Credit Between Cultures: Farmers, Financiers, and Misunderstanding in Africa 9780300162929

Parker Shipton brings a variety of perspectives—cultural,  economic, political, and religious-philosophical—and years of

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Credit Between Cultures: Farmers, Financiers, and Misunderstanding in Africa

Table of contents :
CHAPTER 1. Introduction A Golden Pendulum
CHAPTER 2. Context for Credit A Setting at the Source of the Nile
CHAPTER 3 .Three Faces of the Loan Charity, Usury, . . . and Fantasy
CHAPTER 4. Plans and Dreams An Integrated Approach on Paper
CHAPTER 5. Lenders and Lineages Nepotism as Loyalty
CHAPTER 6 .Untying a Package Deal Borrowing Green Revolution Technology
CHAPTER 7 .Debts and Dodges The Moral and the Hazard in Repayment
CHAPTER 8. In a White Elephant’s Shadow Reversal and Repetition
CHAPTER 9. Wildfire Tobacco Contract Farming
CHAPTER 10 .Self- Help and the Underground Individual Incentive and the Group Guarantee
CHAPTER 11. Self- Help with Help Banking Between Charity and Usury
CHAPTER 12. Crossing Back Rethinking Credit Between Cultures

Citation preview

Yale Agrarian Studies Series James C. Scott, Series Editor

“The Agrarian Studies Series at Yale University Press seeks to publish outstanding and original interdisciplinary work on agriculture and rural society—for any period, in any location. Works of daring that question existing paradigms and fill abstract categories with the lived-experience of rural people are especially encouraged.” James C. Scott, Series Editor James C. Scott, Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed Deborah Fitzgerald, Every Farm a Factory: The Industrial Ideal in American Agriculture Brian Donahue, The Great Meadow: Farmers and the Land in Colonial Concord J. Gary Taylor and Patricia J. Scharlin, Smart Alliance: How a Global Corporation and Environmental Activists Transformed a Tarnished Brand Michael Goldman, Imperial Nature: The World Bank and Struggles for Social Justice in the Age of Globalization Arvid Nelson, Cold War Ecology: Forests, Farms, and People in the East German Landscape, 1945–1989 Steve Striffler, Chicken: The Dangerous Transformation of America’s Favorite Food Parker Shipton, The Nature of Entrustment: Intimacy, Exchange, and the Sacred in Africa Alissa Hamilton, Squeezed: What You Don’t Know About Orange Juice Parker Shipton, Mortgaging the Ancestors: Ideologies of Attachment in Africa Bill Winders, The Politics of Food Supply: U.S. Agricultural Policy in the World Economy James C. Scott, The Art of Not Being Governed: An Anarchist History of Upland Southeast Asia Stephen K. Wegren, Land Reform in Russia: Institutional Design and Behavioral Responses Benjamin R. Cohen, Notes from the Ground: Science, Soil, and Society in the American Countryside Paul Sillitoe, From Land to Mouth: The Agricultural “Economy” of the Wola of the New Guinea Highlands Parker Shipton, Credit Between Cultures: Farmers, Financiers, and Misunderstanding in Africa

For a complete list of titles in the Yale Agrarian Studies Series, visit www.yalebooks .com.

Credit Between Cultures Farmers, Financiers, and Misunderstanding in Africa

Parker Shipton


Copyright © 2010 by Parker Shipton. All rights reserved. This book may not be reproduced, in whole or in part, including illustrations, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and except by reviewers for the public press), without written permission from the publishers. Yale University Press books may be purchased in quantity for educational, business, or promotional use. For information, please e-mail [email protected] (U.S. office) or [email protected] (U.K. office). Set in Ehrhardt and The Sans types by Tseng Information Systems, Inc. Printed in the United States of America. Library of Congress Cataloging-in-Publication Data Shipton, Parker MacDonald. Credit between cultures : farmers, financiers, and misunderstanding in Africa / Parker Shipton. p. cm. Includes bibliographical references and index. ISBN 978-0-300-11603-8 (cloth : alk. paper) 1. Economic assistance—Africa. 2. Poverty—Africa— Prevention. 3. Luo (Kenyan and Tanzanian people)—Finance. 4. Luo (Kenyan and Tanzanian people)—Economic conditions. 5. Economics—Sociological aspects. I. Title. HC59.8.S55 2010 332.1′753089965—dc22 2009050979 A catalogue record for this book is available from the British Library. This paper meets the requirements of ANSI/NISO Z39.48–1992 (Permanence of Paper). 10 9 8 7 6 5 4 3 2 1

TO Susannah

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Prefaceix Acknowledgmentsxix List of Abbreviationsxxv CHAPTER 1. Introduction: A Golden Pendulum1 BROTHERS AND OTHERS: OLD DEBATES, NEW TWISTS

CHAPTER 2. Context for Credit: A Setting at the Source of the Nile19 CHAPTER 3. Three Faces of the Loan: Charity, Usury, . . . and Fantasy36 A GREEN REVOLUTION ON LOAN: LUO AND THE WORLD BANK

CHAPTER 4. Plans and Dreams: An Integrated Approach on Paper55 CHAPTER 5. Lenders and Lineages: Nepotism as Loyalty65 CHAPTER 6. Untying a Package Deal: Borrowing Green Revolution Technology80 CHAPTER 7. Debts and Dodges: The Moral and the Hazard in Repayment102 CHAPTER 8. In a White Elephant’s Shadow: Reversal and Repetition119 PRIVATE AGENCIES AND POPULAR INTEREST: FIRMS, CLUBS, AND THE FEMINIZING OF FINANCE

CHAPTER 9. Wildfire: Tobacco Contract Farming137



CHAPTER 10. Self-Help and the Underground: Individual Incentive and the Group Guarantee156 CHAPTER 11. Self-Help with Help: Banking Between Charity and Usury179 CHAPTER 12. Crossing Back: Rethinking Credit Between Cultures210 Notes247 References299 Index321 Illustrations follow p. 118



his is a study about people who borrow and lend in the interior of Africa, and about several styles of credit and debt found there, involving organizations large and small, from far and near. Based partly on firsthand observation and experience in the equatorial countryside and elsewhere over some years, and partly on others’ work, these pages treat financial and fiduciary culture as a topic worthy of study from more than one scholarly discipline, and as far as possible, from more than one point of view. The attempt is not only to describe local particularities of culture, and circumstances of society, political economy, and technique in changing times, but also to point out some patterns of action more widespread, and some principles of human thought and feeling that seem more enduring, maybe timeless. The African encounter between wealth and poverty—whatever one chooses to call them—can bring together a most unlikely cast of characters for a drama of aid or exploitation. At a farm fair, a land auction, or a chance encounter at a roadside refreshment stand, farmers and financiers might meet face to face. But day to day, as though curtained off from each other’s view but still standing on the same stage, borrowers and lenders, creditors and debtors, act out their lives in invisible bonds of cooperation, command, or collusion. On center stage, for our purposes, stand some people who (if over a certain age) are likely to be missing six bottom teeth to show they are real Luo, but who also might be wearing sunglasses or expensive watches to show they



are of people of Kenya, and of the world. Headscarfed and dress- or kangawrapped if women, trousered and perhaps sandaled in recycled tires if men, these people are farmers, herders, and perhaps fishers, but some might also be doctors of philosophy. Vying for center stage are members of another group equally hard to describe with a single adjective. They belong to the World Bank and other agencies allied to it, and in function, if not also in name, they are loan officers. Mainly economists, in our piece, these financiers are people who may look as though they could come from any country, and who may well dress down when on “mission,” though the stitching in their shoes might give them away. They are urbane semi-nomads: they and their families, if they are lucky, move from Washington to the “field” and back again. In one of their homes they might display Samburu spears and Javanese batiks like trophies on the mantel. The supporting cast and walk-ons are many. Among the farmers and herders identifying as Luo are ones called Luhya and Gusii who live up in the hills a little farther away from the lake, and some others like Suba who, by kinship or by tongue, seem to bridge the Luo to these large ethnic groups. Easy to mistake for some of the World Bank officials are staffers of organizations like the U.S. Agency for International Development (the “bilateral” agencies—that is, those that deal country to country). If their brows are furrowed, it is probably from worries about budget cuts, or worse still, about being found with unspent money in their budgets at the end of the fiscal year. Other characters, from a multinational tobacco agribusiness and manufacturing firm, ride on wheels right up to date. Then there are safari-shirted or tee-shirted agents of smaller, tighter-budgeted, private religious-rooted agencies like Catholic Relief Services or secular ones like Oxfam: people who know which language they are hearing spoken, and who, if they cannot yet speak it, are usually willing to learn. On and off the stage move consultants with jet bags, probably walking at a clip and maybe returning long greetings with short. In Kenya, these are mostly Euro-Americans, and mostly economists, and engineers or other technicians, but sometimes others. Provincial civil servants, who in the Luo country may or may not speak DhoLuo themselves, are more likely than any of the expatriates to appear in pinstripes, usually of a different lapel or tie width—or else in matching safari suits. Also in and out of the scene, almost anywhere, move immigrant minority middlemen—in the Luo country, sometimes turbaned Sikhs or whiskered Syrians, who trade with all the rest



but marry none of them, and perhaps some academicians, unpressed in one way or another, who alternately keep a bit aloof and ask embarrassing questions. Some of the characters play multiple roles—for instance, Gusii trader farmers, Luo loan collectors, Gikuyu tele-bankers on cell phones, or Yankee scholars gone half-Kenyan. Still others—and more than a few—fit none at all. Nor is there any single tongue or idiom in which all these people can easily communicate. In English alone, terms like target group, project impact, and supervision mission have problems of presumption, one-sidedness, or worryingly martial overtone. Dividing “planners” from “beneficiaries,” as in official scripts, leaves begging the question why the former benefit so much more visibly than the latter, and the latter so often end up demonstrating in streets if they survive to. Terms like western (or non-), north, and south have little geographic referent (how do they work in Italy and Morocco? In Sydney and Nouakchott?). Words for farmer or herder turn out to refer to people doing six other things for their living. Peasant is strong language, uttered by feudal aristocrat, doctrinaire revolutionary, or that paradoxical sort who is both. International “development” seems to imply that one nation can help another grow up or grow older faster, a supposition silly, arrogant, or both. Talk of “top-down” and “bottom-up” approaches, even when meant to fault the former, ends up subtly reinforcing the very presumptions about human strata it purports to criticize. Even the leveler-sounding terms like cooperation or counterpart feel suspect to anyone who has peeked at official pay scales for “locals” and “expats” to compare them—a difference of digits likely stark enough, inside Africa, to silence anyone. But none of these tall barriers to communication and understanding makes finance in the middle of Africa any less interesting, or its answers any less vital. Borrowing, lending, and indebtedness concern us all, and so does, or should, the well-being of people in the interior of Africa. Finding out what really happens between the different parties to the flow of and blockage of wealth, and seeking some terms and concepts by which to bridge their variant understandings, seems a task worthy of some effort. This study takes a social and cultural look at a traditionally economic subject, the one that usually lies somewhere in the triangle between usury, charity, and fantasy. In some respects the economists who have studied rural credit and debt up to now have brought the topic a long way, for instance in analyzing effects of interest rate policies, determination of loan repayment, and allocation of measurable costs and benefits over income or class strata.



Contributions by political scientists in recent decades have led to other insights—for example, on urban bias, ethnic patronage, and popular resistance. Something few have yet paid much attention to is people’s understandings of financial borrowing and lending in places where most lending and borrowing have not been financial. Missing are social and cultural dimensions like kinship, ethnicity, ritual, and religion, or the distribution of credit and debt over the life cycle and family development cycle. Also too often missing, in a way harder to specify, is the feel of the loan, the debt, or the broader relationships around them. Financial institutions have been carefully studied in relation to other formal structures and processes, but not in relation to indigenous modes of entrustment and obligation that do not involve money. Problems of translation and the deeper issues of cognition and comprehension beneath them have been rather ignored. This volume builds on two kinds of “field” experience, each of which has taken one or more periods of years. One has been participant observation and other research, in deep equatorial African countryside. This was the more traditionally anthropological fieldwork I have done, much of it with local coworkers, using local languages as well as international ones. It involved living mainly on local foods, using traditional ethnographic methods of extended interviewing, surveys, and so on. The other “fieldwork” has been done in the middle of cities and towns, where the programs for rural-dwelling people are planned and directed. For this I worked among people who were mostly economists and financiers, with also some general administrators and others. This second sort of research I did not always with the explicit intent of studying these people, but more with a view to fitting in with them, attempting to contribute something social and cultural to their work, and studying them more passively and incidentally—though I hope no less empathically. Their ways of thinking and communicating turned out no less exotic, no easier to fathom and interpret, than the ways of thinking encountered among farming, herding, or fishing people in inland equatorial Africa. Studies connecting these two kinds of field observations and experiences represented here—and the kinds of findings possible from the different methods one uses in them—are still rather unusual. It is my hope that they will become less so. People who understand that persons in the kinds of places that get called remote or “bush” have reason, experience, and useful intuition, and that others in centers of power and wealth have ritual and ceremony, emotion, and mythic narrative and belief, will have some hope, I



think, of understanding how long-distance economic and political processes work. This volume is one of three sister studies written to be readable each on its own, or in any sequence. Each of the three somehow concerns entrustment and obligation, focusing on the Luo people in western Kenya—a place with perhaps as long a human presence and experience as any on earth—and other people in contact with them, near and far. Each book brings together theory, historical and ethnographic description, and practical analysis, combining them in its own proportions. The Nature of Entrustment, the first volume published in the set and the most traditionally ethnographic, describes the Luo people, others in the area who speak Nilotic languages like theirs or different tongues, and how they got where they are. After briefly reviewing what anthropologists around the world have discovered about gifts and loans, and how they have theorized about the topic in their different terms, the study proposes a broader view of entrustment and obligation that includes serial conveyances, too, and that includes the dead and the yet unborn as well as the living. In its ethnographic dimension, after describing the main setting and modes of livelihood around the eastern side of Africa’s largest lake, that first book shows how many things with a material dimension intimates and other acquaintances convey and exchange over time—without, or beyond, the direct use of money. Children, animals, seeds, boats, labor, lodging, school fee support, marriage dues, funerary contributions, blood compensation, and things ritually sacrificed all enter the picture, in loans or entrustments that may be repaid within hours or endure as long as several generations. To follow the varied forms of entrustment and obligation through the life course, from birth to death, and through to symbolic rebirth and inheritance, is to gain a broad view of life in this part of equatorial Africa. What I have termed fiduciary culture—the culture of entrustment and obligation— spans the range from the most mundane to the most mystical concerns. It has symbolic and political as well as economic dimensions, ties directly into kinship, ritual, and religion, and has more than a little to do with sex and reproduction. Not everything is ultimately exchangeable for everything else, though a time lag between loan and repayment often seems to make it more so. Rural dwellers in East Africa have plenty of their own debts and obligations, the study shows, before foreign financiers show up on the continent with new loan schemes. That is where the second and third volumes come in. Mortgaging the



Ancestors, the second, discusses land and property matters, showing what they have to do with financial and fiduciary life. That volume describes some European and American political-economic philosophies of property and their history—for instance, in debates about social evolution—and the ways they have played out in western Kenya and equatorial Africa in colonial and independent (or neo-colonial) times. They play out in an attempted reform of landholding by titling land as individual property over the past half-century, and in the attempted establishment of a mortgage system along Euro-American lines. The implications of this freehold-mortgage system, linking land and finance, are momentous for agrarian life in East Africa, as elsewhere. In and around the Luo country, though, the problems take on a particular character that gives them special interest. Here, ancestral home sites and graves are sacred. But among foreigners who have entered East Africa and those they have taught, there is a widely held notion that titling land as private, individual property enhances economic and social development by making land usable as collateral for loans. I trace the roots of this latter idea back several centuries into long-debated Euro-American social and economic philosophy. Then I show how theory has been translated into practice, describing the wavering commitment of colonial government to both protection and reform of Kenyan people, and the eventual triumph of reformism in the latter half of the twentieth century. A clash of cultures and of life ways has resulted. People who are settled on lineage and clan land, with their forebears buried outside their doorways and kin living all around, do not take kindly to financiers who try to yank away their lands for failure to pay interest charges they do not necessarily understand or agree with. Toward the end, the study shows how the freehold-mortgage system has faltered dramatically in East Africa, yet threatens the livelihoods of Luo and other tropical African farming people, denying their most basic social attachments and their commitments to past and future. The volume sets all this in the context of wider and longer struggles over land in Kenya and East Africa—struggles that have at times torn the country apart in bloodshed—stemming in part from territorial confinement, on small scale and large, from early colonial times up to our own. But the dramatic events of violence have been matched by equally dramatic attempts in Kenya to reform the legal framework and constitution to ensure more fairness. In the course of this second volume the most basic issues of belonging, of national civil order, and of governance and sovereignty come



into question, and African understandings challenge some of the most fundamental assumptions of political philosophy on which most nation-states and their property laws have been founded and grounded. But something important remains to be discussed, and important comparisons remain to be made. This third volume published in the set, Credit Between Cultures, rounds out the picture by exploring the kinds of financial credit and debt organized without land mortgages, eviction, and land loss directly at stake. The story takes place against a background of religious, philosophical, and political debates, ancient but still continuing, about credit as usury and as charity, but the book’s main attempted contribution concerns the future as much as the past. It is to see, by looking more deeply into real projects and programs, what broad promise long-distance lending holds— or does not—for increasing agricultural production, addressing poverty, and improving rural African lives . . . or worsening them. We look both critically and constructively into a series of initiatives for farming, and for rural and small-scale trade, as they have evolved, transforming and multiplying, over about the past half-century, taking things in roughly chronological order. Over the latter decades, and later chapters, emphasis has shifted from credit by itself to saving, and to mixtures of the two. Borrowers’ and lenders’ motives too have been mixed, and the most charitable acts sometimes contain self-interest just below their surface; but even a stratigraphic model like this can hardly convey the complexity of the psychology and philosophy involved. This study compares several approaches to finance for people deemed poor, designed ostensibly to help them become less so: those of national and international government agencies (conventionally called “public”), private corporations (“private”), and charitable organizations (“private voluntary,” “nongovernmental,” or “philanthropic”), and finally those of people organizing locally for self-help (“grass roots”). These financial and fiduciary actors all have their periods in the limelight, and they have had radically different styles, but there are also some overlaps and crossovers to be investigated. In any study touching on government, business, and charity, the reader has a right to wonder whether the book will turn out to be a political or moral polemic. Probably no author is without biases, and doubtless any of mine will show through clearly enough. I have endeavored, though, not to take sides between stock ideologies (between corporate capitalism, state socialism, and individual libertarianism, for instance), preferring to explore the mixtures,



sometimes subtle, of players and principles. I hope and plug instead for more and better mixes—compromises, complementary combinations—and transcending ideas in the future. Nor have I attempted the sort of investigative reporting that aims to indict individuals, cliques, or small conspiracies currently in positions of power. That would be a tricky, troubling task anyway, as most of those in bureaucracies whom one might indict for the effects of unsuccessful or harmful projects, when met in person, have struck me as honest, hard-working people with some sort of personal and moral sensitivity. Quite a few, indeed, have turned down other chances for greater privilege or wealth (sometimes far greater) to enter a profession they hoped would allow them to be of service to someone needier than themselves. On a more general moral and political-economic matter, while I certainly deem charity a nobler cause than usury, I must say though that its practical outcomes, especially over long distances, have not always been more salutary. Having assembled what evidence and impressions I can fit into the space, I leave most of the moralizing to the reader who wishes. Exploring credit and debt in the round this way, by examining a series of different initiatives of these different kinds over half a century and more, not only allows for more concrete suggestions about how to manage projects and programs better but also lets us draw more general conclusions about the role of fiduciary measures in addressing rural poverty. Of all three parts, this is the one that examines most closely the different ways of managing loan projects and programs involving cash and kind, the material nature of other things lent to farmers and of the crops they are lent for, and the ways the material side affects the managerial. It is my hope, in this volume and the brief trilogy as a whole, to help bridge a gap between disciplines, showing what is cultural about credit and debt—locally and over long distances—and about the deeper, broader entrustments and obligations into which they fit and fail to fit. I wish to suggest what norms, values, and beliefs—even about kinship, the ancestors, or ethnic identity—have to do with financial and fiduciary action. If there is hope for humans to escape the familiar cul- de-sacs of political-economic debate, like capitalism and communism, individualism and collectivism, libertarianism and authoritarianism—one way might be to devote further attention in the future to forms of African experience and wisdom that often seem to cut across or transcend these. Understanding the familiar economic topic of credit and debt from fresh angles requires combining something



of the absolutism that has typified some kinds of economics with a cultural relativism more typical of anthropology. In a longer view, this study offers a retrospective for an era of international and intercultural history a halfcentury long, in which credit was, and remains for many, a central effort and hope. Another boundary deliberately crossed in this volume is the one between theoretical research and practical commitment. Trying to combine serious academic study with intermittent involvement in programs for “development” or poverty alleviation, as I did for some years, involves exciting challenges but also some frustrations. Scholarship takes time. Contract work for aid agencies and governments usually involves rushed deadlines, hasty or seasonally inappropriate field visits, scattered or superficial samples, and, for a scholar, theoretical or disciplinary compromises, not least in the use of language. While incorporating some lessons learned from intermittent work on contracts for aid agencies and government ministries, then, I have found it necessary to rely more heavily on my independent participantobservation, free-flowing conversation, assisted surveys, archival research, and other reading undertaken for academic and intellectual purposes over a much longer time. I hope in this volume and the previous ones to have shown something of the part that loans and debts, entrustment and obligation, can play in human life—and of the character they take, and the reach and limits of their possibilities, in a particular region notable for its long human experience. But none of this is meant to suggest that borrowing and lending, or finance more generally, constitute the best or only way to approach the problems of rural poverty or powerlessness, or to improve the quality of life, in Africa or anywhere else—as has been so often assumed. Far from it. Whenever attention is given to credit, attention must be given to indebtedness as well, a condition humans can endure only within limits. Different, complementary, and maybe better solutions may lie in other approaches completely. They may lie, for instance, in allowing people born in Africa, and in the tropics around the world, more freedom to come and go, or to send their kith and kin abroad, as they may themselves choose; to discover whatever good things and ideas they might find in the rest of the world, and to bring or send some of these back, if they like, for themselves, and for their communities and continents. That change may take introspection by any and all of us, some bold moves, and time. But it may be no less vital for it.

