Financializing Poverty
Labor and Risk in Indian Microfinance
Sohini Kar




“ONE DAY, Mr. Bose dreamt that his father—who had passed away when he was very young—came to him and asked what he had accomplished in his life. When he recounted everything he had done, including his successful banking career, his father asked, ‘So what?’ That,” explained Mr. Ray, “was the question leading to the micro-finance project.” Based in Kolkata, Mr. Ray, the regional chief operating officer (COO) of a Bangalore-based MFI, was telling me of his entry into microfinance after thirty-five years in commercial banking. In narrating his own journey, he traced that of Mr. Bose.

“I met my guru while working at Citibank,” explained Mr. Ray in the small, windowless MFI office—a world away from the sleek offices of global finance. He had left his comfortable job at a multinational bank to follow Mr. Bose, his mentor, into microfinance. Mr. Bose had been a successful international banker with a prestigious American master of business administration (MBA). He had worked in retail banking for a long time but became tired of the corporate “rat race.” Soon after the dream of his father, Mr. Bose met with Muhammad Yunus of the Grameen Bank and set about establishing his own MFI in India.

In this narrative, the transformation from a commercial banker to MFI founder is precipitated by an ethical encounter. The moral voice of Mr. Bose’s father, denouncing his achievements in commercial banking, turns him from the rat race to the more virtuous path of micro-finance. Going into the business of microfinance is not just a matter of economic rationality (i.e., the poor are profitable) but is inspired by the ethical dimensions of “doing something for the downtrodden.”

Yet throughout our conversation, Mr. Ray was careful to distinguish commercial microfinance as being part of the financial services industry, not simply a development-oriented NGO. This, Mr. Ray explained, enables borrowers to depend on the MFI as a sustainable institution. Moreover, investors support the MFI precisely because of Mr. Bose’s reputation as a banker, as now “many big names in banking are affiliated with [the MFI].” “Doing well” (financially) and “doing good” (socially)—the mantra of social enterprises—are inextricably linked in this narrative of microfinance. “The goal of the MFI is to make a profit, because,” noted Mr. Ray, “why would people invest in a company that is not profitable?” In fact, to keep the distinctions clear, and rather than attempt to do more social work through the commercial arm, Mr. Bose had established a separate NGO to take on these tasks. So, Mr. Ray explained, “there is the business side of micro finance, which requires cautious steps, and the other side is that of helping people.” As social enterprises, MFIs have to incorporate a double bottom line: economic and social.1 As demonstrated in the conversation with Mr. Ray, the pursuit of these dual goals is often complicated. Further, there is ambiguity in how to account for the social side of the ledger. The moral duty to help the poor is shot through with concerns for a sustainable and profitable business, attendant to the risks of lending to the poor.

This chapter discusses the emergent culture of entrepreneurship as it undergirds both the popularization of social businesses and the idea that micro-entrepreneurship can serve as a means to escape poverty. It interrogates the extent to which the practices of both MFIs and poor workers intersect with the ideological premise of entrepreneurship. First, I examine how the stories that social businesses tell, especially foundational narratives—official and unofficial—sustain the ideological premise that these companies are doing good socially while doing well financially. Centering on the founders, these narratives also celebrate an emergent entrepreneurial spirit in India. Effectively, this culture of entrepreneurship ideologically bolsters the current growth of social enterprises.

Second, I explore how social entrepreneurship has coincided with the explosion of “bottom-of-the-pyramid” (BOP) capitalism. Under this paradigm, the poor are no longer considered just passive objects of state-led development but active market participants as consumers and entrepreneurs themselves. The BOP goods and services, stretching from consumer goods to banking, have transformed the poor into new sources of capitalist accumulation. The extent to which the poor have benefited through BOP finance, however, remains unclear. Finally, I look at the precarious conditions of labor, now coded as micro-entrepreneurship, in the informal economy.


One morning, as we went from one group meeting to another, Dinesh, a loan officer at DENA, recounted the story of Mr. Basu, the founder of an MFI where Dinesh had previously worked. Mr. Basu, explained Dinesh, had started with about Rs 18,000 to begin doing business in the district of Howrah, neighboring Kolkata. When he began, there was such demand for money from the people and pressure to provide loans that he did not know what to do. At the eleventh hour, his wife gave him her wedding jewelry to get more money to give loans. When Mr. Basu hesitated to take her jewelry, his wife said, “If you can make people smile with this, then that is an ornament enough for me.” Dinesh had come to microfinance by chance when, while waiting to take the examinations for the much coveted civil service jobs, he had applied to and gotten a place at Mr. Basu’s MFI. For Dinesh, the foundational narrative offered a way for him to make sense of and give meaning to his job as a way of doing good for others.

As did Dinesh and Mr. Ray, people working in various levels of the business recounted their narratives about the foundational moments of microfinance. While a version of Mr. Ray’s narrative is publicly available in a newspaper interview, Dinesh’s retelling is not officially documented.2 However, rather than attempt to verify these stories, I am interested in understanding how these and other foundational narratives shape employees’ and popular perception of microfinance.

In these two narratives, the protagonists—Mr. Bose and Mr. Basu—have significantly different personal and institutional origins: the former comes from an elite international education and work experience in a multinational bank, while the latter is from a middle-class background with a grassroots experience in microfinance. However, the two narratives have similar structural elements: both protagonists are pushed by close kin to further pursue their work to do good for the poor. These are key turning points for the two men in the foundation and development of their MFIs.

The transformative moment is also present in official foundational stories. Two autobiographical works, Muhammad Yunus’s Banker to the Poor (2003) and Vikram Akula’s A Fistful of Rice (2011) describe moments of revelation and transformation that lead to the founding of the Grameen Bank and SKS Microfinance, respectively. For Yunus, an encounter with a young woman in rural Bangladesh who was unable to buy supplies in bulk pushed him to think about microcredit.3 For Akula, it was a woman who was turned away by the NGO where he worked that drove him to scale up lending through his for-profit MFI.4 The figures driving the transformation in these two cases were poor women rather than close kin. Like the popular narratives, these autobiographical accounts of foundational moments demonstrate how deeply moral and financial rationalities are entangled in shaping the corporate histories of microfinance.

