This blog post continues a series of excerpts from a conversation between Jonathan Morduch and Marc Labie, published in Mondes en Développement.
In this excerpt, Morduch and Labie discuss how fashions for different word choices within the discipline of microfinance reflect changing priorities.
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ML: Words that dominate a field indeed often tell us something about the way this field is evolving over time in terms of priorities and values. In the present case, the industry clearly moved from “microcredit,” to “microfinance” to “financial inclusion” nowadays. Do you think that this change of terms truly is meaningful both conceptually and in the practices of microfinance organizations? What does it say for the future? And in your opinion, what will be the next (buzz)word in our field?
JM: Microfinance is a rich text for students of rhetoric. In practice, each shift in wording has brought a shift away from concerns with poverty and social justice toward finance for less poor populations.
Muhammad Yunus was upset when people initially abandoned the term “microcredit” in favor of “microfinance,” even though microfinance better captured the breadth of activity and innovation in the sector. Yunus accurately perceived that, in practice, rejecting “microcredit” was part of a broader rejection of his particular pro-poor worldview—and not just a reflection of the emerging importance of saving and insurance.
That continues now with the buzz around “financial health” and the move away from “microfinance,” “financial access,” and even “financial inclusion.” “Financial health” is a useful phrase since it shifts concern from providing financial inputs to securing financial outcomes. As a terminological evolution, “financial health” can be defended with compelling, neutral logic. But the reality is that, in practice, the shift in wording again dilutes the focus on the historical exclusion of and discrimination against the most disadvantaged communities.
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Read part 1 of the series, on how the birth and evolution of microfinance were shaped by broader currents in anti-poverty thinking. The full article, “A dialogue on the future of microfinance and international development,” published in Mondes en Développement is available here (with access through NYU or another academic institution), or in an ungated draft version here.