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ere some thanks. No piece of writing that takes as long as this one to complete can mention all those who have helped it along, all the ways they did, or all the ways its author feels grateful and indebted. Those who have been thanked in the two companion volumes, but cannot all be named again here, I thank again. Several sorts of institutions have supported this work with various combinations of funding, training, research clearances, contacts, sabbatical leaves, and logistical and other support. Usually a study about finance needs funding. The Marshall Aid Commemoration Commission of the United Kingdom financed preparatory research at Oxford; the Warmington Research Studentship of St. John’s College, Cambridge University; and the Wenner-Gren Foundation funded my first and longest stays in Kenya. Cambridge University and the Royal Anthropological Institute (through the Radcliffe-Brown Memorial Fund) provided supplementary research grants in the early years. The Social Science Research Council and American Council of Learned Societies funded a revisit to Kenya and further library work. The Office of the President of Kenya kindly allowed me research clearance for repeated stays, as did the Ministries of Agriculture, Cooperative Development, and Lands and Settlement. Officers of these ministries and of the provincial, district, and divisional administrations were generous with permissions and interview time. The University of Nairobi’s Institute of African Studies and Institute for Development Studies shared their fine colleagueship and staff support during the research fellowships I held at dif-



ferent times. The Nairobi YMCA and, later, the British Institute in that city provided congenial settings for urban stints, each in a rich mix of researchers and sojourners from Kenya and abroad. Officers of the World Bank, U.S. Agency for International Development, British American Tobacco Kenya, and a large number of smaller aid agencies have generously lent their time to show and tell me honestly of their work and programs; they will understand if I cannot mention them all by name. The World Bank’s Regional Mission in Eastern Africa was especially helpful in my studies of large public-run agricultural programs. On small enterprises and regulatory matters, in Kenya and elsewhere, I learned much with the help of USAID’s Office of Rural and Institutional Development (Bureau for Science and Technology) and its Office for Private and Voluntary Cooperation (Bureau for Food for Peace and Voluntary Assistance), partly through its Assistance to Resource Institutions for Enterprise Support (ARIES) project (Contract Number DAN-1090C- 00-5124- 00); and through the same agency’s Consulting Assistance for Economic Reform project (Contract PDC- 0095-Z- 00- 9053- 00). Harvard University’s Department of Anthropology, Institute for International Development, and John Winthrop House, and more recently Boston University’s Department of Anthropology and African Studies Center, have provided congenial settings and excellent colleagueship in their different ways over many years. Scholar’s and writer’s paradise has several variants on earth, to judge by the three generous postdoctoral fellowships that my sabbatical leaves have allowed me to take up. In the order visited, they are found at the Carter G. Woodson Institute for Afro-American and African Studies, at the University of Virginia; the Agrarian Studies Program, at Yale University; and the National Humanities Center, in Research Triangle Park, North Carolina, at which my particular fellowship was funded by the Horace W. Goldsmith Foundation. The staffs at these research and writing centers are superb across the board, and the fellows too during my years were exciting intellectual company, each time for a congenial mix. My hearty thanks to them all. To shift now to some individuals, John Beattie at Oxford offered much expertise on the Lake Basin (and much early coaching on writing), as did Wendy James and Godfrey and Peter Lienhardt on other Nilotes and neighbors, and Rodney Needham and Peter Rivière on others. At Cambridge, Keith Hart, John Lonsdale, Malcolm Ruel, Sandy (A. F.) Robertson, Michel Verdon, and especially Ray (R.G.) Abrahams have given my work careful



attention; they, (Sir) Jack Goody, and Polly Hill have taught me much and informed my interpretations of African conditions and of others’ attempts to intervene in these. Elsewhere Robert and Sarah LeVine, John Middleton, David Parkin, and Migwe Thuo helped prepare me well for living and studying in Kenya. In Kenya, and especially in Kanyamkago, Kagan, Sakwa, Uyoma, and Isukha, there are more who deserve thanks thank I can mention here for so generously and cheerfully opening their lives to me and others living and working with me, and to our work. In Nyanza, (Fr.) Joseph Fitzsimons and his colleagues at the Rapogi Mission, and Ali Thabet in Awendo, facilitated my early contacts and provisioning. Later I was ably assisted by many others, and especially by Janes Athiambo, Ladan Madegwa, Ben Omondi, Elly Owino Nyanje, Emin Ochieng’ Opere, Joseph Obura Opon, Dan Odhiambo Opon, Everlyn Millicent Adhiambo Odhiambo, Meshack Magak Opon, and Fred Shijenje. They and their families have been exceptionally kind to me; their kin, not least Rispa Akech, Esther Akinyi, Charles Opon, and Ulda Ayier, have offered me hospitality, friendship, and warmth. Ismael Owiro, Joash Songa, and Hudson Azangu thoughtfully arranged housing for periods when I was not living with families. Frederick Ojwang’, Gordon Ombewa Opon, John Omiti, Hezron Oriedo, and Selemiah Ouma lent friendly counsel on many occasions, and Jeremiah and Jedidah Okumu offered kind company and nourishment in Kagan, as did Ladan Madegwa and Agnes Azangu Tizika and family in Isukha. The staff and students of the school I have called Kagogo Primary School and their families proved lively, supportive neighbors and friends. Countless others offered shelter, hens, meals, jokes, and volunteered blessings. These people have made my stays in and around Nyanza enjoyable, instructive, and memorable experiences. May this work be of interest to their progeny as they seek to understand what life was like there. Scholarly contacts formed during research adventures are special. Patrick Alila, Philip Amis, David Anderson, Michael Chege, David William Cohen, Michael Dietler, Thomas Downing, Abraham Goldman, Angelique Haugerud, Ingrid Herbich, Benjamin Kipkorir, Peter Little, George Mathu, Shem Migot-Adholla, Asenath Bole Odaga, E. S. Atieno Odhiambo, H.W.O. Okoth-Ogendo, Elizabeth Munday Otunnu, Nancy Schwartz, Joseph Ssenyonga, David Throup, and Richard Waller were among the many who provided stimulating academic colleagueship both in and on Kenya. Ray Abrahams, Patrick Alila, Frank Fitch, Richard Leakey, and



Elijah Mugo arranged transport when I needed it—and merciful roadside bystanders-turned-mechanics improvised ingenious ways to keep it going. Jennifer Coope, John Coope, Thomas Downing, Roiko Fukunaga, Abraham Goldman, Patrice Haffeman, Anna Jarrold, Nicholas Jarrold, Roger Kirkby, David Salter, Jennefer Sebstad, Valerie Smith, Daniel Stiles, Ann Stroud, Hermione Tudor, Nicholas Tudor, Kazuo Udagawa, and Joseph Valadez were among those who shared not only their hospitality in their postings but also their varied experience with international aid and cooperation in Kenya. Others who kept me in touch and up to date when I was outside the country included Maria Cattell, Caroline Elkins, Alison Field-Juma, Cynthia Hoehler-Fatton, Calestous Juma, Isaiah Nengo, Benzburg Nyakwana, Justus Ogembo, Herine Ogutha, Lisasa Opuka, Arthur Omondi, Daivi RodimaTaylor, Deborah Rubin, Elizabeth Siwo, Barbara Thomas-Slayter, and not least, the tirelessly generous correspondent Nancy Schwartz. Colleagues at the Departments of Anthropology at Harvard, and at that university’s Institute for International Development, did much over a decade and longer to advance and encourage this work. In particular, at Harvard, John M. Cohen, David Cole, Richard Hook, Christine Jones, David Maybury-Lewis, Malcolm McPherson, Sally Falk Moore, Dwight Perkins, Pauline Peters, Subramaniam Ramakrishnan, Marguerite Robinson, and Donald Snodgrass all read draft material; Robert LeVine and Sarah LeVine lent their Gusii and Kenyan expertise; and Harvard scholar-advisers John Cohen, Richard Goldman, Richard Hook, Michael Roemer, Paul Smoke, Stephen Peterson, and John Thomas shared their experience and contacts in Kenyan ministries. Charles Mann, Merilee Grindle, and the entire ARIES project research group helped me learn much about institutions involved in microfinance and microenterprise, from ahead of those waves. Edmund Carlevale, Kathleen Taffel Chamberlain, Eva Greger, Rebecca Grow, Margaret Nipson, Bradley Nixon, Suzanne Sloan, Scott Parsons, John Pollard, Sarah Potok, and Katherine Philp Yost applied their good editing judgment and word-processing skills to early drafts at different times over years, along with all else they did to make office life productive and pleasurable. Boston University anthropology department chairs Thomas Barfield and Robert Weller ran the show while many other colleagues there, not least Fredrik Barth, Charles Lindholm, and Robert LeVine, found magic words to encourage this work along when it seemed slowed by other simultaneous projects. Kathy Kwasnica, Janet O’Neil, and Mark Palmer have made many things work, in all sorts of ways, from the department’s headquarters. Jean



Hay and Walter Sangree, among my B.U. colleagues at the African Studies Center, never tired of urging this work forward, and never ceased to inspire it with their earlier examples. Others who have made daily life so enjoyable at the Center included Barbara Brown, Edouard Bustin, Michael DiBlasi, Allan Hoben, John Hutchison, Jeanne Koopman, Timothy Longman, Zoliswa Mali, Judith Mmari, James McCann, Sandi McCann, Fallou Ngom, James Pritchett, and Diana Wylie, to name only a few on the corridor who have been regular conversants. Peter Bell, Anne Bellows, Maddalena Goodwin, and Joanne Hart made the Center run while providing much of the high morale that all shared. Sara Berry, Jane Guyer, Christine Jones, Pauline Peters, Jeffrey Lewis, and Thomas Tomich helped me rethink the dynamics of African households and homesteads, while we all worked to gain an understanding of intercontinental involvements too. Patrick Alila, Michael Chege, David Korten, Shem Migot-Adholla, and Asenath Bole Odaga have all helped me understand the workings and effects of development and research institutions in Kenya too, as has James Ferguson elsewhere. Edward Greeley, Susanna Badgley Place, J. D. Von Pischke, Stephen Reyna, and in Kenya a number of others whom confidentiality prevents individually naming were among the many who have cheerfully and candidly offered their firsthand experience and insights as current or former aid administrators in large agencies, some of them having worked to change those agencies’ courses in one way or another, or to render their workings more sensitive to African interests and conditions. Among those whose collaboration and assistance in library work proved invaluable were Donald Altschiller, Kathleen Hansen, Diana Jovin, Michael Katz, Frederick Klaits, Anne Lewinson, Clancy Pegg, Thomas Schaub, and Michael West. Eva Greger, Kathleen Hansen, Antonia Lovelace, and Clancy Pegg helped me put quantitative data in order, a process helped also by advice from Eyal Ben-Ari. Librarians at all the universities mentioned above, not least Loumona Petroff, Beth Restrick, Gretchen Walsh, and David Westley at Boston University’s African Studies Library, have helped find obscure sources. Josiah Drewry, Jean Houston, and Eliza Robertson have done likewise at the National Humanities Center. Ones not yet mentioned who used their academic-administrative talents and lent advice to make the writing and editing easier include Barbara Alloway, Janet Hall, William Jackson, Kay Mansfield, Gretchen O’Connor, Elizabeth Rew, and Armstead Robinson. Zachary Deal, Joel Elliott, Hormoz Goodarzy, and others have rescued many pages from oblivion by technical



cyber-wizardry. I am grateful to Karyn Nelson, who drew the map, and to Michael Hamilton, who processed the photos, for lending their talents. Among countless other individuals who have contributed to research and writing in their various ways too numerous to mention are Peres Akinyi, Roger Blench, Rita Breen, Peter Clarke, Geraldine Cully, Frank Fitch, Mark Harris, Suzette Heald, William Jackson, Benjamin Kipkorir, Andrew Macintosh, Pia Maybury-Lewis, Martha Mundy, Kimanthi Mutua, Ben Ogallo, Ronald Ojwaya, John Omiti, Frederick Ojwang’, Philip Opere, Peter Otieno, Selemiah Ouma, John Roberts, Janet Seeley, Marc Sommers, Christian Thorau, Martin Walsh, Charles Weil, and Marie Weil. My students, those both traveling and at home, have kept me on my toes with their probing questions and all else they have continually taught me. Readers providing helpful comments on drafts at one stage or another, in addition to ones mentioned above, have included Sara Berry, Michael Dove, Jonathan Conning, Angelique Haugerud, Goran Hyden, Susanne Mueller, and Walter Sangree, to name only some; others included anonymous reviewers for the publishers. Trevor Burnard, Jean Hay, Sally Falk Moore, and Marguerite Robinson, with their seasoned eyes, suggested where best to cut and condense. James C. Scott, as series editor, and at Yale University Press, Jean Thomson Black as the executive editor, have been ever positive, perceptive, and patient through my lengthy revision of three volumes—more supportive than any author has a right to ask. Production editor Annie Imbornoni too has kept the pipeline efficient and enjoyable, and Joyce Ippolito has done the deft, delicate job of copy-editing. The many others at the Press who have worked hard and well include Laura Davulis, Matthew Laird, and Joseph Calamia. Last, the ones first: My parents James Shipton and Mary Elizabeth Cornu Shipton, and sisters Sarah and Elizabeth Shipton, who have long watched, advised, and cheered. Polly Steele, my spouse, has been part of this work since the beginning, sharing the ups and downs and providing bountiful ideas on both sides of the Atlantic. She and Susannah have affectionately and forgivingly put up, for long periods, with both my presence and my absence—sometimes simultaneous, in a writer’s unwitting way—and contributed to this work in direct and subtler ways beyond measure. All these people and institutions, and others still unnamed, have my sincere gratitude—ero kamano ahinya, asanteni sana, and many thanks—but none need answer for any errors remaining. Those had no origin.



Agricultural Finance Corporation African Land Development Board Assistance to Resource Institutions for Enterprise Support Arab Bank for African Economic Development (Banque Arabe de Développement Economique Africaine) British American Tobacco body burial society (a colloquial generic) Bank-organized nongovernmental organization (jocular) Bank Rakyat Indonesia Co-operative Bank of Kenya Commodity Credit Corporation International Maize and Wheat Improvement Center (Centro Internacional de Mejoramiento de Maíz y Trigo) Cotton Lint and Seed Marketing Board Church of the Province of Kenya Catholic Relief Services District commissioner (United Nations) Food and Agriculture Organization Group of Twenty Finance Ministers and Central Bank Governors Guaranteed Minimum Returns scheme Government-organized nongovernmental organization (jocular)




Human immunodeficiency virus/acquired immune deficiency syndrome Integrated Agricultural Development Project (and Programme) International Bank for Reconstruction and Development (World Bank) International Development Agency (of the World Bank) Institute for Development Studies, University of Nairobi (United Nations) International Labour Office International Monetary Fund Junior Agricultural Assistant Kenya Farmers Association Kenya Industrial Estates Kenya Land Commission Kenya National Archives Kenya Rural Enterprise Programme Kenya shilling (Dho)Luo, the Luo language Monitoring and Evaluation Unit Ministry of Agriculture Ministry of Co-operative Development National Council of Churches of Kenya (orig. National Christian Council of Kenya) Nongovernmental organization New Seasonal Credit Scheme Overseas Development Institute Oxford Committee for Famine Relief (initially) Private Agencies Collaborating Together Provincial commissioner Partnership for Productivity Private voluntary organization (World Bank) Regional Mission in Eastern Africa Rotating saving and credit association Smallholder Production Services and Credit Project (Ki)Swahili, the Swahili language Syracuse University Microfilm Collection Technical Assistant Training and visit system (of agricultural extension)



Technical Assistance Information Clearing House Troubled Assets Relief Program United Nations United States Agency for International Development United States Department of Agriculture


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Introduction A Golden Pendulum Credit—the disposition of one man to trust another—is singularly varying. —WALTER BAGEHOT, LOMBARD STREET


f you tour the United Nations buildings in New York, you will see a gold pendulum in the front lobby of the General Assembly building, where the tour probably begins. Suspended on a wire from an enormously high ceiling, the great shining ball seems to move by itself, propelled by the wobble of the earth. The needle traces in the air a path that always returns to a point just next to the one it reached on the last pass. Gradually, one swing after another, it moves around in a circle, etching a daisy-like figure— and eventually begins its circle again, unstopping.1 The back and forth of wealth between nations can be likened to the movement of that pendulum: the movement of loans and repayments, entrustments and fulfillments, which never seem to come to equilibrium. When I was first taken to visit the U.N. headquarters as a child, I knew little of these things. My young friends and I merely marveled at the pendulum and at the figure it traced with a needle in a broad dish of sand, as it did back then. But decades later, the more I had come to know the work that called itself international aid—from savannah hamlets where you could hear hyenas at night, from offices in capital cities where you could hear fax machines by day, or from dusty archives where you could hear nothing—the more it seemed that a pendulum of change was swinging back and forth rather like this one. Sometimes it seemed to oscillate between charitable aid and usurious profiteering. Sometimes it swung between the “public” and the “private,” or at the edges, between the authoritarian and libertarian. In other ways a pendulum seemed to swing between complex, “integrated” approaches



and simple, “minimalist” ones. It shifted from hands-on rural interventions (like “community development” projects), which purported to contact poor rural people directly with projects and services, to hands-off policies (like “structural adjustment”), which purported to reach rural-dwelling people indirectly through macroeconomic measures like fiscal austerity, currency and trade deregulation, and balance of payment support. Then it began to swing back. Always debated and always somehow in flux, the back-and-forth movements seemed like fashions, but not merely so—they were deeper, more earnest. Like the gold pendulum in the lobby, a pendulum of change seemed to shift its angle on each swing, each time returning to a spot near, but never the same as, the one from the time before. Each time an idea was reborn it had a changed name, a new region, or a different sector of the population or economy as its focus. And so, it seemed in retrospect, the story of “international aid” always looked familiar but never repeated itself exactly. This study is about financial entrustment, about the swings of fashion in international aid, and about things that do not change. More specifically, it is about the efforts of Luo-speaking people and others in Kenya to make sense of, and cope with, foreign interventions in the form of credit and to bring them into their own understanding. Theirs is a very African understanding, but it is one seasoned by decades of their experience in a disadvantaged position in a world order—if an order it can be called. It is also an understanding such as one might find wherever, and whenever, borrowers and lenders connect at a distance—becoming creditors and debtors—across barriers of culture and nationality, or of age, sex, and class. I suggest in this brief volume, the third in a set of related studies, that fashions of “development” keep shifting on the surface, but a steadier process continues and repeats underneath. Loans and other transfers between continents raise fundamental questions about human responsibilities, and here, as before, what might at first seem technical or bureaucratic matters turn out to be cultural, symbolic, and ideological as well. To examine a complex topic like entrustment means traversing the same terrain from a number of angles, much as the pendulum crosses over the central point in its trajectory as it swings back and forth, ever shifting its angle. Descriptive, practical, and moral concerns all fall within the purview of culture necessary for a rounded understanding of credit and debt, and of trust and distrust. The picture to be etched in the chapters that follow, spanning half a century of fiduciary history, will bring into question some of the cen-



tral tenets of what has been called international aid, calling for some deep rethinking about wealth and poverty, about borrowing and lending, and about belonging. Poverty and the Credit Reflex It has become commonplace around the world in recent decades to associate Africa with poverty, among other related hardships and horrors like disease and civil war. It is hard to deny there is poverty in Africa, but it can be just as hard to define it. The term poverty, translated between tongues, does not always carry the same package of meanings or connotations. A few points need to be borne in mind when discussing wealth and poverty in English. Poverty, or at least poverty outside human bodies, is not always measurable in material or in monetary terms. It may have as much to do with relative wants or needs, and related perceptions and self-perceptions, as with control over resources. Poverty may consist less of possessions than of things owed: obligations perceived and felt by others that are potentially able to be returned or transferred. Wealth, as poverty’s inverse, converts back and forth to other things, like power or prestige. Finally—to give the lie to the myth of the pauper continent—serious poverty can be found side by side with great wealth, and indeed the tropics are often one of the easiest places to find it. By both insiders’ and outsiders’ judgments, tropical Africa, and western Kenya within it, are short of capital for agriculture and other productive uses. Does it follow that people in other parts of the world can help people there by lending to them? Development program planners have often assumed so. Credit has been a standard response of international aid agencies to reports of declines in Africa’s per capita agricultural production or rises in its population. Their lending has taken direct and indirect forms. It has come by itself or tied together with training, extension, marketing infrastructure, pricing interventions, conditional requirements about exchange rates, and free emergency relief. All have been among the wide repertoire of international responses to bad news and grim predictions about African poverty. But more often as not—and almost always in the case of the World Bank—the larger aid agencies have built their interventions around loans of one kind or another. The philosophy, the language, and the career incentives of aid officials have been geared to the idea that poor people and countries must borrow.