All four of these narratives draw on a form of sentimentality, or “the emotionally suffused experience of sympathy for others”; sentimentality implies a form of selfhood that “takes shape through its immersion in the well-being of others” (Black 2009, 270). As in the stories of poor borrowers that Shameem Black examines on the peer-to-peer lending site Kiva, foundational narratives rely on sentimentality to drive the development of MFIs.5 Each founder is inspired by a sentimental connection to do something for the poor, and it is sentimentality that structures the ethical dimension of the MFI. As Black contends, however, sentimental accounts can gloss over structural forms of inequality.

The sentimental narrative, moreover, masks a subtler ideological move: Yunus does not simply give money to the poor woman. In his account, he explains that she does not want charity (Yunus 2003, 48). Similarly, Akula wants to find a way to end poverty through profitability. He writes that to help poor women like the one he encountered, he needed to bring more money into microfinance. His solution is to focus on investment: “Why not bring the circle around, making it possible for donors—or investors, as the case would be—to make money from supporting microfinance?” (Akula 2011, 53). Both Mr. Bose and Mr. Basu also turn to establishing for-profit institutions as their primary focus. In effect, what emerges from each of these encounters is a reinforcement of capitalist market logics that implicitly critique welfare as handouts and as unsustainable. Sentimental narratives then require disentangling in terms of their ideological work in sustaining a culture of entrepreneurship that celebrates self-sufficiency over dependence on the state’s provision of services for the poor.

Through the use of sentimentality, narratives of social businesses are not just stories that blatantly celebrate the free market, but they do so in ways that can be harder to disentangle from other discourses. Corporations are “deeply invested in their stories in telling their histories” as part of their social identities, and these stories often invoke tropes that “obfuscate the actual relations of production and division of labor that they must organize and regulate” (Bose and Lyons 2010, 8–9). Investment in this narrative is particularly important for social businesses such as microfinance that must sustain their identity of doing well and doing good.


Social businesses, however, have emerged amid a larger social and cultural shift in the celebration of an entrepreneurial disposition and ethos. In India, a growing number of television channels are dedicated to twenty-four-hour news coverage of business and finance, from the English-language NDTV Money, CNBC-TV18, and ET Now, to the Hindi-language Zee Business and CNBC-Awaaz. Additionally, there is a growing popularity of business degrees and valorization of business figures. All of these examples mark a palpable transformation of the Indian middle class into what Arjun Appadurai, in the American context, has called “business junkies” (2015, 65), where everything from home ownership (mortgages, financing) to sports (franchising, trading players, team ownership) has become increasingly subject to business analysis, while start-up entrepreneurs have become heroes.

The dissemination of business knowledge in Indian everyday life, however, happens in its own social and cultural context. A form of entrepreneurial personhood has always existed within South Asia, where mercantile ethnic groups and castes often structure the identity of the individual engaged in business (e.g., Fox 1967; T. Roy 2010; Weeratunge 2010). Members of the mercantile castes have an advantage over other castes by mobilizing capital through existing social connections (Damodaran 2008). Though professions can no longer legally be predetermined by caste, caste-based and ethnic networks continue to influence everyday economic and professional life in India.6

Lining the shelves in bookstores and on sidewalk stalls across India are books and magazines hawking knowledge about how to succeed in this new economy through business and entrepreneurship. One such nonfiction bestseller in India is journalist Rashmi Bansal’s (2011) I Have a Dream: The Inspiring Stories of 20 Social Entrepreneurs Who Found New Ways to Solve Old Problems. The introduction of the book documenting successful social entrepreneurs consists of short paragraphs almost poetic in form. Bansal identifies the traits of social entrepreneurs as “a new breed of people” who “think like entrepreneurs but feel and work for the cause of society” (ibid., author’s note). There are, according to Bansal, two kinds of people: “thinkers,” who do not do anything about poverty or inequality because they “believe the world is a neat place, with boundaries”; and “feelers,” who will give something, “if not a coin, at least a moment of compassion.” Social entrepreneurs are “thinking-feeling individuals”; they are able to transcend this divide to help bring about change by applying the principles of business. Social entrepreneurs, for Bansal, are neither demanding radical social change, nor are they iconic figures themselves; social entrepreneurs are not like Mother Teresa but are “people like you and me . . . using the principles of business, to create a better world” (ibid.). In other words, social entrepreneurs can be a bridge between the sentimental and free-market rationale.

Bansal concludes in the introduction that while “the bank balance you have on earth will remain, when you depart[,] your karma, you carry forward” (2010, author’s note; emphasis in original). Using the somewhat ironic analogy of a bank balance, she draws on the popular understanding of the Hindu and Buddhist concept of karma—that present circumstances are predetermined by previous actions and that current action can shape future ends—to make a case for social enterprise.7 In making this argument, Bansal assumes the legitimacy of making profit. Thus, she writes of a world where “profit does not equal greed” or “where ‘I’ does not mean crushing ‘them’” (ibid.). The argument stands that profit can be good as long as it does not crush “them.” Forget class struggle—the message suggests—accumulation can exist without exploitation due to the thinking-feeling social entrepreneur.

