As a microfinance practitioner, I chose participatory action research as the methodology that would allow me to research, develop and implement a new approach to lending money to poor people in response to financing needs that meet their livelihood aspirations. Critical to the research methodology are the voices of poor people within the context of microfinance loans. Participatory action research will enable an understanding of the ‘general laws of group life and the diagnosis of a specific situation’ namely the articulation of a financial need that both expresses the livelihood aspirations of poor people and informs the design and delivery of a financial product (Lewin 1946). The idea of conducting such a research required identifying a community of people living in poverty that would ordinarily need financial services as a livelihood solution. The community would also be willing to participate in the research to influence microfinance practice especially by informing provision of appropriate loan products.
In opting for participatory action research methodology, I was cognisant of the fact that communities living in poverty often have limited education and lack entrepreneurial skills and that those elements would impinge on their capacity to articulate their financial needs and therefore appropriately inform the research process (Chapter 1.1.3). This was highlighted during the research process as participants expressed their need for someone to speak for them as is discussed in Chapter 7.2. The gender aspect was also a factor that would impinge on poor people’s capacity to fully engage with systems that affect them. Though this research was not intended to focus on gender, the group lending method used in microfinance institutions mostly serves women, just as the community that participated in the action research were all women. Goldberger et al argue that women often struggle to gain a voice and claim the power of their own mind; feel unheard even when they believe that they have something important to say; are stereotyped; and are often judged on the basis of a male-dominated concept of knowledge (Goldberger et al 1987). These challenges called for a specific way of enabling research dialogue with poor communities especially that women would be in the centre of ensuring a livelihood.
Having identified the research idea, and pursuant to action research principles, I sought to find similar research that highlighted how poor people’s voices had informed the design and delivery of financial services. This information would provide insights into poor people’s practices and motivations for seeking the type of financial services they obtained and thereby inform practical steps needed to achieve the research objectives (Lewin 1946). My search was not successful- rather it revealed qualitative studies done to
understand the coping mechanisms of poor people living on less than $2 a day (Collins et al 2009); clients’ choices to use different financial services and move from one service provider to another (Mukwana and Sebagin 2003); ethnographic studies on the adverse impacts of microfinance (Karim 2011); quantitative studies that highlighted the impact of microfinance services on clients’ lives (Copestake et al 2005); and a systematic quantitative assessment based on comparing 15 separate impact evaluation studies that included 4 randomised controlled trials, 2 non-randomised controlled trials and 9 case control studies done in both rural and urban- based microfinance institutions in 10 Sub- Saharan countries (Stewart et al 2010).
Since the ultimate purpose of this research was to inquire how microfinance services can truly meet the expectations that poor people have, quantitative studies that highlight the impact of microfinance services would have been a useful approach. However, a different approach was sought out of the recognition that quantitative impact studies tend to be confirmatory and predictive in presenting outcomes using measurable facts, on the basis of underlying assumptions of the validity and accuracy of the evaluation instruments (Hayes et al 2011; Chenail 2011). For example, in the CETZAM impact studies, the instruments included measuring variables that confirmed CETZAM had successfully targeted poor people living under the poverty line and that their experience with utilising credit had increased their incomes thereby improving their livelihoods. CETZAM’s strategy had set that as its goal and the evaluation instruments were designed to confirm that fact (Chapter 1.2). However, a later study with CETZAM clients suggested that the service did not meet their expectations, thereby raising questions as to the validity and
accuracy of the evaluation instruments to delve into the unspoken assumptions of the poor people concerned (Musonda 2006). Thus the choice of a qualitative approach in this research aims to locate the outcomes within the experiences of the community in the research. Enabling poor people’s voices to influence the design and delivery of a loan should bring out an understanding of purpose, meaning and ethical outcomes that resonate with poor people’s expectations (Hayes et al 2011). The absence of similar prior studies meant that the research methodology needed to incorporate a way of understanding the voices of poor people and how they influence actions that respond to their needs. Participatory action research with a specific community using qualitative methods would enable an understanding of poor people’s voices as they articulate their livelihood needs and consequently inform the design and delivery of a financial product.
2.1.1 Research Objectives
The ultimate goal of this research is to understand how poor people’s voices can inform the provision of microfinance services that respond to their livelihood needs. The process of reaching this goal entails creating a dialogue space that enables poor people’s voices to inform beneficial financial processes. In the final analysis, poor people’s voices should inform the design and delivery of financial services that contribute positively towards their livelihoods. Critical to this inquiry is the dialogue space that enables poor people’s voices to articulate their financial needs and by so doing, influence the financial services they receive.