jamaica Guyana Haiti

Business people say there is gender-bias Yes No Yes

Mostly female clients get loans Yes NA Yes

Males dominate institutions No Yes Yes

Women clients feel vulnerable when targeted by microfinance Yes No No

Signs of women disempowering effect in microfinance Yes No Mixed

Haiti: Domination of Black Male Lenders

In Haitian society, mulatres and blancs men dominate big business and influence the political affairs; and the elite noirs men have had stakes in politics since independence. In some educated middle-class families, men and women share decision-making, but this has not been the norm (Anonymous Interviews, 3, 7, 14 October 2010). For generations, Haitian men have not only controlled the public space, but the private realm as well (N’Zengou-Tayo

1998, 120). In the Bon Repos focus group, Orphise, a 50-year-old cola vendor, and breadwinner explained to me that her husband is in charge of the family and makes all decisions (Focus group, 9 October 2010). Female-focused microfinance has not resulted in changed (violent) behavioural or cultural patterns between Haitian men and women.

As in other contexts, a Haitian woman’s access to micro-credit changes the family dynamic in traditionally organized households, where men control the decision-making.It is not clear to what extent women’s access to loans negatively affects them. In the Bon Repos

310 The numbers in the Guyana and Haiti cases are too small to draw any firm conclusions; however, they do suggest possible trends that require further investigation.

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focus group, all women agreed that if a man was in the household, he was in charge—even when he did not have a job. Consequently, Marie Rose, a 42-year-old bar owner, told me that she gives her micro loan to her male partner when he needs it for his own activities (ibid).

Different to Jamaica, Haitian stakeholders I interviewed remarked to me that their women would act outwardly submissive to their male counterparts, and that was done to ensure family peace, they agreed to and respected male demands to appropriate their micro loans

(Fieldwork 2010). Women with micro loans contribute to the family’s income (Ahmed 2008,

124; Mayoux 2001, 450; Rankin 2001, 32; Goetz and Sengupta 1996, 45); however, several of the female ti machanns I interviewed said that they gave their micro-credit to the males or let them have access to their business’ earnings (Focus group, Bon Repos, 9 October 2010;

N’Zengou-Tayo 1998, 127).

As highlighted in Table 6.3, Haitian men (like Indo-Guyanese men) tend to hold senior rank, dominate the boards, and are the shareholders in most commercial banks. At

Sogesol, Daphne Loussaint Heraux—a light-skinned311 Haitian woman—is the director general, and Pierre-Marie Boisson—a mulatre—is the president. Though Black Haitian women are visible as microfinance clients, few run the MFIs.312 In 2011, Fonds Haitiens d’Aide a la Femme (FHAF)—which since 1982 has traditionally had female directors like

Francine Celestin—appointed a male director, Wesner Marcelin. KOTELAM, the country’s largest credit union with 45,000 members, is headed by a very dark-skinned Haitian woman,

Marie Marcelle St. Gilles (St. Gilles Interview, 7 October 2010). Carine Clermont, president

311 Refer to chapters 1 and 2 for the use of the term “light-skinned.” 312 N’Zengou-Tayo (1998, 132) finds that many Haitian women are in senior positions in commercial banks.

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of Groupe d’Appui pour l’Intégration de la Femme du Secteur Informel (GRAIFSI), is also active in a rural finance network, Konsey Nasyonal Finansman Popilè (KNFP). In the expatriate-run MFIs, such as FINCA and Fonkoze, there is a large female presence at managerial levels. At the first locally organized microfinance conference in Port-au-Prince

(September 28-29, 2010) there was one dark-skinned Haitian woman, Carine Clermont of

GRAIFSI, as a keynote speaker. In my interviews (n = 48), the managers (most of whom were men) assumed that men are better suited to the hard work of mobile micro banking, revealing an inherent male bias.313

Also evident was an anti-male bias against men in Haitian microfinance (as in the

Jamaica case), where lenders target women. Women are assumed to be vendors and reliable clients for microfinance, and men from the slums are branded as criminal, dishonest and lazy.

One elite interviewee who works with women’s rights organizations stated that focusing only on women stigmatizes them, exposing them to violence in the home and negatively affecting male-female relations in general (Mangones Interview, 11 October 2010):

I am uncomfortable when there is no [gender] balance. I think there should be an effort to look at competence or intelligence and use the concept of poorest because the total exclusion of one group [men] creates issues for women in other areas. When we say women reimburse credit, what are we really saying about poor men? We need “mixity.” Why reinforce a cliché [that poor men are bad] and instill fears about our young [poor and Black] men? Gender is about equity and a sole focus on women will not curb domestic violence. (Anonymous Interview, details withheld)

313 McLeod Arnopoulos (2010, 169) makes a point that the reason the SKS Bank was male-dominated was because Indian husbands would not allow their wives to become loan officers.

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Microfinance directed exclusively to women leaves them vulnerable to verbal and physical abuse (e.g. Jamaica case). In the focus groups Haitian women did not reval any domestic violence due to loans as in the Jamaica case. The women did explain that small loans that are reserved for them increases their financial responsibilities because their men withdraw from working when they know the women can access financing (Focus groups, 9

October 2010; Vonderlack-Navarro 2010). Nicole, a 31-year-old used shoe vendor, explained that her male partner did not help her because she had a loan (Focus group, Bon Repos, 9

October 2010). Roudy, a 41-year-old male clothes vendor, said that he would not support his wife if she already had a loan (Focus group, 9 October 2010). This reverts the onus on women to manage a household by herself once she gets a loan.

Men who may also need a loan but find themselves excluded from micro-credit programs resent pulling their weight in terms of family support, because they see the women as able to manage all household expenses. This burden then falls directly on the woman and she is forced to do everything on her own.314 In my fieldwork, I observed that the ti machann had a noticeably calmer and quieter (also referred to as submissive) disposition compared to the other two cases (Jamaica and Guyana). It was explained to me that this quiet demeanor especially with men enabled women to negotiate their needs within households (Kabeer

2001). Ahmed (2008), Sengupta and Goetz (1996), and Rahman (1999) have criticized loan programs because women do not have control over their loans. However, Naila Kabeer

(2001, 83) argues that Bangladeshi borrowers may actually be making calculated decisions

314 Vonderlack-Navarro (2010) finds that women clients in the Genesis microfinance program in Honduras, are often to manage all family expenses once they get a micro loan.

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when they give their loans to their husbands because men’s businesses tend to be bigger than theirs. Perhaps, Haitian women are also making strategic decisions on the best ways to use their loans (Fieldwork, October 2011).

Conclusion

Micro lenders across all three cases were comfortable talking about gender identities because they felt their programs reached women. However, in Jamaica and Guyana, where race and class interacted with gender, managers in microfinance appeared less inclined to discuss race and class identities as markers for exclusion. Gender identity is not the most prominent identity in determining allocation of economic resources in all three countries and operates differently in the three cases.

Context affects the gender dynamic differently in each case. I argue in this study that gender must be studied in relation to the other identities, such as race and class.

Microfinance’s exclusive focus on women (as seen in the Jamaica case) has left men out of the programs, put women in a precarious position, and created conflicts at the local level

(Rankin 2002, 18; Montgomery 1996, 300). The fact that there were more female managers in Jamaican micro banking did not make allocation more inclusive. In fact, female privilege in micro lending benefits only certain types of women, negatively affects allocation, and significantly complicates relations between poor women at the local level. Furthermore, female-focused financial programs exclude men, and this approach negatively affects the very women it intends to help.

This study uncovered that the allocation of micro-credit according to gender and social class is the principal aspect of Jamaican microfinance. Black men and certain women

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remain on the fringes of lending resources because of inherent biases of educated middle- class female micro lenders, who subscribe to a colonial mentality (see chapters 2 and 3).

Gender bias in programs driven by elite women, who choose economically better-off higglers or women in monogamous relationships, divides women in the slum communities. This fact of gender-focused economic resources complicates relations among low economic strata men and women in the ghettos.

In Guyana and Haiti, educated males dominate the staff in micro banking institutions.

In Guyana, gender identity operates in tandem with race, and a Guyanese woman’s gender is considered in relation to her race. None of the Afro male or female hucksters I interviewed saw gender as the primary reason for their exclusion from lending programs. The Indo-

Guyanese men who dominate micro lending discriminate against Black women clients and give them much smaller loans than they give to Indo-Guyanese clients due to deeply embedded cultural prejudices. Covert policies such as the “married condition” further alienate Afro-Guyanese and privilege Indo-Guyanese, who tend to be in married unions.

In closing, Haitian micro lending mimics programs in many other parts of the developing world, where educated indigenous males run microfinance programs for poor females. Scholars (Ahmed 2008; Rahman 1999; Goetz and Sen Gupta 1996) have critiqued an exclusive focus on women in microfinance because of the backlash and other negative consequences for women’s rights. However, Haitian men do not complain about female counterparts accessing loans, as do Jamaica men. Haitian lenders were recognized for their conscious attempt to reach out to marginalized people (along class lines). However, there are signs that more women should be promoted to senior levels in microfinance organizations,

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particularly in the caisses populaires. More in-depth research is needed to analyze the burdens placed on poor ti machann—as men tend to forfeit their family obligations when women receive loans. It is unclear from my findings, whether this is to avoid violence or whether it is a strategic decision made by women because she finds that her husband’s business earns more income for the family (Ahmed 2008, 122; Rahman 1999, 73).

Chapter 7 Conclusion: Politics of Microfinance Compared

At the First Microcredit Summit meeting in Washington DC in 1997, Mohammed

Yunus (formerly with the Grameen Bank) claimed that microfinance was a phenomenon that would make poverty a relic, relegating it to museums. Our children, he declared, would no longer know what poverty is. Now, fifteen years after Yunus made that prediction, the commercial models in microfinance face criticism from various parts of the world.315 Much has changed since the heyday of microfinance in 2006: Yunus is no longer leading the

Grameen Bank and regulation in India and Bangladesh has curbed activities of private retailers (Roodman 2012b; Bateman 2011).

When I first started this project in 2006, it was not popular to follow a critical analysis of microfinance, as the industry had won the Nobel Peace Prize. But now I find that people support the need to look more closely at the managers and staff persons managing money given to the poor. This type of work, where one privileged group confers funds to a disadvantaged group, merits as close a scrutiny as any other sector (Microfinance Banana

Skins 2011; McLeod Arnopoulos 2010, 317; Bateman 2010). When Maclean’s Gatehouse

(2006) first interviewed Yunus after he received the Nobel Peace Prize, he defended micro- credit as a solution to terrorism and world poverty. Today, Yunus’s (NYT 2011; Yunus

315 See various newspaper articles from 2010 to 2012: “Think Again: Microfinance,” Foreign Policy 1 February 2012; “Microfinance under Fire,” New York Times 21 March 2011; “Microfinance under Scrutiny,” Economist 18 November 2010; “India's Major Crisis in Microlending—Loans Involving Tiny Amounts of Money Were a Good Idea, but the Explosion of Interest Backfires,” Wall Street Journal 29 October 2010.

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2007b) views have changed, and he has observed that microfinance is not a stand-alone tool to combat poverty nor can it correct structural inequalities.

Certain micro lenders, fixated on profit-making of their own institutions, have foregone the promise to make financial services inclusive. Larry Reed of the Micro-credit

Summit Campaign (2012) reminds critics that lenders cannot be homogenized as one type.

This is a fair point. Yet, I found that the exclusion in microfinance takes place regardless of the type of lender (e.g. financial NGOs, MFIs, commercial banks and small private firms can exert bias against business people) in Jamaica and Guyana. This comparative study demonstrated that certain micro lenders (of various types) go against this promise of inclusive financing, excluding eligible business people because of deeply embedded historically-rooted prejudices.

The identity biases of microfinance lenders exclude potentially viable micro- entrepreneurs from accessing economic resources that could improve their livelihoods, as seen in the cases of Jamaica and Guyana. When such bias is present, it lessens the effectiveness of micro-credit as a poverty reduction tool and may exacerbate other social problems, such as domestic and community conflict. Haiti’s case departs from the other two due to the social origins of managers. Having people who know first-hand the lived experience of their clients mitigates class and racial bias, and allows lenders to embrace a revolutionary rhetoric that connects to marginalized groups and to draw on collective systems that work for the people.

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This Study

This project is based on my six years of doctoral fieldwork. In my preliminary fieldwork I had assumed that Jamaica would be the “good” case that would instruct the other two (Guyana and Haiti). Jamaica’s long-standing, stable democracy and legacy of trade unions led me to think that its lenders would avoid partisan and identity politics in micro lending to the urban poor in Kingston. I expected Jamaican microfinance lenders (most of whom were educated females) to be aware of the “garrison phenomenon” and to consciously make micro loans to remedy the grinding poverty of the downtown slums. Instead, I found a sector riddled with politicized programs that many of the poor avoid.

I also expected Haiti—given its reliance on foreign aid, the expatriate domination, and its weak governance—to be the case illustrating politicized microfinance. Haiti’s managers are political but in a positive manner. I did not anticipate that this island nation of repressive regimes and polarizing politics would have inclusive microfinance. However, after three extensive field trips (2008; 2010; 2011), it became apparent that formalized cooperatives, caisses populaires (credit unions), and informal banks have led effective grassroots micro lending. Haiti shares with Jamaica and Guyana a politics of exclusion, where dark-skinned Black people have been largely disenfranchised by whitened and brown political elites. However, Haitian microfinance lenders recognize this entrenched system of social inequality and use financing as a tool to empower—to give back—to the excluded masses, and take risks to expand the notion of inclusive financing.

A comparison of Caribbean microfinance in Jamaica, Haiti, and Guyana reveals that microfinance as a development tool has unfolded quite differently in each country. In many

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countries in the Global South, particularly ones with colonial and enslavement legacies, societies remain stratified by various cleavages, such as race, class, and gender (Handelman

2011, 95–97). Microfinance operations in developing countries can exacerbate local conflicts in cases where local managers belonging to a certain race or class, for example, use personal prejudices to exclude certain persons: I found this to be the case in Jamaica and Guyana, respectively. In spite of the prevailing perception that actors in microfinance are “champions of the poor”—committed to transforming conventional banks to reach the poor—I show in this project that the biases held by Jamaican and Guyanese lenders have created systems of exclusion.

Through two of the cases, I argue that there are different outcomes when politics is involved in micro-credit in socially stratified societies: microfinance can operate as exclusionary where there is bias—as in Jamaica and Guyana; or it can be inclusionary, as in

Haiti. A blatant denial that cultural biases harm and interfere with microfinance allocation does not mean that the managers and staff are unaware of its operation, however, I feel that

Jamaican and Guyanese lenders know very well that many of the urban poor are politically ostracized. They exhibit a choice not to act to mitigate the prejudices that are part of their sub-consciousness.

