Mohammad Javed Kaisar Ibne Rahman

Dealing with ‘Poor Women’ through Formal and Informal Economy: Grameen Bank An economy is an ‘economic system‘ of a nation state or a specific area where different component of that system belongs in different manner. In this paper I choose ‘Grameen Bank‘ as an economic actor. Here I will discuss Grameen Bank‘s contribution as an economic actor in the local premises as well as the connection with the global economic phonomenas and ‗global economy‘. Grameen Bank is a non government organization (NGO), originated in Bangladesh, has owned Nobel peace prize in 2007. There are a lot of debates and controversy on micro credit which is the basic economic element of Grameen Bank. But my argument will not focus on that controversy, rather I will focus on the micro level such as the basic terms ‗poor‘, ‗empowerment‘ and development in relation with local and global economy. My aim is to demonstrate in this paper how ‗poor‘ concept has established and how Grameen Bank as an economic actor deals with ‗poor‘. Moreover, the formal and informal economic relations in different spheres will also come into the focus by allowing local to global connections through different ethnographic examples. However, I will also focus on the ‗agency‘ of person and how it creates multiple agencies through market economy. Grameen Bank Before going in to the discussion, I want give a short description on Grameen Bank. The origin of Grameen Bank can be traced back to 1976 when Professor Muhammad Yunus, Head of the Rural Economics Program at the University of Chittagong, launched an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor. The Grameen Bank Project (Grameen means "rural" or "village" in Bangla language) came into operation with the following objectives: (i) extend banking facilities to poor men and women; (ii) eliminate the exploitation of the poor by money lenders; (iii) create opportunities for self-employment for the vast multitude of unemployed people in rural Bangladesh; (iv) bring the disadvantaged, mostly the women from the poorest households, within the fold of an organizational format which they can understand and manage by themselves; and (v) reverse the age-old vicious circle of "low income, low saving & low investment", into virtuous circle of "low income, injection of credit, investment, more income, more savings, more investment, more income" 1 . As of December, 2010, it has 8.34 million borrowers, 97 percent of whom are women. With 2,565 branches, GB provides services in 81,376 villages, covering more than 97 percent of the total villages in Bangladesh.2 ’Poor’ and Money According to the Oxford Dictionary the word ‘poor‘ has some meaning and the first meaning is ‗lacking sufficient money to live at a standard considered comfortable or normal in a society‘ 3 . In this meaning, the words ‗comfortable‘, and ‗normal‘ have been generalized, rather the meaning of ‗comfort‘ and ‗normal‘ varies in different societies. Different societies 3
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Different cultures have different value in economic system as well as the value of money. In 2008. However. money is not only a mood of exchange rather it is related with the society and culture. The idea of global and local are also inter-connected with each other. and even it still exists in many societies. money is not an isolate economic entity rather it is closely inter connected with other social institutions and which is apparently contextual. In this way. In the rural of Bangladesh. money has 2|P age . Grameen Bank is trying to eliminate poverty from the country by borrowing money to the ‗poor‘ people. Large-scale money transactions threaten the boundaries between such regimes or currency zones in a way that barter does not. Tiv society used to barter and there was a highly developed market organized at which people exchanged their produce for their requirements. 3). Bill Maurer (2006) explained the meaning of money and the great transformation of money. the World Bank came out with a revised figure of $1. It is only when these total patterns are compared that we can begin to go beyond the conclusion that the variable symbolic elaboration of money and monetary exchange is yet another illustration of the way in which different cultures see things differently (Bloch and Parry 1989: 2. However. It is a political decision to organize an economy in a particular way. Bangladesh is considered as a ‘non-western‘ or developing country where barter system was also existed few decades ago. it has been judged by the different level and standard of living such as gross domestic product or GDP. These economic values usually over look the social systems. Furthermore. Shaohua and Sangraula 2009: 164).25 at 2005 purchasing-power parity (PPP) (ibid). ‗Money‘ considered as the ultimate exchange value in the formal economic sphere or in the current global economy. The ‗poverty threshold‘ or ‗poverty line‘ is the minimum level of income deemed necessary to achieve an adequate standard of living in a given country (Ravallion. cultural context or mental pleasure of an individual. barter system is usually found in ‗non-western‘ or nonindustrial societies and here he gave examples of barter system in African societies like Tiv society. it has different meaning or utility of money.Mohammad Javed Kaisar Ibne Rahman have different meaning of money. ‗Poverty‘ is also an indicator of standard of living and it measured by the ‗poverty line‘ in economic terms. because the regulation of money is perhaps the major way in which governments attempt to control their economies (ibid). Barter system has changed over time and money came here as means of exchange. In anthropological perspective. Human Development Index (HDI) etc. The common international poverty line has in the past been roughly $1 a day. just as it is to establish separate currency zones (Humphrey and Hugh-Jones 1992: 5). Humphrey and Hugh-Jones (1992) argue that money prices indicating 'more' or 'less' in these separate regimes are not a universal measure of value. Grameen Bank is using this global economic ‗standards‘ to measure the condition of living of the people. The notion of ‗poor‘ has been established through these international authoritative organizations. In evolutionary process money is considered as it comes after the barter system. However. state and government moreover governance. to improve the living condition or to reach the minimum global ‗standard‘. And barter system was earlier version of exchange value. the meaning of money is not same as the ‗Western‘ societies or even in different ‗rural‘ areas. After establishing the idea of global economic value. In Bohannan‘s (1959) article. and which today traders buy produce in cheap markets and transport it to sell in dealer markets (Bohannan 1959: 492).

