Caroline Schuster's ethnography of microfinance offers a unique look at the interwoven social construction of gender and indebtedness in the neoliberal context of Paraguay's free trade and smuggling economy. The book follows the credit process from a microfinance organisation to the neighbourhood, looking at how borrowers and liability are constructed for individual loans as well as for lending to so-called solidarity groups wherein the entire group is responsible for repayment. It turns out, however, that definitions of responsibility are always collective to some extent even for the individual loans that often hold relatives or partners responsible for repayment.
In addition to its unique focus on the lending process and on the life course of loans and ‘the people attached to them’ (p. 11), the study is especially interesting for several other reasons. First it concentrates on a non-profit microfinance lending organisation, Fundación Paraguaya, at a time when commercial microfinance enterprises are rapidly expanding and praised as the most sustainable and efficient poverty alleviation tools. Secondly, the tri-border region of Paraguay, Argentina and Brazil – where Schuster's study was located – provides interesting insights into the ways in which geographical context and their corresponding economies shape the lives and borrowing/repayment patterns of microfinance participants. Such patterns are integrally shaped by the vicissitudes of the smuggling economy. However, key in the book is the in-depth description of the nuanced processes whereby such programmes produce and reproduce inequalities in gender relations. Since the 1990s, literature on microenterprise development and microfinance has stressed that the inspiration and consequences of microlending are gendered. Muhammad Yunus, who formed the Grameen Bank, argued that women were more likely to repay small loans and more likely to use profits from small enterprises to care for their families than were men. However, Schuster's study unpacks the ways that gender expectations frame lending products and permeate lending/repayment cycles so as to construct gendered ideals of solidarity and to reinforce existing gender inequalities.
Schuster divides her analysis into two parts: 1) Regulatory Forms and 2) The Life Cycle of Loans. Part 1 examines the construction of entrepreneurship and liability proffered by the organisation. Schuster's role as a consultant for Fundación Paraguaya allowed her an insider's look at the regulatory apparatus of the organisation and the processes involved over the life cycle of its loans from both staff and borrowers’ perspectives. Detailed observations of staff training sessions and materials reveal the ways in which staff were taught that entrepreneurial success was a matter of individual personality traits, not of structural opportunities. Although much of entrepreneurial literature has been criticised for its preoccupation with defining personality traits of successful entrepreneurs, the analysis in this book reveals not only that this approach is alive and well, but also elucidates a process that disseminated such individualism to microfinance programme staff. The second chapter in Part 1 outlines the delicate and uneven relations of liability and repayment as they occur in often unpredictable ways and must constantly be renegotiated in the solidarity model, a model through which women gain opportunities and freedom through borrowing, but also are repeatedly bound by the same process.
Part 2 explores the social construction of creditworthiness, and how gender and class are integrally connected to this process. The gendered and disparate definitions of solidarity and repayment responsibility between women's solidarity groups and those of men are fascinating. Men's groups were offered much more independence than were women's: men were not held responsible for each other's loan repayment whereas women were. Not surprisingly, the men's groups were short-lived in the programme, an outcome that further reinforces constructions of social collateral lending as a feminine programme. The next chapter in Part 2 focuses on the complexities of the repayment process and the degree to which, despite their attempts to remain separate, field staff become enmeshed in group dynamics to garner loan repayment and keep groups constituted. This chapter also reveals ways that Paraguay's smuggling economy obscures the lines separating finance, fraud and families, and in so doing requires continuous renegotiations of liability among staff and clients. The final chapter in Part 2 deals with one of the greatest economic and social challenges to the solidarity groups – the death of a member. Group members interfaced with surviving relatives in order to meet the resulting financial and emotional burdens faced by both family and the borrowers’ group. In such cases, the solidarity of the group extended beyond the instrumental aspects of membership. Renewed definitions of liability and group membership had to be developed for the solidarity group, and family members were often involved.
The detailed stories of staff, clients and events featured in the life cycle of this microfinance lending located in the Paraguayan tri-border region offer findings that are both context-specific and suggestive of wider global processes. This is an important book but one that also has some limitations. For example, a more systematic introduction to the study country, region and economy would have promoted greater understanding of the contextual embeddedness of the findings. Moreover, the significance of vignettes about staff and clients might have been more meaningful with a bit more background of the persons and events.
Coherence could have been greatly improved by better chapter introductions offering a clear menu of what was to follow. At times, the writing lacks clarity due to overly complex sentence structure and excessive use of disciplinary-specific jargon. Despite such limitations, Social Collateral is a rich account of the interwoven social production of gender, class, entrepreneurship, lending and social solidarity. Schuster's study of a significant region of the world that is not often addressed in English-language publications also makes it a noteworthy contribution.