The very act of privileged people conferring monies to the urban poor in specific social contexts, such as slums, is highly political; yet these Anglophone lenders refuse to admit that politics is relevant within microfinance. This refusal to admit that racial and class affects lending decisions means that there is little hope these biases will be mitigated. As mentioned in chapters 3 and 4, in the Jamaica and Guyana cases, the failure to admit the

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problem results in its perpetuation and the continued exclusion of the urban poor—those people micro-credit is intended to help—from loans. Poor entrepreneurs, aware of the racial/class biases and potential for political manipulation, thus turn to informal banks (e.g.,

Partner, Box hand), tapping into local banking systems they trust. In this way, they can avoid compliance (binding) to biased micro lenders or political elites.

The exclusionary politics of privileged class groups is commonly practiced in Port- au-Prince, and this behavior has provided a moral justification for lenders (many not from these class backgrounds) to lend to the majority of Haitians who are cut off from services, including financial ones. Haiti’s educated Black microfinance managers are socially conscious and they engage with microfinance as a revolutionary tool for social change. These managers are fully aware that political exclusion disenfranchises the entrepreneurial poor.

Instead of ignoring the possible impact of race/class discrimination, they see micro lending as a tool to counter deeply embedded economic divisions. Corrupt politics coupled with intense racialized class conflicts frame the environment in which microfinance operates; yet managers who run microfinance programs have staved off exclusionary practices in microfinance, particularly through the caisses populaires. Haitians deliberately design and execute financial programs that are collective and inclusive.

In this closing chapter, I first give a comparative overview of microfinance in the

Caribbean, focusing on the key findings from my three cases. Secondly, I discuss the themes of this project that have relevance in political economy, including the politics of exclusion, gender politics in micro-credit, clientelistic micro banking, and Black women’s agency in informal banks in slum communities. Then, I point to directions for future research. Lastly,

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and most importantly, I end this work with policy implications. Jamaican and Guyanese micro banking is problematic, and policy mitigations are needed to counteract internal discrimination. Haiti’s case provides instruction for developing countries that are affected by enslavement and colonization. As much as possible I look to Haiti’s case, as well as local findings, to offer solutions on how to manage microfinance in such a way that it empowers rather than oppresses vulnerable populations.

Micro-enterprise Development in the Caribbean

Despite powerful constraints, African slaves during colonial times engaged in entrepreneurial activities and formal banking (St. Pierre 1999; Wong 1996; Witter 1989;

Mintz 1955). Informal and formal micro lending in the Caribbean thus predates the rise of

‘revolutionized’ microfinance in the 1980s as an international development tool. Caribbean states have long made micro banking part of their strategy for poverty reduction: in 1949, for example, the state-owned Penny Bank in Dominica made micro loans to the poor (Barriteau

2006; Lashley in Barriteau 2006). In colonial Jamaica, cooperatives assisted citizens in the agitation for independence. Entrepreneurship has a long-standing experience in the region.

Because of the high levels of poverty and crime in most countries in the Caribbean, donors and state actors have invested considerably into micro-enterprise development as a way to fight poverty (Poto Mitan 2008; Tennant 2008; Lashley 2004; Rankin 2002; Rahman

1999). Yet the embedded prejudices of people running these microfinance programs interfere with the social objectives of community and economic development. Caribbean micro banking in Jamaica, Haiti, and Guyana reveals that lending unfolds quite differently depending on context and history. This study demonstrates that in two of the cases pervasive

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societal racial, class, and gender divisions produce exclusionary outcomes in microfinance to the urban poor.

Jamaicans and Guyanese living in the slums do not trust these programs because of the lenders’ exclusionary practices. In both of these cases, politics is embedded within microfinance programs. The findings also show the importance of the nature and attitudes of micro bankers in shaping how resources are distributed. In the case of Haiti, racial and class tensions in society do not determine microfinance allocation; lenders are conscious of the potential negative consequence of such biases and strive to make micro lending inclusive.

Haiti’s pro-poor financial services are focused on grass-roots collective systems that check race and class discrimination—as lenders hire staff who know the environment and people they are working with.

Microfinance, the goal of which was to make micro-credit accessible to the entrepreneurial poor, is in reality not easily accessible to Jamaican hustlas or Guyanese hucksters. Jamaican lenders were unwilling to acknowledge the role of identity biases in the allocation of micro loans; whereas in Guyana, they admitted to some degree their biases without remorse. In Haiti, managers and staff, even whitened elites, were politically astute and aware of class and racial conflicts. They have direct knowledge of the lives of those for whom they organize programs to improve social conditions. In the summary of each case below, the cases of Jamaica and Guyana show decision-makers whose microfinance programs are socially removed from the lived reality of those seeking a micro loan. This increases the potential for race and class biases, particularly in the socially stratified

Caribbean context.

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Biases in Jamaican and Guyanese Micro Loan Programs

In the Jamaica case, exclusionary microfinance takes place because class-identified micro lenders (who can also be partisan) discriminate against certain hustlas because of their class (e.g., location, language/education), race (e.g., skin colour, hair) and gender (e.g., men, women with children by different fathers) and politics. Micro-credit’s apparent collusion with political actors blocks the social empowerment aspect. Micro lenders and political elites legitimize an informal order when they work through Dons because this structure oppresses and limits the freedoms of hustlas. Politicized microfinance forces many business people to make calculated decisions to exclude themselves from loan programs to avoid clientelistic practices. As a result, hustlas turn to Partner banks, run by women, to resist the power of Big

Men. Partner banks, reaching tens of thousands of people, are testimony to the tenacity of the hardworking hustlas, who use informal banks to be independent of political strongholds.

Those business people who refuse to take on politicized economic resources available to them have engendered positive developments in their communities, which is what makes their story in chapter 3 so compelling.

The case of Guyana illustrates the creation of powerful ethnic elites in a pluralistic society. There, we saw how political power over time has resided with certain ethnic groups to oppress other ethnic groups. Guyanese East Indians misuse this multicultural environment to incite conflict between the dominant races in order to attain power for their own ethnic group. As noted in chapter 2, Guyana’s politics is gripped by violent racial polarization between the two dominant ethnic/race groups: Afro and Indo Guyanese. In the last 20 years, an Indo-led authoritarian state has directed financial resources away from the Afro-Guyanese

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(Gibson 2006, 377). And the Indian political elites disburse economic resources to their rural

Indo-Guyanese voting base (see chapter 4).

Two decades of Indo-centric politics have produced an environment where the ruling ethnic group has spread racist cultural narratives that stigmatize poor, urban Afro-Guyanese.

Most micro lenders (except for Afro lenders) were adamant that their racial discrimination does not affect the allocation of micro loans. Yet, Indo lenders in interviews perpetuated stereotypes of Afro-Guyanese, which undoubtedly affects how they make loans. In fact, a major Indo-led microfinance lender uses a covert married condition policy when appraising applications, a policy that results in the exclusion of Black hucksters, who are less likely to be involved in legal married unions. The Guyana case thus demonstrates racial bias, since

Indo-Guyanese lenders are more likely to privilege Indian clients. In the slum of

Allbouystown, Afro hucksters interviewed were well aware of the racism against them in microfinance, and know that the Indian PPP government does not make development a priority in rundown Black communities. As a result, Afro hucksters have relied on Penny

Bank and Box hand, to meet their livelihood needs.

Haitian Lenders: Socially Conscious

Haiti, since its inception, has experienced hardship like no other country. It is a country challenged by extreme poverty, unforgiving natural disasters, a vicious cycle of undemocratic regimes, violent political leaders, and intense racialized class conflict. Yet, the

Haitian case stands out from the Jamaica and Guyana cases, demonstrating that history and local organization can actually work to make microfinance inclusive. Haitian lenders, the caisses populaires, have managed to stave off racial and class biases in the allocation of

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financing to the country’s poorest citizens. This is an exceptional finding, because development aid in Haiti has in general not been effective.

Ti machanns showed a different attitude towards micro lending than the business people in Jamaica and Guyana, who were skeptical of these programs and the people running them. This difference in attitude arose through the fact that micro banking has developed in

Haiti during periods of extreme hardship. Cruel and oppressive regimes have alienated the moun andeyo leaving them to their own devices, and cooperatives and caisses populaires have been an important part of the local response. Managers who resemble the clients understand this history and have cultivated lending programs that are radical in its discourse.

Most Haitians access money through the caisses populaires and informal banks. Both types of banks have adhered to African-inspired systems of kombit (collectives), such as sol and cooperatives, which have persisted under various repressive regimes. Most Black

Haitians I interviewed had a combination of pride and gratitude for the role of cooperatives and caisses populaires in contributing to survival of the poor. Micro lenders have developed financial programs that fit with this social context. Black Haitians have founded and run cooperative and collective micro-lending programs through the caisses populaires. Micro bankers genuinely understand the lived reality of the very people they work with and have absorbed the cultural traits of the ti machanns (poor traders) they serve. Many come from those social backgrounds, and others have simply embraced these values. Micro bankers openly state that class discrimination infused with racism marginalizes the masses. The social consciousness of these managers encourages them to use microfinance as a tool to transform the economic situations of the poorest citizens. As a result, their design of and approach to

Haitian microfinance is inclusive of the masses—and they take serious risks in doing so.

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In interviews, Haitian lenders, foreign and local, discussed the importance of economic democracy, and expressed the view that microfinance was the vehicle to assist economically disenfranchised Haitians (Fieldwork, September and October 2010). As highlighted in chapter 5, Haitian lenders use financial services to level the playing field for excluded people. This attitude is remarkable given the corrupt and apartheid-like social structure that exists in countries. The fact that most lenders are at most one or two generations removed from the people they serve influences their philosophy and approach to development finance. Haitian micro lenders, including the whitened managers, thus saw microfinance as a tool to bring about economic democracy (defined to me as closing the widening economic gap between the rich and the moun andeyo). And, in trying to upset the status quo these lenders also risk their lives. In contrast to this revolutionary approach in microfinance, bankers in the other two Anglophone cases hardly had an interest in the economic transformation of society.

Although many international development projects in Haiti are viewed as political and poorly managed, microfinance appears to be an exception (Zanotti 2010). Chapter 5 explains that the elite noir (educated Blacks) in micro-banking have used education as a vehicle for upward social mobility (François Interview, 7 October 2010; Mangones

Interview, 11 October 2010; Colloque sur la Microfinance, 28–29 September 2010). Hence, many banking managers and technical staff are Black with similar social backgrounds. And, as I have outlined above, despite the racialized and class environment, these microfinance sector staff are socially conscious and understand the experience of the ti machann.

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Significance of Findings to the Study of Politics

Micro lending in developing countries can exacerbate local conflicts when personal prejudices result in the exclusion of certain persons from access to resources earmarked for them. International development agencies and organizations offer aid to assist economic growth through micro enterprise development, but these policies, cloaked in a larger neoliberal political project have been simplistically championed without taking into account the cultural diversity and inequalities in emerging markets. Financial programs that target the entrepreneurial poor do not take into account the ways in which the local managers running these programs pervert their purported aims. Micro lenders have the power to misuse resources in ways that leave poor citizens (the consumers) at risk and counter development goals of helping marginalized groups.316 And, this misuse of power makes the masses living in the slums resentful of the local elites (Chua 2006).

The original intent of microfinance—to assist the poor excluded from conventional banks by providing access to financial services—involved the attempt to correct social and market failures that were unfair to certain groups of people (Wilson 2001; Rahman 1999). It meant that banks, which catered to local business elites, had to widen their market reach and had to rethink inherent biases (usually unfounded) about the poor and women. In state banks, corrupt local elites (usually males) misused financial resources (e.g., loans) for their own political ends. By the 1990s, the neoliberal push for free-market democracy coincided with a

316 Some donors in Haiti are aware of risks to poor consumers and are developing policies to protect microfinance clients (Email, Fils- Aimé 2 August 2012).

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shift in the microfinance policy from a tool that was poverty-focused to one that was commercial and would recover costs.

Microfinance’s reinvention in the 1980s was to make access to finance a reality for excluded people in developing countries. Local microfinance managers who know of the divisions in their own society, as in the Jamaican and Guyanese cases, have misused pro-poor financial services to fit with their own prejudices. I find that the individuals running microfinance programs who are focused on race and class issues conveniently reinforce the profitability issue. As a privileged set of people in control of these resources, they are able to use their own biases exclude certain groups (e.g., Afro-Guyanese are less likely to repay loans). The goal of financial profitability is touted as a priority, and the microfinance managers, who belong to a certain group, are able to put aside the social goals in micro-credit to achieve profits (Bateman 2010; Rankin 2001). In doing so, lenders have reordered microfinance to fit with their own personal biases. They misuse financial resources intended to economically and socially empower marginalized people in the slums, and instead reproduce inequalities through the processes in these enterprise development programs.

Neoliberal influenced commercial lenders focused on repayment of loans have been problematic. However, in the Jamaican and Guyanese cases some local elites do not follow the cost recovery goal of neoliberalism and they deny access to eligible business people because of their own inherent biases (and not good business practice). Scale is a fundamental measure of creating access and opportunities to the very poor; yet Jamaica and Guyana have low outreach due to political or identity biases. And for them to be relevant in the

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microfinance arena, these lenders will need to adjust the way they do business to become more inclusive and reach new borrowers.

It is fair to say that certain commercialized microfinance lenders that follow the neoliberal politics to increase financial viability and reach new borrowers have had a negative backlash in terms of inclusive outcomes. Yet opting out of the neoliberal economic order is not an option for many Caribbean countries (nor do I think it would be a proposal people would embrace). However, there may be ways to make the current economic system work. Member-owned models in Haitian microfinance (which also focus on repayment rates and profits) have a different ownership structure focused on its members, and they determine by vote the sharing of the dividends. Perhaps, there is a way to appropriate neoliberal politics to make banking democratic and locally-driven. The cooperative models share the dividends and profits among members, and it is the membership who determines how profits are used.

The latter model suggests that within a neoliberal era that there may be a way to civilize markets through collective ownership.

Political Elites’ Interference in Microfinance

Within certain societies, political elites and privileged ethnic groups are sufficiently powerful that they shape both microfinance programs and access to such programs. As the

Jamaican case illustrates, state involvement in micro-enterprise development is important because emancipating the urban poor through independent livelihoods can reduce compliance to political bosses. This independence threatens the political elite. Political actors interfere in microfinance because they want to be seen as benefactors for the poor masses. A prime example occurred in Haiti after the 2010 earthquake. When a fire occurred in the Croix des

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Brossales market, President René Préval interfered in microfinance by legislating that the ti machanns did not have to repay their loans. Managers in microfinance responded and Préval used state resources to subsidize these losses because leaders feared politicians involving themselves in microfinance to make policy. In India, the 2010 suicides of microfinance clients in Andhra Pradesh resulted in increased government regulation to contain commercial lenders, which favoured the government-owned self-help loan programs. In March 2011,

Prime Minister Sheik Hasina of Bangladesh ousted Mohammed Yunus, founder and Director of Grameen Bank, because she was aware of the political advantages of controlling microfinance to win electoral support (Roodman 2012a; New York Times, 21 March 2011).