In Bangladesh. According to Bill Maurer ‗existing alternatives like Islamic banking and local currencies take ready-to-hand conventions the time value of money. the relations among people in rural areas are more kin based or neighbour supportive. European Union (EU) make some standardization and that ‗grade‘ or ‗level‘ has to follow to export or to deal with this union‘s countries. the problem of the relationship between a representation and reality. is essentialized in the global economic relations but still it has different meaning in different societies.. But this is considered as ‗informal‘. Here. However. Grameen Bank replaces the credit borrowing system from traditional informal microcredit. the structure of the ‗economy‘ is not same in everywhere around the globe. it requires something ‘formal‘ which is also recognized by the global standard. Emergence of capitalism. Bohannan 1959 etc). Therefore. neighbors and relatives etc. Money making sense in different context in different way but at the end it is obeying the international or global meaning in most cases. Formal and Informal While looking at the meaning of the formal and informal market activities in the case of the Grameen Bank and its borrowers. and anthropological view tries figure out those inter-relationship among different social institutions regarding money (Maurer 2006: 17). therefore.Mohammad Javed Kaisar Ibne Rahman been conceptualized in different ways and there a lot of debates on different economic issues. loans from friends. But hegemonic economy (Maurer 2008) has established in a certain way where it is hard to imagine any alternatives to money. but as this example suggests .is a backlash of the normative form of governmentality characteristic of the 3|P age . However. Grameen Bank is following the global meaning of money and the market systems. pawn shops. configurations of using money and the meaning of money is relatively different from the institutional meaning. no matter where the country. Not only does money mean different things in different cultures. At the grassroot level.. use of money at the grass-root level is different which does not always follow the formal rules. In some ethnographic studies depict the picture of kin relation and social bondage where the money and its exchange systems are not same as Western meaning of money and exchange (Bloch & Parry 1989. the concept of global ‗standard‘ of ‗poor‘ is general. I will follow Sassen‘s (1993) argument which propose that informal and formal market economy are not two separate spheres but always interconnected (Sassen 1993: 2289). Meaning and use of money also do not effect to measure the ‗poor‘. In Dunn‘s articles we see. the social system and cultural norms or belief are not as same as ‗Western‘ countries or societies. In Poland ‗reestablishment of black markets. It has been changed over time. Money. and it is a formal institute which plays important role to deal with poor and money in the very rural areas. EU is not permitting those things which are unable to full-fill their standard may mean different things within the same culture (Bloch & Parry 1989: 22). Therefore. and the recognition that finance is a fiction and mix them up into unanticipated configurations‘ (Maurer 2008: 66). and giving money to the poor people to improve their monetary situation as well as living condition. Moreover in Bangladesh. Grameen Bank is not out of this system. Today‘s meaning of money in contemporary ‗global economic‘ society did not express the same meaning always. the culture stands.. meaning of money might differ in different culture or society. industrialism and related systems have great influence in the society and social relation to perceive money. In traditional microcredit system people used to borrow from moneylenders.