Credit has often proved irresistible to lenders as well as borrowers. To officers of aid agencies and banks it means moving large amounts of money and satisfying office superiors, committees, and constituencies, and it can seem less costly than grants and less laborious than training schemes. Industrial nations’ aid agencies have for several decades used development loans, along with grants, as a diplomatic tool to help secure economic, political, and military alliances. At a national level, politicians and functionaries use credit, among other things, to secure powerful urban and rural power brokers as supporters and to quell dissent. Credit attracts intermediary re-lenders partly because it provides new flows of wealth, potentially able to be manipulated or siphoned, and partly because it can help establish political control over its recipients. Within local communities, loan disbursers use their lending powers to launch political careers and to solidify constituencies by patronage. For farmers, herders, fishers, traders, and others who borrow at the end of the chains, credit can mean the promise of cash to solve pressing problems for themselves or kith and kin, a seed for unlimited future growth, a seal of trustworthiness and sophistication, or a tie with officialdom that might come in handy in ways unknown. At all these levels of scale—global, national, and local—credit has been used as a development strategy with mixed motives, self-interested and charitable. Credit attracts all concerned because it promises to contribute to Africa’s scarce capital. Credit promotes itself easily. With its positive connotations of helpfulness and trust, credit can be hard to argue against—which means it is all the more important to understand it for what it is, in the various forms it takes, and to follow it until it becomes debt. Three main triangles frame the book. First is the triad of usury, charity, and fantasy. If usurious and charitable lending form a continuum, we may imagine a line to fantasy departing from the midpoint between. The mix of forms that credit takes is a big part of what makes the topic interesting. The second triangle consists of three ways of organizing credit programs, conventionally called public (run by government), private (run by corporations, for profit), and philanthropic (run by voluntary or charitable institutions, sometimes also called private). They all have different styles of lending, but they overlap too, and at times alliances form between them, where one serves as agent for another. Popping up in the middle of this triangle are self-help associations, which might eventually turn into any of these types. The third triangle is of three things people seem to seek in social life:



power, wealth, and meaning. The first of these includes coercion, formal authority, and subtler influence. The second includes wealth in cash, in kind, and in intangible obligations. The last includes the shared meanings of dignity, prestige, and respectability, as well as feeling, emotion, or aesthetic. People use credit and debt for all of these, but not always with the outcomes they desire. The central setting in this study has its own distinctive character, but in some ways it could also be taken to represent many others in Africa’s interior and around the equator. To nearly three million Luo speakers and neighboring people in the Lake Victoria basin—the southernmost source of the Nile known overseas for only a century and a half at most—farming is a way of life involving a market, a state, and international agencies whose control sometimes seems distant, but whose import is ever palpable. Financing their changing way of life over the past century has exposed Luo people and their neighbors to strange and sometimes threatening forms of exchange and contracts, and it has exposed their remote financiers to mysteries no less perplexing. The result has been a history of misunderstandings, with more than a few ironies and surprises, sometimes tragic and sometimes rather comic. The book builds on work I did in residence in Kenya, especially western Kenya, beginning in the early 1980s—at first as a doctoral student in social and cultural anthropology, and later as a teaching academic on research leave. My first stay, from 1980, lasted a little over two years, with a few weeks of interruption due to illness. The initial few months in 1980 I divided between Nairobi and the small Nyanza town of Awendo. Thereafter, I have spent most of my Kenyan time living in farming communities, with or without my spouse present—eating local foods and participating in many kinds of local activities. Some of it I have spent living with farming families in their homes. My longest rural stays have been in areas called Kanyamkago, Kagan, and Uyoma (all in Nyanza Province), in that order; I also sojourned for several weeks in Isukha (in Western Province). Intermittent visits to Nairobi allowed contact with aid agency managers and others. Of several briefer revisits to Kenya, the longest, divided between Nairobi and rural Kanyamkago, took place in the last few months of 1991 and the beginning of 1992. In rural Nyanza Province I have spoken the Luo language (DhoLuo), the lingua franca Swahili (KiSwahili), and English. Many Luo speak English relatively well, even in the deep countryside, but I have also been helped in important ways by local assistants serving as facilitators, companions, and



often as interpreters too when needed. The sojourn among Isukha, the subgroup of Luhya in Western Province, required communicating in their dialect of LuLuhya, mainly through a local interpreter and in Swahili. In Nairobi and other towns and cities, I more often used Swahili and English, as many urban-dwelling Luo and other Kenyans do. Between the early 1980s and mid-1990s, I worked as an anthropological researcher among economists, program planners, and administrators in a university-based research institute, and I visited aid agencies and government ministries. Sometimes this visiting was done on that institute’s behalf; at other times I visited independently doing contract research or pursuing my longer-term academic research. Putting together findings and experiences from the Kenyan countryside, as well as experiences among city- and town-based program planners and officials, has been the main task of this work. It has been an exercise in trying to compare sometimes startlingly contrasting perspectives on the same topics. I have suggested that development, like most terms that surround it when applied to cultures, societies, or nations, stands for a concept with weak conceptual underpinnings. I do, though, use the word to refer to an industry, a set of people who define their work and their profession by this term, for they and it are real enough. If development presents linguistic and philosophical problems, none is more serious than those found in language about loans. Credit is a nicesounding word. Coming from the Latin credere, to believe or entrust, it conveys overtones of confidence and support, and from the point of view of a lender, a failure to honor an obligation is a kind of betrayal. In the past, agricultural economics textbooks have treated credit as one of many essential farm inputs, rather like soil, water, sunlight, or labor. Realistically, however, credit means debt. Credit is debt: what one calls it depends only on whether one is the borrower or the lender, and whether one is speaking before or after an event. In the development industry, as we shall see, this most obvious fact is ironically the one most easily forgotten. Social Distance and Fiduciary Expectation Credit and debt are a tricky topic. On the surface it might seem that a loan must be midway between a gift and a seizure: a temporary transfer, emotively neutral, morally cancelled out by its reciprocation. Payment and



Table 1. Social Distance and Loan Terms: Some Conventional Expectations Intimates


Quicker, easier agreement Symbolically more meaningful exchangeables involved Immediate full delivery more likely Witnesses, guarantors, or written contract less necessary Debt reckoning less precise “Interest” or incremental reciprocation less likely, and its rates or ratios lower Loan collateral (pledged security) less likely required More leniency in case of arrears or default Sanction of force less likely

Slower, harder agreement Symbolically less meaningful exchangeables involved Delivery in installments more likely Witnesses, guarantors, or written contract more necessary Debt reckoning more precise “Interest” or incremental reciprocation more likely, and its rates or ratios higher Loan collateral (pledged security) more likely required Less leniency in case of arrears or default Sanction of force more likely

repayment, period. But one who digs into the topic can find something enduring, passionate, or morally charged in nearly every shovelful. Intimacy colors entrustment and obligation. People who borrow and lend, as we all do, tailor the terms of their loans and repayments according to interpersonal relationships. Interactions are influenced by common membership in groups, networks, and open categories of persons (things one can map sociologically), but they are also products of personal sensitivities, temperaments, and emotions (things one cannot). Social distances between persons or groups are measurable in some ways—for instance, length of acquaintance, number of kinship links between two persons, distance between their homes, or frequency of physical contact. In other ways, however, they are not linearly comparable, for social bonds vary enormously in feeling or character. Table 1 lists some ways in which loans or entrustments between intimates are likely to differ from ones between strangers. These principles may seem to be common sense. Lenders seem likely to offer easier, more trusting terms to intimates than to strangers. At least as often as not, they do.



But not everywhere, and not always. People in the Luo country, for instance, often find it hard to borrow big sums of money from close kin like siblings or first cousins, because the would-be lenders know that it will be socially awkward for them to demand repayment, and the would-be borrowers know too that to fail to repay would jeopardize a relationship potentially useful in far more ways than the loan in question. At the other extreme, institutional credit programs have sometimes been designed such that large amounts are lent quickly and easily between total strangers, for periods of years. Sometimes strangers lend to strangers without requirements of collateral or evident threats of sanctions for defaulters. It is the exceptions to “common sense” that are ethnographically most interesting. In them economic rationality, narrowly defined, is swayed, entangled, and sometimes overcome by considerations of meaning and power. While it may be easy to diagram rings of responsibility with kith and kin at the center and strangers at the periphery, in real life things are much fuzzier, and replete with ironies and paradoxes.2 Anthropologists have long been familiar with the Melanesian kula ring and the North Pacific Native American potlatch, which involve gifts over long distances that may go for many years without reciprocation, if they are reciprocated at all. The same goes for gifts and loans from donors and aid agencies over long distances—transfers that often defy strict logic of generosity toward intimates and rip-offs from strangers. The aesthetic character, emotional flavor, and political implications of these various transactions, though, can be entirely different. Nor does charity always engender gratitude. When it is unrepayable and places its recipient(s) in a position of seeming helplessness, it can instead provoke not only refusal to repay but also resentment and even violence, directed not necessarily at its donors or lenders but sometimes at others closer to hand. As Thomas Fuller put it in 1732, “A little debt makes a debtor, but a great one an enemy.”3 Allegiances and Categories So credit or entrustment is not just a simple matter of transfers with neutral moral or emotional tone, of loans cancelled out upon return. The thought that goes into it seldom boils down just to cool economic calculation of risks and rewards. Not only do duties compete with other duties,



but duties to living, breathing persons, like sick mothers needing medicine or children needing school uniforms, compete with duties to abstract principles like reciprocity, justice, or fairness. Humans feel obligations both to other individuals and also to groups (for instance clans, churches, or teams), networks (including, say, friends of friends, or kin of clients of schoolmates), and open categories (like sexes, races, ages, and perhaps occupations or professions as they may be perceived)—three basic kinds of things we all belong to. Balancing these and dovetailing their interests is an art. The claims and duties people have to groups, networks, and categories are all at play as “loyalism,” from feelings of attachment to persons, comes up against legalism, from feelings of attachment to principle.4 All of this means that history is not just a history of progress toward individualism, statism, or globalism. There is more to it than that. “Most cases are mixed cases,” as William James once wrote, “and we should not treat our classifications with too much respect.”5 Where large bodies like government ministries or multinational aid agencies seek to deal with rural-dwelling people, there is a temptation for dichotomization and other reductive simplification so typical of bureaucracy.6 In matters economic, this takes many forms—for instance, public/private, formal/ informal, legal/illegal. For loans, it also takes forms like cash/kind, high interest/low interest, or secured/unsecured. To historians and other scholars of development, or what calls itself development, such dualism makes an easy academic target—just as, from another perspective, academic distinctions like applied/theoretical or nominalist/realist are easy to criticize.7 But complexity too has its limitations. Ironically, the more complexity becomes an intellectual orthodoxy, the simpler the universe of allowable conclusions becomes. And public administration of any sort, no matter how progressive or enlightened, is surely difficult without drawing artificial lines. A trick in designing or analyzing aid finance is to thread the way between the Scylla of simplicity and the Charybdis of complexity. Similarly, a proper understanding of the topic requires a certain mix of mental and material concerns and an appreciation of their interrelatedness. A central theme of this study is that in an agrarian setting, the nature of credit and debt, and more broadly, of entrustment and obligation, depends on the material nature of the things involved: seeds, cows, cash, or something else. Luo farmers can teach us that there is little point in attempts to abstract



or calculate transfers of value or moral obligation without appreciating the stuff (if any) ostensibly transferred, the material setting(s) in which the exchange happens, and perhaps the seasonal timing. The physical realities in our topic do not make it any less subject to the basic truths of human cognition; indeed, they make it more so. Humans think electrochemically, assimilating novelty by familiar if still scientifically mysterious pathways, and not least with metonym and metaphor. The ideas most easily communicated are ones that draw analogies to familiar things like the human body and its growth and reproduction, or other familiar things like trees or houses. The histories that get remembered and repeated are ones that conform to readily recognizable story lines, with the presumptuous villain from power centers (Sauron, Voldemort . . . or the agents of authoritarian corporation, state, or giant multinational aid agency?) or the self-denying stranger-hero from nowhere (like Shane, Mary Poppins . . . or the savior from the fledgling microfinance fund?). They are the stories of marvelous successes or catastrophic failures, which leave us wondering what in real life comes in between. The words and figures that program planners and politicians like most to use are ones that simplify complex realities and assimilate them to what is experienced already and into dreams and fears known only in fiction. Where communication between cultures is concerned and language gets streamlined, metaphor, story, and the human tendency for categorical simplification become more critical still. The deeper we look into local social and economic life in equatorial Africa or elsewhere, the more we see borrowing and lending, and this activity shades right into other forms of entrustment not economic in nature; some are symbolically and religiously charged.8 Luo people and their neighbors in western Kenya have many kinds of credit and debt, entrustment and obligation, before and without internationally financed credit programs. They are born and die with claims and debts, and their balances never really even out. It can seem unfair, then, that just in order to settle accounts, some lending authorities will go so far as to remove people from their homes, farmland, and pastures.9 The mortgaging system, using land as security for loans, ill fits agrarian tropical Africa. It falters over both practical and symbolic obstacles, yet it deeply endangers rural people by challenging their most basic attachments to place and to each other. So in this volume we look at some alternatives. The agencies and programs described herein all did something right. They all ran their loan



schemes, or at least the ones described here, without directly or knowingly threatening anyone’s home, as the ones described in the mortgaging book did.10 They did another decent thing, too, in historical perspective: they used no debtor prisons or direct, explicit indentured bondage or enslavement for these programs. Without the use of land collateral or debtor prisons, then, can institutional credit benefit East African farmers? And if so, can it do so over long distances? Recent decades have tested the limits of entrustment and obligation between strangers as international agencies have expanded their reach, and as country-dwelling people too have expanded their means of communication and transaction over distance. Chapter Outline The following, in brief, is the organization of the book, basically chronological, with a few flashes forward and back. Chapter 2 introduces the central context: the setting in equatorial Africa and the Luo-speaking and other people who live in it, farming, herding, fishing, sometimes migrating, and borrowing and lending—lately, over long distances, more often borrowing. Some Kenyan programs dating from before that country’s independence in 1963 are noted to show how colonial methods of finance, and of governance carried out partly through it, carried over into the independent period. Chapter 3 presents a bit of historical background on the traditions of borrowing and lending. The Luo, neighboring people, and others who speak and understand English have been introduced to many of these traditions from outside. This history is millennia long, now involving sacred texts and celebrated novels that enrich, but also complicate, their understandings alongside their own oral and lately written traditions. Some of these are understandings they share with financiers from without. This chapter also introduces, from its inception in the mid-1940s, the World Bank, which plays a major role in chapters that follow. We will see how credit begins to appear in three faces of usury, charity, and fantasy. The next chapters move in for a closer look. One of Kenya’s most ambitious rural credit programs ever, examined in some detail in Chapters 4 to 8, illustrates the complexities of financial project design and execution, the problems rural people encounter in borrowing, and the striking differ-



ences between the ways program planners and farmers can perceive the same project. The project was Kenya’s Integrated Agricultural Development Project (IADP), discussed together with a subscheme, the Smallholder Production Services and Credit Project (SPSCP), as the IADP-SPSCP. It was a green revolution program offering hybrid seeds, fertilizers, and pesticides on loan. Designed by officers of the World Bank and other agencies in the early 1970s, and implemented between 1976 and 1982, the IADP attempted to tackle the “whole farm.” For this scheme, and others like it around the world, to succeed, many things had to go right—not just on farmed land, but also in the aid agencies, government ministries, research stations, input supply chains, extension services, and crop marketing cooperatives. We watch these interact in retrospect—and compare some different perspectives of different parties in the mix. It is not giving too much away at this point to say that things in this program, and in others like it around the world, did not work out quite as planned. But it is important to understand why not, and that is what I try to explain. The answer goes way beyond any question of loan collateral and security, and thus beyond the question whether land should be titled as private property. Chapter 8, concluding the section on the IADP-SPSCP, ends with a reflection on the repetition of experience in program designs and outcomes. If “public” loan schemes can get overcomplicated or become selfdefeating, can anyone in the “private” sphere run them more efficiently or effectively? Chapter 9 briefly provides a point of comparison: a private multinational firm’s tobacco-growing project offering inputs on credit— again without land titles as collateral security. If the government’s and international aid agencies’ projects were an exercise in strategic complexity, this one is an exercise in strategic simplicity. The British American Tobacco story suggests just how tightly a big organization with a strict, streamlined management and an expensive “extension” apparatus can control crop production for a highly lucrative cash crop—and how deeply, in doing so, it can affect the ecology and economy of a region it touches. As I suggest in this chapter, moreover, the changes are by no means limited to material or financial ones; they profoundly influence social and indeed religious life as well. If they include changes for better and for worse, there is no guarantee that the pros will cancel out the cons. After several decades’ experience of international farm finance programs, financiers in the late twentieth and early twenty-first centuries



began wondering what lessons they might “borrow” from farming people themselves—not just about farming and borrowing but about lending and saving. Chapters 10 and 11 briefly present some of those lessons.11 With excited interest in microfinance in the 1980s and early 1990s, program planners and scholars alike discovered, or rediscovered, local self-help groups like rotating saving and credit associations, which need no one’s injection of capital or anyone’s supervision to get started. What clues, researchers wondered, might these rather modest little group activities offer for organizing larger-scale finance? Some financial reformers also started looking again to local individual moneylenders—those so often disparaged as pariahs and caricatured as parasites in fiction and on stage, and on more than one occasion evicted en masse from African countries as merchant ethnic minorities. Indigenous bankers and banks sprouted up and grew their operations with remarkable speed, borrowing some of their methods from overseas to mix with local concepts and traditions reworked. What can be learned from such people and those who deal with them, and how applicable might these lessons be to larger-scale and more “formal” finance? These are issues program planners of different stripes might want to consider in deciding whether to try to emulate local or “spontaneous” financial mechanisms, to link up to them, or to leave people alone to manage their own financial affairs. Toward the end of the twenty-first century’s first decade, a crisis occurred in the world of finance and fiduciary affairs. The home mortgage market collapsed in North America and other parts of the world, and so did numerous investment, lending, and savings banks depending on new forms of swaps and trades based on mortgage debts. In the process, much of what economic analysts had blithely assumed were real estate, real wealth, real credit and debt, and real ways of rating them turned out to be fantasy—real only in the way that fiction is real. Processes and structures that had been assumed sound and reasoned beyond question suddenly either disappeared or turned inside out and upside down with new mysteries that even the most esteemed pundits and financial tycoons seemed at a loss to explain. Some of the answers might come from unlikely places: inland equatorial Africa, for instance—a part of the world that is not known for high finance but that has deep and long experience to offer with entrustment and obligation more generally. The state of play at the time of publication is summed up briefly at the end of Chapter 11—before Chapter 12, the conclusion, offers a look back and beyond.



Threads Running Through The biggest question throughout this volume is the shortest, and the one most seldom asked in development planning circles: Why credit? The word’s positive connotations, as already noted, can obscure its downside, the side having to do with indebtedness. Which side comes to mind can depend on one’s position, as borrower, lender, or third party—before, during, or after the loan or repayment. A simple exercise, using almost any major document from the World Bank or other big aid agency allied to it, gives the lie to it. To cross out the word credit each time it appears and to substitute the word debt shows how freely the word credit is used in the rural development industry, and how often it is somehow disengaged from the idea of eventual indebtedness and from the psychological, as well as economic and political, burdens it can involve. In the chapters on government-managed credit, a long series of programs illustrates program designers’ and implementers’ unceasing quest to establish and reestablish rural credit projects. Questioning their motives need not mean condemning them as people; many are bright, sympathetic people, and many entered their line of work through experience in volunteer corps or private agencies, in which they submitted themselves to privations or risked their health. But political pressures from financial backers and other actors constrain their work, and bureaucratic processes within the agencies themselves can impede communications between the brain and the hand. A historical perspective on the international finance called “development aid” reveals some puzzles. This is a field in which catchphrases appear, take over, and disappear within a few years. But different pendulum swings have different durations. Real behavior does not always follow those fashions closely or change so dramatically. The many different buzzwords of development in recent decades—participation, integration, grass roots, empowerment, learning process, capacity-building, and even sustainability— translate only irregularly and unreliably into visible projects and programs. Some, indeed, are terms used to cover up precisely their opposites. Rural African life continually reveals the artificiality of “sectors” as used in models of African farming economy. Economic developers’ conventional distinctions between sectors of the regional economy may be less useful in an area like Luoland than in parts of North America, where economies are often more compartmentalized in time or space. Urban and rural sectors overlap



in that they involve many of the same people and in that cash often flows directly, if not always reliably, from homes in one to homes in the other. Agriculture overlaps with transport, mining, and industry in that any individual may participate in all of them during a given period, and in that all these kinds of activities can help sustain each other within the family or homestead.12 Public and private, formal and informal likewise are distinguishable only arbitrarily, and with much overlap.13 More broadly, economy in an East African setting is ultimately inextricable from kinship, religion, and other dimensions of social and cultural life, just as it cannot meaningfully be separated from politics. Crude categories like sectors and disciplines, devised to simplify thought and to tidy up a messy world, will always find uses as heuristic devices. But they are foreign inventions, and what happens between or across them, as with Luo farmers’ fields, may turn out as important as what happens within. A final theme, here as in the two sister studies, is the culture-bound nature of ideas about time, space, and money. Intimacy and strangerhood, interest and usury, primordial attachments and willful contracts, aid and obligation, and value itself are all concepts whose translation from one language and culture to another leaves much room for misunderstandings. An increase in long-distance travel and communication, such as the past century has seen, does not automatically overcome these, but often just accentuates them. The starkness of surface differences between people makes more urgent the task of reaching for a deeper understanding where our commonality may reappear.

