It's not cold money it's warm money : microcredit and empowerment in the case of the New Zealand women's loan fund

Since the early 1990s, microcredit, often inspired by the Grameen Bank of Bangladesh's model, has been utilised as a way of alleviating poverty in the less-developed world. These microcredit programmes (MCPs) in the less-developed world have been extensively studied, with considerable focus upon their putative role in 'empowering' poor women, even though the nature of this concept has remained contentious. However, less attention has been paid to the increase in the number of microcredit organisations in the developed world. This thesis focuses upon a small-scale, women-only, no-interest, microcredit fund in New Zealand, the Women's Loan Fund (WLF), in order to examine the extent to which, and the way in which, it 'empowers' its borrowers. A critical review of the literature on empowerment provides the basis of my approach, which draws heavily on Christens' (2012) discussion of relational empowerment. This approach suggests that women will only be empowered in a microcredit scheme if there is a relationship between the lenders and the borrowers based upon ideas of community, trust and transformational power. In other words, empowerment is a process in which an emotional relationship - reflected in trust, reciprocity and confidence - accompanies, or precedes, economic empowerment for disadvantaged women. My study examines whether a concern for relational empowerment orients the activities of the WLF and, to the extent that it does, how successful the organisation is in the eyes of Lenders and/or Borrowers. The thesis involved a detailed study of 2 WLF branches, one in the North Island and one in the South Island of New Zealand, based on scrutiny of relevant documents, particularly the WLF's Guidance Manual; interviews with Coordinators, Trustees and Borrowers; and participant observation of WLF branches' activity. The analysis demonstrates that the WLFs operate, implicitly, with a notion of relational empowerment, which is broadly shared by both Lenders and Borrowers, as well as being consistent with the organisation's aims. It also reveals the importance the organization places on community and trust as a crucial step towards economic empowerment. Finally, the thesis indicates some of the ways in which relational empowerment could be used in future studies of microcredit in the developed world