the system is the same but operates in different countries or societies in different ways. But. cannot borrow money from those. All these businesses are treated as informal businesses which are not highly regulated by the government or these are not in the taxation boundary. In this sense. lends money to the poor people without any mortgage or physical assets but they require reference and guarantee from other borrower (Schreiner 2003: 4). most of the borrowers of these loans are doing ‗informal‘ business in rural areas. Bangladesh is a developing country and its economic structure is not fully capitalist economy. commensuration and hierarchy (ibid: 183). For example mobile phone use for public handy craft production. poultry firm. who does not have such property. Microfinance in general—is to collateralize the asset of future access to loans. See detail: Review commissioned by the Norwegian Ministry of Foreign Affairs of matters relating to Grameen Bank http://www. mobile phone (for publicly use). Similarly. In some ‗informal‘ economic activities where transaction of physical good or product is not important rather service is much important. through their micro financing process. In informal or formal economy: products or services have social. small shops etc. Grameen Bank get the ‗formal‘ authority for giving loan and this loan giving process is ‗standard‘ in the country‘s legislation system as well as in global economic sense. Most of the cases micro finance used for small business like small dairy firm.4 Most of the formal lenders require physical assets such as land or houses to borrow money. in industrial countries. In a market transaction a good changes hands. buyers and sellers are So that people used to talk with other persons through public mobile phone and these phones was distributed by Grameen to the rural women. EU does not want to permit black market as food processing industry is highly regulated sector in European Union. Therefore calculation of a product or service is context oriented. 5 a person could have very important conversation which is not financially measurable in the market economy system. However. According to Sassen. borrowers repay because they want to preserve future access to loans (ibid) (Grameen Bank has a lot of defaulters in re-paying loans and the process of giving loan and its returning process is one of the major debatable issue in contemporary micro-credit system).Mohammad Javed Kaisar Ibne Rahman European Union‘ (Dunn 2005:175). 4 4|P age . in Bangladesh. The formality in the loan giving process was much needed to receive foreign donations and Grameen Bank was receiving funds from Norwegian development assistance fund. Standardization thus implies legibility. Economic polarization and transformation of economic structure affected many part Grameen Bank received NOK 392.693 million during 1986 to 1997. the "informal economy" refers to those income-generating activities occurring outside the state's regulatory framework that have analogy within that framework (Sassen 1993: 2289).norway. economic system changes social structure by its own manner. The good is detached from the seller‘s world and attached to that of the buyer (Michel & Muniesa 2005: 1232).pdf 5 In Bangladesh. Once the transaction has been concluded. On the other side. Here Grameen Bank. cultural as well as economic value. The poor. there is not enough land phone line facility in the rural areas or mobile phone was not so cheap to own personally. microfinance in low-income countries works a lot like credit cards in high-income countries. In this perspective micro financed activity are ‗informal‘ but these are the very important for the larger economy.

these economic activities help those people for their living. Grameen Bank‘s such economic structure has global impact which is observed in the local level. Though this is a generalization of whole country‘s women but in most cases. women are treated as responsible for the domestic labour.grameen-info. Women More than 97 percent of the borrowers of micro-finance form Grameen Bank are women6 and to empower these rural women economic activities are treated a means to develop human conditions. 10241026). Women are migrating to ‗rich‘ countries to do the ‗women work‘ where those work that affluent women are no longer able or willing to do (Ehrenreich & Hochschild 2002: 3). In this perspective domestic works are treated as the work for ‗women‘ in many societies. Not only is the sexual division of labour but also power relation is important. and lack of financial freedom treated as a major obstacle for this. In the example of the informatics workers/ higglers traditional gender connotations are challenged on various levels but also re-inscribed.Mohammad Javed Kaisar Ibne Rahman of the society especially in big cities.php?option=com_content&task=view&id=16&Itemid=112 Grameen Bank borrowers attend a weekly centre meeting to make loan repayments. On the one hand these women (higglers) travel different countries and they usually work in formal business. However. New consumer culture-. Of course this mobility of http://www. and it is very complex where economic factors are closely related (Anderson 2002: 113). All these income generated activities have a great role in the country‘s economic frame work. For Grameen Bank as an NGO or an economic actor is trying to encourage women to relate with the market (informal or formal business does not make any sense to them but they are still working as an active economic agent in her position). Therefore. Bangladesh‘s economic structure is not as same as Western economic structure and economic polarization did not effect in the same fashion. In theorization about the informal economy has focused on the shortcomings of less developed economies: their inability to attain full modernization (ibid: 2289) and these economies works as ‗backward‘ (ibid) sector. Moreover. Women are vulnerable in many developing countries.‗formal‘ economic structure has developed at the same time informal economy belongs everywhere. It also affects patterns of social reproduction and consumption (Sassen 1993: 2295). 6 7 5|P age . as these people are very ‗poor‘ and they don‘t have any other alternative to do so. But now globalization has impact different level of country‘s economy. Bangladesh government knows about this informality but they over look these sectors for some reasons. Gender issue is important in global economic sphere. it is the reality. which is organized by the local branch staffs of GB. And most of the borrowers are women. the weekly meetings7 help women strengthen support networks beyond kin groups and offer women a chance to gather in public and to hear their first names spoken with respect (Schreiner 2003:29). Grameen Bank and other similar organizations are doing these economic activities and keeping alive formal and informal activities simultaneously. Several studies find that Grameen and similar agencies empower women. or government is not financially capable enough to subsidize all these people. in Bangladesh context. ‗Work‘ is defined by money in most cases such as wage labour. they are producers and at same time the way of consumption is perceived (Freeman: 1018. Division of labour is highly related with ‗money‘.