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Brothers and Others Old Debates, New Twists

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Context for Credit A Setting at the Source of the Nile Silver and gold the gods have refused them, whether in kindness or in anger I cannot say. —TACITUS, GERMANIA


ny study purporting both to describe a particular geographical setting at a particular time and to identify some truths of broader application has got to lay out a bit of context, if only to round out the feel. I begin by describing the people and some of their neighbors in the part of western Kenya where most Luo live, and where I have lived among them as their guest for extended sojourns. A People and a Home Country Western Kenya and the Luo people, for most readers, have needed less introduction since 2008 than before. Before, that is, a period of civil strife over a Kenyan presidency and other things, a Luo’s installation as a prime minister there in a coalition government, and the election of a lettered Luo son, lawyer, community organizer, and author as president of the United States all occurred in less than a year’s span. These dramatic events put Luo into world news and consciousness as they had seldom been in the past. But even good journalism and candid travel memoirs can represent history and culture only so far. Here, then, let me give a bit more background.1 Luo can be variously conceived of as a stock or race, a culture or way of life, a language, or—since these do not always coincide or form clearly distinct human sets—as a concoction of the classificatory mind. Most who call themselves Luo, like other Kenyans and tropical African people, speak more than one language, Swahili and English being now the most wide-



spread around the lake and across Kenya. But most also have one language they deem their mother tongue. People in Kenya who speak the language now called Luo (or in that language, DhoLuo) claim close kinship to other groups found to the northwest, in northern Uganda and southern Sudan, and an ethnic identity with Luo found in a territory adjacent to their own on the Tanzanian side of the southern border. Linguists in recent decades have classed the Luo (or JoLuo) of Kenya and Tanzania, along with the less numerous Acholi, Lang’i, and Labwor in Uganda, as western Nilotes. They get this name from their putative origins half a millennium ago or before, somewhere around the Bahr el Ghazal region of southern Sudan, a region where Dinka, Nuer, and others and others now live. Their migrations to the eastern area of the Lake (Nam Lolwe in their own tongue, Lake Victoria to anglophones and anglophiles), known mainly by oral tradition and only lately becoming verifiable genetically, occurred in waves or more likely in trickles—it is hard to tell—but not all at one time or by one route. What is certain is that in a nation and region of remarkable differences in population densities over lands deemed rural, Luo are among the more densely settled, though not quite the most. In and around the eastern lake basin, Luo live adjacent to, and in some places interspersed with, speakers of other tongues classed as belonging to both Nilotic and Bantu language families. Kenya as a whole had some twenty-nine million people in the government’s 1999 census and an estimated thirty-five million in 2008. Of the roughly 4.4 million people counted in Nyanza Province (and of the 5.1 million estimated for 2008), an overwhelming majority would identify themselves as Luo, but just how overwhelming is harder to say, and three-quarters is probably a generous estimate.2 The Luo people’s immediate neighbors to the north include the Bantu neighbors Luhya or Luyia, most of whom live in Western Province. The ethnonym Luhya itself is a tag of twentieth-century origin, covering subgroups of eclectic origins. Luhya, taken together, at somewhere over three million themselves, vie with Luo for second largest group in Kenya (after Gikuyu or Kikuyu, who probably number just over four million as the largest). Other groups neighboring the Luo include Gusii (sometimes also called Kisii—around a million at the last count) to the southeast, Kuria to the south, and Suba. Gusii, Kuria, and most Luhya are classed as speaking Bantu languages; indeed their tongues are closely related. The Suba people,



who live interspersed in parts of southern Nyanza, descend from people who spoke a language close to that of the Gusii, Kuria, and some Luhya, but have become so assimilated to Luo that nearly all speak the Luo language as their mother tongue. Of all these groups, the southern Luhya and the Gusii highlanders show—along with the more uphill of the Luo—the highest rural population densities on maps, with densities in some locations rising above five hundred per square kilometer. These numbers are so dense that one could almost call these areas rural cities. The groups abutting Luo also include, at varying densities, their “Nilotic” linguistic kin, the Nandi and Kipsigis (grouped together in recent decades, among several other groups, as Kalenjin), to the north and east, and the Maasai to the southeast.3 Luo people have never all remained confined to the province where most of them live now (Nyanza, formerly called Kavirondo), despite the efforts of British colonial administrators in the first half of the twentieth century to do just that to them and other Kenyans in their respective home areas. Luo enclaves can be found in cities and towns across Kenya, in former resettlement project areas in the Rift Valley and elsewhere (areas lately contested with violence), and abroad. And Luo country itself spreads over the southern border of Kenya into Tanzania, by the great lake, with a population a small but unknown fraction of the size of that in Kenya. The fact that Luo is not just a language but an ethnic identity with many other dimensions makes it often a hard or arbitrary decision who is Luo and who is not. Intermarriage and interbreeding have blurred physical distinctions somewhat between Luo and their Bantu-speaking neighbors. Most of the cultural qualities, too, that one might use to define Luoness are also shared with one or another group outside, including most features of settlement pattern, house construction, kinship organization, etiquette of interaction and conversation, and way of life more generally. One of the more distinctive cultural features that others have liked to point to, however, is the importance of fish in the Luo diet, until recently at least. Even more distinctive is that Luo have long refused to practice genital cutting—that is, circumcision for males, or clitoridectomy or more among females. This, in one form or the other, is for most other neighboring groups in the region an important feature of initiations. In its place, Luo have, in the past, ceremonially removed six bottom front teeth (incisors and canines) as a marker of Luo belonging and maturity, and also, we may be sure, as an occasion for imparting or reinforcing certain cultural and moral instruction. In recent

Nyanza Province, western Kenya, showing eastern Lake Victoria/Nyanza and predominant languages (in italics). Study sites: (1) Kanyamkago, main site; (2) Kagan; (3) Uyoma; (4) Isukha. Sources: adapted from Consultative Group for International Agricultural Research (CGIAR)/International Potato Center (IPC),, and World Bank (2006).



decades, in response to accruing but still debated biomedical evidence about reducing health risks, some Luo have started circumcising males—blurring yet another blurring social boundary. Many Luo women in the past have marked their abdomens with scar decorations (cicatrization), but they are not the only East Africans to have done so, and the practice of covering by more clothing since the early twentieth century has rendered cicatrization increasingly rare. Luo people gain their main livelihood from cultivation and herding, at least in most places they live and in most of their lives. The short-handled, handheld, wooden, and flat-iron-bladed digging and weeding tool (L. kwer, Swa. jembe), usually translated as hoe, has been increasingly supplemented by the ox plow (sometimes drawn by donkey or mule) since the early twentieth century, and around sugar estates, by the tractor too. Men do more clearing than women, and both commonly plant and harvest together or in coordination (depending on the crop), but women do most of the timeconsuming weeding and thus put in more hours in farming than men do— even in the crops that men end up selling. Married women keep their own houses, fields, and granaries. They store crops both in the granaries and in their kitchens. As many of the crops Luo and their neighbors grow derive from outside Africa as within. Sorghum and millet yielded to white maize (that is, white corn) as the biggest food crop in the late twentieth century—for better or worse—but all of these grains can be mixed in the staple called kuon in Luo or ugali in Swahili (and known elsewhere in Africa by other names, such as sadza), a firm mass of boiled flour resembling polenta or thickened grits in consistency. Cassava (or manioc—the tapioca plant) is grown not only for its bulky, starchy tubers, which are cut and ground into an ingredient for kuon, or ugali, but also for its more vitamin-filled leaves. Promoted under colonial authority as a famine standby crop, sometimes by force, cassava still serves something of this function by local volition in our times, especially in the lower-altitude areas, where not as many crops grow as well as they do uphill. Its relatively light and flexible labor demands give it appeal where migration and disease can make labor supplies uncertain. Beans, other local pulses, potatoes (plain and sweet types), kale and numerous other leafy greens, meats (usually eaten only on special occasions), and fish round out the meal in dipping sauces. Grain porridges, citrus and other fruits, and seeds like sesame furnish breakfasts, desserts, and snacks at times. In Luo country and



most of western Kenya, the diet is usually not elaborately spiced, but carefully textured, and the predictability of ugali as the filling caloric mainstay is something many Kenyans and other East Africans find comforting. Moving from lower to higher altitudes, crops grown mainly for cash include cotton, cultivated on dark, heavy, clayey portions of land around the lake shore, and groundnuts (that is, peanuts). Sugarcane and tobacco are grown higher up, and coffee is grown higher still. As one leaves the Luooccupied lower parts of the lake basin for the highlands, coffee remains in evidence, and tea, the highest-altitude crop of these, also becomes more common. Western Kenya has grown all these crops since the mid-twentieth century or earlier (although tobacco was grown for only a few decades as a commercial crop). To this list of cultigens, French beans, pineapples, and other exogenous fruits and vegetables have caught hold since the 1980s and become important export crops in higher-potential farming areas of Kenya, largely under strict contract-farming regimes partly under the control of foreign or minority-owned (including South Asian Kenyan) firms. Cattle, sheep, goats, and chickens are all common throughout the rural Luo country and surroundings, and all of these figure prominently in Luo and western Kenyan ceremonial life. Indeed, in rural areas, it has mainly been in ceremonies, up until recently, that these animals have been slaughtered for eating; the daily diet is based much more heavily on plant foods. Donkeys and two- and four-wheeled vehicles are common for transport. In economic terms, the Luo country is only moderately favored with rain, soil fertility, and agricultural productivity—all of which rise in the higher-altitude parts of the lake basin, where population tends, unsurprisingly, to be densest. In political-economic terms many Luo would say their country has long been discriminated against by Nairobi and whoever was in control of it since Nairobi’s founding as a railway stop at the turn of the twentieth century. In any case, some Luo people and other Kenyans have looked with frustration or envy at the high-value cash cropping, the marketing and communication infrastructure, and the other built-up favors that are more conspicuous in the densely settled highlands in and around Kisii (in western Kenya), where Gusii speakers predominate, and in parts of central Kenya where Gikuyu, Meru, and Embu speakers have their three adjacent homelands. These areas, and adjacent areas of Luo country, have some of the world’s densest rural populations. In practice, this density means that many residing there can no longer make their main living from their lands. Nor is agriculture how most Luo would prefer to be spending their time or



earning their way. As younger men, in particular, speak of things, farming and herding are but the fallbacks. Many of these men, though, will take more shine to, and pride in, cattle and other animals later in life, and these are among the main things elders are deemed to control. Fishing, an important part of Luo collective self-image and reputation, is practiced in fact by only a small minority who tend to do it as specialists. Indeed, in recent years, overfishing and ecological imbalances in the big lake have left many small boats high and dry on the lake shore and driven a number of fishers to other lakes or the seacoast, sometimes with their families. No discussion of Luo or Kenyan livelihood should miss noting that these people have entered countless walks of life in city and town; in mine, plantation, and factory; in church, company, and university; and in household service in suburbs. The enormous variety of Luo occupations, and the way many people have of shifting, straddling, and migrating between them, is obvious enough to anyone who spends even a brief sojourn in Kenya, as it is just about anywhere else in Africa. And yet bureaucratic analysis encourages basic errors when it categorizes people as producers or consumers, or as farmers, traders, or other specialists, as though they did nothing else. In Kenya, about as much as anywhere south of the Sahara, European and South African minority immigrants and politically connected Africans have formed urban and rural elites. These elites have variously controlled much of the industry, larger-scale farming and ranching, and trade and finance. Vested interests of both exogenous and indigenous elites have kept land and other resources as poorly distributed as they have been—scarcely better than in South Africa or Zimbabwe. In Kenya many of the elites’ largest landholdings are found in the Rift Valley and adjacent highlands. At the edges, the visual contrast between these former eviction zones and abutting former “native reserves” that have far denser settlements and more intensive land use can be striking. In the towns and cities, meanwhile, Hindu and Muslim traders and other businesspeople from South Asia (especially Goa and Gujerat in India) and elsewhere have tended, with their families, to form endogamous enclaves and networks that are depended upon but also sometimes resented by many others around. Many of them are keenly aware, from bitter experiences including wholesale eviction from Uganda under the Amin regime, that their presence, social aloofness, cultural distinctiveness, and undeniable commercial achievements might not always be tolerated in equatorial Africa. Nor is



racism hard to find, directed in one direction or another, in Kenya. Rather than just assimilating, many Asian Africans keep channels of communication open overseas, in part as insurance against the worst. The eastern side of the great lake has never had, and arguably has never needed, traditional kingdoms like those of the northern side, or even chiefdoms like those found in the southern side or parts of the western. Partly for this reason, early colonial occupants liked to call the eastern side savage or primitive. But all this can be flipped over if one considers the highly developed sense of life sequencing and seniority that has long pervaded life in the eastern side of the lake—a sense just beginning to be understood by outsiders and which might, when considered from a local perspective, make many of these outsiders look crude, savage, or primitive in their own ways. Anthropologists who like to classify kinship systems have found that in terms of traditional local ideals, the Luo and most of their western Kenyan neighbors are patrilineal and virilocal (this latter term referring to the practice in which during or after marriage a bride moves to her groom’s home, near which they will eventually set up their own homestead), the one seeming to befit the other. Polygyny remains common, but it is difficult for men with little land or other livelihood. It is easy to conclude that patriarchy reigns. This conclusion is simplistic, but not wrong where external relations are concerned. Luo, other Kenyans, and middle African people in general have tended to use men—and men have tended to presume the authority—to represent their bigger groups officially to the public and to foreigners. They do this even when it is women’s crops, exchange, or other economic activities in question. But things are different in public marketplaces, where women often prevail in numbers. Neither patriliny, polygyny, nor virilocality means that kin ties through women are unimportant, or that women have little influence in family and kindred matters. Far from it, either way. Patriarchy does not pervade all, among Luo or any of their neighbors around the lake basin. But these patterns together do mean that many women, especially after marriage, must look outside patrilineages and larger patriclans for some sorts of support. This brings us to religion—something not always deemed separate, in middle Africa, from the rest of life. Major African religions, as faiths, practices, or groupings, have never had labels as convenient as Christianity or Islam, but all three types are present in western Kenya. Western Kenyans who seek explanations or assistance in practical matters ranging from health to weather will turn to ancestors as overseers or potentially vengeful beings



needing placation by prayer or occasional sacrifice or offering, directly or through elderly intermediaries. Attention to ancestors and lineage (and to animal and other local spirits not attached to any of these) is often challenged by foreigners and locals alike. But what some of these too loosely call ancestor worship is never expunged, so tightly interwoven are ancestors and their spirits with much of what Luo have considered their customs—for instance, marriage payments and burial practices. The preponderance of Luo and other western Kenyans nowadays identify themselves as Christians of one denomination or another—Roman Catholic or Protestant—the influence of church missions having been constant and pervasive, for better and for worse, since the first were set up in the earliest years of the twentieth century. European, American, and other clerics partitioned Luo country to keep help peace among themselves. Among the Protestant churches number many—literally hundreds—founded by Kenyans themselves, from foreign mission roots or from eclectic mixtures of local and imported influences, some as prophetic, messianic, or other revitalization movements. In the lake basin and Kenya, as in much of tropical Africa, churches provide social groups and networks for married women living otherwise rather isolated among their conjugal kin. A still small but growing portion of the erstwhile Luo population now deems itself Muslim and thus abjures ethnic (or tribal) or lineage divisions, as do some Christians too. Some elderly men and women, and infirm persons, are able to earn money through divination, healing, and providing protection from witchcraft. These practices can be quite lucrative. Repugnant to indigenous, Christian, and Islamic traditions alike is antisocial witchcraft or sorcery, but just about anyone around the region will say it goes on and causes much trouble to the persons and families it afflicts. (And everyone knows the misfortunes have material causes too. The questions divide into different hows and whys, and few in the region deem science to contradict witchcraft or magic, just as few deem it to disprove divinity.) Gaining protection from witchcraft is one of the big concerns of those who hire shamans; seeking revenge for it is another. Witchcraft and witchcraft accusations in East Africa are not just archaic concerns, vestiges of pre-European times. On the contrary—the tendency of some to express envy, jealousy, and more general anxieties by witchcraft accusations and persecutions is among the main public concerns where personal and family fortunes and health are made unpredictable by the capri-



ciousness of economic development projects, and where the biology of medical treatments remains inaccessible to many. People who get too rich too fast, or who take others’ blood, are often accused of enacting witchcraft or sorcery at night, or otherwise in secret, for their own gain at others’ expense. In an era of on-and-off aid flows, and of troubles like the current HIV/AIDS epidemic, opportunities for witchcraft accusation and occasions for attempted retribution are legion. Among the causes and effects of dissent, poverty ranks high, and where poverty and ill health combine in vicious circles, the outcomes can include movement, violence, or both. Where mobility is impeded—as by border blockages, districting, and the use of ethnic-specific identity cards—violence becomes more likely. Luo have many war heroes (Ramogi, for instance, eponymous for the JoRamogi or Luo) whose exploits and conquests are repeated in the stories grandmothers tell. In recent decades, less gloriously, Luo have participated, variously as victims and sometimes also as perpetrators, in ethnically framed battles within Kenya, just as many earlier participated as soldiers, porters, guards, or other actors in two “world” wars on behalf of the British and their allies in the twentieth century. But participation in these unfortunate events is not always voluntary, and Luo, Kenyan, and African people do not all wish to be known for such things; they would rather be remembered for the much longer intervals of peace and relative harmony in which most have lived their lives. Most who call themselves Luo would prefer to be known and remembered for—and many are deservedly known abroad for—loyalty to family and friends; a rich tradition of instructive and entertaining stories, songs, and dances; a subtle, sophisticated, and congenial etiquette; an eager embrace and mastery of modern science and technology when they can get access to it; and devout and faithful religion melding old and new in endlessly creative ways. They are deservedly known for proficiency in multiple languages, including English. (This is true still of more men than women, who, outliving men on average, are more likely to be known and turned to instead for “deep” Luo language.) Luo are also noted for high educational achievement at home and abroad. Having seen something of the way of life that Luo people and some of their neighbors largely share, we now return to the topic of borrowing and lending to begin to see what part the loan has played in the story of their country and region.