Taking cues from other leaders, political elites in Jamaica and Guyanese are no exception, and they have directly interfered in micro lending to control the urban poor.

Political control of the urban poor is a goal that goes beyond the three cases in this study. In my comparative project, I have demonstrated that politics is already embedded within many micro-credit programs and it is the manner in which local managers respond that can either nurture political manipulation (e.g., Jamaica or Guyana) or stem biases (e.g.,

Haiti) from interfering with the allocation of micro loans. My research has shown that microfinance manager behaviour is an essential element in the debate on the efficacy of microfinance as a poverty reduction tool. Although I do believe that a few (brave) practitioners would agree with my assertion, many others will not agree. In light of the recent criticisms of microfinance, the literature has moved increasingly towards criticizing microfinance as a neoliberal product. Yet it remains to scrutinize the individuals who

(mis)manage micro banking for the world’s poor. This research has focused on micro lenders as the key variable in explaining problems of accessing microfinance.

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When local sub-elites (microfinance managers) capture lending programs and apply their own race, class or gender biases against persons otherwise eligible for it, this compromises the social development aspect of microfinance. Identity politics should not determine who gets and who does get loans, yet intersecting identities such as race, class, and gender actually do affect the allocation. Radical rhetoric of “economic democracy” espoused by Haitian managers (foreign and local) is absent from the Jamaican and Guyanese discourse on microfinance. Rather, Jamaican and Indo-Guyanese managers deny that their own identity politics interferes negatively with micro-credit access to the urban poor.

Micro entrepreneurs in Jamaica and Guyana argued persuasively in this study (see chapters 3 and 4) that they are indeed excluded from micro loan programs by biased local microfinance managers who replicate inequalities in the larger society. Microfinance managers who are prejudiced against certain clients reinforce clients’ feelings of distrust, as in the cases of Jamaica and Guyana. In these two countries, micro lending reflects the deeply entrenched class and race prejudices of those persons in positions of power. Hence, business people do not trust these programs. Micro lenders in Jamaica and Guyana make matters worse when they refused to admit the role of race and class in the allocation of loans. Haitian micro lenders, even whitened elites, were intuitively aware of class and racial conflicts and, despite the stratified social environment, used financial services in a radical way to benefit those ostracized by political and business elites.

Exclusionary Microfinance in Jamaica and Guyana

In Jamaica, class (e.g., ghetto location) and gender (e.g., being male) are entwined identities that make it difficult for poor people, especially Black men, to access micro loans.

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As shown in chapter 6, micro lenders, most of whom are educated females, who manage these programs live far from the lived realities of the hustlas on whose behalf they are supposed to make micro finance loans. Imported models of microfinance that are female focused exclude poor Black men as well as women deemed sexually promiscuous by the educated elite females running microfinance programs.

Biased racialized cultural narratives warp the telling of the Black entrepreneurialism story in Guyana. The mostly Indo-Guyanese bankers, operating within a racialized political environment, favour poor Indos over poor Afros. Poor Blacks, and to a lesser extent dougla, are marginalized from economic resources. Jamaican and Guyanese micro lenders who manage loan programs are not interested in socially conscious policies to overcome the politics of exclusion that alienates marginalized groups. And, their blatant disregard for social exclusion is what makes them and the programs they run disliked by many micro- entrepreneurs in the slums.

Home-grown Caisses Populaires and Sols: Reaching the Masses

State weakness, extremely high levels of poverty, and the historical alienation of

Haiti’s moun andeyo all contribute to the vibrancy of both formal and informal microfinance.

Poor entrepreneurial people have had to organize. In spite of a weakened and corrupt state, poor Haitians have a strong sense of democratizing local structures and pooling community resources for the well-being of the community. Sols brought over by African slaves more than 200 years ago continue to reach millions of economically poor Haitians, as noted in the last section of chapter 5. Cooperative culture has been around for a long time and it is deeply embedded in communities as a way to contest political wrongdoings. In this historical

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context, the caisses populaires, commercial banks, and NGOs have hired technically- competent Blacks, diversified staffing, and hired personnel interested in adjusting financial programs to the needs of Haitians.

Haitian micro lenders, Black and local whitened elites as well as foreigners, actively engage in a discourse about economic democracy to correct social injustices by an entitled minority, which controls the country’s wealth. While some micro lenders in Jamaica and

Guyana appear reluctant to speak about politics, race, and class, Haitian microfinance lenders

(Black, local whitened elites, and foreigners) are eager to discuss these issues. Local staff persons working in microfinance programs, especially in the caisses populaires, are drawn from the very communities they serve, and concepts of economic democracy are not mere rhetoric but a part of the social agenda for these agencies doing business.

Gender Politics in Micro-credit

At first glance, gendered exclusion does not seem possible given that microfinance is focused on women. However, in the Caribbean context, female-focused models exclude poor males and complicate the living space for the female counterparts of these men. Microfinance programs and methodologies that have been largely learned and borrowed from abroad fail to take into account the local context. Brohman (1995, 130) stresses the importance of programming for the local context. In chapter 6, this extrapolation of women-focused financial programs supports the growing literature that it exacerbates intra-household conflict between men and women and intra-community conflict among women of the same social group (Ulysse 2007; Tafari-Ama 2006; Miller 1991). In Kingston, a preponderance of females working in microfinance institutions at senior levels and a focus on women as clients

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do not ensure gender equality. Rather this gender imbalance disempowers and puts female clients at risk for domestic violence (Jamaica case). Moreover, leaving poor men out of microfinance contributes to internal disputes, and men exit from their duties and overburden women with all the family’s financial obligations (Haiti case).

While access to microfinance is not exclusively gender-related (because class and race biases also affect who can access a micro loan), gendered biases are occurring. Educated women elites leading microfinance organizations are the main instigators of gendered biases against poor males in the Jamaican case. Poor men must become a part of the development process for change to occur in lower income communities. Failing to rethink gender in terms of its context leaves micro business women in these communities disempowered in a conflicted space, with angry and emasculated men. Jamaican men (potential clients) feel excluded by the women in charge of these financial programs because these educated middle class actors (not from the slums) are detached from the very people they are supposed to serve.317

Comparative Gendered Reflections

Microfinance is run largely by Indo-Guyanese males who come to the job with a general gender bias and an inherent prejudice against Afro-Guyanese as a whole. As I have said before, based on the available evidence (which is admittedly only suggestive), that the

Guyana case, like the Jamaican, appears one in which racial discrimination is the primary factor in explaining loan cases. Three of the five loans that were given went to Indo males.

317 “Hogman” mentioned that it was “women’s time” and that was why microfinance was going to females and not to hardworking men like him, and he urged that in order to curb crime, microfinance managers needed to “think men” (include males in their programs).

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However, their racism against Afro males may be even more powerful than their prejudice against Afro women. In other words, racial bias may be deepened by gender (anti-male) bias. As we saw, in my very small sample in Allbouystown, not a single Black man obtained a loan, although one Black female did. Although Afro-Guyanese argue that their race impedes them from obtaining access to microfinance, there is an impression that being male and Black increases the likelihood of not getting a micro loan. It may also create an environment where Blacks do not even bother to apply for loans because they believe they have no chance of obtaining one. As in Jamaica, there is a view that Black men are less reliable than women.

Microfinance access in Haiti reportedly is focused on helping excluded female micro- entrepreneurs. Similar to the Guyana case, senior Haitian micro lenders are mostly males.

However, in Haiti most people accessing a micro loan are poor Black women. Stakeholders interviewed and ti machanns both claim that micro lenders do prioritize women over men in

Haiti. Though the sample is quite small, there is some indication that in Haiti (as in Jamaica) managers favour women in the allocation of loans and this complicates the lives of women and can lead to domestic conflicts. Although there was no sign of Haitian male lenders causing harm to the female ti machann, some of the stakeholders interviewed felt that the situation of educated men making loans to poor women may have future implications.

Haitians I interviewed call for a gender balance, or what is locally referred to as “mixity,” where there is promotion of dark-skinned Black females to managerial levels and the clients also include males.

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Clientelistic Micro Banking

Clientelism clearly has a negative effect on microfinance development in the two

Anglophone cases of Jamaica and Guyana. The Jamaican case illustrates how microfinance can appear, upon a superficial examination, to be effectively aiding development. However, upon closer examination, it becomes evident that microfinance is at risk of reinforcing oppressive structures. Jamaica’s Big Man politics, is the unfair disbursement of economic resources to certain segments of the urban poor. Jamaican Dons and MPs insert themselves in various ways into formal lending projects in the slums to push their own agenda. And certain

Indian Guyanese lenders are perceived to have close relations with the political elite. In both places, micro lenders claim political neutrality but are, in fact, either receiving financial state subsidies, or are the recipients of support from informal politics, partisan politics, or both.

Local people know about these arrangements even though managers think they do these dealings in the back rooms.

Informal and partisan politics seeps into Jamaican microfinance, and as a result many business people make conscious decisions to withdraw from politicized forms of microfinancing. Clientelist microfinance, exposed in the Jamaica case, is likely to be found in other diverse developing contexts. Local people should not be underestimated because they know that their politicians use misuse funds and collude with micro bankers. Informal lenders such as Dons, in the case of Jamaica, also make micro loans, although the consequences may be dire for those hustlas who default. Dons make it possible for microfinance retailers to do business in the slum community, and at times the lenders and

Dons align and work together because of respective self-serving interests. Lenders want security and use the informal order to ensure repayments are made and Dons are able to

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control new entrants and manage the residents. Hustlas perceive these alliances correctly, and accordingly many opt out of microfinance programs because they do not want to be controlled by politicians or gangsters. As such, they quietly resist politicized microfinance, and this means that hustlas turn to their own local banks, called Partner.

Black Women’s Agency

Politics inside of microfinance force poor business people, many of whom are female, to retreat towards self-financing options. Literature on informal banks is extensive, and while this literature examines people’s ingenuity in creating local banking programs, it does not discuss the agency of uneducated Black women in organizing banking systems for low- income entrepreneurs when microfinance lenders fail to reach these entrepreneurs.

Jamaican hustlas and Guyanese hucksters rely on informal banks when microfinance is manipulative. Women from the slums create informal banks to help excluded persons access money. Haitian lenders have taken cues from the legacy of informal systems and the locally-run caisses populaires are able to resist exclusionary tendencies. When microfinance programs involve politics they consequently fail to empower or transform lives of poor people who live under oppressive local systems (e.g. Jamaica and Guyana). Elites in both

Anglophone countries running these programs understand a different lived reality from the very poor business person living in the slums. Simply put, I found that poor business people in both countries distrust local people managing micro-banking programs. When ordinary people perceive that microfinance is being offered in an attempt to manipulate them politically or to exclude them based on identities, micro entrepreneurs show resistance by turning to informal banks, such as Partner and Box hand. This agency in informal banks

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allows business people to remain independent through enterprise and this in turn produces a form of resistance from below.318

Informal banks are not only about survival mode but they are a testimony of people’s perseverance not to be controlled. As highlighted in chapter 3, agency emerges when poor

Black women entrepreneurs, living in politicized garrisons, create Partner banks to resist clientelistic microfinance. Jamaicans also turn to Partner, a long-standing savings tradition among poor people, because they trust these informal systems more than they do microfinance programs run by elitist intermediaries. Jamaican hustlas resist political micro lenders by organizing Partner for excluded groups. Afro-Guyanese hucksters rejected by

Indian bankers turn to local financial systems Box Hand for its reliability and to save face.

When entrepreneurs witness resources being squandered or perceived to be political, they become skeptical about the intention of microfinance.

Future Research Directions

This project has opened up many avenues for future work examining the intersection of politics and private sector development in slums in the Global South. Three main areas of work can build on this study to examine whether non-Blacks, who are poor in the Caribbean, access services more so than Afros. First, this project suggests the importance of expanding research on the Guyana and Haiti cases to examine political involvement in micro lending in the peripheral towns or rural areas, where the bulk of the populations live. Second, in Guyana

318 Raeymaeker (2009, 7) finds that informal cross-border trade is a form of resistance of the Congolese people to a patrimonial state. In 2010, on assignment to examine cross-border trading in the Eastern Congo, I witnessed traders turning to self-employment as a way to reduce their reliance on clientelistic politics.

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and Trinidad, have large Indian business communities, and it may be useful to examine whether Indian businesses behave in ways that discriminate against other groups, particularly

Blacks, since both states have Indian political leadership. Third, research might be directed toward an examination of the experience of business persons of mixed-race backgrounds, especially the dougla racial group in Guyana, to see whether mixed racial groups experience privilege (compared with Blacks) or discrimination in business activities.

There is also room for comparison to this study beyond the Caribbean, as biases in local economic programs may be occurring elsewhere, such as in Africa. For example, in the

Democratic Republic of Congo and Rwanda I found that that many cross-border traders felt that microfinance programs excluded them based on ethnicity; yet lenders claim that their programs focus on women (Assignment, DR Congo and Rwanda, July and August 2010). In sub-Saharan Africa, it would also be important to examine issues of class, ethnicity, and gender as factors in the exclusion. My work in the Caribbean shows that the interplay of these identities affects who gets and who does not get loans and this analysis may be relevant in other places too.

As shown in two of the Caribbean cases, partisan politics can interfere with micro lending, and it might also be a factor in West Africa’s microfinance lending practices. Kah,

Olds, and Kah (2005, 25) found that, in Senegal, leaders in microfinance institutions capitalized on political relations for their own ends. Colleagues working in microfinance programs in countries like Nigeria, Egypt, Indonesia, Afghanistan and Iraq suspect that micro loans are subject to political party politics. In July 2012, my work in Jakarta, Indonesia revealed that politics within micro lending programs is a current issue among marginalized aboriginal groups. It is likely that local politicians would interfere in the allocation of

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microfinance since it seeks to meet the needs of such a large constituency, the entrepreneurial poor.

After years of examining the social economic group at the base of the economic pyramid (low-income entrepreneurs), I have had an opportunity to meet and discuss microenterprise development with the business leaders in various global south countries. Research on the politics of the business elites, also referred to as market-dominant minorities (Chua

2003), is an important area that requires more research. In order to interview business elites for this study, I had to get clearance to enter the gated communities where they lived and worked. Rich business elites are also affecting development outcomes. Understanding market behavior at the top level and its relations to the political elites is central to understanding poverty, development programs, and investments in a developing country. In fact, in Haiti there appears to be a nouveau riche class of Black entrepreneurs who are quite different from the traditional business elites, which may also be worth exploring.

An examination of the diversity (race/ethnic, class, and gender) of actors on the multi-lateral level of the microfinance industry is extremely important. Such research would involve examining the technical and racial background of donors and technical experts who manage global microfinance programs. Important questions to ask would be: Do women dominate leadership positions within the global microfinance industry? Is identity politics in microfinance policy a repercussion of what is going on in programs in the international development arena? The question of race and class biases of those leading these programs is a salient one; and in considering how policy is formulated, we need to think about the identities of these actors.

