The debt trap: the indebtness of the poor in South Africa
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Date
2004
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Publisher
University of the Western Cape
Abstract
Providing international loans to governments in developing countries is seen as contributing to the upliftment and development of the Third World, according to a set of pre-determined criteria. From the neo-liberal capitalist perspective, this loan provision is widely conceived as one of the answers to poverty alleviation. Despite this, many Third World countries continue to be steeped in debt through these loans and stringent conditions. On a local level, micro-finance for small business development is seen as a tool for development and alleviating poverty. Millions of Rands have been made available in South Africa for micro-finance by government and backed by international financial institutions. As with international debt, already we are seeing a similar situation at the grassroots level of the poor and low income groups being indebted through micro-loans. They are in arrears with debt repayments, are over-indebted and their personal poverty is deepening as a result. In this thesis, I explore the different aspects impinging on low-income groups that are contributing to their indebted and poor situation. I explore the neo-liberal perspective, namely the GEAR strategy, as well as the micro-finance initiative against the backdrop of international and national debt tied to the IMF and World Bank. The glaring similarities between national and personal indebtedness are then examined. The focus then shifts to a micro-level case study of a group of low-income indebted people living in the Cape Metropolitan area. A range of elements from positivist, structuralist and humanist perspectives is employed to evaluate the circumstances of this sample. Both quantitative and qualitative research tools are used to construct a socio- economic profile of the indebted person.
Description
Magister Artium - MA
Keywords
Finance, Personal, South Africa, Poor, Loans, Economic aspects, Microfinance