John Ritchie

Microfinance: accountability from the grassroots

Purpose – The purpose of this research is to use an accountability framework to explain the emerging tensions in accountability and how an intended bottom-up approach became progressively supplanted. This paper is set within an emerging Zambian microfinance organisation moving into crisis. Design/methodology/approach – A series of semi-structured interviews were conducted with key local microfinance specialists, managers and accountants, clients and past and current loan officers. Live observation of the client-loan officer interface and internal meetings provided triangulation on accountability relationships in the midst of crisis. Data were analysed using NVIVO, a qualitative computer software package. Findings – The findings show that tensions between vertical and horizontal accountability in practice can be directly translated into heightened pressure and stresses on both the non-governmental organisation (NGO) and its loan officers, which constrain overall accountabilities to other stakeholders and disguise other potential dysfunctions. Research limitations/implications – This study focussed on accountability at the grassroots in microfinance NGOs with a social mission. It reveals potential for further personal, community and socially constituted accounting research within microfinance in particular. Originality/value – The paper adds to the literature on NGO accountability. It will be of value to researchers and practitioners seeking to gain a better understanding of not-for-profit organisations whose goals are not primarily wealth creation. It also gives details on under-researched areas in accounting, namely NGOs and poverty reduction, and practices in Sub-Saharan Africa.

Loan officers and loan ‘delinquency’ in Microfinance: A Zambian case

Abstract The paper seeks to promote greater understanding of the importance of loan officers in group-based microfinance by explaining their actual roles, dilemmas and tensions when working with poor clients. Few existing studies have used data outside Bangladesh and most focus upon relatively well-performing institutions. Using data from Zambia this study focuses on the recent crisis of Christian Enterprise Trust of Zambia (CETZAM) and the effects of its practices for accounting for and dealing with defaulters. The findings firstly show that loan officers faced powerful hierarchical accountability pressures and pursued inappropriate methods to compel further repayments to resolve this crisis. Its approach to borrower default was found to be stressful for loan officers and potentially detrimental for CETZAM’s own short and long-term survival by reducing client loyalty and trust.

Disclosing the loan officer’s role in microfinance development

The exclusion of the poor in developing countries requires radical enterprising solutions. Hence, microfinance was originally developed to intermediate through tailored double-bottom line initiatives, which would first supply more appropriate credit and, then other ‘financial services’, in an essentially participatory, ‘bottom-up’ way. This would support local, small-scale economic activity while enhancing well-being and social/gender justice. However, frontline local officers, originally recruited into microfinance institutions to help ‘empower’ the poor towards this end, have in practice been found to adopt unexpectedly different roles. Using original data from Zambia this article examines how this occurred in a frontier field situation. Here loan officers performed multiple, ambiguous and changeable roles while their home institution at first sought to decouple, and then prioritized its own immediate survival over their other founding aspirations. Where they acted more like ‘loan repayment agents’ and ‘debt collectors’ than genuinely participative ‘facilitators’ supporting the poor, further, unintended consequences resulted. Any further decoupling and retreat from committed double-bottom line working could bear heavily upon the further/future development prospects of microfinance.

Chasing shadows: enterprise culture as an educational phenomenon

Abstract The already chequered history of the culture concept in both the social sciences (Archer 1988) and educational studies (Burtonwood 1986) took yet another turn when recently coupled with ‘enterprise’. Moreover those shadowy ideas about enterprise culture that resulted sometimes claimed simple and straightforward links from education, through into economic performance, towards supposed new national capabilities and well‐being which were rarely that clearly proven in practice. Nevertheless, in chasing these shadows, educational institutions now host a plethora of schemes and initiatives, ranging from the likes of the Mini‐Enterprise in Schools Project (MESP), through Enterprise in YTS, to Enterprise in Higher Education (EHE), Enterprise Awareness in Teacher Education (EATE), Training and Enterprise Councils (TECs), and various others with no clear end in sight. Not only that but, very much under the shadow of ‘the’ enterprise culture as government and state would have it, many such institutions’ own...