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Policy Mitigations to end Discriminatory Microfinance

Historical racial intermingling has led to complex cleavages along class, race, and gender lines. In the Caribbean, whitened minority elites have benefited from their inheritance and are at the pinnacle of an economic pyramid. In contrast, the majority of people of African ancestry are left at the base of the pyramid with limited options of social and economic advancement. During the post-independence era, a significant number of educated Blacks emerged: this group has not always assisted the poor. This study found that eligible business people are not able to access financing, even in microfinance programs. Systemic discrimination hinders microfinance development in two of these enslaved and colonized countries: Jamaica and Guyana, where outreach is low.

Haiti’s story is different despite its similar legacy of race and class based politics.

Educated Blacks are divided: some have used their power to wreak political havoc and to deprive people of basic resources, and others have used their education to rise in organizations to advocate for change. The latter group is the type of Blacks working in microfinance organizations in Port-au-Prince. These technical managers use their skills in a way to correct unfair political conditions and market imperfections to help the marginalized.

They have learned about the struggles of the poor to make a better life through watching their mothers and grand-mothers struggle with small trading activities. These Haitian managers view micro loan programs as a political tool to emancipate the economically downtrodden masses.

The radical rhetoric we hear in Haiti touts microfinance as a tool for change and this is missing in the other two cases. Instead micro bankers in Jamaica and Guyana misuse

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microfinance and they instigate inequalities among people, when they allow their personal biases to interfere with the allocation of loans to the urban poor. There are no mechanisms of accountability to expose this deliberate use of identity and partisan politics to hurt vulnerable populations. These intermediaries mask their own prejudices as “helping the urban poor,” when in fact their use of financial services stigmatizes certain groups and contributes to local conflicts.

As demonstrated in this project, low-income business people in the slums of Jamaica and Guyana are excluded from or are excluding themselves from economic development programs. Jamaican managers and staff persons have applied class-based biases infused with racism to allow certain hustlas to access financing. The Jamaican case is further complicated by the use of clientelism. Microfinance managers who subscribe to a white ethos and uptown norms, and who are fully aware of the garrison politics downtown, allow partisan politics to occur in these environments. Only hustlas who conform to these uptown middle-class value systems are able to access micro loans. It is because of the attitudes and actions of the people managing these programs, that most business people downtown do not trust microfinance as a tool to help them. Policy changes are needed to counter these covert activities and to ensure micro lending is consistent with its social empowerment aspect (an aspect they claim to do to when they access subsidies).

Cultural narratives by Indo-Guyanese are racist and demeaning to all Afro-Guyanese, and the state project of depriving Afro-Guyanese access to resources has permitted this for the past 20 years. Many Indo micro bankers exhibit an obvious racism, which they have internalized to prevent Afro-Guyanese from accessing micro-credit. Indian staffing is

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justified through the argument that Indo-Guyanese have business acumen and Afro Guyanese do not. Other managers claim they do not want to put Afro-Guyanese staff at risk because of their racist clients. These excuses fit with the state’s politics of excluding Black actors from either managing or accessing economic resources.

Anti-discrimination policies are absent from economic development programs which are to assist marginalized groups like Afro-Guyanese. Instead microfinance managers and staff persons have absorbed the Indian-centric political project to exclude Blacks from access to finance. Outreach to eligible Black borrowers is low because of racism. Policies are needed to mitigate racism by ensuring that staff persons who resemble the marginalized groups are hired. Furthermore, although ordinarily targeting resources can stigmatize one group through preferential treatment, in this case, the extreme exclusion to financial resources has been so systematic over two decades, there is now a need to target Afro-

Guyanese hucksters.

Interestingly, the Haitian case may be the one to instruct the region (and other diverse places) on how to increase outreach and to develop inclusive financing for the poor. Lenders who understand the context mitigate class and racial bias in pro-poor financial programs.

These managers and staff persons have learned from the masses about how to develop and organize financial products, services, and programs in such a way that it borrows from local traditions and systems to meet the livelihood needs of the entrepreneurial poor. In fact, managers take grave personal risks when they adhere to a radical rhetoric of changing the economic system. Yet, microfinance development is limited in what it can do to transform the social inequalities pervasive in Haitian society.

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In this section, I make policy suggestions at the national and regional levels to end discrimination in micro lending and to protect poor consumers.319 At the national level, these recommendations are for state agencies overseeing microfinance. Leaders in financial institutions, microfinance organizations, and the country’s development banks need to restructure funding programs to ensure that internalized biases are rooted out from these institutions. Such biases jeopardize investments, as the risk for social conflict will always be present when racial and class prejudices are embedded into financial programs for the poor.

At the regional level, bi-lateral and multi-lateral agencies have the responsibility to expose the social inequalities and make leaders aware that systemic and historically rooted biases are affecting access through prejudiced lending practices. I am aware this will not be easy. No one thought that social performance management (SPM) systems would be possible in microfinance but a number of MFIs are using SPM to adhere with investor guidelines. I believe that (partisan) politics should be a unit of analysis when microfinance organizations are reviewed or evaluated. This means that when institutional appraisals are conducted (in the

Caribbean), there is a line item for this category “politics active.” And, should there be evidence of politics that is negative then the appraisal should give a low score for performance. Politics of the negative sort can affect the external funds MFIs can receive because most investors do not want risk losing their money. The idea here is that lenders will have to ensure that their institutions are free from partisan politics (and identity bias, may be harder to prove) to access capital. Otherwise, the failure to measure partisan and identity

319 Some of my policy suggestions for Jamaican are taken from a report (JA-T1042) completed for the IDB and the Office of the Prime Minister in 2009.

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politics within microfinance institutions will not end exclusionary microfinance. We must understand the social dynamics of the societies in which micro lending is taking place to ensure inclusive financial services.

Reforms in Jamaican Microfinance

The reality is that microfinance is suspect in the Jamaica case. Business people in the garrisons do not trust most micro lenders, especially the mainstream ones. And, these micro lenders busy themselves with forums and conferences discussing best practices (Carib Cap website, accessed 23 August 2012) and they miss that embedded biases is what is affecting performance. An inherent tension exists in the microfinance sector between potential clients and micro lenders: there is a need to build trust. A certain sub-set of microfinance retailers are not reaching business people in the Kingston slums because of their own cultural prejudices. The state, donors and investors do not question the class bias infused by racism that affects outreach to the downtown slums. The reforms will change the mind-set of employees in micro lending organizations. Staff persons must be given incentive to adapt to the needs of clients and to develop programs and services that reach vulnerable persons. To achieve this goal the following is required:

 Need for evidence-based research that goes beyond technical issues of those clients

accessing loans. Independent researchers should go to the ghetto communities and speak

to a cross-section of entrepreneurial people in order to understand the impact loan

programs have on the entrepreneurial poor, both as clients and non-clients. Ideally, the

research should not be subsidized by the micro bankers, a current practice of

organizations such as JNBS or MEFL, as this influences the outcome of the research.

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 Scale alone cannot assure inclusivity. Data must be disaggregated by slum, gender, party

affiliation (if any), age and education to understand which segments of the poor are being

left out.

 Streamline and better organized micro and small business networks to avoid duplication.

 A reevaluation of the lending practices of managers and staff persons of microfinance

organizations so that lending reaches more people and avoids any bias. The number of

private financial companies is increasing because of their ability to work in hard-to-reach

communities. Companies such as Kris N Charles, First Union, and Microcredit Limited

appear to be reaching the entrepreneurs in the slums. In this project, it seemed as though

Kris N Charles appealed to male clients from the garrisons. It would be good to learn

more about their lending practices that appeal to this group.

 Increased opportunities for young males who are entrepreneurial and live in the slums

and seem to have no to access to financial facilities. This can be done by creating

assessment tools that can be used to find out who these young males are and what are

their capabilities of repaying the loans.

 Diversify the type of lenders in the market and give support to private financial

companies who lend to the slums such as Kris n Charles. This will force mainstream

lenders to expand outreach to groups they deliberately exclude.

 An increase of loans for family-owned businesses (e.g., cook shops) to both men and

women.

 The promotion of patois in the workplace. One way to restore trust between the classes is

to increase the use of patois in retail banks, especially ones offering microfinance, so that

the staff and managers connect with clients through language. Adults should not be made

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to feel that their local dialect of English is inferior to the language of instruction given in

the formal educational system (Hossein 2009).

 The hiring of staff persons and managers who have first-hand experience of the garrisons

so as to make clients comfortable accessing loans from MFIs. In this way, staff persons

and the organization’s culture will not superimpose cultural and class bias on people

downtown. This is a practice carried out in a number of microfinance worldwide because

these managers will lived experience and know how to reach and program for these

entrepreneurs. Staff persons should be ready to undergo specialized training to enable

them to adapt to the needs of the poor, as in the case of Haiti.

 Special gender consideration for male applicants. Having focus groups with men only is

needed to understand their business needs and to develop products that fit with their ways

and habits. This will send a message that institutions are not privileging women clients

but are listening to men too, and will remove the pressure women feel to be the only ones

securing a loan for the family.

 Male literacy in the downtown slums is low. Men are sensitive to their limited literacy;

therefore providing private rooms where loan officers can assist applicants to read

applications is important. This effort to support males may also require one-on-one

sessions to go over the policies with them.

 A review of specialized microfinance agencies with their headquarters in the exclusive

New Kingston area. If the bulk of the clients are located downtown, then micro lenders

should be based in the downtown commercial district or mid-town (Cross Roads) areas,

as opposed to the uptown financial district where many of the garrisons are not close to.

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 Review policies that exclude single mothers (with several partners). These women should

not be flagged as problematic because they do not conform to uptown norms. Micro

lenders can also expand their view and see multiple partners as guarantors for the client

than impose their own moral righteousness on people who choose not to marry.

 Zero tolerance of the use of the Don or informal structures by microfinance staff persons

to ensure clients repay their loans through fear. Such use should be grounds for dismissal.

Also, zero tolerance for institutions accepting a parallel state structure and using it to

ensure high repayments rates (related to bonus system). Clients living under a parallel

state apparatus should not feel that microfinance staff persons collude with Dons or area

leaders. A hotline number (by text or calling) to report political interference should be

developed so clients do not have to feel threatened, and a neutral agency would have to

manage these complaints.

 Due diligence of staff persons to stay out of partisan politics, and not to tolerate

professionals who openly engage in politics (especially if they are involved in loans to

slums). Organizations or staff persons who do politicking should not be involved in micro

lending given the politicized nature of the slums. State-run micro lenders (e.g., SSF,

MIDA, JBDC) are not encouraged because of their poor track record. Donors that confer

and contract such individuals and organizations are complicit in reproducing inequalities

and creating partisan alliances.

 The inclusion of a political unit of analysis in audits and ratings of microfinance

programs. Any lender seen as working within an informal political system and evidence

of supporting it (working with informal leaders) should not receive a positive rating.

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 Encourage innovations such as the COPE-Hope for Children (local CBO) project, so that

lenders who do not want to send their staff persons into certain communities can work

through locally-based CBOs to reach eligible business people. However, if MFIs hire

staff persons with lived experience in the slums, they understand how to work in these

contexts.

Policy Programming to Privilege Afro-Guyanese

Indian Guyanese business people also discriminated based on racial identity. Afro-

Guyanese have difficulty accessing financial services from Indian lenders. Changing the mindset of the Indo-Guyanese managers and staff persons—which reflect the attitudes of the demeaning racist narratives that pervade society—may start with awareness. And, carrying out programs to address racism in microfinance is a starting point for building trust between the two groups. Further, it is also important to ensure that there are policies to swing the pendulum in favour of Afro-Guyanese through targeted programs and to develop anti- discrimination policies. To achieve this goal the following is required:

 Pro-active hiring programs of Black loan officers and managers to increase the client

base of Afro-Guyanese in the urban areas. It is unjust to penalize Afro-Guyanese and not

to hire them because poor Indo-Guyanese clients are racist against them as loan officers.

By hiring Afro-Guyanese microfinance organizations can diversify its outreach and

include more Afro-Guyanese clients.

 Collect and disaggregate loans granted by gender, race, age and location to ensure equal

opportunity and a fair allocation of financial services.

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 Increase loan sizes to Afro-Guyanese run businesses in the urban areas especially for

females (quite low lending levels to women at the largest MFI).

 Zero tolerance for MFIs who have a personal relationship with political elites.

 No support for government-run microfinance programs (e.g. WOW).

 Elimination of the “marriage condition” policy from microfinance programs as a way to

screen loan applicant, as this measure penalizes Afro-Guyanese. This policy imitates

conventional banks and has an exclusionary tendency to alienate Blacks who do not

marry.

 Workshop (similar to the Carib Cap project forums) with micro lenders to change the

inherent biases that are affecting lending to the urban poor. And to develop consumer

protectionism for clients based on political interference.

 Leadership training to target Afro-Guyanese and dougla bankers to assume leadership

roles in microfinance banks and programs.

 An increase of micro and small business lending in commercial banks. It was discovered

that Afro-Guyanese see foreign-owned commercial banks (e.g. Scotia bank and RBTT).

as being outside of the racial politics that have captured many of the indigenous banks.

 Diversification of boards: in this case recruiting Afro-Guyanese board members and

members who come from different social class backgrounds.

 Increase research on informal banking systems, such as Box hand and Penny Bank.

Improving Haitian Micro Lending

Haitian micro lenders seem to have inclusive finance. Ti machanns also seem to trust and appreciate these micro loans programs because other entities ignore and deprive them of

315

goods and services. The following policy suggestions may strengthen the financial programs for the urban poor:

 Increased recognition that talent in microfinance is drawn from people who share similar

social origins as the people. This is a best practice that should be widely disseminated in

the region.

 Need to promote female technical staff to managers and executive positions.

 Development of loan products of longer-term duration to support productive and artisanal

activities.

 Showcase microfinance as a political tool (e.g. Haiti case) working against entrenched

class systems.

 Need to investigate kidnappings and murders of staff persons who have lost their lives by

working in the economic development sector.

 Increased funding and policy support for MOIs and their networks (such as KNFP,

ANACAPH, Le Levier) to expand microfinancial services. Publish and document these

experiences.

 Review of female-focused microfinance, and to create a balance of male and female

clients so as not to stigmatize the program, or to levy additional burdens of women.

When males are excluded women and children will have to work longer to repay the

loans.

 Increased and diversification of loans to target males as well so that women are not the

only ones requesting loans, and giving males a chance to opt out of household affairs.

 Support of research on informal banks such as Sols and Sabotays.

316

 Legalization of organizations making micro loans, as formality is important with non-

cooperative lenders.

 Development of consumer protection policies for the microfinance industry.

Regional Policy Suggestions

For each of the cases, I provided context-specific policies; however, I do find that certain policies can be carried out at a regional level. Some of the following policy recommendations at the regional level can be considered by the IDB, USAID, CIDA, and the

CDB, all which have significant microfinance investments in the region. Microfinance which is also known as “inclusive financing” appears to be problematic in cases where lenders use their own personal biases (going against better business practice) to exclude business people.