While Bansal works karma into the entrepreneurial disposition, others have adapted independence leader and critic of Western capitalism Mohandes K. Gandhi as a model leader, strategist, and innovator.8 For instance, Arun Maira, the former chairman of Boston Consulting Group in India, who has served as a member of the Indian Planning Commission, turns to Gandhi in his argument for a more local model of business management. Speaking to the online news site Rediff, Maira notes, “We keep feeling that models of people in the West are the ones we should follow. In a way, we remain subservient to the leadership values and models of the West” (quoted in Ganapati 2003). Maira—strangely echoing postcolonial critiques—is insistent that Western corporate models cannot be used in the Indian case. Rather, he suggests, we need to turn to Indian leaders as a model for business leadership. He argues, “In business, empowerment is all about making sure everyone is connected to the organization’s goals. Gandhi has a way of doing that: making sure that everyone in the cause is connected to the goal” (ibid.). Finally, Maira turns to aligning capitalism with Gandhi’s vision of India:

In the last few years, there is a thinking that capitalism is not just about creating wealth, but you have to take care of the shareholders and stakeholders, too. Many years ago, this emphasis on the interests of the stakeholders was labeled socialism. So, Gandhi’s ideas and the lessons learnt from him are not totally different from what corporate India would like to do. (Ganapati 2003)

The corporation’s wealth creation cannot occur apart from wider social concerns. In identifying the populace as shareholders and stakeholders rather than citizens, Maira simultaneously reworks the relationship between the state, its citizens, and corporations, and indeed between capitalism and socialism. Businesses have to be concerned as part of management strategy with doing good and balancing the interests of both the corporate shareholders and the stakeholders of society more broadly.9

Rather than a singular teleology of capitalist development, Luc Boltanski and Ève Chiapello define the spirit of capitalism as “the ideology that justifies engagement with capitalism” (2005, 8, emphasis in original; see also Weber 2001). Thus, the culture of entrepreneurship in India is a distinct ethos, not necessarily a globally legible one. Capitalism absorbs its critiques, but in a distinctly Indian way, drawing together existing notions of mercantile castes and ethnicities, Gandhi, and ideas of karma. Anthropologists have long examined the capitalist encounter with noncapitalist societies and the process of enfolding greater parts of the world into the capitalist system (Nash 1994; Taussig 1980). Other scholars have subsequently argued for the need to study the hybrid forms of capitalism that emerge in these encounters rather than privilege the “Eurocentric assumption that the Midas touch of capitalism immediately destroys local indigenous economies and cultures” (Yang 2000, 481; see also Bear et al. 2015; Li 2014; Tsing 2005). Historical analyses of economies in the colonial encounter challenge universal models of capitalist transformation, demonstrating the role of indigenous capitalists in the process of transformation (e.g., Birla 2009; R. Ray 1995). Rather than reproduce a singular grand narrative of global capital, attention to the local particularities and historical contingencies reveals the dialectical processes through which global capital interacts and intersects with vernacular capitalisms, competing elites, and local politics.

That the expansion of capital has not been homogeneous is not to say that capital has not been triumphant; rather, it is to suggest that its forms of expansion have often been more complex and absorbed into the social fabric of everyday practices and local ideologies. May 2011 marked the opening of the Mumbai chapter of the Dalit Indian Chamber of Commerce and Industry (DICCI). Held at the exclusive Taj Mahal Hotel, the organization was feted by Dalit entrepreneurs, as well as members of Mumbai’s business world and officials of the BSE. While some heralded this as “Dalit capitalism” or “capitalism with a social face,” others wondered if a few elite, successful entrepreneurs could really make a difference for the millions of Dalits who continue to face caste discrimination in India (Economic Times 2011b; Karunakaran 2011). Entrepreneurship, it would seem, could be brought to bear on one of the harshest forms of social exclusion in South Asia, if only those who are oppressed are entrepreneurial enough to escape their exclusion.


Speaking to the Economic Times, K. C. Chakrabarty, the former deputy governor of the RBI, observed, “Our dream of inclusive growth will not be complete until we create millions of micro-entrepreneurs across the country. . . . While much of social capital creation has been driven by idealism and the non-profit sector, a view that is fast gaining ground is that creating access to essential services and products for under-served communities—rural or urban, below or above the poverty line, can be profitable” (Economic Times 2011c). For Chakrabarty, the dream of inclusive growth is equated with the creation of self-sufficient micro-entrepreneurs. Ultimately it is the appeal of profitability, not idealism of the nonprofit sector, that drives this dream. Thus, the movement toward social businesses depends not on an alternative to capitalism but on a shift that operates very much within its logic.

In 2004, C. K. Prahalad, a professor of management at the University of Michigan, published The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits. The book is a critique of “the paternalism toward the poor” (2010, xiv) not only by the state but also by NGOs and multinational corporations (MNCs). The BOP model is not a call for greater CSR. Rather, it is an argument for what Prahalad calls “inclusive capitalism” (ibid., xiii). With dignity tied to consumer attention and choice, the BOP model advocates a shift from thinking of the poor as victims to considering them “resilient and creative entrepreneurs and value-conscious consumers” (25). Note here the transformation of the poor from proletariat with nothing but their labor to sell to both entrepreneurs and consumers. The bottom line, writes Prahalad, “is simple: It is possible to ‘do well by doing good’” (26).

For corporations, the bottom billion offers an immense, untapped, or unsaturated market of potential consumers. This concept of the bottom billion has been widely picked up in mainstream business and investment practices. From tailoring fast-moving consumer goods, such as sachets of shampoo or detergent, to investment in banking services such as microfinance, corporations looking to expand their markets have increasingly embraced the poor. There are opposing views of whether profit from social businesses should be accumulated by capitalists or only reinvested in the company. Within microfinance, for instance, the sides are represented by Muhammad Yunus, who sees social businesses as a “non-loss, non-dividend business” (2007, 24), and Vikram Akula (2011), who argues that investor returns are necessary to scaling up.10 Nevertheless, for both sides, profit is the hallmark or symbol of a sustainable business and therefore absolutely necessary. Thus, even as the BOP approach is seen to restore the dignity of the poor as consumers and to reaffirm the notion that businesses and their leaders are not driven by the singular pursuit of amassing wealth, it still operates within the framework of capitalism.

