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Abstract:
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"Microfinance encompasses a broad range of financial services provided to people or groups of people otherwise unable to access mainstream financial services. Microfinance has gained importance since the 1980s within the international development field as an effective tool to alleviate poverty, and in many contexts, it is also understood as an effective tool for addressing gender inequality. The Microfinance institutions (MFIs) work on the premise that poor people are unable to engage in income generating activities due to inadequate access to saving, credit, insurance and other such financial facilities. Therefore, MFIs around the world concentrate their activities on providing these services through innovative means to suit each country’s unique needs. It has become a vast global industry involving a continuum of interest groups, ranging from non-for-profit organizations to corporate banks. This paper argues that the predominant microfinance model of lending to the poor, especially women, through group collateral has significant association with the utilisation of commons. A majority of the loan recipient of microfinance loans in the developing world make at least a part of their living by utilising common pool resources (CPR) such as forests, fisheries, agricultural lands, mineral resources, waterways and the like. Since the loan size offered through microfinance initiatives is small, it is tempting to ignore the environmental impacts of income generating activities (microenterprises) that are undertaken by recipients of microfinance. But the volume of microfinance loans recipients around the world, 106,584,679 million as of 2007, is large enough to warrant further research on the association between microfinance, gender and the commons. This paper seeks to draw the connection between microfinance, gender and the commons. In doing so, the paper proposes a broader theoretical framework, the Capability Approach, to evaluate microfinance initiatives which can accommodate gendered as well as environmental concerns."
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