Book Review: Borrowing Together: Microfinance and Cultivating Social Ties. Becky Yang Hsu (Cambridge University Press, 2018)

In this article I review Borrowing Together: Microfinance and Cultivating Social Ties by Becky Yang Hsu. Introducing the book I analyse the emergence of the microfinance project and the contested debates around its efficacy in the light of backlash resulting from the suicides of overindebted borrowers in India. I contextualise the book through critical socio-legal and transnational legal pluralist scholarship which focuses on the production of norms by private actors, the social and public law consequences of these norms and the growing inter-connectivity of relations. Against this background, I show how Hsu’s rich ethnography of two field sites in rural China exposes how the primary drivers for loan repayment are the informal social norms of personhood, morality and social relations that are grounded in a holistic Chinese understanding of personhood called ‘Guanxi’ in Chinese. A ‘Guanxi’ typology of personhood connected to material and emotional components and personal relations conflicts with the individualistic typology of personhood upon which the dominant ‘Grameen’ economic model for group lending microfinance has been based, with the backing of economists like Stiglitz. Hsu shows how examining loan repayment through the lens of the ‘living’ Guanxi behaviour she observes within her field sites tell us much more about the use, operation and effect of microfinance than a reading of the loan repayment data would expose. In this way, Hsu captivatingly navigates how local ‘social’ ties and behavioural norms impact upon what people did with microfinance and are thus directly relevant to the development outcomes within her field sites. Her work adds much needed insight into the current work of scholars and development practitioners concerned with understanding where microfinance went wrong and what can be done about it in the context of the project’s resurgence.

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