As corporations have expanded their social influence, the growing focus on “business ethics” in management studies reflects a larger shift toward considering the role of the corporation within society at large (Das Gupta 2010). With the popularization of social businesses emerges a new conceptualization of capitalism as ethical (see also Barry 2004; Dolan, Garsten, and Rajak 2011). I use the term “ethical” here without normative judgment. In other words, it is not that ethical capitalism is “good” as opposed to other forms of capitalism. Rather, the term connotes the way that individuals involved in social businesses understand their work as being particularly morally inflected, particularly with social ideals of poverty alleviation. The shift to the BOP is, as Ananya Roy suggests, the “ethicalization of market rule” or the “struggle to retool practices of calculation and rationalities of risk that take account of, and even mitigate, the exploitative character of bottom billion capitalism” (2012, 106; emphasis in original). This is not trickle-down economics where benefits of the free market will eventually get to the poor; rather, the poor are central to the economic and ethical dimensions of businesses and the future of capitalism.

One aspect of the turn toward ethical capitalism has been the growing emphasis on CSR and fair trade. The CSR framework does not provide corporations with regulations around what to do but, as Dinah Rajak (2011) argues, enables businesses to reframe social problems to align with corporate interests.11 Meanwhile, fair-trade movements have moved producers, sellers, and consumers to imbue products with ethical meanings as they circulate, though never questioning the basic premise of capitalist production and circulation.12 Rather than a simple and crude adherence to free-market logics, both CSR and fair trade offer the possibility of a more ethical capitalism. Social businesses, like CSR and fair trade, attempt to explicitly link the ethical and economic in their business model. Unlike CSR and fair trade, however, social businesses are directed toward both providing services to and profiting from the poor or underserved populations. The poor are seen as a potential market for businesses, not as objects of charity or beneficiaries in a supply chain.

Such moralization of the market is a complicated process that intersects with existing ideas of development, the role of the state, and corporations. On the one hand, economic relations are not themselves driven purely by rational choice calculations of individuals. Local ideologies and cosmologies, social obligations, forms of reciprocity, and hierarchies have always shaped economic relations (Graeber 2001, 2011a; Malinowski 2002; Mauss 2000). On the other hand, the rise of neoliberal economics since the 1970s has given way to a conception of the market as a calculative logic that is applied to social spheres beyond the economy (Brown 2005, 2015; Ong 2006). While grand narratives of free markets have relied on the concept of the invisible hand of the market, movements toward an ethical capitalism demonstrate “the rise of a new visible hand, which conjures morality at the heart of corporate capitalism” (Rajak 2011, 16; emphasis in original). Here, not only is the failure of free markets to address poverty acknowledged, but private corporations are actively endowed with new meaning: to incorporate development goals into their missions as a profitable practice.

Ethical capitalism, particularly through social entrepreneurship, marks an attendant shift in the ideologies and practices of development. Anthropologists have variously critiqued development discourses and interventions in the global South, often focusing on the discursive production of development as a technology of power (e.g., Escobar 1995; Ferguson 1994). Yet, as Julia Elyachar argues, the very problem of development is reformulated with the introduction of BOP capitalism. The discovery of the wealth at the BOP and of the ability to do well while doing good has meant “there is no need to try to change poor people. Nor is there a need to change the institutions in which poor people are educated and work. There is no need, as such, for development” (2012, 113). Development, including the provision of social welfare, is no longer conceptualized as a means of reducing poverty but more aptly is expected to be a positive externality of corporate enterprise.13

Deconstructionist critiques of development aimed at centralized planning emerged at the very moment that neoliberal policies (e.g., structural adjustment and economic deregulation) were changing the terrain of development and the role of the state (Smith 2008). Ironically, then, critics of development—including, perhaps unwittingly, anthropologists—have rejected the assumption that the state or development agencies “could know the poor and their needs” (Elyachar 2012, 119). Corporations can now imagine the poor as agentive consumers in a new or underserved market rather than as citizens deserving basic provision of services. In effect, it is the bottom line—not the state’s obligation—that provides poor people with affordable access to education, housing, or health care.

With the growing privatization of everything from education to health care, including through the socially inclined businesses, it is purchasing power that increasingly determines access and availability of basic services for the bottom billion. This shift has also aligned with financialization. Thus, in addition to taking the poor as a potential market, public services have become sites for investment. For example, a report from J. P. Morgan on “impact investing” explains how “in a world where government resources and charitable donations are insufficient to address the world’s social problems, impact investing offers a new alternative for channeling large-scale private capital for social benefit” (O’Donohoe, Leijonhufvad, and Saltuk 2010, 5). Impact investing, following the BOP model, is expected to generate social benefits beyond the financial return. The authors of the report explain that this “emerging asset class” offers a vast market opportunity for investment, estimating “a potential over the next ten years of profit ranging from $183bn to $667bn and invested capital ranging from $400bn to nearly $1 trillion” (ibid., 11). Potential areas for impact investing include agriculture, health, water, energy, housing, education, and financial services.

As a financial service, microfinance also falls into this category. Access to credit is formulated not only as part of inclusive growth but also as a profitable business. From the perspective of the critiques of development, there is something ironic in the conceptualization of the poor as now free from the paternalistic and disciplinary powers of NGOs or state-run development programs. With the new avatar of the poor who can pull themselves up by their bootstraps with access to credit and a little bit of entrepreneurial ambition, even critiques of the development discourse can fail to acknowledge the structural inequalities of everyday life at the margins in the absence of the state’s services. Debt becomes a means for the poor to pay for these privatized services, so more capital is extracted from the poor and circulated to pay for these now private social services.


The culture of entrepreneurship not only promotes businesses to fix social problems; it also envisions citizens, including the poor, as potential entrepreneurs. While the discursive emphasis in microfinance of creating millions of micro-entrepreneurs may cultivate a culture of entrepreneurship (i.e., a social and cultural context in which the traits of the entrepreneur are celebrated and embraced), does it actually succeed? Moreover, how does this new form of the entrepreneurial poor fit into the existing notion of the informal economy?