Credit for Farmers in Kenya: Continuities from Colonial to Postcolonial Times Contemporary financial aid programs in western Kenya are deeply rooted in colonial and early postcolonial history, and the following few paragraphs offer a brief peek into those antecedents. Several features of the early institutional attempts at farm credit carry through independence in 1963 and right into recent times. Here are some to watch for. First is an imbalance between credit and savings, an imbalance that worsened after independence as bigger loan projects came onto the scene. Second is a supply-led pattern of subsidized rural lending by which lenders entrust resources in unproven institutions, a pattern motivated partly by political concerns. Third is a centralization of authority in the capital city combined, paradoxically, with a decentralization within that city. Other equally important patterns set in the early years, concerning the borrowers themselves, included, fourth, a combination of lending biases favoring wealthier and better- connected smallholders and, fifth, a heavier emphasis on individual borrowers than groups. Sixth, we see a dirigisme, a pattern of centrally planned, rather authoritarian direction, concerning the uses to which rural people may put the loans they receive. A final pattern to note is one of only partial and irregular repayment, with shortfalls most often forgiven or neglected in time. Whether grafted from Europe or spontaneously evolved, the customs and traditions inhering in development administration circles are about as real and rigid as any inhering in East African farm hamlets, and here they are seen catching hold. During the first decades of colonial rule in western Kenya and around the lake basin, from about 1900 until the Great Depression of the 1930s, British policy toward agricultural finance was basically twofold.4 On one side, the colonial government and its appointed agents offered loans and price subsidies to help the settlers and estate farmers coming in to colonize the countryside. On the other, while denying anything like these sweet deals to the farming and herding people who were at first called Natives and later Africans, government officials tried to protect these people from what they considered dangerous money lending. This really meant loans becoming available to some from immigrant Indian and other southern Asian–originated traders, the minority who in many eyes composed a kind of commercial middle class and middle race. These, with their superior numeracy if not also literacy, their family ties to the emerging towns, and their new supplies of manufactured trade goods from Europe as well as around the Indian



Ocean, were well positioned to take advantage of people around the lake who were not long experienced in handling money in banknotes, coins, or letters of credit. (Several switches of authorized currencies throughout the colonial period gave them a further edge.)5 British colonial servants had learned what they perceived as the hazards of usury and indebtedness in their own and their compatriots’ Indian experience. After the British annexed Tanganyika following the defeat of Germany in what became known as the Great War, they were able to apply their paternalist protection policies there too. Colonial administrators in Kenya tended to assume that “Native” or “African” farmers in Kenya were too poor to save, although a few especially observant ones did notice their saving in cattle and other animals, in granaries, in durable goods, or (for cash) in mattresses, boxes, or buried containers.6 To these examples one might add the entrustment of savings to others to keep it out of their own hands; the requests some paid workers make of their employers to withhold their pay and let it mount, safe temporarily from their spouses and other claimants; and the attempts many make to keep much of their money in large bank notes for indivisibility. Saving is no foreign idea in rural Kenya. In inflationary times, though, savings do erode. The first colonial institution to encourage cash savings, the Post Office Savings Bank, was set up in 1910–11. Fewer than a thousand people classed as “Native” or later “African” (racial categories as well as genealogical descriptors) used it colony-wide, with an average of less than ten pounds apiece deposited by the end of 1927: the population was “practically untouched.”7 The cautious response continued most of the century. Many of those who saved in the P.O. were townspeople like clerks and house servants. Country dwellers had better options, since savings there grew at 2 percent yearly, and most farm animals at most times could reproduce much faster than that. Another reason for unenthusiastic response was that post office savings did not give access to loans. Savings banking might have allowed loans, but a series of paternalist colonial government laws from 1903 on strictly regulated lending to “African” people, keeping the amounts low (usually to below two hundred shillings) and the numbers of borrowers minuscule until the strictest rules were repealed in 1948 and again in 1960, on the eve of independence.8 What this meant was that colonial-period institutional loans to “Africans” remained mainly a prerogative of the government. But here too, lending started slow. The Kenya Farmers Association



(KFA), lending from the 1930s, was set up by and for “Europeans” (who might be South Africans or other paler-skinned settler farmers), and exceptions in its early years were rare, individual, and not just for farming.9 Things began changing, slowly, in 1937, eight years into the Great Depression. Provincial commissioners (PCs) convened and decided that “the local native councils should consider voting small sums of money to be available for loans to suitable Africans for the development of mixed farming.”10 The PC of Nyanza, C. Tomkinson, allowed district agricultural officers to submit specific proposals for up to five families per district (far less than 1 percent) having “Better Native Holdings” to apply for loans from Local Native Councils for farming according to “our approved system.”11 Five per district were not many, and the lending was still strictly controlled. But there were signs of a new spirit afoot, embodied as a feeling of experimentation in Nairobi: a 1937 memo from the director of agriculture of Nairobi to the provincial commissioner of Nyanza called “Loans to Natives” “purely an experiment,” but he surmised mixed farming on small holdings to be “in certain large areas the only possible salvation of the native peoples.”12 During the 1930s, British colonial officials drew up some grand plans for developing, and then perhaps exploiting, rural Kenya. But the nearly worldwide depression, followed by the second “world” war, prevented them from implementing most of these plans until after that war’s end, when new money became available to add to the funds already being collected for decades in taxes. (These payments Luo and others around the lake had financed in part by growing cotton, a very labor-intensive cash crop—many on pain of beatings.) When the British did bring these plans out of the mothballs in the late 1940s, they pushed their rural modernization agenda hard, with vigorous campaigns for terracing and other soil-conservation measures. These measures were applied especially in the central highlands north of Nairobi (a city growing out of a railway depot), in a region where Gikuyu, Embu, and Meru people—three groups linguistically and culturally close and occupying adjacent territories—predominated. Well intentioned or not, these plans backfired terribly. The forced labor, among other factors (including a ban on a female initiation ceremony involving genital cutting—a deeply rooted central Kenyan tradition, but not a Luo tradition in the west), led to a powerful underground resistance movement in the central highlands. Known to officialdom as the “emergency,” and eventually known to everyone as Mau Mau, a period of insurrection and armed civil strife lasted from about 1947 to 1953, a harbinger of a far broader-



based independence movement. Mau Mau looks to many in hindsight more united, with that single name, than it was in actuality.13 It played out largely as Gikuyu violence against Gikuyu, as it happened, and British violence against them too, to an extent only recently realized abroad. Altogether the movement and the emergency surrounding it claimed many thousands of lives—but ended in a few dozen deaths of “white” settlers too, much better publicized. For central Kenyans, and for immigrant settlers who had been so fortunate and indulged in other ways, it was a terrifying time. The Mau Mau emergency was part of what prompted the colonial government to adopt the infamous Swynnerton Plan—named after the assistant director of agriculture Roger Swynnerton, who oversaw its creation from Nairobi. This was an ambitious plan to boost agricultural growth in Kenya through credit and other associated strategies. It had two main provisions, each a reversal of former policy. One was to allow and encourage “Africans” to grow high-value cash crops, formerly forbidden in most districts. These crops included coffee, tea, and pyrethrum, crops some uplanders had begun growing anyway. The other provision was to institute the first nationwide titling program in tropical Africa. The individual titling of agricultural land as private property would enabling farming people, now owners, to hand over land titles to financiers as security for loans. This would turn out to be a slow process. It continues to this day, nearly half a century after independence. The early Mau Mau years were also the years when the central administration shifted from its old paternalist policy of protecting farmers from seductive credit to one of pushing farm loans concertedly into rural Kenya. That was no accident. Politically, the idea was to co-opt a class of better-off farmers to help quell resistance to colonial rule. By the early to mid-1950s, when Mau Mau got suppressed and the Swynnerton Plan was being unrolled, the Kenya government had begun dispensing small loans to “African” farmers, extending some of the earlier schemes that had been reserved for “settler” farmers only. In 1948 the secretariat in Nairobi approved ten loans apiece for the troubled central highlands and North Nyanza, regions where tea and coffee both thrived, and then approved loans for the rest of Nyanza and adjacent Kericho. Loans of £50 (Shs. 1,000), at a subsidized rate of 4.5 percent interest (the Land Bank rate for “white” farmers), were allowed for individual farmers who followed approved grass-fallowing practice for conservation.14 The interest charge was imposed, as one district commissioner rather



presumptuously wrote, “in order to get the African out of the ‘everything for nothing’ way of thinking.”15 Administrators felt their way along case by case, choosing between several possible lending channels. For most of these early loans they chose the Local Native Councils, which were renamed African District Councils in 1950 (these had taxed maize since the war years). For others they leaned on the African Land Utilization and Settlement authority (later the African Land Development Board, ALDEV, with a succession of similar-sounding names), and the Land Bank (which had lent to Europeans since its founding in 1931).16 From about 1951, new cooperatives for “Africans,” legally open to them since 1945 (having been denied since European farmers had introduced these in 1908), were also approved as loan conduits. At first they served for group dairying equipment purchases only, then later for loans to individuals, along with the other channels beginning to open.17 Each loan seemed to involve much correspondence and red tape for all concerned, even though most borrowers were well-connected members of rural elites, already personally acquainted with district authorities. Not a great deal was recorded about how borrowers used their loans, but right from the outset, repayments lagged everywhere behind agreed schedules.18 By 1958, when district commissioners and agricultural officers formed the Joint Loan Board to coordinate lending and to try to ensure approved loan use and repayment, Nairobi officials were sending out threats to discontinue lending. More correspondence. But no discontinuance. Instead, more loans. As independence grew near, a few government programs formerly restricted to “Europeans” were gradually opened to “Africans.” Some required land title collateral—a story already told. Among those that did not was the Guaranteed Minimum Returns (GMR) scheme, a program of loans and crop insurance begun in 1942 during the second “world” war for wheat and later maize growing.19 It was run through the Land and Agricultural Bank, absorbed after independence into the Agricultural Finance Corporation (which also did land-secured lending under separate schemes). The minimum landholding requirement of one hundred arable acres (about 40.5 hectares) had been a de facto race filter, since few “Africans” in Kenya had been left with that much usable land. From 1964, the newly independent government lowered the minimum to fifteen arable acres (6.5 hectares). That was fine for the Rift Valley, where farms were bigger, but not for the densely settled Nyanza uplands.20 And it shut out women almost completely.21 Repayments lagged, and many of the borrowers claimed the crop insurance, honestly or not. In 1979, sixteen years



after independence, as the century’s worst drought was setting in and threatening famine, the government shut down the program.22 But by this time bolder experiments were under way. One was a project conceived at a conference in Kericho in 1966, and begun in 1970, called the Special Rural Development Programme (SRDP). This program’s loan scheme, administered by a specially created regional and physical planning unit within the Kenya Ministry of Planning and National Development in coordination with agriculture and other ministries, was designed genuinely for small-scale farmers—0.8 hectares minimum, reduced in steps to 0.2 within two years. Finally, densely settled highlanders of local origins could officially qualify for farm loans. But although the farmers were small, the funding connected them far afield: the program was paid for by the United States (through USAID), Sweden (through the Swedish International Development Cooperation Agency, SIDA), and the United Nations. The SRDP exemplified the multisectoral sort of “integrated” program described earlier: sweepingly ambitious plans, but for just a few selected localities in six provinces nationwide. It was an attempt to include roads, health, education, agriculture, and livestock within a comprehensive modernization program in those places.23 In this way, the scheme was the opposite of the other kind of “integrated” program to be described later and more deeply: the kind for a more focused slice of life, the agricultural one, over much wider areas. But within its agricultural element, the SRDP partook of an evolving pattern that would also characterize that bigger successor program. The loans, meant for maize growing, were subsidized.24 Borrowers seem to have had estimated incomes twice those of nonborrowers.25 The hybrid seeds introduced were ones being locally adopted anyway. The fertilizers arrived late, and most stopped using them. Repayment rates fell from about 90 percent to 33 percent in the first three years. Not all borrowers had much to repay with, and those who did had little incentive to repay. Nor was the problem to do with not using land titles as security; this method did not induce much more repayment when tried.26 In 1979 the program was shut down, like the older GMR program for larger farmers, the same year. Many lessons had been learned, including in Nairobi.27 The main one was that centrally planned and administered credit programs for small-scale farming on the Equator are not easy to manage, for borrowers or lenders. With hindsight we may add others, by way of summary. Colonial government tightly controlled money lending to African farmers, with strict



racial and class barriers, until the 1930s. The Great Depression and then the second world war kept loan money from flowing until after the latter was over in 1945.28 Although some of the players were new, after independence, the strategies of agricultural and rural credit implemented in Kenya and other former British colonies in Africa were not. Patterns becoming familiar were subsidies, disregard of savings potential, concentration of control by and for the capital city (though not within it), de facto preference for betteroff borrowers within allowed ranges, and attempts to control what borrowers grew and how they did so. Not new either, after independence, was the nature of motives behind loan programs, which have often included patronage and political appeasement, whether under threats from inside the country (like Mau Mau) or from outside the country (as in the Cold War). Loans tended to get smaller but more numerous after independence, as lending authorities relaxed rules for eligibility. Such spreading-out can serve the purpose of securing votes and other political support for whoever is perceived to be providing the loans, inside the country or out. Whether it improves farming or farming people’s livelihood—or does anything for repayment—is another matter. It is ironic that the response of the world’s two largest aid agencies and the Kenya government was not to back away from small-farm credit after the disappointing experiences described here but to roll out a larger program for the very thing. What was really going on, and what was going right and wrong? It is almost time for a closer look. That begins in Chapter 4, in case the reader interested only in Kenyan particulars may wish to skip ahead. It is well, though, before entering the close-up, to step back briefly and ask some basic questions about borrowing and lending, and about the kinds of financial and fiduciary ideas and institutions to which Luo people and others living among them have been exposed from near and far.


Three Faces of the Loan Charity, Usury, . . . and Fantasy Thou shalt lend unto many nations, and not borrow. —DEUTERONOMY 28:12 A man always has two reasons for what he does—a good one, and the real one. —(ATTRIB.) J. PIERPONT MORGAN If every bird take back its own feathers, you’ll be naked. —THOMAS FULLER, GNOMOLOGIA


he days when an explorer, a lender, or for that matter a scholar could approach a setting in the middle of Africa as a tabula rasa, and expect to get away with it, are gone. This chapter takes brief note of some historic discussions of borrowing, lending, and indebtedness to give some idea of the repertoire of ideas from afar that Luo, other Kenyans, and others in the lake basin have had at their disposal—and contributed to— whether as people of a former British colony, now part of the Commonwealth, or just as people of the world. A glimpse at the moral-philosophical ideas from ancient imported texts and other readings to which many in equatorial Africa have been exposed through church, school, travel, movies—to say nothing of cell phoning—helps us see more clearly, further in, which problems in their area are new and which old, and which ones local and which not. Some of these have shaped the ideas of their foreign creditors and deposit-takers too. For convenience and internal flow, the chapter’s content is divided rather arbitrarily under the three consecutive headings of usury, fantasy, and charity; but each of these things can contain something of the other two. We reach far back in time, and talk about players small and large, coming finally up to our own era. By that time, and by chapter’s end, we



meet one of the major institutional players, an international lending bank— that Bank—to feature prominently in later parts of the story. We know already that within our first few years alive, we humans engage in exchanges and reciprocity of different kinds (food, toys, noogies) and make moral as well as practical judgments about them. Children, before they know of loan documents, have a sense of fairness, easily appeased by gifts and shows of affection and easily offended by theft and seizure, unrequited exchange, or unprovoked aggression.1 (Much the same is coming to light among chimps and some other creatures. They show they get reciprocity, or something like it—even with a lapse of time.)2 How much of all this is generated by innate proclivities, and how these might work, is still much open to debate. We humans also learn from each other, and not just from our contemporaries.3 Since Luo and others in the eastern lake basin, most of whom currently identify as Christian in one way or another, are more than a little familiar with ancient Judeo-Christian scripture (as well as their own oral history), it is well to begin with a discussion that reaches at least as far back into history and literature as they do. Credit as Usury: Brothers and Others, in History and Fiction Money lending. The mere phrase suggests something morally dubious, carrying a weight of judgments from the past: Shakespeare’s Shylock, hard to forget after half a millennium. Yankee robber barons of the Gilded Age. Sharp-shoed mobsters in crime films. Inner-city loan peddlers and callous repo men. The euphemisms with which English and many other tongues are filled—words like interest, collateral, and repossession—suggest by their very indirectness that in common practice of money lending and taking, something is somehow afoul. How long has it seemed so? Readers who go as far back as the Babylonian Code of Hammurabi in about the eighteenth century B.C.E.—or comparably old records wherever they might be found in Egypt, China, or India—are struck by both similarities and differences between these descriptions and prescriptions of custom, and those with which they are familiar.4 In this case one finds interest charges, debtor enslavement, and jubilees proclaimed from time to time by priest-kings, freeing all in their domains from debts or the servitude into which debtors have fallen.5 The debtor enslavement might seem harsh



in most of the world today. The interest charges might be familiar in many places, though, and the demands for loan forgiveness might remind one of bankruptcy protection in America, or of demonstrations outside the annual meetings of the World Bank. In the nearly four millennia between Hammurabi’s time and our own, most of the thought and debate reflected in writing has been given to the topic of lending to take, rather than on lending to give: the loan to profit rather than to provide. One can masquerade as the other, of course—a subject to which we shortly return—but the imbalance remains. That is partly why the aid and development agencies have been sailing with few navigation points. Another reason, also to be seen, is institutional amnesia. There is much to remember or forget. Different kinds of people have written about the loan and reciprocity, or left us pictures of them, in different periods of history.6 If our earliest writings on the topic come from priestkings like Hammurabi or their scribes and contemporary accountants, other storytellers and playwrights would come in before too long to fill in more of what we really need to know. Aeschylus’s Oresteia trilogy, for example, is one big multigenerational family saga of the tragedy of tit-for-tat vengeance— that is, a kind of credit and repayment inverted—with a warning about what happens when we do not forgive.7 It is not in fact dissimilar, in moral, to a story Luo still tell their grandchildren about a lost bead and how trying too hard to get one’s own bead back can split family and society apart. And in a way this story is not too different either from this timeless adage: “If every bird take back its own feathers, you’ll be naked.”8 The Hebrew and Christian Bibles contain numerous descriptions, rules, and injunctions to do with borrowers, lenders, and moneychangers, often with opprobrium and sometimes outright condemnation, as in “[He who] Hath given forth upon usury, and hath taken increase: shall he then live? He shall not live . . . he shall surely die; his blood shall be upon him” (Ezekiel 18:13) or with praise for those who refrain (Psalms 15:5).9 The Hebrew Bible, or Old Testament, mentions sabbaticals, seven-yearly pronouncements of loan annulment comparable to the Babylonian jubilees. The Qur’an, familiar in coastal and urban East Africa and becoming more known too in western Kenya, states, in one translation, “O ye who believe! Devour not usury, doubling and quadrupling. . . . And ward off (from yourselves) the fire prepared for disbelievers.”10 Many Muslims everywhere indeed consider unjustified increase or usury, usually translated ribā, a sin second only to murder, while in fact debating it often.



Nor is it just sacred or religious texts that make such condemnations. Historian and biographer Plutarch, born in Greece and transplanted to Rome in the first and second centuries C.E., wrote of usurers as “vulturelike” (as well as “wretched,” and “barbarous”).11 More than a few philosophers, from the time of Aristotle, have deemed loan interest an unnatural form of exchange, unknown to the animal world and despised in our own.12 In the past two millennia, two moral, ethical, and political questions about loan interest, or what is so called today, have been particularly striking for their divisiveness, at least in European and related traditions—and one can find debate about it in about any period one chooses. One is about whether charging any increase, between loan and repayment, is allowable at all—whether legally, morally, or spiritually. (Note, though, that terminology changes. Usury in English, from the Anglo-French usurie, once referred to anything that would now be called loan “interest,” but after about 1500 the meaning shifted, leaving “usury” to refer only to unfair or exploitative loans or their conditions.) It is striking how many different ways clerics of Jewish, Christian, and Muslim faiths have found to divide and subdivide among themselves—not just between denominations or faith communities, but also within—over this issue.13 A second issue, no less hotly contended over the ages, is whether it is acceptable for lenders to lend on harsher terms to their intimates than to strangers—with interest or higher interest, for instance—or whether one who lends ought to lend on the same terms to everyone, without discriminating. The issue comes well into focus in two brief, adjacent passages in the Hebrew Bible or Old Testament. Here is Deuteronomy 23:19: “Thou shalt not lend upon usury [neshek, or interest] to thy brother [l’ahika]; usury of money, usury of victuals, usury of anything that is lent upon usury.” And 23:20: “Unto a stranger [nokri] thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury, that the Lord thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it.” Debate about seeming contradictions like this Deuteronomic “double standard” is one of the things that keeps texts like the Bible alive in readers’ minds. Now, readers and listeners have translated and interpreted the Aramaic terms for “brother” and “stranger” in these twin passages in all sorts of ways. Brothers, for instance, can be literal brothers, clansmen, tribesmen, belongers, members of one’s own faith community, or persons known; and strangers likewise can be as non-kin, non-clansmen, non-belongers, tribal



aliens, infidels, criminals, persons of lower classes or statuses, persons unknown, and so on. But the broader issue of whether any discrimination at all is allowable or is illegal, sinful, or unconscionable has pitted theologians, philosophers, and moralists against each other for millennia.14 We will see it come up in Africa in our times. Churchmen in the English tradition in particular, and anglophones in general, tended to take a pretty dim view of profitable lending up until well beyond the first Protestant Reformation. Martin Luther’s initially harsh views on it softened a bit (leave it to your own conscience, he finally concluded). The Genevan John Calvin’s views, more inured to urban commerce, softened more, as if to accommodate inevitable practice. The writings of philosophers and political economists opened up to interest still further, some of them showing indeed a limited positive regard around the late eighteenth century—not coincidentally, a period of imperial expansion and industrial revolution. Then it was that Adam Smith (especially in The Wealth of Nations), Jeremy Bentham (In Defense of Usury), and others came up with warnings about anti-usury regulations as having potentially perverse effects on economy and on personal liberty of both borrowers and lenders. For instance, in Smith’s view, outlawing usury could force moneylenders to charge higher interest to compensate themselves for the extra risk (for instance, of jailing) they take on by lending.15 John Stuart Mill, David Ricardo, and others were much swayed by arguments like this. Not that theirs were the only voices being heard. Karl Marx, Friedrich Engels, and their followers in labor movements, from the mid-nineteenth century on, established their own sternly critical tradition of anticapitalist political economy, condemning loan profiteering and banking as the very heart and soul of capitalist exploitation and using imagery like the vampire to describe it. But their approach and ideas never really prevailed over the English academic (or bureaucratic) political-economic traditions in their time, or for a long time afterward. (Not, that is, until their rekindling and reworking in some wide academic circles in the 1970s.) They did make inroads with important thinkers like Henry George in America, and with the leaders of the Fabian Society in Britain—forerunners of the Labour Party—whose members, however, were gradualist reformers, not proponents of abrupt revolution, let alone of violence.16 So Marx, Engels, and their followers were far from being without influence, even in Britain and its expanding colonies. But others whom the central architects of British colonial rule respected more—for instance, philosopher and polymath Herbert Spencer, the arch-