not only in the ‗poor‘ or developing countries but also in developed countries such as USA8. At the local level. who are responsible for structuring the market‘s basic layout. In global aspect. Grameen Bank is creating different social settings in the local sphere as well as global spheres. The local and global are blurred to some extent. but still it is building a change whether it is good or bad in society‘s perspective. In Chicago pit. electronic economy. Global is imaginary or hypothetical as well as it is important how a local individual perceive or adopt that global.Mohammad Javed Kaisar Ibne Rahman women is not highly encouraged in many societies (within the country). Grameen Bank as an economic actor is creating different forms of relation in different places. moreover. According to Moore (2004). The idea of ‗poor‘ and its counter idea ‗micro credit‘. A market is not only a ‗market‘ or a place for transaction but more than this. and the individual traders (ibid). through a changing array of ―experiments‖ or plans. global consumerism or transnational communities (Moore 2004: 74). mass media. Grameen Bank is helping to re-establish or justifying the ‗poor‘ people and showing the ways to get rid from this situation. micro-credit is creating new relationships with others in small sphere. Among these factors are the market‘s architecture and spatial ordering. sociotechnical arrangements for conducting trading activities. Zaloom unifies her evaluation by concentrating on the outlooks and actions of three classes of human agents who seek. This idea has become global in the ‗global economic‘ arena. Grameen Bank maintaining its global branches and sharing its idea and experiences with other countries and institutes. and the ways that the market differentiates itself and its activities from the broader social setting.wacphila. Grameen Bank is not only a micro finance distributor NGO but it is a big actor and it is giving multiple agencies to the people. conceptions of self that affect trader motivation and action. to skim profits from the market‘s underlying transactional flows: designers. both are local as well as global. Again these people are connecting with the Grameen Bank‘s local employees. locals and brokers cultivate relationships with each other (Zaloom 2006:100). she persuasively contends that the evolution of financial exchanges is better understood as the product of a complex and subtle synthesis of economic.pdf 8 6|P age . social. Grameen Bank has many other businesses for the ‗poor‘ people. There are a lot of influence with the global ideas such as experiences from migration. borrowers are building relation with neighbours to create a group to get the loan. In the same way. there is nothing absolutely local or global now. and cultural influences. Instead. Here is a new form of social relationship is building up like Chicago pit. the social composition of the trading community. One of them call ‗social business‘ and recently Grameen and Groupe Danone formed a social business UNA-USA Model UN Conference on micro credit http://www. who monitor and guide the dealing of their firm‘s traders. flexible capital. Zaloom argues that the explanations put forth by economic rationalists for assessing the codevelopment of markets and technologies are too narrow. Local to Global The idea of micro credit is now implemented in different countries of the world. New relationships are creating network and communication through different business as well as micro-credit.

net/2006/03/13/d60313011410. Although this is not wrong. a global product or concept which is penetrating in the very rural areas of Bangladesh through Grameen. Sassen‘s way of looking at this case acknowledges that these women actually are part of the global process themselves and not just on periphery of it. it is hard to imagine an isolate society or a concept in the world. it is not the complete picture of what is happening neither. women who taking money from Grameen Bank also are exercising their agencies in the local sphere as well as global sphere through ideas and their survival strategies moreover their economic activities (both formal and informal). Grameen Danone Foods Ltd. Because of globalization. Grameen Bank dealing with the local sphere and local community as well as it is interacting with the global economy by taking global ideas. In the similar fashion. produces a special yogurt and this idea is very new in Bangladesh.htm 9 7|P age . I tried to relate Grameen Bank‘s economic activities to both local and global level as well as women as a medium of these economic activities. but it misses to focus on how these women exercise their agencies and actively pursue their aims by engaging in the global sphere. Conclusion As an economic actor. Yogurt is not very common food in rural Bangladesh but now a ‘global‘ food idea has becoming in to the local. Mazzarella (2003) in his article argues how a global product conceptualized in local India through advertisement. In the same way. Grameen Bank is playing an important role all over the Bangladesh as well as in global economic surrounding. the ‗yogurt‘. Grameen teams up with Groupe Danone to set up food plant http://thedailystar. concepts or initiatives from the global economic.Mohammad Javed Kaisar Ibne Rahman enterprise in Bangladesh9 to eradicate poverty by providing nutritious dairy food for children in the rural areas. Following Sassen‘s argumentation would mean to interpret the work of women as sustaining the well-being of what happens at the global circuits (a thereby the rich countries) with their work on a local level (Sassen 2002: 256). In this paper.