Policy-makers are aware that increasing outreach in the Jamaica and Guyana cases is needed but have focused on technical skills of staff and external issues. Scale alone cannot be a signifier of reaching inclusivity; but the deliberate exclusion of people has led to the low outreach (about 10%) by lenders.

 Hire staff and managers who resemble the class and racial/ethnic origins of persons being

served by microfinance (e.g. Haiti case). To ensure that staff persons receive the training

they need to be able to respond to the needs of the clients. Targeted hiring and

supplementary training will ensure that micro lending responds to the needs of the poor.

 To ensure that pro-poor financial organizations adapt an in-house policy to protect poor

consumers. As part of this policy, the organization must state clearly its opposition to

any form of discriminatory or sexist processes, and develop systems to treat matters that

may arise.

317

 Ban political funds that capitalize lenders in highly political environments. State funds

for microfinance should be channelled through an independent institution. Banks and

organizations making loans to the urban poor should not take capital from politicians, as

this complicates lending, particularly in slums that are highly politicized.

 Invest in microfinance as a stepping stone for supporting growth and the development of

Small and Medium Enterprises (SMEs).

 Include politics as a unit of analysis in institutional analyses and audits of microfinance

organizations. Organizations that work with informal and formal political structures must

be examined closely.

 Do not allow microfinance persons who are known to politically campaign to access

donor or state funding (Jamaica case). Donors should carry out due diligence because

failure to vet and analyze the partners they choose as implementing partners leaves the

funding agency complicit and responsible for the partisan politics that replicates itself in

microfinance programs. It is not acceptable for any organization to have politically active

managers and staff persons, whether they disburse funds at the institutional or client

level.

 Increase investments in MOIs such as cooperative financial lenders and credit unions.

 Channel grants and donations to an independent and non-political body that disburses

funds on a competitive basis. Government subsidies have been problematic in the region

and continue to be a risk for viable micro lending organizations.

 Rethink gender programming in context (Bedford 2009, 49). Young males from the

Kingston ghetto who are entrepreneurial have a difficult time accessing financial services

(may be most deprived group in some slums). There is a need for policy change to “think

318

men” when designing loan products.This way poor women are not at risk for domestic

abuse or men cannot renege on obligations when loan programs exclude them.

 Create policy to diversify board members, so that they include women and men from

various socio-economic (class) backgrounds.

 Increase research grants to credit unions and cooperatives in the region.

 Research informal banking systems prevalent in the Caribbean region, such as Partner,

Susus, Box hand, Meeting turn, and Sols.

 Promote the local vernacular language of the masses in microfinance programs. Micro

lenders are to absorb local culture of the people they serve. One way of doing this would

be to speak Patois or Kreyol in the place of business so clients in this socio-economic

group feel welcomed.

 Develop local leadership programs in microfinance to train and develop the capacity of

Afro-Caribbean people, particularly those who come from the lower classes.

 Offer workshops with micro lenders to change the inherent race, class, and gender biases

that affect lending to the urban poor. This would be a sign to the population that lenders

are concerned about creating equal opportunities for them.

 Ensure that donors such as IDB and USAID refrain from funding regional networks

beyond the initial stage. If there are local networks, donors should work with these pre-

existing networks and not start competing ones (Jamaica case).

Conclusion

In many parts of the world, microfinance is not working as it should because of the distribution of political power among certain groups. Microfinance was reinvented to be

319

inclusive finance; yet it is not reaching many eligible business people. Donors, (sometimes) unaware of these local dynamics, make capital contributions without understanding the embedded political and cultural biases that sustain the underdevelopment of certain segments of the society. This lack of awareness of local politics puts investments at risk. Local elites

(both in country and in donor offices abroad), are often the ones controlling the resources, and have no interest in bettering the plight of the masses. The research presented here has shown not only political elites seek to manipulate microfinance to garner political support, but that other sub-elites (managers and staff in MFIs) use small loans as a tool to reproduce inequalities. The racial and class hierarchies that define the broader political process operate within local MFIs—that is, micro-credit officials reflect the biases of these hierarchies (race and class) in their lending practices. Hence, this study supports much of the criticism that has been levelled against commercialized microfinance because of its harm to poor entrepreneurs.

As shown in this study, the discriminatory allocation of microfinance is a reflection of the embeddedness of societal and political, racial and class hierarchies in the MFIs studied.

And unfair power dynamics misuse microfinance to oppress the masses. This study is the first attempt to explore the impact of the attitudes of the managers and staff involved in micro lending. In this closing chapter, I have argued that in the Jamaica and Guyana cases, lenders have identity biases that instigate conflicts and leads to the exclusion of certain business people. Moreover, this exclusion was linked to politics more broadly.

The historical context of each country has affected micro lending differently. As witnessed in Haiti, the legacy of African traditions of informal groups (sol) and socially

320

conscious lenders has influenced the microfinance sector to structure financial systems that reflect the trusted local systems of the moun andeyo. These traditional systems of gwoupmans and kombit exhibit strong democratic processes even though patrimonial political elites have failed to ensure lasting democracy at the national political level (Fatton

2007, 221-223). As Fatton (2007, 222) explains, the very poor who suffered under authoritarian regimes have created their own “home-grown version of democracy.” People alienated by the state have turned inward to create their own collective systems to help one another. To some extent, Jamaicans also find local systems (such as Partner bank) to turn to when a clientelist system has shaped microfinance allocation. Finally, Guyana’s own race politics stems from a difficult colonial past that has persisted over the years to privilege one ethnic group over another, and microfinance allocations mirror these internal political tendencies.

Micro-enterprise development as a stand-alone development intervention in the global south cannot tackle historical inequalities. Jamaican and Guyanese micro lenders of a certain class and racial background control economic resources, and they have the power to replicate inequalities and inequities against sub-sets of the urban poor that do not conform to their views. For social change to emerge through microfinance in these two contexts is limited at best. However, the Haiti case suggests that an alternative for development is possible because the people-owned caisses populaires are doing business differently and adapting to its context. And, it helps that their managers are from a similar class and racial/ethnic origin as the masses, and know how to organize financial programs that are free from elite capture. It is this bottom-up and collective approach in micro banking determines a greater level of social transformation for poor entrepreneurs.

Appendixes

Appendix 1.1: Elite Interviews and Discussions—Microfinance Lenders and Stakeholders from 2008 to 2010

No. Institution Country Person/Position Date

Jamaica

Microfinance Lenders/Wholesalers

Jamaica National Small 1 Business Limited Jamaica Frank Whylie, General manager; 24-Feb-09

Jamaica National Small 2 Business Limited Jamaica Anonymous, 2 Managers 25-Feb-09

Jamaica National Small 3 Business Limited Jamaica Anonymous, 2 Field Officers 25-Feb-09

Horace Bennett, Executive 4 COPE Jamaica Director; 1 Field Officer 16-Mar-09

Micro Enterprise Financing Anonymous, Senior managers (2) 5 March; 12 May 5 Limited (MEFL) Jamaica and Board Member; 1 Field Officer 2009

City of Kingston Cooperative Ewan Shaw, Assistant General 13 March; 8 May; 6 and Credit Union (COKCU) Jamaica Manager 9 June 2009

Jamaica National Building 31 March; 30 7 Society (JNBS) Jamaica Earl Jarrett, General Manager April 2009

National Development Anonymous, Senior 8 Foundation Jamaica Jamaica Managers/Executive 15-Apr-09

Churches Cooperative Credit 27-May-09 9 Union Ltd (CCCUL) Jamaica Basil Naar, Managing Director (Multi)

10 CCCUL Jamaica Waldon Wright, Manager 27-May-09

Churches Cooperative Credit 11 Union Ltd Jamaica Anonymous, Field Agent 28-May-09

Jamaica Microcredit Limited 12 (MCL) Jamaica Mitzian Turner, Managing Director; 1-Jun-09

Anonymous, 1 Senior, 1 Field 13 MCL Jamaica manager 28-Sep-09

14 Self-Start Fund (SSF) Jamaica Carmen Lowers, Director 15-Apr-09

Access Financial Limited Marcus James, 2 Field officers (not 15 (ACCESS) Jamaica named) 25-Mar-09

321 322

Jamaica Cable and Wireless Barrington Whyte, Managing 16 Cooperative and Credit union Jamaica Director 12-Mar-09

Trevor Hutchinson, CEO; Judith 17 Kris An Charles Limited Jamaica Hutchinson, CFO 12-May-09

Lloyd Campbell, Managing Director; 1 Senior manager; 2 Field 18 First Union Financial Limited Jamaica Officers 28-May-09

Nation Growth Microfinance All Anonymous, 3 Managers, 2 19 Bank Jamaica Field Officers 10-Mar-09

Jamaica Business Development 17 March; 1 April 20 Center Jamaica Valerie Veira, Managing Director 2009

21 OBF Financial Services Jamaica Field Officer 17-Mar-09

22 Bank of Nova Scotia Jamaica Assistant General Manager 18-Mar-09

23 National Commercial Bank Jamaica Senior Manager, Female 25-Mar-09

Yvonne Lewars, General Manager, Development Bank of Jamaica AFI; 2 senior managers; Board 8 March; 28 May 24 (DBJ) Jamaica member 2009

Development Options Ltd 13 March; 20 25 (DOL) Jamaica Maureen Webber, Owner April 2009

Micro Investment Development 26 Agency (MIDA) Jamaica Vivian Chin, Managing Director 10-Mar-09

11 March; 2 Oct 27 Pan Caribbean Financial Ltd Jamaica Dionne Allison, Manager 2009

Stakeholders (Business and Financial Experts)

28 Bank of Jamaica Jamaica Economist, Male Feb-09

United Nations Development 29 Program (UNDP) Jamaica Machel Stewart, Program Manager 16-Mar-09

Caribbean Policy and Research John Rapley and Damien King; February to 30 Institute (CAPRI) Jamaica senior managers (2) October 2009

Father Gerry McLaughlin (former 31 Jesuit/ Roman Catholic Diocese Jamaica founder of COKCU) 19-Feb-09

Microfinance (3) and Trade unions 32 Consultants Jamaica (1) Apr-09, July 09

33 MSME Alliance Jamaica Rosalea Hamilton 11-Mar-09

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Jamaica Cooperative and Credit 34 Union League Jamaica Anonymous, Senior Manager 20-Mar-09

35 Economist, business writer Jamaica Keith Collister 25-Aug-09

Small Business Association of Edward Chin Mook, President; 2 36 Jamaica (SBAJ) Jamaica Members 16-Mar-09

Private Sector Organization of 37 Jamaica (PSOJ) Jamaica Economist 9-Feb-09

Jamaica Chamber of 38 Commerce-Civics Committee Jamaica Younis Samuda, Big Businessman 21-Jul-09

Jamaica Microfinancing Raymond Gabbidon, Executive 39 Association (JAMFA) Jamaica Director 20-Mar-09

University of Technology 40 (UTECH) Jamaica Horace Williams 27 Oct-09

Community Activists and NGOs

Agency for Inner city Renewal 7 and 25 March 41 (AIR) Jamaica Henley Morgan, Director 2009

2 April; 26 42 AIR Jamaica Anonymous, 2 Managers October 2009

Association of Women's 43 Organization in Jamaica Jamaica Hermoine McKenzie, President 12-Jul-09

44 Kingston Restoration Company Jamaica Morin Seymour, Executive Director 26-Feb-09

45 Peace Management Institute Jamaica Damien Hutchinson, Director 29-Jul-09

1 and 25 March 46 S Corner Jamaica Angel Stultz, Executive Director 2009

47 Liberty Hall, Marcus Garvey Jamaica Nicosia Shakes, Acting Director 30-Sep-09

Hope for Children Development 6 and 31 March; 48 Company (HCDC) Jamaica Richard Troupe, Managing Director 26 October 2009

Donor Agencies

United States Agency for International Development Jimmy Burrowes, Senior Specialist, 6-May-09; 27 49 (USAID) Jamaica 2 US Embassy July -09

50 Boulevard Baptist Church Jamaica Devon Dick, Pastor 7-Apr-09

51 Inter-American Development Jamaica Carina Cockburn, Specialist 20 Feb-09; 3

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Bank, Jamaica (IDB) March 2009

12 March; 29 Sept 52 USAID Civil Society Project Jamaica Sharene McKenzie, Expert 2009

53 CIDA/Jamaica Jamaica Vivian Gray 10-Jul-09

Community-Level Experts

54 Area Leaders Jamaica Anonymous, PNP 24 Feb-09

55 Area Leaders Jamaica Anonymous, JLP 25 Feb-09

Anonymous, Senior-Level, 2 27 May; 29 56 Tivoli Community Center Jamaica Coordinators September 2009

20 and 30 March 57 Banker Ladies Jamaica Nikki, Char and Carlyn 2009

Research and Academic Organizations

Anthony Harriott; Claremont Kirton; David Tennant; Barry Chevannes; Errol Miller; Mark Figueroa; Michael Witter; February to 58 University of West Indies/Mona Jamaica Lawrence Nicholson October 2009

Martin Brown, Hope Perkins, 59 STATIN Jamaica researchers 28-Oct-09

Political Elites

60 Government of Jamaica (JLP) Jamaica Bruce Golding, Prime Minister 23-Jul-09

61 PNP Politician Jamaica Anonymous 9-Mar-09

62 PNP Politician Jamaica Anonymous 16-Jul-09

63 JLP Politician Jamaica Anonymous 29-Jul-09

64 PNP Politician Jamaica Anonymous 24-Aug-09

65 JLP Politician Jamaica Anonymous 28-Oct-09

Government Agencies

Social Development 1 April; 25 Sept; 66 Commission Jamaica Director (1); Field Officers (5) and October 2009

Peter Gordon, Director; Angella 4 March; 16 July 67 Planning Institute of Jamaica Jamaica Taylor-Spence, Senior Manager 2009

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Deanna MacFarlane, Senior 68 Jamaica Trade and Invest Jamaica Manager 4-May-09

Gene Shaw, Manager of Inner cities 69 Jamaica Social Investment Fund Jamaica Basics project 2-Apr-09

Government of Jamaica, 70 Ministry of Information Jamaica Senior Official 1-Apr-09

Office of the Prime Minister, Anonymous, Director and Senior 71 Development and Planning Jamaica Analyst 23-Sep-09

Constituency Development Funds, Office of the Prime 22 July; 5 Oct 72 Minister Jamaica Cavell Francis and Managers (2) 2009

Kingston-St Andrew Corporation, Markets 73 Department Jamaica Anonymous, Senior Official 27-May-09

Government of Jamaica, Ministry of Industry, Investment Reginald Budhan, Permanent 74 and Commerce Jamaica Secretary (Senior Official) 24-Sep-09