evolutionist and proponent of trade—remained convinced that banking, finance, and trade, and most of what they involved, were signs or necessary elements of thriving civilization. Just as Adam Smith had perceived a “natural human tendency to truck, barter, and exchange,” so did Spencer (editor of the Economist magazine, among many other things) deem exchange quite natural; he found perceived exchange among some nonhuman animals. Commerce, trade, and finance built on this were natural, too, and something to be cultivated.17 They were all part of getting goods and services circulating, getting economies going. Governments existed in part to regulate trade and commerce, thought Spencerians, but they should not regulate too much. What we have seen already suggests that cultures and contexts vary considerably in how indebtedness is perceived: as sin, as crime, as innocent error, as victimization by other humans, as force of complex circumstance, or as more random misfortune attributable only to higher powers or to abstractions like chance or fate. Whether we move through time or through space, we see much such variation in these perceptions, and in ways of acting on them. When Briton John Hanning Speke first reached the lake he and Richard Burton dubbed Victoria in 1858, Britain still had debtor prisons (a favorite setting in Dickens’s fiction) but was about to abolish them the following year (they endure in a few other countries). Bankruptcy laws as lenient as today’s in North America were rare or unknown.18 When and where either will spread or wane in future is hard to know. So those are just a few old rules, debated and reinterpretable injunctions, and variations. Now some twists and turns: questions of borrowing, lending, and debt can get technical or philosophical. Questions of interest and usury, to be well considered, must almost do so perforce. Where matters of translation between languages are concerned, they can span the range from the most qualitative to quantitative concerns. Anyone who wishes to fathom African understandings about this topic must note at least two things. One is that languages differ deeply on financial and fiduciary matters. Many African languages have terms for borrowing and lending, and some have terms for loans.19 Even so, many East African people insert the English word loan for official credit when speaking their own tongues—as if to mark its foreignness. Few African languages known to me, though, even if they have terms for loans, have any term to translate precisely to either interest or usury, and this raises the question whether their speakers have any ready corresponding indigenous concept or whether



those who enter into transactions of this sort will always view them as part of someone else’s culture, an alien custom. This latter seems to be the case in many parts of Africa, including much of western Kenya (although this does not imply that the local languages and ways of thought there are any less complex in grammar or sophisticated in form, precision, or artistry). Second, those who do speak of interest and usury, using whatever tongue, in the middle of Africa do not necessarily conceive of it in terms of rates— that is, increments per unit of time. By this I mean the understanding of time as a “given” and a constant, a line or (if compounding) a parabola on a graph. This idiom, copied from British law, has been used in legal statutes in that country’s former colonies across the continent—in Kenya, Nigeria, and the Gambia, for instance, where any interest charge over 48 percent per year has been deemed “harsh and unconscionable” and therefore illegal.20 By contrast to this idiom of rates, people in many in African agrarian settings, including western Kenya, seem to prefer to think of interest more in terms of ratios, bracketing time out of the picture. Or they think of it in terms of something that can rise stepwise, from one harvest season to another. It makes little sense for creditors to try to dun farming people for loans in the seasons in between, when they likely have far less to repay with than right after harvests. This topic of fundamental economic idiom and understanding, vital for understanding credit and debt between cultures in rainfed agrarian parts of Africa, is covered in more depth elsewhere.21 Now, to get just a step more technical, even when people happen to agree on using rate calculus for communicating about interest, they still need to take into account changes in the value of currency (or other things borrowed or repaid) over time, in order for any rule about it to have much meaning.22 A rule setting a maximum rate of interest below a rate of currency inflation (value loss for the lender) begs to be ignored. Or the rule just gets selectively invoked to punish whomever the police, judge, jury, or executive behind them wishes, for whatever reason, to zap.23 Finally, even where all can agree on effective interest rates net of currency changes, they can still disagree on the economic effects of raising or lowering them (let alone the social and political ones). Here let us note three points commonly made in favor of each, just for an idea. High interest can scare away borrowers reliable enough to have other sources, and attract the riskiest (to economists, “adverse selection”). It can trap and impoverish borrowers and make them miserable. And it can discourage repayment because borrowers have less incentive to stay on good terms with lenders in order to re-borrow. Low interest, however (making loans expensive to administer, per



unit), can drive a lender or lending institution into the ground. Cheap loans get eaten by politicians or other powerful or well-connected persons, or ones offering bribes or kickbacks, before they ever reach the intended beneficiaries. Last, low interest can discourage its borrowers from saving, eliminating any pride or sense of accomplishment that comes with it, on their own. In debates like these, something that either side can claim as an advantage— depending on perspective—is that borrowers’ diverting subsidized loans to other purposes not subsidized can reduce lenders’ control over their use. Several of these varied effects, while intuitively true and often real enough in lived experience, are hard to measure and weigh against the others across the debate line because they differ in kind, like apples and oranges. And yet economists perennially debate them anyway, and so do others, including administrators, political philosophers, and moralists. One way of making the moral-political-economic arguments easier to sort out is to be able to distinguish between equality and fairness. One is something you can often measure; the second is something you feel. Neither need imply the other, especially not where loans and interest—involving inequality by definition, but maybe not unfairness?—are concerned. More things than just interest rates, indeed more than rates and ratios, can make a loan seem unfair. For example, some borrowers are inexperienced in handling big amounts of money in the volatile form of cash and face difficulty keeping it intact. Other issues include the quality of seeds and appropriateness of fertilizer; the requirement of mortgage collateral, where used, and the implied risk of eviction and homelessness; or any threat of bodily seizure, imprisonment, or torture. There might be low-interest extortion, or what might be called “concessionary usury,” and perhaps its inverse, “high-interest charity.” These things make lending or borrowing not just a science of numbers but also an art, a matter of feel. Issues like the ones just described, many of them debated for millennia, spring up often in African settings, and they are likely to spring up wherever else humans borrow, lend, and write, giving scope for misunderstanding and acrimony, if not bloodshed. Perhaps all those animal species who seem not to borrow or lend are not so dumb. Credit as Fantasy I have said that credit and debt always have an element of fantasy or make-believe about them. The topic can be approached from two ends: what uses tellers of stories make of credit and debt, and what stories or acts



of imagination credit and debt themselves contain or betray. The second is maybe the harder part, since it involves a harder inward look. Certainly there is plenty of borrowing and lending in oral tales and written literature. European traditions of fiction and drama, such as in the writings of Dante Alighieri (in the Divine Comedy), William Shakespeare (in The Merchant of Venice), Molière (L’Avare, the Miser), Emily Brontë (in Wuthering Heights), Charles Dickens (in A Christmas Carol, say, or Little Dorrit), and Fyodor Dostoevsky (in Crime and Punishment and The Brothers Karamazov), have tended by and large to disapprove of moneylenders and related kinds of financial profiteers. Much the same could be said of American fiction, from Edith Wharton (in House of Mirth) to Tom Wolfe (in Bonfire of the Vanities).24 The best-known European writers, and many of the American ones too, have tended to portray profit for the lender as entailing loss for the borrower—the seesaw principle—rather than leading us to suppose that both lender and borrower might lose, or gain, by the same completed twoway transaction.25 Without gainsaying either that loans often enrich some and impoverish others, or denying the great literary merits of any of these writers or their works (for who could fail to see the former, or to appreciate at least some of the latter?), we will have occasion to gain some perspective on this common implicit assumption in our literary canon, which has done so much to form public perceptions and stereotypes in the anglophone and European worlds and well beyond. Credit and all the social and political power it involves depend on functions of human imagination. Each of us who borrows or lends, or even observes others who do, imagines a debt that has no material substance of its own. A borrower’s and lender’s imaginings may not exactly coincide, particularly not after time passes and one may grow bigger and more vivid while the other’s shrinks or blurs. Even neutral third parties’ memories can fail or be influenced. A piece of paper may help, but if the paper refers to money, it refers to value dependent on many people’s belief and trust. To describe and control such perceptions takes imagination too. In written history on credit and debt, the shifting among religious, legal, and technical idioms is radical. While more than a few historians of finance have argued that their topic has been a story of progressive secularization, one could argue instead that one kind of “theology” supplements or replaces another. Economy and religion, to their believers or knowers, provide master principles, master narratives, and master metaphors for making sense of the world. (In economy, consider “earning a living,” “living on borrowed



time,” or “paying nature’s debt,” for instance.) They have much in common, whether their adherents like it or not. In one way and another, economy is religion. And credit—a term from the Latin credere (to believe), after all— can be, as much as anything, an item of faith. That belief in credit itself is somewhat mystical has long been noted by advocates of both capitalism and socialism. Let us take two already touched upon. Libertarian John Stuart Mill observed in 1848, “Credit has a great, but not, as many people seem to suppose, a magical power; it cannot make something out of nothing. How often is an extension of capital talked of as equivalent to a creation of capital, or as if credit actually were capital.”26 Similarly, George Bernard Shaw, who sympathized more with gradualist social reformers, wrote this in 1928, just before the stock market crash that began the Great Depression: “And so at last, all the bankers and the practical business men come to believe that credit is something eatable, drinkable, and substantial, and that bank managers can increase or diminish the harvest by becoming more credulous or more skeptical as to whether the people to whom they lend money will pay them or not (issuing or restricting credit, as they call it). The city articles in the papers . . . are full of nonsensical phrases about issuing credit, destroying credit, restricting credit, as if somebody were shovelling credit about with a spade.”27 Both these authors argued that in a loan, wealth gained by one is lost at least temporarily by another, and thus wealth is not created but only transferred. But who was listening? Who would be listening in the early 2000s? Credit is, whatever else, a realm of imagination. Our education teaches us to imagine it as an input, like sun or water, for farming—but one that humans can bring into existence.28 Vision of past, future, and conditional, and how they might connect, is part of it. Writes novelist Margaret Atwood, “Without memory, there is not debt. Put another way: without story, there is no debt.”29 And without memory, we risk reliving the story of what debt does. It is also striking how consistently, over many centuries, humans have sought to conceive of financial and fiduciary matters and communicate about them by using animal and bodily metaphors, like Aristotle’s birth of money from money (in interest), Plutarch’s vulture usurers, Marx’s vampires . . . or, contrariwise, Yaron Brook’s recent vision of credit and interest as the “lifeblood of industrial-technological society” that facilitates production and trade.30 Economists still continue to invoke images like Adam Smith’s “invisible hand.”31 Staffers of the World Bank and other international aid agencies speak of projects, and sometimes of countries, as this or



that staffer’s “baby,” and “development” as an idea draws more than a little from metaphors of human growth and maturation. Critics of the Bank and allied agencies, meanwhile, write of its “tentacles.” The projects are spoken of has having their own “lives.” We humans make big, complex, or abstract issues concrete and human-sized—to try to get a handle on them, sometimes twisting them in the same move. This prompts the question of how much anyone ever really understands financial processes that affect us all. I suspect that simplifying and resorting to somatic imagery—as we all do, lest our language become lifeless itself—may subtly change the nature of the thing: when we “bodify,” we modify. One of the final chapters will show how relevant remains the question of human understanding of, and control over, human-created fiduciary processes and institutions. The same chapter also discusses how economic pundits, prophets of our time, struggle verbally to get a grip on a financial and economic collapse—while politicians and administrators listening to them, and repeating some of the same terms and phrases, throw money desperately about in hopes and half-expressed sacrifices. Having reminded ourselves that borrowing and lending can involve more than a little imagination, fantasy, and faith, we are ready now to consider the world’s largest lender for people considered poor. Credit as Charity: International Public Finance, and a Bank for Credit . . . and Debt The history of intercultural and intercontinental finance for poverty alleviation has long roots, as already suggested. But those roots have taken some sharp turns, and there has been some grafting involved. When most of Africa’s nations broke from their former colonial rulers and occupants in the late 1950s and early 1960s, colonial financial structures and processes yielded to newer ones across the continent. And that is where a new kind of institution comes in—if not yet a wholly new kind of finance. One of the key developments in the world of rural finance over the past century has been the founding of the World Bank, a lending bank, in 1945. A second has been the turning of that Bank’s attention a couple of decades later from Europe to much of the rest of the world, including and not least the tropics. A third has been the extension of that Bank’s involvements and influence—and of its prevailing political-economic philosophy—in the late twentieth and early twenty-first centuries, through a vast capillary network



of consulting contractors, research institutes, university departments, and training centers for government officials, private aid agency staffers, and others. Among the key partner institutions of the World Bank has been the U.S. Agency for International Development, which has arisen over roughly the same period and been placed under the auspices of the U.S. Department of State. A few words on these momentous developments now, for readers unacquainted, so that the institutions will be familiar enough in the chapters to follow. By a few years after the second world war, international lenders of new kinds had been establishing themselves in the tropics. The Marshall Plan of the United States, for European countries, morphed into the International Cooperation Agency (ICA) in 1955, then this became the U.S. Agency for International Development (USAID) in 1961.32 Much broader than the Marshall Plan in coverage, these latter two as well have mainly been donor, or grant-giving, agencies rather than lenders. (One of their explicit goals, under Public Law 480, the Agricultural Trade and Development Assistance Act of 1954—also called Food for Peace—was to give vent to American surplus food to keep prices high at home.)33 And some of their donations of money, staff time, and materials have funded loan projects and programs in tropical countries. Most of their grants and loans have been made contingent, at least ostensibly, on political and legal conditions concerning democracy, free enterprise, and human rights. A watershed event, meanwhile, was a meeting at the colossal Mount Washington Hotel in Bretton Woods, New Hampshire, 1–22 July 1944, toward the end of the second world war. (This was the same year the League of Nations transformed itself into the United Nations after another meeting at Dumbarton Oaks, in Washington, D.C., from August to October.) The Bretton Woods meeting was called the United Nations Monetary and Financial Conference. In it, 730 delegates from forty-four allied nations agreed to found the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD). The latter became the biggest part of the World Bank.34 The conference was mainly to discuss the IMF, intended at first to stabilize war-shaken currencies. During those two weeks, it is reported, only about a day and a half were devoted to the discussion and agreement for setting up the IBRD.35 To get, that is, 730 people of widely differing cultures and languages to agree on all . . . The World Bank, built around that IBRD, was at first intended mainly to provide aid for rebuilding and infrastructure for war-torn industrial



countries, especially in Europe (the reconstruction part). It would eventually shift its main purpose to intervention in countries deemed poorer, in a wider range of latitudes and longitudes, including many in tropical Africa (the development part). This shift would take time, though—about twentyfive years—and a particular set of historical circumstances to bring it about. The Bank was set up as a money lender, not a donor. That it is often called a donor instead, even by its own staffers, reflects an attempt to avoid the old stigma of money lending as well as, arguably, a certain tendency toward self-aggrandizement in Bank idiom. It may also reflect on the fact that some of the Bank’s loans are issued on concessionary terms (that is, below market interest rates) or that not all the Bank’s loans actually get repaid. This last part, though, is not as true as it might seem, since governments have often siphoned other accounts, like import customs, to repay lost loans issued for purposes like farming or industry. That the Bank is a lender is of paramount importance for its story, for whatever are the shortcomings of credit—and of debt—as a strategy of human interactions are, by charter, shortcomings of the Bank. It is true of both the IBRD and the International Development Association (IDA), known as the “soft loan window” of the Bank for poorer countries (but a window staffed by most of the same people), added to the IBRD in 1960. It is also true of the International Financial Corporation (IFC), the quasiindependent unit for larger private enterprises and industry, added to the World Bank Group (that is, with the IBRD and IMF) in 1956. Being set up to lend to nation-states, the Bank as an institution has always tended to believe in nation-states, defining and sorting human populations in terms of “countries” more than tribes, classes, religions, or anything else. Staffed largely by mathematically trained economists and by engineers and other technicians, the Bank has always, in its publications, worked toward defining problems of poverty and need in such a way that they have technical solutions.36 In all these ways, there has always been something circular about it. The Bank is composed of officers chosen from scores of nations, but until lately staffed in its upper echelons predominantly by ones from its largest funders, in North America and Western Europe. Its board was long a men’s club, for all practical purposes, but steps have been taken to redress its sex balance. The Bank has had only one headquarters, in Washington, D.C. Its president has always been chosen, up to now, by the president of the United States, housed almost next door. (The choice has been determined by this country’s having been at the outset, and for long, its largest funder—a



position lately challenged.) Its officers know about many moneys, of course, but from the outset, most of the Bank’s publications referring to money have used the U.S. dollar as the main, if not only, currency of calculation.37 The Bank has always tended to hire U.S. and European firms preferentially to do most of its supplying, building, and consulting, including advising for itself and the governments to which it lends. So practically and symbolically, despite its publications’ scrupulously inclusive rhetoric, the Bank has always had something unequal about it.38 The Bank remained a cautious lender with a tight budget for about a quarter-century, during which time it was mostly preoccupied with the reconstruction of European infrastructure and industry after the second world war. Its turn into a lending behemoth with worldwide ambitions and a mission for reaching people deemed the rural poor is usually, and rightly, associated with the name of Robert McNamara, its president from 1968 to 1981, although he was far from alone in pushing for these changes. The transformation he and his colleagues effected on the Bank, and thus eventually on world history, has been well and often enough described elsewhere to need only brief specific treatment here.39 Where did it come from? Probably as much as anywhere from three sources. One was the bagload of guilt McNamara brought from his previous assignment as secretary of defense during the catastrophic war in Indochina. A second was the triumphs of the previous two decades of the civil rights movement, which had brought new sections of the world’s population into visibility and conscience. A third was the intellectual fashion of “modernization,” which had kept its hold over the academy since the early 1950s and before, and which was really still in full flower in the late 1960s there, or if beginning to wane there, then still at least in many quarters outside. Heir in some ways to “civilization,” in the anglophone world at least, modernization meant many things to many people: technology, industry, commerce, urbanity, secularism, nationalism, democracy, education, individualism, statehood . . . it was a hydraheaded notion with no clear center or defining delimiter; that is, a “polytypic” or “polythetic” idea.40 Just as important, it was a loose orthodoxy whose general drift few grayhairs or silverbacks in the academy or government seemed still to question—at least not quite yet.41 So those were three of the influences behind the Bank’s transformation. McNamara’s guiding philosophy for the Bank, touched by civil rights–era ideals and formulated in close connection with economist Hollis Chenery,



was a push for a “new direction” from economic growth by itself to a more populist “redistribution with growth” through broader satisfaction of “basic needs.”42 To most economists, that meant economic needs—needs to lend to. The easiest way to advance in the Bank, in the McNamara years and beyond, was to move money. One was expected to get loans into the pipeline for whoever was deemed the poor and not to block anyone else’s pet loan project. And to speak in numbers. The Bank of the time was an odd duck: a bleeding-heart technocracy. What the Bank itself did during the period was grow, and what it did with its power was to spread it around (a different sort of redistribution). It grew in size, wealth, connections, outright power, and subtle ideological influence—effected through an ever-expanding network of research institutes, consulting companies, training seminars, and government ministry connections—for better, for worse, or both.43 It particularly cultivated those connections, and shoveled money, toward countries of strategic military interest to the United States and its Cold War allies and supporters, such as Kenya, with its pro-market policies and its deep-water port, Mombasa, on the Indian Ocean. Capitalist-leaning Kenya seemed to form a bulwark against two neighboring states that were then leaning toward socialism: Tanzania (from shortly after independence in 1964 to the 1990s) and Ethiopia (from 1974 to 1987). Kenya also offered coffee, tea, and other cash crops. For the United States, Kenya was a most useful client nation during the Cold War period. One more “-ism” needs mention as part of the zeitgeist of the late 1960s and early 1970s, where our main story in the following chapters really begins. This is “integrationism.” In development “econospeak,” it referred not so much to the racial integrationism, although it surely borrowed some visceral appeal from this at the time. It referred instead to a style of project and program design and management then deemed ideal that was tried out around the world from the early 1970s to the early 1980s. Integration, in development, could mean either of two things, in different times and contexts. In India, since the 1950s or earlier, it had meant attempting to influence together what many economists and administrators then perceived as the “productive sectors” of economies—and of life—such as agriculture, industry, transport, and trade, and also, with them, the “social sectors” such as education, health, and welfare. (This binary distinction never bore close scrutiny.) Projects this vast in conceptual and managerial scope tended to be small and strictly delimited in geographical area (often in



single rural communities). A few, like the experimental Cornell Vicos project in highland Peru, starting in 1952, had achieved some renown as “vehicles” of local political and technological change and economic growth.44 These were omnibus, but local, projects. In Kenya, the Special Rural Development Programme was such a project. By the late 1970s, project or program “integration” had come to mean something rather different in the aid agencies and government ministries. Now it referred to initiatives much more restricted in topical scope—a single “sector” like agriculture, typically—but much broader on the map. (Hence the development of programs with names like “Integrated Agricultural Development Programme” rather than “Integrated Rural Development Programme.”) In Kenya, for instance, multiple districts nationwide would be touched—or “reached,” in common development parlance, which tended still to place the active agents in cities and power centers and the passive “beneficiaries” in the rural periphery.45 Integration meant directing the stream of production from input procurement to product marketing, and it meant integrating whatever various ministries and agencies and might be concerned for the cause—for instance, agriculture, livestock, and cooperatives. The objectives were to introduce farmers to new green revolution technology, bring them into markets, bring them the benefits of new wealth, and get “stagnant” rural economies moving.46 The largest and most powerful lending organizations set up ostensibly to help development and reconstruction, like the World Bank and the state cooperatives it helped set up around the world for a time, have always had competing purposes in one way or another. They are there to hand out money, but also to get it back. They are there to help poor and powerless people, but also to help their funders, contractors, suppliers, and other participants in broader economies and polities. They have relied heavily on the rhetoric of mutual interest and collaboration, but they sometimes exemplified the authoritarian style of management in practice. Set up to distribute wealth, but in the end perhaps concentrating and monopolizing in both wealth and power, these are interesting organizations indeed. Now back to Kenya, where we shall observe them at work.