Accounting for microfinance failure: insights from Zambia

The global trials of mainstream finance have brought calls for the development of human scale alternatives such as microfinance. However, developing country microfinance has itself been taken to task over its collective failings without much evidence about individual grassroots microfinance institution (MFI) failure. So, using an extended case study of PRIDE Zambia (PZ), this paper examines different stakeholder and other accounts about how this once promising MFI frontier failed. It finds that fast track founding and premature expansion based upon indifferent governance, hierarchical mismanagement, and unrecognised frontline problems further compounded by malpractice and corruption were central to PZ’s final failure. Zambia is a difficult frontier for donor-funded MFIs and, when PZ first sought to change its original grassroots character, its survival was so jeopardised that it failed as a result.

Working miracles? regional renewal and East Asian interlinkages

This contribution considers the arguments surrounding claims that a ‘New’ North East is arising as a particular result of an upsurgent regional economic miracle whose frontal East Asian interlinkages promise continuing business and organizational transformations ahead. Largely off-circuit for other economic miracle claims before, this ‘New’ North East benefits from both any supposed British economic miracle at large and that recently associated with East Asia generally. But while current British state-public narratives constantly reiterate miraculous transformational possibilities, others constitute their chances very differently. Using a concept-led social constructionalist perspective this contribution explores alternative interpretations of the North East economic trajectory which constitute any East Asian interlinkages several other ways. It finally acknowledges differing debates over what roles these interlinkages actually play while posing further questions about where else the North East regional economic trajectory might be headed instead.

Arguing Chinese Economic Miracle Claims

Once the Chinese economy drew little inspiration. For long its true prospects did not greatly excite. Some like Max Weber considered China too backwardly custom-bound instead. Others could scarcely imagine any real economic breakthrough. Subsequent Chinese economic claims hardly dispelled these doubts. But now China stands reinvented all that might finally change. Today’s rising Chinese economic miracle claims surpass them all. Many envisage China being transformed into some global factory-cum-marketplace challenger ahead. Yet for all that certain doubts remain. Accordingly this paper deliberately reconstitutes these claims themselves. In so doing it finds the three particular modal arguments they employ are more than just accessories to rising economic facts. They rather forestructure whatever these facts are taken or supposed to be. Consequently only when such argumentation itself appears better recognised will any true basis for Chinese economic miracle claims finally become clear.

Interrogating the Asian crisis : economic governance under challenge.

The so-called ‘Asian crisis’ at first appeared so incontrovertibly astounding, perplexing and compelling that few fully interrogated it as a result. As the accompanying shock and surprise further undermined other surrounding equilibria, economic governance at large appeared critically challenged. Few anticipated it and many were first quickly seized by it, but still this crisis puzzled, right through into any would-be ‘Asian recovery’ later. Although some regard that recovery as an ‘Asian reply’ to precipitate Western intervention, this paper argues that only better understanding of how any Asian crisis was socially constructed thus will reveal its full nature, course, and consequences generally.

Evolving China Strategies: How the Japanese Compare

The recent designation of China as a global factory-cum-marketplace that might better suit the prevailing world order poses vital questions about both. At the very least, observers should question how differing international trade and business approaches towards China might evolve and compare, given the prospects ahead. This study examines various historical Japanese approaches towards trade and business with China, and puts forward the following four-fold typology of modes: classic trader-merchanting, imperial-militarist, civil-nationalist, and strategic-managerial. It is argued that the strategic-managerial mode is still emerging but that it presupposes rising Japanese intent, and corresponding Chinese support, for going beyond bilateral trade towards increasing organization and direct investment to China and better management within the country. The detail of this emerging mode remains provisional upon the realization of its full scope and potential, but it may be differentiated from Western European approaches not just by the relative volumes of aid, trade and investment, but also through the extent of organizational coupling and managerial sustainability. Western European investors in particular might observe how Japanese firms learn from China, as well as what, and thereby better prepare themselves for major changes ahead.

Theorizing Economic Miracles

Economies are socially constructed phenomena, but the idea of economic miracles, once redeemed from modernist doubt, certainly surprises and puzzles more than most. Both highly politically prized, and considered the spur behind worldscale change, such miracles enjoy exceptionally good press, and carry their appeal right through into everyday life with richly suggestive images about miraculous nations, industries, firms, technologies, products, and ‘entrepreneurial’ leader figures. Yet they remain perpetual philosophical puzzles which, despite first confounding established worldviews, stay difficult to fully demonstrate, prove, and explain along recognized lines thereafter. Key arguments over whether, where, and how they ever arise, what form and course they take, and whether they are reproducible elsewhere are therefore difficult to decipher and resolve without the guiding theorizations outlined here.