Ajanta, a DENA borrower in her thirties, ran a sari business and offered to show her stock one morning after the group’s meeting. She had taken a loan from DENA most recently to buy a new stock of saris in anticipation of the increased demand ahead of the upcoming Durga Puja festival, the biggest festival in West Bengal, celebrating the goddess Durga’s annual return to the Himalayas, her natal home. People wear new clothes over the ten-day celebrations. For the wealthy of Kolkata, this might mean multiple new outfits; for the poor, it might mean one or two. Regardless, Durga Puja signals the busiest shopping season in the city, a time of intense business for sellers.

Up the narrow set of stairs in a concrete building with a communal courtyard, we arrived at the small room where Ajanta lived with her family. Climbing on top of the bed, she retrieved the bags on top of the steel almirah (wardrobe) containing the stock she had just picked up from the wholesale district of Burra Bazar and pulled out the saris that were still crisply folded. She explained that the more expensive saris cost about Rs 800 for her to buy, and she sold them at about Rs 1,300 for a profit of about Rs 500. In addition to selling to neighbors and friends, she had found certain places where she went round to sell the saris, such as a nursing home nearby. Most of the women who formed her clientele, however, could not afford to buy a sari upfront. Rather, they paid for it most often on credit: a deposit of Rs 300 and the rest repaid in increments. Thus, Ajanta’s debt to DENA had produced new networks of debt. Ajanta was the exemplary borrower for DENA: a true micro-entrepreneur. She had taken a loan to build her small sari business, but indebtedness now extended outward from her, as she sold her goods on credit to those who could not afford them outright.

Yet in many ways Ajanta was also an outlier, precisely because she did run a sari business. During another group meeting, I was asking all the members for what kind of businesses they had taken loans. As several of the women responded “sari business,” Mukul, the branch manager, who was familiar with my research ritual, joked to muted laughter from the borrowers: “I’ve always wondered; you all take loans to sell saris. Who is buying and who is selling?” Certainly, a striking number of borrowers (143 of 625 borrowers or 23 percent; see Table 1.1) told me they had a “sari business.”14 On a number of occasions, loan officers explained the prevalence of the sari business among borrowers in terms of the relative ease in providing evidence during the verification process. Women would often keep one or two new saris at home, and when the loan officer asked to see evidence of their business through inventory, the potential borrower could bring out these saris. Similarly, others claiming to sell cosmetics, usually from catalogs (e.g., Oriflame, a Swedish multilevel marketing company), would bring out an old and out-of-date catalog—one that could be circulated among other group members—as proof of a business.

This is not to say that there are no legitimate sari business owners among the borrowers, such as Ajanta. In contrast to the rhetoric of women’s empowerment through entrepreneurship, borrowers most often described their businesses as belonging to the family or, more specifically, to a husband or son. In particular, these were the service jobs (e.g., taxi, rickshaw), small manufacturing work (e.g., leatherwork, plastics recycling), and construction (see Table 1.1). Women did run many of the retail businesses, such as selling fruit and vegetables or running food stalls, but these were considered more to be family run, rather than singularly owned by the woman. While the loans were often used for nonbusiness purposes (e.g., education, health, household repairs), on paper, at least, they were for businesses that reflected not an emergent entrepreneurial culture but the existing informal economy.

TABLE 1.1   Businesses of borrowers from DENA

During a house verification for a new loan, Putul, the branch manager, asked the husband of a borrower—she was out when we visited—what he did. “I drive a bus,” he replied. “But I also run a business delivering Bisleri [filtered water].” Asked what he did for this delivery business, he explained that he had to pick up the twenty-liter jars of water from the Bisleri dealer, for which he put down a deposit. For these deliveries, often up several flights of stairs in apartment buildings without elevators, he received a small delivery charge. Looking through the loan application forms, Putul noted that for the last loan, he had listed a business selling fish. “Yes, but that didn’t work, and now I’m working in water,” he replied. If the expectation of micro-finance is that the poor, with the small loan, will be able to grow a sustainable (and profitable) small business, this borrower reflected the realities of working in the informal economy, where people constantly move between jobs and sources of income. Further, the borrower who delivered water for Bisleri made very little from the deliveries, while his labor enabled greater supply networks for the private bottled water company.

Almost 90 percent of the Indian population is estimated to work in what is categorized as the informal economy.15 Liberalization of the Indian economy has led to its further informalization, with privatization leading to fewer public-sector jobs and increasing efforts on the part of private firms to reduce costs of production through labor cuts (Harriss-White 2002). The ongoing industrial decline in West Bengal and the “flexibilisation of production” (Raychaudhuri and Chatterjee 1998, 3062) have also contributed to this process of informalization of labor, particularly in the urban center of Kolkata.16 It is difficult to differentiate between micro-entrepreneurs and the millions who already work in the informal economy, sustaining their incomes through multiple ways other than or in addition to waged labor.

Even in cases where a borrower or her husband might have a job in the formal economy, they were often supplementing incomes through informal work (e.g., small businesses, domestic work). Yet the designation of the informal economy has effectively removed the obligation of the state to help those who seem to have “made their own way, depending on themselves or their communities to survive” (Elyachar 2005b, 172). Informal work is no longer seen as an issue for the government to address but is simply assumed to be part of a functioning economy. This is not to deny the centrality of the informal sector in the economy as a whole.17 Informalization of the economy can, however, be seen as the process by which people are increasingly held responsible for their own well-being, a process that resounds with the micro-finance goal to create millions of entrepreneurs who are responsible for their own fate, but without much attention to what this might look like or how it might be experienced by borrowers.