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A Green Revolution on Loan Luo and the World Bank

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Plans and Dreams An Integrated Approach on Paper When thou doest alms, let not thy left hand know what thy right hand doeth. —MATTHEW 6:3


y about 1973, the quickly expanding World Bank had become the planet’s largest creditor for agriculture.1 This was a role its leadership accepted and touted. Bank president Robert McNamara committed the agency—and was pointing other aid agencies the way—to what he called the “new direction” for international aid. Poverty alleviation had become the central ostensible aim, and the “small farmer,” then most often represented as an individual male family head, was the point man. This was the era of hands-on involvement, the era of reaching out by those who deemed themselves on top to those they deemed on the bottom. One speech and policy pronouncement after another pointed to the poor farmer and called for credit, credit.2 Aid agency planning documents, populist in terms and tone, contained lofty, optimistic language about improving the lives and productivity of project and program “beneficiaries.” They talked about extension and teaching, seldom about listening or learning. They talked about credit, seldom about debt. Written in a flat, gray, neutral style, and filled with numbers and tables, they seemed to bespeak their own authority. These planning documents bore little trace of the politically charged debates that had gone on within the aid agency, of the local jockeying and gerrymandering for area coverage in provinces and districts, or of the often strained negotiations between aid agency staffers and host government officials. Nor did they bear much trace of the strategic geopolitical interests that



some Africans and others perceived to underlie American-dominated “foreign aid” in the Indian Ocean region during the Cold War era: interests that would become more clearly evident later, when, after the fall of the Berlin Wall, aid would slump dramatically. For now, the business of aid looked more steady, committed, and earnest—at least on paper. This brief chapter describes a paper project, an official vision from a capital city: a scheme for the rural poor, as imagined by some of those better termed the urban and cosmopolitan rich.3 By the mid-1970s, when the Integrated Agricultural Development Programme was put into effect, Kenya was the favorite country of international lenders and donors in eastern and central Africa.4 Agriculture was the favorite “sector” for public investment and assistance in rural Kenya, and “smallholders” were the preferred “target group” within agriculture. Surely, then, they must need a program. The planning began in the prospective funding agencies and the Kenya government in 1972, but it did not really get into high gear until 1975. World Bank officers assumed the lead. (The Bank’s official documents, however, made the program look like a Kenyan idea, as Bank documents often do.) Over several years of planning, the Integrated Agricultural Development Programme (IADP) and the two main projects within it, the Integrated Agricultural Development Project (also called IADP) and the Smallholder Production Services and Credit Project (SPSCP), had emerged as the main thrust of Kenya’s campaign for directed small-farm development. The SPSCP, begun in fiscal year 1975–76, was financed by the U.S. Agency for International Development (USAID) and the government of Kenya. The Integrated Agricultural Development Project started a year later, financed by the World Bank (both the International Bank for Reconstruction and Development, IBRD, and its “soft window” International Development Agency, IDA), the Arab Bank for African Economic Development in Africa (known by its French acronym, BADEA), and the Kenya government. The International Fund for Agricultural Development (IFAD) joined the consortium for the second phase of the Integrated Agricultural Development Project. At local levels, the IADP (project) and the smaller SPSCP dovetailed and were virtually indistinguishable. From the late 1970s the SPSCP was subsumed under the IADP (project) and thus put under World Bank “supervision.” Hence I refer to them in the following pages as the IADPSPSCP or “the project.”5 The nomenclature of the overall IADP program



and its component projects caused some confusion among the major players as long as it lasted, and they could speak English!6 The IADP-SPSCP as planned would be bold and massive. In its costs, its geographical coverage, and its organizational complexity, it would eclipse all the government’s previous and concurrent attempts to provide credit and extension for mixed enterprises on small farms. The first phase of the Integrated Agricultural Development Project, to run from 1976 to 1981, was expected to cost about U.S. $35.8 million (K.Sh. 288 million in 1976). The second phase, to begin in 1980, was expected in 1979 to cost about U.S. $92 million.7 Two further phases, later to be abandoned, were envisaged.8 The IADP-SPSCP was intended, at least on the surface, for “belowaverage farmers.”9 It was aimed at areas that had been excluded from previous development projects and at the “less privileged” smallholders who had not participated much in the growth of Kenya’s main export crops (coffee, tea, pyrethrum) in the decade since Kenya’s independence in 1963. In its first phase, from fiscal years 1976–77 to 1980–81, the IADP (here, without the SPSCP) would operate in fourteen districts of the Nyanza, Western, Central, and Eastern provinces.10 The SPSCP would cover parts of eight districts in three of these provinces.11 The IADP Phase I alone would reach eighty locations, which, in the 1969 census the planners used, had contained about 283,000 “households,” the term usually used in the plans to mean single- or multi-house family homesteads. Half of the “beneficiaries,” according to the IADP Phase I plan, would be farmers living east of the Rift Valley, and half would be living west of it. The equality of this projected distribution was notable, in view of the previous concentration of Kenya’s small farm credit on the Central and Eastern provinces. Now the Nyanza and Western provinces would get a comparable share. In terms of altitude, too, the emphasis would be equally divided. About half the loans would go to the “coffee zone” (from about 1,300 meters above sea level) and upward. About half would go to lower, drier zones, where cotton and groundnuts grow as the main cash crops. Here too, the plans departed from precedent. Previously, money in Kenya had always gone uphill, to the cool and rainy zones, where agriculture was least risky. Since many of the farming people classed as smallholders had not yet had their lands titled, the IADP program (here including the IADP-SPSCP project) would require no land titles as collateral for loans. Instead, credit



would be secured by crop lien (or “crop hypothecation”). Each borrower was expected to produce one or more “anchor” commodities (crops, milk, or other farm products) for sale through government monopsonies, which would deduct repayments. The program planners envisaged the numbers of borrowers rising year by year. The IADP Phase I would lend to 5,500 in 1977–78, 19,000 in 1980– 81, and 70,000 nationwide within five years.12 (The SPSCP would reach about 20,000 borrowers in roughly the same period.) Later phases would cover still more areas. The national Development Plan for 1979–83 stated that the Integrated Agricultural Development Programme, including some minor subprojects, would directly reach about 400,000 borrowers and their families within two decades. “Indirect beneficiaries” to pick up new technology by rub-off would be more numerous still. Altogether, the 1979–83 plan stated, the program would directly or indirectly reach about 80 percent of the country’s smallholders (Pt. 1, p. 248).13 It would not take much to qualify for a loan. A farmer had to have access to at least two hectares (4.9 acres) of arable land but not more than 8.5 hectares (about twenty-one acres)—at least at the project’s outset. Farmers in the cotton zone would have to commit at least 0.2 hectares to this crop, as their “anchor” to ensure they repaid.14 No one with a net annual income over K.Sh. 15,000 could borrow.15 These were the only rules. IADP plans noted the important role of women in Kenyan farming and directed that they be “adequately represented” as recipients of training and extension.16 Loans would be small, by Kenyan institutional standards. In most areas, up until 1981, recommended amounts fell between K.Sh. 700 and 1,500.17 As usual in such programs, interest rates had been a sticking point in the planning process. World Bank planners had wanted higher interest rates, but government officials, whether more concerned about the patronage value of lending or about the problem of eventual debt, had wanted heavy interest subsidy. All finally agreed that farmers would pay 1 percent per month (12 percent per year). At current rates of inflation, ranging between about 10 and 16 percent in the project years, this meant slight or even negative real interest charge.18 These numbers represent more charity than usury. Unlike previous loan projects aimed at single crops or farm activities, the IADP would embody a new approach based on the notion of “whole farm” planning. This outgrowth of the holistic “farming systems” school of agronomic thought emphasized complex interactions of various farm activities. A farmer would receive a set or “package” of inputs and instructions for



several crops or farm activities simultaneously, usually for a mix of food and industrial crops. Extension agents would visit and instruct the average borrower three times per growing season.19 (Learning from the farmer him- or herself was not considered so important.) The IADP-SPSCP and associated projects within the broader IADP program would strengthen the agricultural and livestock services and the institutions for supplying farm inputs and marketing crops, meat, and milk. The plans said so. Farmers were expected to borrow again and again: their yields and “incomes” would grow progressively over about four growing seasons as they got used to the crop packages. It was planned that borrowers’ maize yields per hectare would rise by more than 150 percent, and their cotton yields by about 200 percent. Their total “incomes” would rise, on average, by about 40 percent in lower zones and by over 50 percent in higher zones.20 The poorest borrowers would enjoy higher percentage rises still. Farmers hitherto ineligible for institutional loans would now be fully incorporated into the government’s development efforts. The IADP-SPSCP would serve them as a stepping stone to bigger loans from the Agricultural Finance Corporation or other organizations serving wealthier and larger-scale farmers. But these loans, unlike the IADP-SPSCP loans, would probably involve them in the risky business of land mortgaging. As first planned, the IADP-SPSCP would not radically alter amounts of land cultivated or require more family work. Borrowers would hire labor seasonally. The project planners thought this was a good thing. As the 1979–83 Development Plan put it, this credit-induced hiring “will make a significant contribution to increased employment as well as output” (Pt. 1, p. 245).21 In terms of the national economy, the increases in production that the IADP-SPSCP would bring about were expected to contribute significantly to Kenya’s self-sufficiency in food and to help earn much-needed foreign exchange.22 In terms of administrative control, the program was expected to help the government decentralize planning from Nairobi to the districts, although the plans never clearly spelled out how. Kenya’s Ministry of Agriculture and the Ministry of Co-operative Development would share the main responsibility. Broadly speaking, the Ministry of Agriculture, considered in Nairobi to be the senior of the two ministries, would plan and oversee the project as a whole. It would set appropriate crop packages for each district and altitude zone, take charge of the research, training, and extension, organize tractor-hire schemes where planned, and monitor and evaluate project performance. The Ministry of Co-operative



Development was to carry out the lending, the primary crop buying, the crop storage, and the loan collection. Both ministries were supposed to collaborate in choosing the borrowers. (This coordination, it would turn out, was one of aspects of the project the least well thought through.) A word about cooperatives. Different eras favor different structures of organization. A vehicle in fashion in the period of “integrated agricultural development” in the 1970s and early 1980s was the producers’ cooperative (or co-operative, coöperative, or just co-op) for input supply and marketing. The idea is an old one.23 In theory, a cooperative is a self-governing, jointly owned body that serves the interests of its members. Often an underlying rationale is to cut out the profiteering commercial middleman by giving scattered producers a way to buy and sell in bulk. In Kenya, producers fell under the Ministry of Co-operative Development, and they were divided into cooperative “unions,” covering large parts of districts, and “societies,” covering smaller areas nested within these. Enough has been written about cooperatives, not least in Kenya, to make unnecessary an extended description or analysis here, but they have often appealed, at least to many politicaleconomic theorists, as a kind of compromise between capitalist and socialist principles.24 In East Africa, cooperatives were set up by or with the approval of colonial authorities and funded, before and after independence, by the World Bank and by northern European bilateral aid agencies whose home governments approved such a mixed economy. While some African government officials like to speak of them as belonging to their members, in the countryside they seem always to have been perceived by rural people as belonging more to the government.25 And that has been part of their problem.26 In the IADP-SPSCP, loans would pass from Nairobi to the farmers in cash and kind through a series of “on-lending” organizations, including the state cooperative hierarchy.27 After delivering farmers their inputs, cash, or purchase vouchers, the cooperatives would buy their marketable crops and resell them to several “parastatal”—that is, government-owned and -controlled—marketing boards. (Coffee farmers could repay in coffee through coffee cooperatives, although coffee was not otherwise a project crop.) Around the two core ministries of the project, then, would revolve many other bodies with other responsibilities to the project, including the Ministry of Livestock Development, the Agricultural Finance Corporation, the Kenya National Farmers’ Corporation, the Kenya Farmers Association, the



National Cereals and Produce Board, and the Cotton Lint and Seed Marketing Board. A main aim of the project was to strengthen Kenya’s institutions related to agriculture by increasing the flow of resources through and between them. With this ambitious and vastly complex design, the government and donor agencies launched the IADP-SPSCP to lend to those they knew as the “rural poor.” To sum up, there were several notable policy reversals and experiments to reach previously neglected areas, altitude zones, and economic strata. The “integration” of ministries, input suppliers, and marketing boards would be matched by the “integration” of the crop package down on the farm. The IADP-SPSCP would help strengthen the nation’s lending and marketing institutions and boost its farm yields for food and export. Altogether, it was a grand hope. A Mix of Motives Before closing this discussion of the aims of the IADP-SPSCP, we should consider the possibility of ulterior motives among the donors and the national development planners. The project was an attempt to increase the use of purchased inputs and marketed output. Some might argue that it represented a subtle and self-interested attempt by suppliers of foreign capital, members of an African urban elite, or both, to increase their control over the labor and surplus product of the poorer rural areas. Was it an attempt to extract cheap food and raw materials from the countryside for consumption or processing in the cities and abroad? A way of creating a demand for chemical farm inputs, machinery, and possibly consumer goods manufactured in the cities and overseas? A way of ensnaring small farmers into positions of economic dependency and disadvantage?28 Such patterns would at least be familiar ones in tropical Africa. Clearly the project designers thought smallholder market involvement a good thing: hence the inclusion of several cash crops in the crop packages, the emphasis on expensive manufactured inputs, and the plan that a large proportion of the food crops would be sold. Crops like sorghum, millet, and cassava, used mainly for home consumption, were notably absent from the original project plans. Cooperatives are used as a means of incorporating rural people into a market economy and of extending government control over this participation. But the IADP-SPSCP cannot be understood just as a money-spinning



scheme of urban elite or foreign interests. The international loans and the farm loans were made on highly concessionary terms and at the lending institutions’ risk. The project’s heavy costs to Kenya were to be supported by taxes paid mainly in the cities and larger farms. Smallholding farmers were not directly taxed in Kenya in the project years (although they were taxed indirectly in sub-market prices paid them for crops they sold through state-controlled buyers).29 So while the arguments about the economic self-interest of groups outside the smallholding farm areas are well worth considering, they would be easy to overstate in the case of the IADP-SPSCP. Were the motives political, then? We recall Robert Bates’s influential critiques of government agricultural policies across Africa, arguing that it is in the political interests of African governments to confer special benefits to a minority of farmers in order to “secure the defection of favored farmers from a potential rural opposition and their adherence to the governing coalition.”30 Subsidized input supply schemes are an instrument of patronage, a tool of self-interested policy. (As we have seen elsewhere, the government had conferred special agricultural advantages to rural elites as a political stabilizer in the past, notably through the Swynnerton Plan.) Artificially low food prices and selectively issued transport and marketing licenses are others. Bates has suggested, furthermore, that governments have a stake in the market inefficiencies that these policies engender, as these help prevent farmers from organizing among themselves. In the 1980s Bates, Hart (1982), and others using the revived heading of “political economy” argued that African governments use agricultural policies like these to bankroll armies and police forces, while co-opting the support of rural elites. The governments have had to do so, arguably, because of the inherently unstable position of the state in Africa. Carved onto the map without regard to existing ethnic, linguistic, or religious entities, the African nation-state is an arena of intense and undying regional factionalism. National rulers must seek every means to keep themselves in power, often at the expense of the rural poor. While the project’s heavy emphasis on cash crops and purchased inputs is clear, self-interested motives of market extraction and political gain do not show up so clearly in project documents or interviews. They remain more conjectural. It is as easy to say the planners misunderstood the small farmers’ needs as to say they wanted to exploit them. If government officials design projects like the IADP-SPSCP partly to raise revenue, officers of the large international agencies design them partly to move money, as we have seen. This can be an apolitical motive, a matter



of career-building and agency survival. In the case of Kenya, where the U.S. government was interested in docking rights for naval ships in the Mombasa port and in a pro-market bulwark against socialist Tanzania and unstable Ethiopia and Somalia, agricultural aid from American-controlled agencies could also be construed as part of the price of a political alliance. A senior officer of one of the giant funding agencies later recalled to me in conversation, “The IADP? We did that for Kenyatta.” (Kenyatta was the nation’s founding president, who died in 1977.) “We took every ‘unfundable’ project and rolled them all together to fund for him.” Regardless of any higher-level political or diplomatic considerations behind the project, at least some of the project planners and administrators earnestly hoped to raise the farm productivity and incomes of poorer and smaller-scale farmers. The goals of stimulating rural markets, improving rural “incomes,” consolidating government power, moving agency money, and cementing geopolitical alliances were not necessarily contradictory. In such a large project designed by agency committees, moreover, motives were easily glossed over and never needed to be consistent at root. The Phases The Kenya government began lending under the SPSCP in 1976 and under the IADP project proper, Phase I, in 1977. No reliable figures ever existed for the number of loans actually issued nationwide in any year. Nor would they have meant much, since what were planned as crop “packages” were distributed incomplete, as separate farm inputs, in practice and left to farmers to combine. But it is certain, in retrospect, that neither project involved anywhere near the numbers of farmers projected either in the initial estimates or in the government’s annual work plans.31 Certain too is that numbers of participants plummeted over the years rather than rising as planned.32 Seeing that loans had been released from Nairobi behind schedule every year, seeing poor participation and repayment rates, and seeing little evidence of project “impact” either on the farms or in the government institutions concerned, Nairobi officials knew within the first few years that the IADP-SPSCP was in trouble. The second phase of the IADP project went into operation in 1980–81 as the first phase approached its end. As planned, Phase II would touch parts of fifteen districts, only some of them touched so far by the IADP Phase I or SPSCP. Alarmed by what they perceived as farmers’ misuse and rejection of



IADP credit, the government and aid agencies shifted some of the emphasis from farm credit toward infrastructure: building more crop storage facilities for the cooperatives. They also added some food crops mainly for local consumption, like sorghum and green grams, into the crop packages for some areas. Although reduced, Phase II credit was still expected to include about 38,000 smallholder borrowers in five years: about 25 percent of the farmers in the locations where it would operate.33 Again, planners hoped that more and more farmers would borrow. “Net cash incomes” of participants would almost double, they expected, from about K.Sh. 900 to about K.Sh. 1,600, in Nyanza and other provinces.34 By 1982 these projections too looked unrealistic. Credit was again being released late from Nairobi. Again, only a fraction of the farmers expected were borrowing. Although it was still early to judge, evidence of raised yields was slim or nonexistent. Project administrators, both in Nairobi and in the provinces, now seemed mostly to consider the great smallholder credit venture a mistake. That is the thumbnail history as seen through the telescope, you might say, from offices in the capital city. Now it is time to zoom in closer—and deeper into the countryside—to see, in the following chapters, what the IADP-SPSCP looked like on the ground, where plants grow. For this closer view, my research team interviewed, along with numerous officials concerned, a bigger sample of 164 people, in eighty-two IADPSPSCP participant and eighty-two nonparticipant (or independent) homes, in rural areas where practically everyone was involved in farming. They were located in three locations, in three districts. The locations were called Kagan (then in South Nyanza District), West Uyoma (then in Siaya District), and East Isukha (then in Kakamega District). The three locations represented three different altitude zones, ranging from the cotton and groundnut zone by the lake (represented by West Uyoma) to the coffee and tea zone higher in the hills (represented by East Isukha).35 The locations were served by different cooperative societies under different, larger-scale cooperative unions. We interviewed comparable numbers of farming people in all three locations about the credit project and matters related.36 Let us look now at the picture that they, and others around who offered further thoughts, collectively painted of an internationally financed, government-run farm finance project up close and of what it felt like to live with it.


