Regulating credit: tackling the redistributiveness of neoliberalism - DEBORAH JAMES

Runaway liberalization and belated regulation

"Ostensibly ‘to open up the market for small borrowers’, previously excluded from opportunities to start small enterprises because of their inability to borrow money from the big banks, existing legislation restricting the interest rate was removed in 1992. Removing the restriction would enable lenders – in theory equally small – to run viable businesses catering to the needs of such borrowers, thus creating opportunities for both." (James, 2013)


I think that the article, staring by its title, is a very good review and critique, through the South African case of how microfinance has become an extended neoliberal practice that intentionally targets the working class and the poor with the objective of bringing them into the financial market and creating channels for earning profit from them, even though it is with the rhetorical construction of providing them with tools for improving their lives.

With that said I think that James provides a very interesting and telling insight into the mechanics of these microfinance endeavours. First she describes the historical development of this institutions in a society deeply shaped by the Apartheid system and its racial and ethnic discriminatory organization and how sometimes the unexpected consequences of good-intentioned policies can be worst than the problem they are trying to fix. Second, the description and analysis of the both sides of the struggle when came to new regulation painted a very good picture of the scenario that in my opinion repeats itself everywhere when the public-private happens; and finally third, the author humanizes both those historical moments and the public debate through testimonies and quotes from people involved in the microfinance arena and by doing so she comes full circle in her analysis that began in the state sanctioned assassination of workers protesting predatory lending.