maids and sex workers in the New Economy. Exchange and Value. Martin. Schneider (ed. Dunn. exchange. Ehrenreich. 109. Parry eds. Callon. Cambridge University Press: 1-32.2006. Elisabeth (2005) Standards and Person-Making in East Central Europe. and Ethics as Anthropological Shaohua Chen and Prem Sangraula (2009) ‘Dollar a day‘ World Bank Economic Review Volume 23. In Signs: Journal of Women in Culture and Society 26 (4): 1007-1037 ‘Grameen teams up with Groupe Danone to set up food plant‘ by news correspondent of the Daily Star. & A. 2011 http://www. Cambridge.norway. Ong and S. Hochschild (eds). Ehrenreich. Bill.) Microfinance for the Poor?. 2008. R. Humphrey and S. Journal of Economic History 19: 491-503. Barbara & Arlie R. Malden. Blackwell Publishers: 173-193. In Anthropological Theory 4(1):71-88. (2008) Re-socialising Finance? Or Dressing it in Mufti? Calculating Alternatives for Cultural Economies. & A.Mohammad Javed Kaisar Ibne Rahman References Anderson. Hugh-Jones eds. 35: 15-36. Hochschild (eds). Maurice and Jonathan Parry (1989) Introduction: Money and the Morality of Exchange. Bloch and J. visited on 17 February 2011 http://thedailystar. Moore. Carla (2001) Is local:Global as Feminine:Masculine? Rethinking the Gender of the Globalization. S. B. R. In A. In Cultural Anthropology 18(1): 33-71.Number 2-2009-Pages 163-184 ‗Review commissioned by the Norwegian Ministry of Foreign Affairs of matters relating to Grameen Bank‘ : visited on 18 February. Cambridge University Press: 1–20.htm Hashemi. Ehrenreich.128. and value: An anthropological approach.J.pdf 8|P age . Money and the Morality of Exchange. Paul (1959) The Impact of Money on an African Subsistence Economy. Journal of Cultural Economy 1(1):65-78. (1997) ‗Building up Capacity for Banking with the Poor: The Grameen Bank of Bangladesh‘. Paris: OECD Humphrey. Maurer. Global Assemblages: Technology. Politics. maids and sex workers in the New Economy. Barter. Bohannan. Ravallion. Bloch.M. B. William (2003) ‘Very Bombay‘: Contending with the Global in an Indian Advertising Agency. Organization Studies 26(8): 1229-1250. Mazzarella. Hochschild (2002) Global Woman: Nannies. Caroline and Stephen Hugh-Jones (1992) Introduction: Barter. Vol. London: Granta Publications. Michel & Fabian Muniesa (2005) Peripheral Vision: Economic Markets as Calculative Collective Devices. In C. pp. in H. London: Granta Publications. Bridget (2002) ‗Just Another Job? The Commodification of Domestic Labour‘ in Global Woman: Nannies. -------. In Annual Revue of Anthropology. Henrietta (2004) Global Anxieties: Concept-Metaphors and Pre-Theoretical Commitments in Anthropology. Collier eds. The Anthropology of Money. In M.

org/education/2010_mun_microcredit. 2011 http://www. Chicago: The University of Chicago Press. 2011 http://www.grameeninfo.wacphila. Mark (2003) A Cost-Effectiveness Analysis of the Grameen Bank of Bangladesh.grameeninfo. Caitlin (2006) Out of the Pits: Traders and Technology from Chicago to visited on 16 February. visited on 18 February.grameeninfo. Louis UNA-USA Model UN Conference on micro credit.php?option=com_content&task=view&id=16&Itemid=112 visited on 16 February. Yale Law Journal 103: 2289-2304. 2011 9|P age .php?option=com_content&task=view&id=16&Itemid=112 visited on 16 2011 http://www. 2011 http://www. Saskia. Center for Social Development. (1993) The Informal Economy: Between New Developments and Old Schreiner.pdf Zaloom. Washington University in St.oxforddictionaries.Mohammad Javed Kaisar Ibne Rahman Sassen. Web address http://www.php?option=com_content&task=view&id=19&Itemid=114 visited on 16

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