International

76 Microfin, Trinidad Trinidad Gerry Pemberton Nov-08

Prakash Dhanraj, Managing 77 Microfin, Trinidad Trinidad Director 11-Feb-09

78 UWI/Cavehill, SALISES Barbados Jonathan Lashley 24-Apr-09

Organization of American 79 States Barbados Francis McBarnett 24-Apr-09

80 Caribbean Development Bank Barbados Kelvin Dalrymple, Economist 27-Apr-09

81 Caribbean Development Bank Barbados Lisa Harding, Specialist 27-Apr-09

82 UNDP Barbados Barbados Gilles Romulus, Manager 27-Apr-09

Inter-American Development Mark Wenner, Microfinance 83 Bank USA Specialist 9-Nov-10 (Multi)

85 AZMJ, Microfinance Firm USA Anita Campion, Expert 10 Dec-09

84 McMaster University Canada Professor Benson Honig 8-Apr-10

Inter-American Development 9 November 2010 85 Bank USA Winsome Leslie, Senior Specialist (Multi)

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Guyana

Microfinance Lenders

86 IPED Guyana Leslie Chin, CEO 1-Nov-08

87 Small Business Finance Trust Guyana Manjula Brijmohan, Director 15-Apr-10

88 Microfin, DFLSA Guyana Lindel Harlequin, CEO 16-Apr-10

10 April and 19- 89 IPED Guyana Ramesh Persaud, CEO Apr-10

90 Republic Bank Guyana Erica Moore, SME Head 22-Apr-10

91 Republic Bank Guyana Deborah Yang, Manager 22-Apr-10

92 Scotiabank Guyana Abu Zaman, Retail Manager 23-Apr-10

Quacy Williams, Branch Manager 93 Scotiabank Guyana (Bartica) 23-Apr-10

Guyana Bank of Trade and 94 Invest Guyana John Tracey, Managing Director 29-Apr-10

95 Demerara Bank Guyana Andre Lam, Assistant Manager 4-May-10

David Ramdeholl, Assistant 96 Demerara Bank Guyana Manager 4-May-10

Stakeholders (Business and Financial Experts)

97 Businesswoman Guyana Jocelyn Dow 1-Nov-08

98 Empretec Guyana Judy Semple, MD 16-Apr-10

Craft Producers Association of Anonymous, Female, President and 99 Guyana Guyana businessperson 17-Apr-10

100 D & R Limited Guyana Desmond Hollingsworth, owner 17-Apr-10

Patrick Henry, Chief of Party 101 Carana, USAID Contractor Guyana (Enterprise and Environment) 22-Apr-10

Mohammed Ali, Executive and 102 Gafoors Retailer Guyana Board member of SBDT 23-Apr-10

Small Business Association of 103 Guyana Guyana Patrick Zephyr, President 27-Apr-10

104 Independent Consultant Guyana Wayne Fordyce, Expert 30-Apr-10

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105 Guyana Volunteer Association Guyana Bevan Currie, Owner 3-May-10

Retired big businessman, formerly with Guyana’s 106 Manufacturing Association Guyana Samaroo Jodha 6 and 14 May 10

Community Activists and NGOs

Andaiye, Joy Marcus and Karen 107 Red Thread Guyana D'Souza, Managers 1-Nov-08

African Cultural and 108 Development Association Guyana Eric Philips, Executive Director 30-Apr-10

Caribbean Association for Feminist Research and Action Thandi Seaforth Cordis, Country 109 (CAFRA) Guyana Representative 30-Apr-10

Glynis Alonze Beaton, General 110 YWCA Guyana Secretary 30-Apr-10

Faizeel Ferouz, President and Central Islamic Organization of Businessman of Pharmacy Twins in 111 Guyana Guyana Allbouystown 3-May-10

112 Mark Benschop Foundation Guyana Mark Benschop, President 7-May-10

Donor Agencies

1 Nov 2008 and 113 USAID, Guyana Guyana Winston Harlequin, Manager 22 April 2010

Inter-American Development 114 Bank Guyana Derise Williams, Analyst 19-Apr-10

United Nations Development 115 Program/Guyana Guyana Marlon Bristol, Economist 4-May-10

Community-Level Experts

Young Leaders of 116 Allbouystown Guyana Anonymous 23-Apr-10

Community Development 117 Council (CDC) Guyana Anonymous, Female 25-Apr-10

Allbouystown Neighborhood Development Association 118 (ANDA) Guyana Anonymous, Leaders (2) 25-Apr-10

119 ANDA Guyana David Hari, Chairman 26-Apr-10

328

120 Youth activist Guyana Kurt Pearson, Junior-level 3-May-10

Research and Academic Organizations

121 University of Guyana Guyana Kardasi Ceres 1-Nov-08 (Multi)

122 University of Guyana Guyana Oneal Greaves, Chair 17-Nov-08

123 University of Guyana Guyana Frederick Kissoon 7-May-10

University of Guyana, International Development 124 Studies Guyana Professor Clive Thomas Multi

University of Guyana, Women's 125 Studies Guyana Audrey Enid Benn, Lecturer 7-May-10

126 University of Guyana Guyana Michael Scott, Dean 13 May 2010

Political Elites

Empowerment and Community Development Office, Office of Odinga Lumumba, Presidential 127 the President Guyana Advisor 22-Apr-10

Ministry of Housing and Water Philomena Shury, Parliamentary and National Directorate of Secretary of the Ministry of Community Development Housing and Water and National 21 April and 4 128 Councils Guyana Director for CDCs May 2010

Former politician (Min of Education under Jagan; Min of Housing, Social Security, Min of Women and Youth, Min of 129 Labour, Min of Health) Guyana Jeffrey Henry, Senior Expert 7-May-10

Government Agencies

Anonymous, Female, Senior 130 Ministry of Finance Guyana Official 15-Apr-10

131 Go-Invest Guyana Geoff Da Silva, CEO 19-Apr-10

Ministry of Tourism, Industry 132 and Commerce (MINTIC) Guyana Jonathan Said, Economist 29-Apr-10

133 MINTIC Guyana Anonymous, Analyst 29-Apr-10

134 Matching Grant, MINTIC Guyana Cecile Welch, Junior-level 30-Apr-10

Ministry of Labour, Human 135 Services and Social Security Guyana Kareem Abdul Jabar, Senior Expert 7-May-10

329

Haiti

Microfinance Lenders

136 Initiative du Développement Haiti Wesner Marcelin, Director April-08

137 Sogesol Haiti Daphne Louissaint, Manager April-08

138 GRAIFSI Haiti Carine Clermont, President 29-Sep-10

139 GTIH Haiti Marie Palme, Manager 30-Sep-10

Fonkoze - Sevis Finansman 140 Fonkoze (SFF) Haiti Anne Hastings, Director, CEO 4-Oct-10

141 Micro Credit National Haiti Jean Max Chery, Manager 6-Oct-10

142 KNFP Haiti Lionel Fleurstin, Executive Director 6-Oct-10

Lhermite François, Managing 143 FDI Haiti Director 7-Oct-10

144 KOTELAM Haiti Marcelle St. Gilles, CEO 7-Oct-10

145 Sogesol Haiti Pierre Marie Boisson, Chairman 11-Oct-10

Sinior Raymond, Eexcutive 146 ACME Haiti Director 14-Oct-10 (Multi)

147 FINCA Haiti Sophie Vincent, Senior Manager 14-Oct-10

148 Le Levier (Caisses Populaires) Haiti Sony V. Extantus, Manager 14-Oct-10

Stakeholders (Business and Financial Experts)

149 Haiti MSME Haiti Anonymous, Specialist (Haitian) March -08

150 Haiti MSME Haiti John Jepsen, Senior Manager April-08

Michele Breton, Senior Advisor for 151 Desjardins (DID) Haiti Credit Unions and Cooperatives April-08

Independent Consultant in 152 Microfinance Haiti Raoul Jean-Louis, Expert 3-Oct-10 (Multi)

Windsor Calixte, Executive 153 ANIMH Haiti Director 6-Oct-10

154 UPAC, Canadian Embassy Haiti Hugus Charles, MFI expert 6-Oct-10

Pierre Turcotte, Credit Union 155 Desjardins (DID) Haiti Expert 7-Oct-10

330

Independent Consultant in 156 Microfinance Haiti Pascale Marie Theodate 12-Oct-10 (Multi)

Community Activists and NGOs

157 USAID funded INGO Haiti Jeffrey Tines, Manager March-08

158 QiFD Haiti Eric Calpas, Director 30-Sep-10

159 QiFD Haiti Sergine Pierre, Manager 30-Sep-10

160 QiFD Haiti Cindy Luxama, Junior 30-Sep-10

161 CORDAID Haiti Anonymous, Senior Manager 2-Oct-10

162 CHF International Haiti Eline Mystal, Manager 4-Oct-10

Donor Agencies

Jempsey Fils- Aimé, Senior 30 Sept; 3 Oct; 14 163 IADB Haiti Specialist Oct 2010

164 IADB Haiti/US Sergio Navagas, Senior Specialist 09-Nov-10

165 USAID Haiti Anonymous, Manager 2-Oct-10

166 USAID Haiti Marie Vertue, Senior Specialist 12-Oct-10

167 USAID Haiti Haelee Kim, Economist 12-Oct-10

Community-Level Experts

168 Remember the Children Haiti Robert Pressoir, President 3-Oct-10

169 Remember the Children Haiti Anonymous, Junior-level 3-Oct-10

170 Remember the Children Haiti Anonymous, Junior-level 3-Oct-10

Business Owner and Sabotay 171 player Haiti Sylain Luxon 4-Oct-10

172 Via Rios NGO Haiti Berdine Edmond, Mid level 12-Oct-10

173 Via Rios NGO Haiti Daniel Delva, Manager 12-Oct-10

174 CRACED Haiti Noelsaint Dieufait, Director 5-Oct-10

175 CRACED Haiti Anonymous, Junior level 5-Oct-10

Organisation des Femmes Bon 176 Repos Haiti Milhouse Fortune, President 5-Oct-10

331

Research and Academic Organizations

177 Miami University/INURED Haiti/US Louis Herns Marcelin April and Nov-08

Jean Reuben Peterly, Researcher, 178 INURED Haiti Wesner Marcelin, Manager 5-Oct-10

179 CRESFED Haiti Suzy Castor, Director 11-Oct-10

180 FOKAL Haiti Lorraine Mangones, Director 11-Oct-10

181 Quisqueya University Haiti Maxon Julien, Lecturer 12-Oct-10

182 Quisqueya University Haiti Louis Delime Chery, Professor 12-Oct-10

Government Agencies

Ministere de l'industrie et 183 Commerce Haiti Anonymous, Senior-level 4-Oct-10

184 Customs Agency Haiti Anonymous, Manager 14-Oct-10

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Appendix 1.2: Interviews with Micro-Entrepreneurs in Jamaica, Guyana, and Haiti (2009 and 2010)

Code No. Alias Sex Age Country Sector Date

MP 1 Ionie F 43 Jamaica Vendor/Sweets 3-Mar-09

2 Samuel M 28 Jamaica Barber shop 3-Mar-09

3 Denham M 42 Jamaica Cookshop 3-Mar-09

4 Pauline F 46 Jamaica Cookshop 3-Mar-09

5 Rastaladee F 74 Jamaica Seller "Suck-Suck" 13-Mar-09

6 Bruce M 32 Jamaica Grocery stop 13-Mar-09

7 Miss Paddy F 45 Jamaica Cook shop 27-Mar-09

8 Gem F 47 Jamaica Seller/Cake and Crab 27-Mar-09

9 Danny M 57 Jamaica Mechanic 31-Mar-09

10 Big Reds F 47 Jamaica Hair and Sewing 31-Mar-09

11 Anonymous F 38 Jamaica Vendor/School snacks 31-Mar-09

FG1 12 Anonymous F 45 Jamaica Cookshop 20-Mar-09

13 Joy F 52 Jamaica Higglering 20-Mar-09

14 Yvette F 41 Jamaica Sewing 20-Mar-09

15 Earl M 37 Jamaica Seller/Bag juice 20-Mar-09

16 Cheryl F 34 Jamaica Vendor/Snacks 20-Mar-09

17 Carlene F 39 Jamaica Grocery shop 20-Mar-09

18 Faye F 49 Jamaica Grocery shop 20-Mar-09

19 Petagaye F 57 Jamaica Grocery shop 20-Mar-09

Grocery shop/Raising 20 Beverley F 52 Jamaica chicken 20-Mar-09

Grocery shop/sausage 21 Novelette F 36 Jamaica maker 20-Mar-09

333

22 Cherry F 62 Jamaica Soup/ Raising goat 20-Mar-09

23 Anonymous F 48 Jamaica Higglering 20-Mar-09

24 Fay F 60 Jamaica Grocery shop 20-Mar-09

25 Anonymous F 45 Jamaica Grocery shop 29-Aug-09

Seller/sandwiches at 26 Brian M 42 Jamaica school 29-Aug-09

27 Anonymous M 28 Jamaica Street vendor 30-Aug-09

28 Anonymous M 44 Jamaica Higglering/shoes 30-Aug-09

29 Captain M 54 Jamaica Welding 3-Sep-09

30 Anonymous M 38 Jamaica Mechanic 3-Sep-09

31 Ras M 42 Jamaica Taxi 3-Sep-09

32 Wayne M 26 Jamaica Vendor/various 3-Sep-09

33 Anonymous M 56 Jamaica Carpentry 4-Sep-09

34 T M 29 Jamaica Higglering 4-Sep-09

35 Anonymous M 27 Jamaica Grocery shop 4-Sep-09

AG 36 Mel F 40 Jamaica Snack shop 18-Apr-09

37 Mrs. Burrell F 42 Jamaica Grocery shop 18-Apr-09

38 Diane F 43 Jamaica Meat and Fish shop 18-Apr-09

39 Darkening F 47 Jamaica Grocery Shop 2-May-09

40 Goalie F 27 Jamaica Grocery Shop 2-May-09

41 Judith F 38 Jamaica Grocery shop 2-May-09

Vendor/bag juice and 42 Ms. Eulalyn F 64 Jamaica pudding 2-May-09

43 Baby G F 42 Jamaica Sewing shop 5-May-09

44 Teech F 49 Jamaica Grocery shop 5-May-09

45 Rameen M 27 Jamaica Game shop 5-May-09

46 Bom Bom F 25 Jamaica Higgler 5-May-09

334

47 Joan F 49 Jamaica Grocery shop 12-May-09

48 Tall man M 52 Jamaica Grocery shop 12-May-09

49 Novelette F 39 Jamaica Ice cream vendor 12-May-09

50 Maria F 39 Jamaica Grocery shop 12-May-09

51 Marcia F 52 Jamaica Ice cream vendor 12-May-09

52 Nana F 57 Jamaica Fruit seller 12-May-09

Home-based Nail and hair 53 Marcia F 34 Jamaica salon 12-May-09

54 Miss Netty F 67 Jamaica Snack shop 13-May-09

55 Carlene F 37 Jamaica Home-based hair salon 14-May-09

Vendor at school/ ice 56 Dor F 50 Jamaica cream, snacks 14-May-09

57 Carol F 49 Jamaica Grocery shop 14-May-09

Street vendor/cleaning 58 Andrew M 41 Jamaica supplies 26-May-09

Cook shop/ Vendor of 59 Muzelle F 34 Jamaica shoes and juice 26-May-09

60 D M 33 Jamaica Cook shop 26-May-09

61 Cola F 25 Jamaica Bar 26-May-09

62 Sico F 64 Jamaica Grocery shop 26-May-09

63 Stealy M 42 Jamaica Carpentry/construction 28-May-09

64 Kaydian F 38 Jamaica Cook shop 28-May-09

65 Leon M 38 Jamaica Cook shop 28-May-09

66 C M 45 Jamaica Cook shop 28-May-09

67 Daisy F 54 Jamaica Cook shop 28-May-09

Vendor/ice cream and 68 Natalie F 38 Jamaica detergents 29-May-09

69 Jackie F 40 Jamaica Nail and hair 29-May-09

FG2 70 Mina F 48 Jamaica Grocery shop 16-May-09

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71 Jackie F 42 Jamaica Baby daycare 16-May-09