Quite in contrast to what is recommended in the management books and courses that have become so popular in India through the culture of entrepreneurship, making do in the informal economy often requires constant movement between multiple or on to new projects—the “jugaad ways of development to fulfill their basic needs” (Singh, Gupta, and Mondal 2012, 88). Jugaad is a Hindi word for “making do” or a “quick fix.” At the bottom of the pyramid, jugaad “is not just an innovation system, but a strategy for survival, by stretching resources of the poor, to extract more value from smaller resources” (ibid., 104; Jeffrey and Young 2014). Small businesses owned by the urban poor rarely follow a structured plan. Rather, under conditions of chronic un- or underemployment, people constantly try to make ends meet by hustling between subsistence strategies.18 Such informal workers in the slums are unlikely to accumulate capital in the long term.


The tiny windowless hut was the bookbinder’s workshop. On our way, Saurav, the branch manager who was introducing me to them, explained that Purnima and her husband, Arijul, had gone to six other microfinance institutions before finally getting a loan from DENA, which he had sanctioned. We came to the door, where the middle-aged couple sat in the dark room, squatting on the floor with a bucket of glue, surrounded by piles of completed and incomplete books. During the interview, Arijul answered most of the questions, even though it was Purnima who was the official borrower.

When they had decided to set up the bookbinding workshop, Arijul and Purnima had rented the room but could not afford to buy the equipment they needed. Arijul explained that they first had taken a loan of Rs 8,000 from DENA two years ago to buy special equipment for binding, indicating a heavy green metal contraption in one corner of the room. The press helped bind the books with the glue, a bucket of which Purnima was mixing by hand when we arrived. Since then, the loan amounts had increased, and they were now on their fourth loan of Rs 17,000. But how well the business did depended on the season. Usually, they managed the work between husband and wife, but during the busy seasons, such as around Durga Puja, they had to hire additional labor. During these times, they needed at least two more people to complete the work. Even during these busy seasons, once the costs of labor had been accounted for, they made about Rs 10,000 per month.

Arijul explained that the weekly repayment to DENA could sometimes be hard, and at times they did not have the money to repay the loan (around Rs 360 per week). On those occasions, they had to get the money from elsewhere (e.g., moneylenders). Sometimes they did not get paid by their customers and would have to wait a while for payment. They now hoped for another loan to buy equipment to make the binding process faster. For Purnima and Arijul, their business meant managing a constant set of risks: seasonal demand, extra labor, and managing multiple loan repayments.

In an interview with Mr. Maity, the deputy director of the Enterprise Development Institute (EDI) in Kolkata, I asked what constituted an entrepreneur. An entrepreneurship promotion organization, EDI was founded in 1999 through joint collaboration between the Bengal National Chamber of Commerce and Industry (BNCCI) and the Government of West Bengal. EDI offers training and support to develop entrepreneurship in the state. Among its activities, it works to create awareness about entrepreneurial activities and runs workshops and courses on entrepreneurship for small-business owners, unemployed youth, retired military servicemen, women, and minorities. In response to my question, Mr. Maity distinguished entrepreneurs from managers: “[The] entrepreneur, he is the owner of his enterprise. He started his venture. It is his venture, and he is the owner.” Here, the distinguishing feature of the entrepreneur is ownership. Beyond proprietorship, however, the distinguishing disposition or traits of the entrepreneur, according to Mr. Maity, are “independence, risk-taking ability—should be moderate risk taking, not high risk, not low risk—perseverance, problem-solving attitude, flexibility, communication and interpersonal skill, hardworking.” While proprietorship reflects the need for ownership of capital or the material dimension of the business, the entrepreneurial habitus is marked by the ability or willingness to take appropriate risk.

Can poor, informal-sector workers really be considered to be entrepreneurs? As proprietors and risk takers, Purnima and Arijul could, of course, nominally fit into Mr. Maity’s definition of the entrepreneur. They even hire labor at certain times of the year. Yet the choice to enter this kind of work remains structurally conditioned for the poor. The material conditions—the equipment, stock, or capital—that allow the bookbinding couple to stay in business are tenuous. Moreover, earning Rs 10,000 per month (approximately US$2 per day per person, with the family unit being just the couple), and with debt payments to one MFI alone being around Rs 1,440 per month, does not allow for much accumulation of capital—not, at least, enough to get them out of poverty. A culture of entrepreneurship celebrates those like Purnima and Arijul, with their small bookbinding business; it renders these small businesses into the goal of development policy. What it does not do is acknowledge their difficulties and structural constraints. Once the poor have credit from an MFI, it is assumed they will be able to harness the market to pull themselves out of poverty. Yet such a formulation fails to account for the everyday conditions of labor of the “self-employed.” Without a labor movement to draw attention to such conditions, the toil of small businesses is effectively erased.

Aneel Karnani argues that rather than romanticize the idea of entrepreneurs, focusing on creating “opportunities for steady employment at reasonable wages is the best way to take people out of poverty” (2007, 31). Arguing that most informal-sector small-business owners are not necessarily so by choice, given higher and regular wages in the formal sector, Karnani suggests the International Labour Organization’s (ILO) term “own-account worker” is more appropriate than the romanticized notion of “poor entrepreneur.” In other words, while “entrepreneur” comes to mark the ideological valuation of self-sufficiency and market efficiency, “own-account worker” refers to the basic definitional category of people who are self-employed without having employees.

Of course, the definitional change from entrepreneur to “own-account worker” does not necessarily reflect the realities of working in the informal economy. Consider, for example, the case of Rekha and her husband, who drives a taxi. They lease a taxi, paying the owner Rs 400 every day that it is driven. The taxi would be theirs when or if they ever paid up the Rs 3 lakhs (about US$5,000) for it.19 Rekha estimated that they made about Rs 8,000–10,000 per month as income, but after accounting for fuel, car repairs that seemed to constantly add up, and necessary household expenditures for their family of four, there was never quite enough to pay off the lease. Certainly “own-account” is not as romanticized as “entrepreneur,” but it still tends to individualize the informal-sector worker rather than recognize the structural conditions and social networks of obligations (leasers, moneylenders, etc.) under which they work.


