Ariel Wilkis nos hizo llegar su presentación en el último ISA-Buenos Aires. Acá va. Por cierto, Ariel no tiene problemas con responder comentarios y preguntas en castellano.
In my current work I discuss the expansion of financial agencies specializing in providing personal credits for consumption. I’m interested in this process because it has meant one of the mechanisms of incorporation of the popular classes into the financial system. A recent survey on financial practices in Greater Buenos Aires showed that about 20% of the informal workers, the welfare beneficiaries and the people living in slums-, obtained a credit through these agencies in the past year. (Wilkis, 2012). The first interpretation of this process can follow a sequential argument (as Geertz or Bourdieu et al. would do): the expansion of the credit market replaces the informal credit systems of the popular classes. With regard to this interpretation I would like to stand two points out. On the one hand, the above survey shows the simultaneity and heterogeneity of financial practices (both formal financial practices -for example, the use of credits cards, and informal financial practices -for example, buying on “fiado”). On the other hand, and this is the central theme I’m interested in presenting in this brief communication, we note that the making up of a certain personal credit supply is organized on the basis of a kind of guarantee which is usually central in informal credit systems: the moral capital. The credit agencies in question organize the supply, the interaction and the credit assessment on the recognition of ethical virtues of those who demand the money.
It is important to bear the following point in mind. The literature has indicated that within formal credit systems (banks, for example) moral evaluations play a central role (Lazarus, 2012; Ferrary, 1999; Wissler, 1989). This last has been identified as part of an informal dimension of the interaction between creditors and borrowers. Instead, funding agencies analyzed here explicitly and formally offer their credits based on the kind of guarantee that we call moral capital. Therefore, the recognition of ethical virtues become standard procedures. These ethical virtues are connected to the formal expansion of the financial system. I will divide the next while in four. I will talk about the idea of kinds of guarantees and moral capital; second, I will make a brief description of two of these agencies I’m discussing here; third, I introduce some extracts taken from a couple of interviews with my informants; and fourth, I will reflect on the moral dimension of credit and alternative finances.
A moral sociology of credit
These lines are part of a comparative research program of the sociology of credit. This program has been articulated around the concept of kinds of guarantee. On the one hand, the basic idea is that kinds of guarantees are mutiple (monetary, legal, moral) and are combined in different ways. On the other, that kinds of guarantee play a crucial role in the organization of credit relationships. This can be seen at macro and micro levels. Building clientele, the interaction between creditors and borrowers and credit scoring technologies can be analyzed from the kinds of guarantees and their combinations. Moral capital can be considered a kind of guarantee together with other kinds such as economic capital or legal capital.
Brief description of financial agencies
Banco Azteca was established in 2002 in Mexico and it currently has 1500 branches. It operates in Argentina since 2007. Unlike the big banks that have their branches in the financial center of Buenos Aires, the local branch operates together with the Elektra home appliances in the residential area of Laferrere, in the Greater Buenos Aires. With regard to the granting of credits, the bank has the policy of visiting the homes of the applicants for credit in order to carry out “environmental” assessments. It provides the possibility to pay weekly installments, thus adapting its method to a small fractional amounts economy (Guyer, 2004). Prices are not displayed but the amount of installments payments with interest rates ranging between 60% and 110%. Cash loans and the sending of money are also offered.
In 2001 FIE Gran Poder, a Bolivian capital microfinance institution, opened its first branch in the commercial district of Liniers, also far away from the financial centers, close to residential neighborhoods and near the community of Bolivian immigrants. The clientele was expanded to other nationalities. Weekly installments are also allowed to pay. Just like Banco Azteca, a group formed by six to eight evaluators per branch analyze the situation of each credit applicant. One of the dimensions of the assessment has to do with how the family is constituted. According to one of the bank’s executive: “the technology we apply has been tested in Bolivia. We make many interviews with friends and family in order to see if the person is trustworthy” . The salary of the evaluators varies according to the credits that are paid.
Some extracts of an interview with an evaluator of the Banco Azteca
“Basically, we deal with people with low incomes. In general, they work in building and domestic service. The ideal customer does not have a paycheck, he/she works per week or per day of whatever. Ideal customers do not progress a little bit more because they don’t know how to save. Each time the company told me that we were fulfilling them their dream, I thought it was a bit exaggerated, but in the course of time my own experience showed me that it was true. Their dream is to have a TV and a DVD to watch movies. All this explains why the lower classes are the ones who really look after the credit. We call for a series of requirements: receipt and more than two years seniority (the so-called labor roots), a service (for example, a proof of residence) and his/her ID card. We authorize the credit by means of ‘environmental’ (evaluations). We study the status of the person. A person can live in a cardboard house but being orderly at the same time. This last says a lot of the applicant, as for matters of responsability. Many times you realize the importance that people give to a credit or how much they desire it from the way he/she treats you. This data also lets you get to know how educated he/she is. I can assure you that I have cried with my clients, because we have left bad times apart. I can even consider some of them my friends, because they help me and I help them.”
“Alternative finances?” “Bank of the poor?”
Observed from the perspective of the “alternative” financial practices, these financial relationships cause inconvenience. These banks deploy the economic objectives of the “alternative finances” (credits to the creditless, that is, to those having no credits) and also have greater insight into the real economy. Are not we talking about more democratic finances? These banks lead to ask uncomfortable questions by means of a different road: the “alternative finances” claim for building a more ethical economy. These banks do not demand being alternative financial institutions but their strategy is to economize on ethical virtues. Therefore, do they reach by other means the same purposes that the alternative finances pursuit? If those practices defined as alternative can assume features of the dominant financial practices (Maurer, 2012), the reverse can also happen. These “banks of the poor” destabilize that of alternative of the alternative practices, thus arguing that the association formed by economy + ethics is not a formula but an enigma.
-Bourdieu, Pierre, Boltanski, Luc y Chamboredon, Jeanne-Claude, 1963, “La banque et sa clientèle : Éléments pour une sociologie du crédit”, Rapport du Centre de Sociologie Européenne, CSE, Paris. pp.220.
-Geertz, Clifford (1962) “The Rotating Credit Association: A “Middle Rung” in Development. Economic Development and Cultural Change, vol. 10, no. 3, pp. 249-54.
-Ferrary Michel (1999) “Confiance et accumulation de capital social dans la régulation des activités de crédit”, Revue Française de Sociologie, pp. 559-586, , Vol XL-3, septembre 1999
-Lazarus, Jeanne (2012), L’épreuve de l’argent. Banques, banquiers, clients, Calman Lévy, Paris.
-Guyer, Jane (2004) Marginal Gains. Monetary transactions in Atlantic Africa. University of Chicago, Chicago.
-Maurer, Bill, 2012, “The disunity of finance: alternative practices to western finance”, Oxford Handbook of sociology of finance, Karin Knorr-Cetina y Alex Preda (editors) Oxford, Inglaterra. (prensa)
-Wissler A. ( 1989) Les jugements dans l’octroi de crédit . In L Boltanski and L Thévenot (eds) Justesse et justice dans le travail (pp. 67-119).
-Wilkis, Ariel (2012) “Sociología del crédito: nuevas prácticas en los sectores populares urbanos” –en prensa-.