Microcredit and reconstruction in Afghanistan: An institutionalist critique of imported development

Abstract

This chapter investigates the inconsistencies in perceptions by the international donors of the positive role of microcredit in improving rural livelihoods in Afghanistan. We examine the interface between the role of microfinance institutions (MFIs) and the pre-existing rural institutions that have traditionally governed credit transactions for generations of rural Afghans. In our analysis, we view MFIs as introduced organizations with anticipated institutional roles by the international donors and the Afghan government to facilitate desirable socio-economic change. An institutionalist framework is applied to primary and secondary data to assess the outcome to date of introducing microcredit in Afghanistan. This chapter concludes with a series of recommendations for integrated policy and operational interventions to improve rural livelihoods in post-2001 Afghanistan. © 2009 Springer-Verlag New York.