It was July, and the monsoon rains had flooded the streets of North Kolkata. Tania, the loan officer; Mukul, the branch manager; and I waded our way through the murky water to the group meeting. When we arrived, the meeting center, adjoined to a temple for the goddess Sitala, was bustling with preparations for the puja that was to take place in the evening. As we waited for the other members of the group to show up, one of the borrowers, Kalpana, spoke of her son. “He’s finished college, but he doesn’t have a job,” she sighed. “He’s taken all the [civil service] exams, but nothing came of them. Do you know where he can get a job?” she asked the DENA staff, desperate for information on how to secure a position for her son. Despite the rise of the culture of entrepreneurship, Kalpana’s plea for DENA to help her son find a job marked its limits. As India celebrates its newly minted millionaires and billionaires in the new economy of entrepreneurship, many still wait for jobs that will offer stability in their everyday lives.

Caught up in a process of what Craig Jeffrey has called “long-term waiting” (2010, 3), many—particularly youth—in India are forced to defer dreams, goals, and life projects as they wait to enter stable employment. That Kalpana desires a job for her son with stable wages and benefits is understandable under conditions of insecurity. As people wait for these seemingly unattainable jobs, however, they continue to hop between the precarious ones, hoping to find ways of making do, in conditions increasingly familiar across the world. Following neoliberal reforms of the 1970s, much of the world has experienced a shift from stable, long-term employment to temporary or contractual labor conditions as the norm (Allison 2012; Molé 2012; Muelebach 2011; Muelebach and Shoshan 2012; Weston 2012). Globalization has entailed the movement of manufacturing jobs from the global North to the South, albeit with lower wages and markedly less security. On the one hand, Fordism in the industrialized world has provided “powerful images for a social order of mass inclusion and citizenship through labor” (White 2012, 400) and the hope of more secure lives in the industrializing world. On the other hand, despite growing precarity in the global North, Fordism remains an imagined future for the global South.20 It is imagined that the new regimes of labor will enable the kind of security offered by Fordist promise.

In India, the transition from the developmental to liberalized state reflects this duality, with the dismantling of state-owned industry. Whereas the postindependence Nehruvian model of large-scale industrialization was once the perceived way forward for development, liberalization has led not only to privatization of these industries but also to growth in service-sector jobs (e.g., call centers) that have helped a growing new middle class rather than the working class.21 Of course, informal labor has always been precarious for the poor in India and is not simply the result of neoliberalism (Cross 2010). Nevertheless, the neoliberal state and business have increasingly weakened organized labor and undermined workers’ rights, including blocking demands for greater employment security.22 Further, with the ongoing process of urbanization, there is a steadily expanding population of precarious labor in the cities of the global South and a pressing need to address mass under- and unemployment in these metropolises.

Despite exploitation and alienation of labor in Fordist disciplinary regimes (Fraser 2003), its passing has engendered nostalgia for a past that guaranteed employment and security, or what critical theorist Lauren Berlant calls “cruel optimism.” People grasp for stability through attachment to a “problematic object in advance of its loss” (Berlant 2006, 21). Here, attachment to labor, whereby changing economic conditions, including the flexibilization of labor and the privatization of services, has engendered a desire for industrial capitalism despite its exploitative dimensions. How do we think of alternatives when the resistance to the new culture of entrepreneurship is expressed as the desire for another form of exploitative industrial labor?


Aditi, dressed in a maroon salwar kameez (loose-fitting pants and tunic) and her black hair in a long braid, sat bouncing a small child in her lap during the meeting. When asked what she used her loan for, she stated quietly that she gives the money to her husband for his vegetable stall. It was early in my fieldwork, and the regional manager of an MFI (not DENA) was taking me to visit group meetings. With a visitor in the midst, the regional manager glanced up sharply and admonishingly pressed her: “You don’t do anything yourself?” “No,” she responded. “But you’re supposed to do something for yourself,” he persisted. “With the child to take care of now and all, I can’t really do anything,” she responded half defiantly, rocking the young child on her knee, refusing to further explain her not “doing anything.”

In this exchange, while the question “Don’t you do anything for yourself” is a highly individualizing statement, Aditi locates herself within the social world of familial obligations. Although she references her husband’s vegetable stall, her apparent dismissal of doing something struck me as a kind of disavowal of the ethos of the culture of entrepreneurship. Aditi not only recognizes the value of her own labor in providing child care; she refuses to engage with the conversation that she must do something to prove that she deserves the loan.

Political theorist Kathi Weeks, writing of antiwork politics, notes that “the willingness to live for and through work renders subjects supremely functional for capitalist purposes” (2011, 12). In the case of the borrower delivering Bisleri water, in his hustle to find work, he expands the networks of a major water distributor while making only a fraction of the capital the company accumulates. This is not to deny that those like Ajanta or Purnima and Arijul may truly enjoy or find pleasure in work. Moreover, they must work in these various spaces to survive and to ensure the well-being of their families. The unqualified valorization of those who make do in the informal economy without recourse to the state, however, makes it very difficult to critique structural conditions of capitalism and of the impact of structural transformations in the Indian economy on lives and livelihoods.

This chapter began with a discussion of the notion of ethical capitalism and social businesses serving the bottom billion. Both contradict classical liberal economic theories of free markets while still holding to the tenets of capitalism as a social good. The ideological power of ethical capitalism reveals what Boltanski and Chiapello (2005) observe is the ability of capitalism to absorb critique. Critique, in effect, is enfolded into the possibilities of capitalism itself rather than in the development of alternative social and economic systems. Rather than simply celebrate the entrepreneurial spirit of social businesses such as MFIs or micro-entrepreneurs themselves, or alternatively turn to nostalgia for industrial capitalism, it becomes necessary to recuperate the nonsentimental utopia from its capitalist co-optation and to consider the possibilities of alternative economic arrangements.

