| Summary: | The proliferation of microfinance worldwide has been due to its claimed impacts on poverty reduction and women's empowerment. Conversely, it has been criticised for furthering the neoliberal policies of external agencies by using poor women’s entrepreneurship and mutual trust as a joint liability mechanism to reduce the costs and risks for the capital provider. Set against this, Indian microfinance exhibits a wide spectrum of delivery models, from subsidized to unsubsidized and commercial credit. Microfinance impact literature considers its impact to be neutral to the process of delivery and therefore contains few cross model comparisons. It privileges the dominant policy model of primarily positive impacts, and has overlooked rather than examined differing worldviews. This research questions external perspectives and explores actor perspectives. This research is located in a semi-arid livelihoods context, i.e. the Koppal district in Karnataka State, India. It takes a critical and interpretive approach and adopts a longitudinal case study methodology to examine use of money from women's own perspectives. The field work shows that loan demand is context dependent and low in a semi-arid region with uncertain and risky investment opportunities. Microfinance provided by informal sources was used for survival and social needs. Three models of formal microfinance delivery emerged, of which two relegated the poor to the margins but the SHG-Bank linkage model combined poverty focus and market orientation to offer a stable borrower lender relationship. The field research also considered the social learning process that takes place among Self Help Groups (SHGs) in the utilisation and repayment of microfinance. The women differentiate money delivered in different ways, and social relationships determined financial relationships. This research reveals multiple meanings of money, recognises new opportunities and vulnerabilities created by formation of SHGs, and highlights that microfinance models which provide women access and control over money enhanced their decision making ability and so were the most empowering.
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