Society for Economic Anthropology
Oral Presentation Session
In the global North, the Subprime Crisis led to a series of debates over who was to blame: speculative financiers or irresponsible (poor) borrowers who took on mortgages they could not afford (see McLean & Nocera 2010, Mian & Sufi 2014). Yet, as poor borrowers were tarred—often unfairly—through the Subprime Crisis, a decade on from the Global Financial Crisis (GFC) there has been a different approach to poor or “subprime” borrowers in the global South. With the global proliferation of microfinance, poor borrowers were seen as an untapped, desirable, and profitable market. At first glance, subprime lending and microfinance appear not just to be geographically disparate, but also to have different moral valences: one, a form of predatory lending—using teaser rates to seduce low-income borrowers—the other, a developmental project of extending credit to the financially excluded in order to help them out of poverty. On closer inspection, however, we argue that subprime lending and microfinance are two sides of the same coin. We base this assessment on our wide-ranging ethnographic engagement with the specific financial actors in India and Paraguay who make it their work to generate these scales. We suggest that what we see is an emergence of a subprime empire, where “poverty capital” (Roy 2010) is central rather than peripheral to emergent forms of capital accumulation, concluding with observations on the emergent risks of the shadow banking sector.