72 Sonia F 44 Jamaica Grocery shop 16-May-09

73 Dallion M 31 Jamaica Cook shop/Carpenter 16-May-09

74 Nadine F 33 Jamaica Snack shop 16-May-09

75 Kaleen F 41 Jamaica Vendor/ice cream 16-May-09

76 Coral F 50 Jamaica Syrup selling 16-May-09

77 Miss Fay F 62 Jamaica Dress-making 16-May-09

78 Angie F 46 Jamaica Grocery shop 16-May-09

Landlady/ Seller cell 79 Peaches F 40 Jamaica phone cards 16-May-09

80 Lesa F 41 Jamaica Vendor/ pastry, milk, juice 16-May-09

81 Clare F 46 Jamaica Hair stylist and nails 16-May-09

82 Vudy F 48 Jamaica Vendor/ school snacks 16-May-09

83 Miss. S F 32 Jamaica Higglering 18-May-09

FG3 84 Mr. Walker M 62 Jamaica Carpenter 22-Aug-09

85 Tweety bird M 32 Jamaica Car wash 22-Aug-09

86 Dolvin M 35 Jamaica Painter/Artist 22-Aug-09

87 Vincent M 48 Jamaica Tailor 22-Aug-09

88 Miquel M 40 Jamaica Taxi driver 22-Aug-09

89 Flippy M 38 Jamaica Cook/chef 22-Aug-09

Food processing/ salt fish 90 Clifton M 40 Jamaica and herrings 22-Aug-09

91 Anonymous M 38 Jamaica Carpenter 22-Aug-09

92 Bald head M 43 Jamaica Barber shop 22-Aug-09

WT 93 Donna F 40 Jamaica Grocery shop 1-May-09

94 Juliane F 34 Jamaica Grocery shop 1-May-09

95 Sonia F 50 Jamaica Snack shop 1-May-09

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96 Dragon F 40 Jamaica Grocery shop 1-May-09

97 Tricia F 33 Jamaica Grocery shop 1-May-09

98 Diane F 42 Jamaica Slippers seller 6-May-09

99 Patsy F 46 Jamaica Grocery shop 6-May-09

100 Dot F 48 Jamaica Vegetable stall 6-May-09

101 Pansy F 42 Jamaica Sweety and Fruit seller 6-May-09

102 Millie F 59 Jamaica Soup seller 6-May-09

103 Lorraine F 39 Jamaica Higgler/clothes 8-May-09

104 Aunty Amy F 62 Jamaica Sewing/drapes and sheets 8-May-09

105 Patsy F 46 Jamaica Grocery shop 8-May-09

106 Dionne F 40 Jamaica Higgler/children's shoes 8-May-09

107 Rose F 48 Jamaica Biscuit/snack stall 8-May-09

108 Sophia F 39 Jamaica Cook shop 8-May-09

109 RastaTasha F 30 Jamaica Grocery shop 11-May-09

110 Rastaman M 43 Jamaica Grocery shop 11-May-09

111 Eva F 50 Jamaica Pastry shop 11-May-09

112 Shotta M 50 Jamaica Pastry shop 11-May-09

113 D M 41 Jamaica Cook shop 11-May-09

114 Sonia F 36 Jamaica Snack/ice cream vendor 15-May-09

115 Monica F 50 Jamaica Grocery shop 15-May-09

116 Anonymous F 35 Jamaica Sewing/grocery 15-May-09

Grocery shop/ Vendor of 117 Kin Kin F 30 Jamaica gas 15-May-09

Fruit seller/ nail polish 118 Donna F 33 Jamaica vendor 15-May-09

RT 119 Shortman M 45 Jamaica Cook shop 17-Apr-09

120 Hervin F 70 Jamaica Bar owner 17-Apr-09

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Sewing/drapes, sheets, 121 Empress Fay F 55 Jamaica cushions 17-Apr-09

122 Doylee F 37 Jamaica Cook shop 13-May-09

123 Colonel M 30 Jamaica Welder 13-May-09

Auntie 124 Blosson F 55 Jamaica Bar owner 1-Jun-09

125 Miss. Betty F 78 Jamaica Grocery store 1-Jun-09

Glass and home supplies 126 Fergie M 52 Jamaica store 1-Jun-09

127 Miss B F 38 Jamaica Haberdashery 1-Jun-09

128 Kiddies M 45 Jamaica Haberdashery/variety store 1-Jun-09

129 Tricia F 31 Jamaica Bar owner 3-Jun-09

130 Kevon M 18 Jamaica Grocery store/Wholesaler 3-Jun-09

Reggae 131 Rasta M 32 Jamaica Snack stall 3-Jun-09

Car and water pump repair 132 Peter M 34 Jamaica shop 3-Jun-09

133 Rocky M 37 Jamaica Water pump repair shop 3-Jun-09

134 Noah M 60 Jamaica Cabinet maker 3-Jun-09

135 Paula F 33 Jamaica Bar owner 5-Jun-09

136 Angella F 45 Jamaica Snack shop 5-Jun-09

137 Monica F 71 Jamaica Vegetable stall 8-Jun-09

138 Charm F 43 Jamaica Grocery shop 8-Jun-09

139 Marcia F 33 Jamaica Nail salon 8-Jun-09

140 Roxanne F 24 Jamaica Snack shop 8-Jun-09

141 Ann F 45 Jamaica Haberdashery 10-Jun-09

Vegetables, fruits and 142 Beverly F 62 Jamaica provisions stall 10-Jun-09

143 Birdie F 29 Jamaica Grocery shop 10-Jun-09

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144 Cheryl F 40 Jamaica Seamstress 10-Jun-09

145 Nicky F 29 Jamaica Fruit stall, market 10-Jun-09

146 Nana F 61 Jamaica Snack shop 10-Jun-09

FG4 147 Cardene F 35 Jamaica Seamstress/Day care 10-Jun-09

148 Dell F 57 Jamaica Vendor/snack and biscuits 10-Jun-09

149 Blacka M 57 Jamaica Higgler/clothes, Arcade 10-Jun-09

150 Lloyd M 47 Jamaica Mechanic 10-Jun-09

151 Sheryl F 34 Jamaica Higgler 10-Jun-09

152 Kadian F 21 Jamaica Ice cream vendor 10-Jun-09

153 Joyce F 58 Jamaica Seller/Snacks and drinks 10-Jun-09

154 Gwen F 63 Jamaica Snack stall 10-Jun-09

155 Robert M 43 Jamaica Party rental 10-Jun-09

156 Auntie Joy F 44 Jamaica Grocery shop 10-Jun-09

Restaurant and grocery 157 Angella F 52 Jamaica shop 10-Jun-09

158 Sharon F 47 Jamaica Seamstress 10-Jun-09

159 Ann F 44 Jamaica Cookshop 10-Jun-09

160 Jerome M 27 Jamaica Cabinet maker 10-Jun-09

Grocery fruit seller in DT 161 Browning F 35 Jamaica market 7-May-09

Imported fruit 162 Tessa F 31 Jamaica seller/market 7-May-09

163 Colonel M 54 Jamaica Grocery stall at market 7-May-09

Higgler/women's clothes FG5 164 Charmaine F 34 Jamaica and cosmetics 30-Mar-09

165 Novlette F 33 Jamaica Grocery shop 30-Mar-09

166 Jacqueline F 48 Jamaica Bar owner 30-Mar-09

167 Cholus F 45 Jamaica Grocery shop 30-Mar-09

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168 Janet F 52 Jamaica Grocery shop 30-Mar-09

169 Millicent F 66 Jamaica Vendor/clothes, Arcade 30-Mar-09

170 Michelle F 35 Jamaica Dress-making 30-Mar-09

171 Luna F 50 Jamaica Grocery shop 30-Mar-09

172 Nicky F 30 Jamaica Higgler/varies 30-Mar-09

173 Cutie F 54 Jamaica Higgler/children's clothes 30-Mar-09

174 Goadie F 50 Jamaica Higgler/men's clothese 30-Mar-09

175 Smiley M 50 Jamaica Ice man/seller 30-Mar-09

176 Dave M 44 Jamaica Pet shop 30-Mar-09

177 Baba M 44 Jamaica Ice vendor 30-Mar-09

178 Rambo M 23 Jamaica Biscuit shop 23-Jul-09

179 Mais M 29 Jamaica Bakery 23-Jul-09

180 Wifey F 36 Jamaica Bakery 23-Jul-09

181 Shirlee F 43 Jamaica Cosmetic shop 23-Jul-09

Haberdashery/clothes, 182 Kitty cat F 38 Jamaica household items 23-Jul-09

183 Liberty F 40 Jamaica Grocery shop 23-Jul-09

184 Candy F 31 Jamaica Grocery shop 25-Jul-09

185 CD man M 28 Jamaica Street vendor/CDs 25-Jul-09

186 Fada M 51 Jamaica Snack shop 28-Jul-09

187 Ziggy M 26 Jamaica Grocery shop 28-Jul-09

188 Zaza F 34 Jamaica Bar owner 28-Jul-09

189 Puncy F 54 Jamaica Grocery shop 28-Jul-09

190 Karen F 46 Jamaica Grocery shop 28-Jul-09

TG 191 Brenda F 30 Jamaica Ice cream vendor 11-Jun-09

192 Cindy F 44 Jamaica Snack shop 11-Jun-09

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193 Allison F 35 Jamaica Grocery shop 11-Jun-09

194 Angella F 43 Jamaica Grocery shop 11-Jun-09

195 Mr. Daley M 66 Jamaica Variety shop 11-Jun-09

196 Jackie F 39 Jamaica Grocery shop 11-Jun-09

197 Tony M 49 Jamaica Bar and grocery shop 11-Jun-09

198 Miguel M 50 Jamaica Pastry and grocery shop 12-Jun-09

199 Amy F 47 Jamaica Pastry and grocery shop 12-Jun-09

200 Nadine F 36 Jamaica Hair salon 12-Jun-09

201 Isis M 44 Jamaica Grocery shop 12-Jun-09

202 Ricky M 29 Jamaica Bar 12-Jun-09

203 Jamax M 33 Jamaica Grocery shop 12-Jun-09

204 Tat F 43 Jamaica Grocery shop 7-Jul-09

205 Carlene F 37 Jamaica Snack counter 7-Jul-09

206 Lisa F 22 Jamaica Street shop/snacks 7-Jul-09

207 Steph F 29 Jamaica Grocery shop 9-Jul-09

208 Vinette F 44 Jamaica Snack stall 9-Jul-09

209 Aunt Merle F 56 Jamaica Grocery shop 9-Jul-09

210 Jimmy M 49 Jamaica Cook shop 9-Jul-09

211 Tikka M 49 Jamaica Grocery shop 9-Jul-09

212 Vincent M 48 Jamaica Baker/Pastry shop 9-Jul-09

213 Robert M 48 Jamaica Grocery shop 9-Jul-09

214 Sharon F 42 Jamaica Grocery shop 13-Jul-09

215 Peaches F 42 Jamaica Grocery shop 13-Jul-09

216 Krissy F 24 Jamaica Grocery shop 13-Jul-09

217 Keisha F 27 Jamaica Bar owner 13-Jul-09

FG6 218 Reds M 40 Jamaica Seller/ variety, cream 15-Jul-09

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Vendor/cigarettes and 219 Hazel M 77 Jamaica phone cards 15-Jul-09

Marley 220 Bling M 20 Jamaica Game shop 15-Jul-09

221 Niney M 38 Jamaica Higgler 15-Jul-09

222 Crissy M 26 Jamaica Hair dresser 15-Jul-09

223 Ms. Fatty M 68 Jamaica Patty seller/ fry fish vendor 15-Jul-09

224 Annie M 43 Jamaica Higgler/household items 15-Jul-09

225 Lamore M 34 Jamaica Higgler 15-Jul-09

226 Sydonnie M 53 Jamaica Higgler 15-Jul-09

FG7 227 Brian M 27 Jamaica Motorcycle repair shop 25-Aug-09

228 Welda M 24 Jamaica Welding 25-Aug-09

229 Thomas M 37 Jamaica Masonry 25-Aug-09

230 Hog man M 19 Jamaica Butcher 25-Aug-09

231 Boozie M 30 Jamaica Jerk chicken seller/cook 25-Aug-09

Brokie 232 Shark M 32 Jamaica Street vendor/donuts 25-Aug-09

233 Shawn M 30 Jamaica Vendor/CDs, music 25-Aug-09

Nail and hair home-based ALB 234 Big Mama F 30 Guyana salon 20-Apr-10

235 Bibi F 52 Guyana Vendor, plantain chips 20-Apr-10

236 Nanny F 63 Guyana Food shop, poulari 20-Apr-10

237 Franco M 49 Guyana Fruit vendor 20-Apr-10

238 Zia F 55 Guyana Gift shop 20-Apr-10

239 Penny F 43 Guyana Food shop 20-Apr-10

240 Foodie M 52 Guyana Tailor 20-Apr-10

241 Steve M 46 Guyana Grocery shop 20-Apr-10

Bora (greens) vendor, 242 Anonymous M 48 Guyana Bourda 22-Apr-10

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Huckster (shoes), Bourda 243 Anonymous F 40 Guyana market 22-Apr-10