In conditions of precarity, informal labor—coded as entrepreneurship of the poor—is celebrated while ignoring the structural conditions of poverty. The culture of entrepreneurship calls forth and celebrates a particular disposition; it enfolds the entirety of the person into the goal of building a business: “every subject is rendered as entrepreneurial no matter how small, impoverished, or without resources, and every aspect of human existence is produced as an entrepreneurial one” (Brown 2015, 65). Resisting the demands of such all-consuming work, Weeks recommends resisting “the work ethic’s ideals about labor’s necessity and virtues” (2011, 15). As Kathleen Millar (2014) argues, such resistance can, for example, be found among catadores in Brazil, who counter the demands of wage labor and seek out greater autonomy to balance the precarious demands of everyday life through work on Rio’s trash dumps. Beyond the refusal to work under conditions of Fordist or precarious labor, however, is the need to consider new politics of redistribution. For instance, basic income grants can disrupt the existing normative work-based programs in development by bringing the right to income before work to the world’s poor (Davala et al. 2015; Ferguson 2015; Standing 2009). Such transformations, however, would not be wholly new in India; rather, they would be part of an ongoing process by which money and banking have been part of the state’s project of development, which is explored in the next chapter.


1. This is sometimes called the triple bottom line, including the environment. For the purposes of microfinance, it is called the double bottom line.

2. While the interview is publicly available, I have not included its reference to protect the anonymity of Mr. Ray.

3. Banker to the Poor (2003) follows Muhammad Yunus’s transformation from an academic economist to the founder of the bank that serves the poor in Bangladesh and its eventual growth worldwide.

4. After graduating from Tufts University, US-born Akula moved to India to work at an NGO that provided microcredit. Upon returning to the United States, Akula embarked on a PhD in political science at the University of Chicago. During his time as a graduate student Akula founded SKS Microfinance as a profit-driven microfinance venture.

5. Examining the person-to-person microlending website Kiva, Shameem Black (2009) argues that sentimentality in the stories of potential poor borrowers is key to raising funds from rich lenders by creating emotional linkages across distance.

6. See Subramanian (2015) on the ways that caste continues to play a role in seemingly meritocratic settings, such as universities.

7. Through karmic reincarnation, action in the current life shapes the future of the spirit, and one can assure a better future by performing caste duty (Keyes 1983).

8. For instance, there is a 2010 business book Gandhi, CEO: 14 Principles to Guide & Inspire Modern Leaders by Alan Axelrod. Challenging capitalist development, Gandhi championed alternative development based on village life. Gandhi’s vision, however, was overturned by Nehru’s belief in large-scale industry (Chatterjee 1993).

9. Karen Ho (2009) has traced the increasing valuation of shareholder value in corporations, over, for example, employees, leading to an overemphasis on the financial side of corporations.

10. Like Prahalad, Muhammad Yunus has also advocated the role of for-profit businesses in alleviating poverty. In Creating a World without Poverty: Social Business and the Future of Capitalism, Yunus, however, criticizes mainstream free-market theory for envisioning people as “one-dimensional” profit maximizers (2007, 18). Yunus sees the social business as a “non-loss, non-dividend business” (ibid., 24). That is, while investors can recoup their investment, the profit is reinvested in the business rather than shared with investors. This is a key difference from Vikram Akula (2011), who describes investor returns as key to scaling up the business.

11. See also Benson (2012) on CSR in the tobacco industry; Welker (2009) on the mining industry; and Shever (2010) on the oil industry.

12. For example, see Dolan (2007); Goodman (2004); and Lyon and Moberg (2010). See also Hilton and Daunton (2001) on fair trade and consumer politics.

13. In his argument of development as freedom, Amartya Sen (1999) differentiates between the means, or instrumental aspects, and the ends of development. For Sen, freedom, as an intrinsic value, is both a means and an end of development.

14. The data in this table were collected by asking every member of a new group (ninety-two groups total) that I visited the stated purpose of their loan.

15. Keith Hart argues that urban economies that lack significant industrial development “must grant a place to the analysis of informal as well as formal structures” (1973, 89). See Breman (1996) and De Neve (2005) on the Indian informal economy.

16. See also Bagchi (1998) and Pedersen (2001) on industrial decline in West Bengal. See Gooptu (2007) and Mukhopadhyay (1998) on its impacts on Kolkata.

17. The informal economy is not separate from, but sustains forms of, production and circulation in the formal sector and ultimately links to the global economy (Nordstrom 2001).

18. As Loïc Waquant finds in US ghettos, mass unemployment, chronic underemployment, and inadequate welfare support mean that most residents have “little choice but to ‘moonlight’ on jobs, to ‘hustle’ for money through a diversity of schemes, or to engage in illegal commerce of various kinds (including the most dangerous and potentially lucrative of them, drug retail sale), in order to ‘make that dollar’ day to day’” (2008, 62).

19. Lakh is the indigenous term for 100,000.

20. As Kath Weston writes, both the industrialized global North and the industrializing South are subject to nostalgia: “One case may enlist future-directed nostalgia, the other memory-driven nostalgia, but it is nostalgia all the same. Nostalgia, in each case, for a less precarious existence” (2012, 432).

21. See Gooptu (2007) and L. Fernandes (2006) on the new middle-class politics. Despite the rhetoric of liberalization, the Indian state remains involved in the economy. However, the policy trend has been of “a rightward drift in which the embrace of business continues to grow warmer, leaving many others out in the cold” (Kohli 2004, 285).

22. For instance, conflict between workers and management of car manufacturer Maruti Suzuki at the Manesar, Haryana, plant, erupted in 2012 and led to the death of a plant manager. While the protests allegedly stemmed from a caste-based slur by the manager, they were also the culmination of long-brewing dissatisfaction over labor conditions, including the use of contract workers who lacked job security. The state, however, has responded with violent repression of workers, including mass imprisonment and labeling workers as “Maoists” (Teltumbde 2012).