Contrary to their claim that there is no collateral for the loans, it is the group and a Bangladeshi woman’s honor and shame that operate as the collateral.
Microfinance and Its Discontents: Women in Debt in Bangladesh - Lamia Karim (2011)
Shaming of women is the collateral that guarantees 99.9% recovery for microloans. Perhaps that’s why it makes good business sense for women to get the bulk of microloans worldwide - as much as 86% in South Asia.
Good business sense. How good? Very good in fact: an estimated $125 billion was extracted from poor countries by microfinance institutions over a period of 18 years
This can be called A Shrewd Shaming of the Shrew.
(Maria) Galindo’s observation that micro-finance is a mechanism to place women under the control of the formal economy can be generalized to other countries and so can her argument that loans are traps from which few women can profit or free themselves.
From Commoning to Debt: Financialization, Micro-Credit and the Changing Architecture of Capital Accumulation - Silvia Federici (2014)