244 Bucky F 21 Guyana Huckster, used clothes 24-Apr-10

245 Mummy F 72 Guyana Sweetie vendor, Tiger Bay 25-Apr-10

Huckster, used clothes, 246 Tastey F 34 Guyana fruits 26-Apr-10

247 Marcia F 32 Guyana Confectionary shop 26-Apr-10

248 Miss Hazel F 61 Guyana Seamstress 26-Apr-10

249 Corney M 29 Guyana Body repair shop 26-Apr-10

250 Nee F 28 Guyana Hair and Nails salon 26-Apr-10

251 Pimp Juice M 24 Guyana Car wash 27-Apr-10

252 Nicky F 31 Guyana Salt goods shop 27-Apr-10

Rhea Food 253 gyal F 28 Guyana Cooked Food vendor 27-Apr-10

254 Nutman M 50 Guyana Taxi owner 27-Apr-10

255 Sumin F 48 Guyana Grocery vendor 27-Apr-10

256 Grannie F 65 Guyana Salt goods shop 27-Apr-10

FG1 257 Jenny F 53 Guyana Snackette 28-Apr-10

258 Shonelle F 39 Guyana Pastry 28-Apr-10

259 Rushal F 37 Guyana Snackette 28-Apr-10

260 Brother M 57 Guyana Grocery shop 28-Apr-10

Groceries and sun-shades 261 Red girl F 34 Guyana vendor 28-Apr-10

262 Sita F 57 Guyana Pourri vendor 28-Apr-10

PAP FG1 263 Rose F 52 Haiti Shoe vendor 9-Oct-10

264 Orphise F 50 Haiti Cola vendor 9-Oct-10

265 Marie Auge F 23 Haiti Cosmetic seller 9-Oct-10

266 Rose Marie F 42 Haiti Bar owner 9-Oct-10

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267 Ifrenertha F 52 Haiti Grocery vendor 9-Oct-10

268 Nicole F 31 Haiti Used- shoe vendor 9-Oct-10

Diverse consumption 269 Marie Sonie F 45 Haiti vendor 9-Oct-10

Diverse consumption 270 Donyi M 35 Haiti vendor 9-Oct-10

271 Marie Rose F 31 Haiti Shoe vendor 9-Oct-10

Diverse consumption FG2 272 Michelene F 48 Haiti market vendor 9-Oct-10

Market vendor of food 273 Miveline F 34 Haiti stuff 9-Oct-10

Market vendor of food 274 Marie F 52 Haiti stuff 9-Oct-10

Marie 275 Jhanye F 38 Haiti Cosmetic seller 9-Oct-10

276 Roudy M 46 Haiti Clothes vendor 9-Oct-10

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Appendix 1.3: Interview Tool

To be filled out prior to interview Enumerator initials:

Alias or First Name only:______Date of Interview: ______

Age:______Status: Self-employed; Employee; Unemployed Sex: Male Female Circle all that apply. City/Country: ______Registered: Yes No Area name: ______Type of Business : ______

Instructions: All interviews must answer Section A. This questionnaire has four parts: A, B, C, D. Make sure you thank the interviewee for their time and ask permission to start the interview. An interview takes on average 40 minutes.

Read the suggested script. Be prepared to ask questions and listen to the responses and write down what they say. Modify the script as needed but make sure the confidentiality and voluntary aspect is clear for everyone.

------

To start: My name is Caroline Hossein and I am a student researcher from the University of Toronto in Canada and also working with University of West Indies (UWI) and the Caribbean Policy and Research Institute (CaPRI), an independent think tank, based in Jamaica. I am here to ask you questions as part of my own research but also to effect policy changes that may make a difference for very small business persons. I am conducting research to understand how microfinance operates in low income areas of your country and to learn about any political implications in the sector. I want to learn what you have to say and what you think may assist me in my study. The study intends to discover the experiences of poor business persons – and what banks meet your need and why? Do micro loans really help your business activities expand and increase its profitability? And does politics exist in microfinance? If yes, how?

All your answers are strictly confidential and you should feel free to be honest with your responses. I hope that what you tell me today will contribute to research and sharing knowledge about the microfinance sector in your country. If you don’t want to answer anything please feel free to say so. This interview should be about one hour and ten minutes long so we may need to stay on topic. And I hope that it may be okay but I may follow up with you at another time should I need clarifications. Please note that I am going to do this research in Jamaica, Haiti and Guyana. CaPRI intends to use this data to make change so we are asking many business owners to share information with us.

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Make sure: Ask for permission before you start the interview either verbally or by informed consent form. (In some cases, ask people to sign the informed consent form – if relevant. Go over this consent form.) Write down responses using Jamaican patois.

At the end: Thank the interviewee for their time. Make sure you answer any questions. And reassure them that their answers are important and that you will keep all information confidential.

------

Be prepared to modify and rephrase questions until the person is clear on the question being asked of them. All questions are voluntary and they do not have to answer them: they can say “pass”.

Section A: Individual enterprise level

1. What is your marital status: married common-law divorced/separated widowed single visiting a. If married or in a common law relationship, what work does your partner/spouse do? - ______

b. Do you have children (pickney)? Yes No c. How many? ______

d. Do your family/relatives work for you? Yes No If no, go to question 2.

e. If yes, please specify who works with you?

2. Tell me about your household. (Those living together and sharing the same food at least once a day). Total # ______Adults (>=18yrs)______Children (<18yrs)______

a. Do you ………………………..your home? taking care or capture (squatting) rent own share b. Head of household (principal decision maker) Self husband/partner/male relative wife/partner/female relative jointly – couple

c. What social class do you see yourself a part of? (must be their opinion) ______

3. How long ago did you start this business? ______(year)

a. Is your business owned by: self cooperative partnership/family owned business

b. Formally registered Yes No

4. What type of business do you have? a. Why did you decide to have your own business? b. Your business activities are: Retail Services Production Wholesale Other c. What types of goods do you purchase? (Make notes about procurement or the buying process) d. Who are your suppliers? Foreign Local Both Don’t know

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e. If foreign/overseas, what countries? (Write down any businesses in particular) f. Who are your customers? (your clients/buyers)

local Jamaican businesses foreign businesses If overseas, what countries? ______

5. Where did you get money to start up your business? (Probe for Banks, microfinance, Partner, Dons)

6. Do you have a loan or did you ever have a loan? Yes No If no, go to question 8. a. How would you rank the importance of loans to your business?

Critical (cannot survive without it) Very Important Important Not Important Don’t know b. Is your loan with: Formal Local Formal foreign Semi formal Informal Family Money lender c. If loan is important, how has the loan helped you in life? (Do not read. Let them answer. Multiple responses are possible)

No help Increased wages Shorter or longer working hours Less physical work/drudgery Equipment Education/Training Medical costs/improved health Independence More and better food Clothing Improve your housing Furniture, utensils, goods for your house Recreation; leisure activities Other (specify)______

Only ask if person has (or had) a loan.

7. Do you think a loan helps (or helped) your business expand and increase profitability?

Yes No DK a. If no, explain why.

8. Do you get most of your income from this business? Yes No a. Ask for a “rough check” (an estimate) only. What is your daily/ or weekly business sales (in JMD)? How much money does your business make? (An estimate is fine of total sales; specify if it is weekly or daily) b. Asking for a “rough check” only. On average how much profit do you take home per day or week? (Subtract expenses from total sales. Some people may give you a percentage like 20% and this is fine too. Specify if it is weekly or daily.)

347

9. Do you pay rent for office/stall space? Yes No Do you work from home? Yes No

10. Are you worried about the current global financial recession/crisis? Yes No

11. Do you have a saving account? Yes No

If yes, continue, if no, go to question #12.

a. If you have a savings, where do you keep your savings? (check all that apply) ____Foreign ___Local _____other (Write down the name of a place).

b. How do you use your savings? (Let them say their answers here first)

Children’s education Household assets Healthcare Home improvement Inventory Emergencies Other

12. Do you have employees? Yes No If yes, continue, if no, skip to question 13.

a. If yes, how many of each of the following types of staff do you use in your business?

Paid Unpaid

Full time Part time Totals

Males

Females

Total

13. Since you started your business, how has your business changed? (Don’t read aloud options. Multiple responses are possible. Look for changes in their businesses that are good or bad. Write down what they say). None Expanded size of business Added new products Required additional help Sold in new markets Improved product quality

Obtained discounts for bulk input purchases

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Continue to the Next Sections:  Important: Answer all sections in one sitting or return at an agreed time to continue the session. Make sure to explore and explain what you mean by the terms used.

Section B: Politics & Microfinance 1. What does the term (word), politics mean here in Jamaica? (Let them define what politics means to them in their own words.)

a. How do you feel about politics? (Wait for answer)

2. Does party politics exist in your community? Yes No DK

a. If yes, how? (Ask for an example.)

3. Do you vote? Yes No Cannot say

4. Are you politically active (and campaign for MPs)? Yes No Cannot say a. If yes, how? (Ask for an example on partisan activities.)

5. Do you receive any support from the government e.g. MPs? Yes No Cannot say

If yes continue, if they reply no, or cannot say, go to next question. a. What kind of support do you get? b. Who is your point person in government (e.g. MP)?

6. Only ask if person has a loan. If you have a loan, why do you think you were successful in obtaining your loan(s)? a. Why do you think some very good business persons from the ghetto are not successful in getting loans?

7. What kind of impact does politics have on your business? Positive Negative None Both

8. Do you think government should provide loans to business persons in the ghetto?

Yes No DK

a. Explain why or why not.

10. Do you think very small small businesses should pay taxes? Yes No

a. Explain why or why not.

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Section C: Microfinance & Identities

1. What institutions provide loans for very small business persons here in the ghetto? 2. In your opinion, are loans going to qualified business persons who come from the ghetto?

Yes No DK

a. In your community, which kind of business person has the hardest time getting a very small loan? (Probe identities, what biases exist with sub-elites)

3. Have you had a hard time accessing loans? Yes No Self excluded themselves “never tried”

Explain. (Ask for reasons as it pertains to their own identities: is it gender, race, ethnicity, age, class, sexuality) If the person has excluded themselves or “never tried” (but wants a loan), find out why they excluded themselves.

4. Do some business persons in the garrison get micro (very small) loans more easily than others? Yes No DK a. Why do you think this is the case? (Focus on exclusion/various identities; write down quotes)

5. Discrimination exists in terms of lending criteria and qualifications. Is there any other form of discrimination in lending money to business persons from the ghettos by MFIs (these loan places)? (Allow of time to respond as this is a hard question. Remember they may have said something earlier that answers this question as well.)

Yes No DK a. If yes, explain what you mean. (List what issues they are having) 6. There are a number of ways small small business people can get money for their business. What kind of financial provider/model meets the needs of business persons in the inner city? (Read them aloud for person and check all that apply. State whether they have a preference for one or the other. Multiple responses are possible.) Informal bank (partner) Commercial bank Member-owned (cooperative or credit union) Other (specify)______

7. Do you think all financial institutions treat business women and business men fairly/the same? Yes No DK

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If no, explain why. (What are the exclusions, list reasons in order) 8. What financial products do you want from a micro financial institution/place? (You want to find out if they want loans or savings or insurance or business training or financial advice. Multiple responses are possible.) a. Are any of the financial providers located in your community? Yes No DK b. If yes, which ones?

c. If there are no banks, would like a lender (can be mobile) based here in your community? Yes No DK Only ask question if person has a loan: 9. As a microfinance client, name three things you like most about the lender. (Check all that apply. Do not read aloud. Multiple responses are possible.) Fees/Interest rate Policies Training Process Staff and management Products Services Other (specify)  Only ask question if person has a loan: 10. Name three things you do not like about the lender. (Check all that apply. Do not read aloud. Multiple responses are possible.) Fees/Interest Rate Policies Training Process Staff and management Products Services Other (specify)  11. Do you find interest rates affordable for very small loans? Yes No DK a. Should government make laws to control interest rates? Yes No DK b. Can new businesses access loans? Yes No DK Explain your answer. 12. Do you believe with a loan that your very small business can prosper into a larger business? Yes No 13. What are the attitudes of “outdoor” persons (such as Uptown persons) towards very small business persons from the ghettos? How do they behave “look pon yuh” and speak to you? (Take time as this is not an easy question for most persons to answer.)

Section D: Social and Community Development

1. In your community, do persons organize and work together? Yes No DK

If yes, continue and if no skip to question #2. a. Why do people organize socially in the community? b. How do people organize where you live? (Ask for an example.)

2. Do you value community organization? Yes No DK

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3. Does community support help businesses grow and develop? Yes No DK

Explain why or why not?

4. Do you think community groups can counteract or survive when there is an internal flare up, war or negative party politics? (such as partisan politics or gang war)

Yes No DK Explain what you mean.

5. Are all community organizations free to operate in the ghettos? Yes No DK

Explain your answer.

6. Are you a member of an organization? (check all that apply)

Cooperatives Business association Women’s organization Youth association

Religious group Community Political party Partner Other (include partner) 7. Do you participate in Partner “partna”? Yes No

a. With all the banking options here in Jamaica, why is partners so prevalent here? Why do persons join partner? (Write down exactly what they say. Multiple responses are possible.)

b. Do you think Partner should continue? Yes No DK

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Appendix 3.1: Description of Slums in the Jamaica Case

Community Maxfield Park Arnett Gardens Rosetown (Lower)* Whitfield Town Tivoli Gardens Denham Town

Election results PNP (61.48%) Trench Town PNP (88.15%) PNP (91.49%) West Kingston JLP (86.16%)

Population 5,103 10,201 2,642 12,172 4,405 8, 345

Level of Violence High High Very Low/None High Low Moderate

Main forms of Intra-party, Gangs, Gangs, Multiple Dons, NA Gangs, Police Police, Don Petty theft Violence Police Party Factions

Access to State None High Low Low High Low Resources

External support Very Low High Moderate-High Very Low Low Low

Community and Norman Manley High Arnett Gardens FC, Boys’ Rose Town Benevolent HCDC-COPE Tivoli Gardens Community Center, Day care, Social (shift school) School, Town, Charlie Smith High Society, Community library, Presidential Click, (Don), Edward United Youth Organizations Lift Up Jamaica School, HEART training HCDC, Information Affairs Club centre, the Trench Town, and Crisis Task Force (I- Reading Centre and Boys’ Act) Peace Management Town, AIR, Many Christian Institute (PMI) churches

Access to Low High Very Low Very Low High High Microfinance

Active Micro JNSBLL, Partner, COKCU-AIR, CCCUL, HCDF-COPE, Access, HCDF-COPE, Don, Partner, JNSBLL, JNSBLL, MCL, Lenders in Slums in Michaels Investment, JNSBLL, MEFL, Partner, Partner, Orion Partner MCL, Nation Growth, MEFL, Nation this Study Kris an Charles, Dons First Union, Worldnet, Growth, First Union, Orion Kris an Charles Don, Partner

*Lower Rosetown is a JLP stronghold but it is part of Trench Town constituency represented by a PNP MP Omar Davies. Sources: Population data from STATIN 2001. The 2007 election data from www.jamaicaelections.com/general/2007/index.php. Most community profile data taken from various SDC reports 2007 to 2009 and the Jamaica Information Services(JIS): http://www.jis.gov.jm/newsletter/archive/jan2009/jan30/index.htm. Information on Lower Rosetown’s organizations taken from http://www.princes-foundation.org/index.php?id=291 and Information Affairs and Crisis Task force (I-ACT) pamphlet (an organization created two years ago by Melbourne Absolam) to target inner-city youths between 7 and 18 years old.

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