Lenders and Lineages Nepotism as Loyalty Farmers who can get credit generally do not need it. —JOHN GERHART, 1975


ho gets government loans is always a political issue, whether on a large scale or small. Where credit is subsidized, there will be competition for it, and it will be given out as a favor. Both borrowing and lending will be coveted as privileges, and the patterns of distribution are likely to reflect this. That is how it was for the IADP-SPSCP in Kenya. The following few pages describe how loans in that project were conveyed to the western Kenyan countryside and handed out—who got them, who did not, when, and why. In the process, we come across happenings that might easily be condemned as a kind of corruption—for instance, pork-barreling, nepotism, bribery, graft, or diversion. Some of these occurrences, however, will turn out to contain some ironies requiring a closer, more sensitive look. Not all may be locally understood as corruption, nor do they all necessarily prove so harmful. The districts the project covered were chosen with much bargaining and concession among planners and politicians with personal constituencies, formal or hidden. But subsidies are gifts and favors, and others wanted in. So the project’s geographic scope ended up much expanded from the original ideas once everyone in a position to make trouble in the government had been placated. Within its selected districts, the IADP-SPSCP covered some areas much more heavily than others. Cooperative unions and societies, quite varied in their borrowing and marketing records, were all assigned varying quotas of farmers in the annual project work plans. The planners in the



Ministries of Agriculture and Co-operative Development set no rules about distribution of loans at more local levels—that is, within the domain of a particular cooperative society. By all indications, little attention was paid to the matter in Nairobi, or even at district headquarters. The borrower rosters that cooperative societies sent to their parent unions did not list locations or sublocations. When I asked in an interview how loans were locally distributed, a senior credit administrator in the Ministry of Co-operative Development in Nairobi paused a moment and said, “I think they’re self-distributing.” Kinship and Loan Allocation But were they? Our study showed that the distribution of loans within each of three societies’ particular domains was markedly uneven. Let us see just how much, and whether the unevenness reveals any pattern with meaning. One of the cooperative societies in our study areas, for instance, covered two locations I shall call A and B, nearly equal in population, with 51 percent and 49 percent, respectively, in the 1979 national census. They were virtually identical in topography, in ethnic composition, in agricultural activities, and in most other respects. But the shares of the IADP-SPSCP loans they received were quite different. The cooperative society’s three top officers (the chairman, the secretary manager, and the treasurer) all came from Location A. Of the 365 farmers to whom the society awarded loans from 1976 to 1981, 280 (77 percent) lived in Location A. Indeed, that location got the majority of loans in each of the six project years, peaking at 86 percent. So loans were going where the local lenders lived. Could it be just a fluke? My local helpers and I wondered. We looked into two other cooperative societies, counting again to learn about loan distribution. The allocations again revealed patterned inequalities.1 One of the societies covered eight sublocations, each with between 10 and 17 percent of the total population, and the loan totals they received varied between 1 and 41 percent of the total of 185. The three with the highest proportions of loans (41, 21, and 11 percent) among the eight turned out to be the home sublocations of the society’s three highest officers during the project years. In the other cooperative society, each of the fifteen sublocations covered had between 5 and 10 percent of the population, but three of the sublocations received no loans at all. The first, third, and fourth highest proportions of



loans (19, 8, and 7 percent of the total of 204) went to the home sublocations of the society’s three principal officers of the time. There is obviously no coincidence here either. In each case, loans ended up concentrated around the lenders’ homes.2 Of course, the borrowers may have been self-selected to a degree, since neighbors of cooperative officers were the people most likely to assume they had the best chance and to apply for the loans in the first place. Requiring no collateral, and with no very clear threat of punishment for default, IADPSPSCP loans seemed more a gift than a liability.3 So they went to the lenders’ own neighbors. That cooperative society officers lent to their own neighbors is best understood in terms of clan and lineage politics. Among the Luo (and the Isukha Luhya, among other neighboring Bantu-speaking groups), residential proximity corresponds with kinship proximity. Close male neighbors tend to be close agnatic kin. Most of today’s sublocations are based on the territories of large-scale lineages or clans, as suggested earlier. The “locations” that these make up in the Luo country are ideally exogamous units, and although many of these are not based on single lineages (and any location or sublocation has jodak, or land clients, from outside), their constituent groups do sense some common identity and interests as against outside groups. Up to colonial times, by custom, members of adjacent Luo ogendni (the units that later became “locations”) were allowed to fight for blood. That a cooperative society officer now should favor his own location or sublocation is no big scandal or surprise, as Luo people speak of it. It is more like a natural order. Luo refer to cooperative societies in a kinship idiom, or with kinship analogy. They speak of the cooperative officers as JokaSociety: the borrowed English word society is given the Luo prefixes jo, meaning “people of ” or “descendants of,” and ka, meaning “the place of.” This is the normal way of referring to a lineage or lineage cluster, as in JokaRachuonyo, the people of Rachuoyo’s place. When a Luo lineage or location grows large enough so that quarrels or fights break out among constituent groups, it can subdivide. So too with cooperatives. The first cooperative society referred to above was nearing a split when studied. The farmers of Location B, discontent with their share of the loans, were trying to secede and form their own cooperative society. Interestingly, in 1981, as soon as their movement began to look serious, they received 48 percent of the society loans, their biggest share in six years. The



JokaSociety of Location A were trying to win Location B back—and to hang onto control over the loans that higher authorities assumed Location B was sharing.4 Lenders favored not just their neighbors, but themselves. In two cooperative societies out of four whose records were closely studied, the largest IADP-SPSCP loans (from over a hundred in each case) were awarded to the society chairmen themselves. The loans were recorded in plain figures in the society records, which circulated to the parent unions. They were not secrets.5 Clearly, a bit of self-concern in loan allocation is nothing to be ashamed of in western Kenya. On the contrary, it can be a matter of pride. Once, a Luo chief, traveling with me across his home district, pointed out the homestead of a former national assistant cabinet minister. The homestead was unimposing, showing little sign of special wealth or power. The chief was full of scorn. It is important, he said in his proficient English, to use one’s government position for the nation’s development, but it is also important to use it for one’s own personal development. So development seemed to have two meanings. Perhaps “self-distributing” did too. To sum up, the loans were allocated in ways the international donors and lenders had not expected. The principles of branching lineages were taken into account as living forces affecting the decisions not only of the most “traditional” farmers but of new public servants as well. It would not be ethnocentric to note that Luo moral obligations of kinship and neighborhood—what some disparage as “nepotism”—sometimes eclipse an abstract ideal of universal “fairness” or randomness that some developers favor, or the ideal of service to a government that brought incomprehensible hardships to many Luo earlier in their lifetimes. It would indeed be ethnocentric to expect otherwise.6 And where, anyway, are “pork-barreling” and “nepotism” absent from local public administration? Nepotism is loyalty. Choosing Borrowers, Officially and Unofficially The project planners intended that agricultural extension agents under the Ministry of Agriculture would judge potential borrowers by their farms and farming methods and recommend suitable names to the cooperatives. Most every sublocation had one of the front-line extension workers, called junior agricultural assistants ( JAAs), assumed to be the best placed for knowing farmers’ cases. This man (for at the time, all were men) and the



location’s second-line technical assistant (TA) would meet the cooperative society officers at least once each lending season to discuss the prospective borrowers. The planners assumed these local officials would make the decisions jointly. After this screening, cooperative societies would pass applications to their respective unions. In reality it worked differently. In each of the three IADP-SPSCP areas visited, relations between cooperative society officers and agricultural extension agents were bitter, partly because of disagreements about lending authority. Extension agents complained that cooperative society officers systematically excluded them from meetings for choosing borrowers. Indeed, some cooperative officers had relied on recommendations of their own neighbors rather than relying on the JAAs. Because loans were coveted, the privilege of dispensing them was also coveted. Farmers in western Kenya stereotype a cooperative society officer as someone who uses loans to ingratiate potential political supporters. The cooperatives, like other lending bodies, sometimes serve as springboards for parliamentary and other campaigns. But the society officers do not always have the control over their allocations that they would like. A cooperative society chairman lamented being strong-armed into lending to the favorites of his locality’s national political representatives. Farmers, meanwhile, complained that the cooperative officer’s being protected by just such a national politician made him unremovable from office. When interviewed about how they chose their borrowers, cooperative officers and agricultural extension agents mentioned these criteria most often: farm size, previous experience with new technology, diligence in farming, and wealth. When the local farmers (that is, those who were not also officials) were asked about those officials’ criteria, some mentioned the same factors—but the most common answer was the personal tie, whether by kinship, friendship, or neighborhood.7 You had to be connected, they said. The local lenders made it clear that they cared far less about bringing “development” to the least developed (as printed in the project plans) than about lending to farmers who would repay. They knew their own performance would be judged on the basis of loan collection—something easier to quantify and prove in annual reports than poverty alleviation. Ministry bureaucracy gave the junior officials no incentive to think otherwise. Choosing borrowers somehow acquainted or related meant having social and moral bonds to draw upon at collection time, if that ever came. Choosing strangers meant taking unnecessary risks.



There were, of course, ways around this difficulty with strangers. In one IADP-SPSCP area studied, many farmers spoke of bribes (or unauthorized gifts) to the lenders: often a single sheep, a goat, or even a cow, or a cash payment ranging from one hundred to five hundred shillings, most often three hundred to four hundred—that is, between 24 percent and 53 percent of a loan in the usual range of 750 to 1,250 shillings. Usually, it seemed, the lender deducted the borrower’s secret payment when issuing the loan, but both understood the latter would have to repay the full debt as though nothing had been subtracted. Farmers found lenders would reduce or dispense with bribery demands for their own kin, neighbors, or friends. Bribery seemed to substitute for kinship or friendship. The payments may be seen, too, as a kind of “high-risk premium” compensating the lender for the likelihood of a default. The concept of bribery is problematic, however. What anglophones mean by this term does not necessarily connote to western Kenyans quite the same special sinfulness or immorality as it does to some foreign analysts. Rather, it can be seen as one of a broad line of merging transactions, including common hospitality and official fees, which may or may not be looked upon as immoral. While farmers perceive bribery as illegal, they see it also as an expected routine of officialdom: an illegal formality. The Luo speak of “bribes” in a language connoting the sharing of food: chamo asoya, to take a bribe, literally means to “eat” it.8 Often the explicit or unspoken object of the verb is not the money or gift but the giver himself or herself: you eat the person. Like food sharing, bribery implies the obligation of a return favor.9 What some farmers in western Kenya might find most immoral is not to make or accept a bribe but to accept one without somehow reciprocating. Others disagree. Why did farmers agree to bribe their lenders from their loans and be recorded as still owing those amounts, plus the accruing interest? Several explanations suggest themselves. Some borrowers (or “loanees,” as Nairobi aid agents called them) were clearly gambling, and rightly, that no one would ever make them repay. Some expected that the remainder of their loans would earn them enough to compensate, or they counted on an upcoming harvest or a son’s going away to work (or a ship’s coming in). Some saw repayment time as a long way off. Some simply had urgent cash needs at the time: for school or hospital fees, marriage payments, and so on.10 IADP-SPSCP loans usually arrived just in the months when granaries begin to run low, and some borrowers accepted the adverse terms out of desperation.



The loans were in demand. Local officials had to compete for the privilege of dispensing them; they favored their own relatives and neighbors with them while strangers had to bribe for them. Project managers in the agencies could not sense the heavy demand for the loans in the rural areas. Some in the World Bank and USAID saw the falling rates of participation— which really came from cooperatives’ refusing defaulters further loans—and wrongly inferred that the loans were simply unpopular. But they were right to the extent that the farmers were “dropping out” (or opting out) after borrowing, a topic to which we will return. Altogether, local-level cooperative officials enjoyed great freedom in allocating their loans. They were only loosely supervised by their unions, and seldom did anyone check whether the farmers they chose met the official project criteria. So they chose the kinds of people they wanted as clients, supporters, protectors, and friends. Kinds of Borrowers To analyze the distribution of loans among kinds of people, there are as many ways to slice a population for analyzing loan distribution as there are to slice an orange. Here we look at just a few: sex, age, wealth, connection in cash economy, and office-holding. Although the IADP-SPSCP plans had emphasized the inclusion of women, participants were usually men, and men deemed homestead heads (weg dala) at that. In the three locations visited, males took from 80 to 96 percent of the loans. Farmers throughout saw project credit as something of a male province, and men usually appeared to know much more about this scheme than their wives. Widows and single women were exceptional in that they usually seemed to know as much about the loans as men, but they received fewer loans than their numbers would have warranted.11 Since all the cooperative society officers in the locations visited were men, it is not surprising that the bulk of the loans went to men too. Loans were made by and for adults only, even though children participate actively in farm work all over Kenya. The borrowers’ ages, in some cases only estimated, ranged from twenty-eight to eighty, but most were between forty-five and sixty-five years old, and the averages ranged from about fifty to fifty-five. Elder men usually showed they knew more about institutional credit than younger men did. In this rather gerontocratic society, it is



hard for younger cooperative society officers to refuse loans to elders who ask for them.12 It helped to have good-sized land too, to get a loan—never mind what the rules said about hectarage.13 In other ways, too, participants as a group were discernibly richer than nonparticipants in every location studied, although these differences were not great.14 The differences seemed greatest at the extremes: almost no participants could be called very poor, by local standards, but there were a number whose neighbors deemed them very wealthy. That few of the poorest farmers received loans can be attributed not just to lender biases but also to caution on these farmers’ part. Interviews made clear that the poorer farmers were those most worried about indebtedness and confiscations. Poor nonparticipants frequently remarked that they would not consider borrowing, for just this reason. Many of the wealthier participants were community officeholders— chiefs, assistant chiefs, county council representatives, school headmasters, and others—and few such officeholders had gone without loans. The local notables, once having borrowed, tended to default completely, a topic to which I later return. Evident was the mutual patronage between cooperative officers and extension agents, on the one hand, and other community leaders, on the other.15 By the time of our study, more farmers who had received loans grew cash crops than farmers who had not received loans. Cash cropping correlated positively (though not always strongly or very significantly) with project participation in the three major cash crops of the areas concerned—cotton in the lower zones, coffee and tea in the upper zones.16 There are several ways to explain the correlations. Cooperatives officials and the agricultural extension agents preferred to lend both to wealthier farmers and to cash croppers—they said as much.17 The same kinds of farmers likely to plant cash crops may have been likely to seek credit too: those most eager for money or those with school fees and the like to pay. The project itself may have induced a few borrowers to plant cash crops, but what seemed to be more important was that cash croppers were somewhat more likely to be approved for loans in the first place. In sum, the IADP-SPSCP lending process favored neighbors, relatives, and friends of the lending officers over people unconnected. It favored men over women, and elders over juniors. It favored wealthier farmers perceptibly but not strongly. To its credit, the project did appear to involve more ordinary farmers than any previous major farm loan scheme in western



Kenya, as planned. It was the first to make most farming homesteads in the region officially eligible to borrow, and it was the first to include among its participants many who had, for instance, modest landholdings, no salaries, no ox plows, no iron roofs. Nepotism for Fairness—Or, How One Skew Can Offset Another Allocation of loans, I have suggested, can involve different kinds of biases or skews leading to inequalities of distribution.18 One kind is geographical. At local levels, a cooperative society covers locations and sublocations within its territory. Among the Luo, the Isukha Luhya, and other strongly patrilineal, virilocal peoples, it seems that where kin groups concentrate in particular areas, microgeographical biases have much to do with kinship biases. In the case of the IADP-SPSCP, these geographical and kinship biases appeared quite strong. Another kind of inequality or de facto bias observed was economic: loans tended to go to wealthier farmers. With the IADP-SPSCP, this bias was perceptible but weak. These two kinds of partiality may be connected. In a society like the Luo (or the East Isukha Luhya), in which most lineages include a wide range from rich to poor, the connection between a kinship bias and a wealth bias in lending is likely to be negative. The more the kinship bias, the less the economic bias, and vice versa. The principle can best be understood by imagining simple and extreme cases. If a male lender among the Luo (or Luhya) were to issue twenty-five loans to relatives within a certain close kinship distance—say, within a circle of agnates related to him by descent from his father’s father’s father—he would probably have to choose poor and rich, and all shades in between, because his field would be quite limited (unless he belonged to an extraordinarily prolific lineage). In contrast, if he had to issue all twenty-five loans to farmers in the wealthiest percentage of the population, he would probably have to look far and wide outside his circle of known kin. There simply would not be enough close relatives rich enough to qualify. So the kinship bias and the wealth bias appear as a tradeoff. Narrowing a field of eligible farmers by one criterion is likely to spread it out by another. This is a principle of conflicting inequalities, a principle of incompatible or mutually offsetting skews. When lenders are given a number of loans



to distribute within a limited population and allowed to choose as many of their own relatives as they like to receive them—as was the case in the IADP-SPSCP—they are likely to choose some borrowers who would have been unlikely candidates had it not been for their kinship.19 If all this is true, an interesting policy implication may be drawn. This is that project planners who wished, for one reason or another, to encourage a broad distribution of the loans among poorer farmers as well as richer ones would be advised not to discourage kin favoritism (“nepotism”) or neighbor bias.20 This would make sense for societies like the Luo, where richer and poorer farmers are mixed together in kin groups and in neighborhoods. Finally, kinship bias may link to gender bias. I have suggested that both were heavy in the IADP-SPSCP: cooperative society officers gave loans mainly to their own lineages and lineage clusters, and they gave them predominantly to men. In virilocal societies with exogamous lineages and lineage clusters, like the Luo, a lending officer’s female agnates of married age live away in other areas. They tend to live outside the domain of the cooperative society, in other parts of Luoland. The cooperative officers can give loans only within their societies’ domains. Clearly, then, loans that follow agnatic ties here must go to men (or women who are unmarried, or divorced and returned), and loans that follow affinal ties end up in the hands of members of stranger lineages.21 In sum, the distribution of IADP-SPSCP loans at the local level showed both economic biases and kinship and neighborhood biases in varying degrees. The patterns of lending and borrowing were strongly influenced by the segmentary lineage system and the custom of virilocal postmarital residence that obtained among the Luo (and their Bantu-speaking neighbors as well). The IADP-SPSCP was designed to reach poorer strata of farmers than had ever received government loans—for instance, in the GMR and SRDP schemes—and this it seems to have done. But this expansion of credit opportunities to poorer farmers could not be attributed simply to planning. Indeed, the official criteria for eligibility for loans, and the populist tenor of the plans as a whole, meant little to the lending officials at the local level. These lenders were not closely supervised. They were free to issue loans to their own relatives and neighbors in accordance with the pressures of the lineage system, and their having done so shows that these local officials were still very much subject to “traditional” social obligations and privileges in their “modern” official roles. While their partiality to kin and neighbors can be considered a kind of inequity, it may,



ironically, have promoted equity of another kind. It may have helped spread the project’s rewards to poorer farmers.22 Delays and Shrinkage A loan that an international agency or government ministry issues to a farmer in the countryside needs a way to get there. Whether in the form of money or some other sort of credit transfer, it can go through human hands, or now by more direct, electronic means. The IADP-SPSCP took place just before the revolution in cell phones and electronic banking hit rural Kenya, and the loans went through human hands. Its loans never passed smoothly or quickly from Nairobi to the farmers. The series of “on-lenders,” six at the very minimum, proved long, and it meant authorizations and countersignatures at several stages along the way. Somehow the funds shrank in the process. Broken down by cooperative union and by project (the IADP and the SPSCP for the moment being considered separately), the rates of attrition that occurred just between the release from the Co-operative Bank of Kenya (CBK) in Nairobi (according to its records) and the societies (according to union records) varied between 19.9 percent and 67.1 percent in the cases of three western Kenyan unions studied.23 Broken down further, by year, the attrition rates varied more widely.24 Quite often the shrinkages were of unauthorized sorts. Farmers of western Kenya received both fewer and smaller loans than in either the original project plans or the annual work plans.25 Some never received their fertilizers or pesticides as prescribed. Loans came late. Whereas the project planners had intended that farmers would receive their loans in good time to prepare their lands for a February planting, at the onset of the long rains, farmers in the areas studied received theirs at various times between March and July each year from 1976 to 1981—always between one and five months behind schedule. The problems of late release began in Nairobi but did not end there.26 Only rarely did funds reach even the provincial unions in time to allow distribution to farmers by planting season. Donor agency staffers and senior government officials in Nairobi appear to have tried, at least in the latter project years, to ensure earlier release of funds from Nairobi. What some of them did not realize was that the money was being held up not only in the capital city but also in the provinces.



Coping with Late Loans (and Vexing the World Bank) Borrowers in the countryside were bitter, if unsurprised, about the delays. They tended to view the cooperatives as corrupt and inefficient bodies for handling money. Many informants believed that the cooperative officers at various levels withdrew farmers’ loan funds temporarily to stock up their own shops or finance other personal enterprises. Just as Nairobi’s project administrators had trouble seeing whether the loans were being held up in the provinces, farmers had trouble seeing whether they were being held up in the capital first. No one had a clear view of the whole lending chain, and this allowed some officials along the line to hold up the funds with impunity. Farming people found loan delays to be the greatest problem with the IADP-SPSCP. Indeed, most identified this as their chief trouble, more than all other troubles combined.27 Farmers’ retrospective statements about how they used their loans—questionable, of course, in quantitative surveys but supported by intensive interviews and cross-checks—also reflected the problem, and they revealed a variety of strategies for coping with it. Generally, farmers waiting for late loans did not delay planting long. Rather, they planted what they could at the start of the rains, by their own or independently borrowed means. Farmers with oxen and plows at their disposal—roughly half of the homesteads in the project areas visited possessed both—then had an advantage over farmers without. Some project borrowers who did not own them hired them from other farmers on a system of secondary, informal credit; they agreed to pay the owners when the IADP-SPSCP loans finally arrived. In this way they linked up their own system of “informal” credit to the “formal” institutional system. The promise of an IADP-SPSCP loan made it easier for a farmer to obtain an ox team and plow on credit from a neighbor. But not all project participants who lacked their own plow teams could do this. And those who borrowed draft animals or plows from neighbors had to wait until the owners had finished their own fields, often in the middle of the rainy season. Such delays dramatically reduce yields.28 Responses to loan delays varied somewhat by eco-zone. In the lower, drier cotton zone, where yields are riskier and where rains fall briefly but intensely and black cotton soil quickly turns to a dense, unworkable mud, farmers usually went ahead tilling and planting by hand hoe rather than waiting. In the higher zones, with their longer rainy season, easier soils, and better and more reliable yields, more farmers decided to wait for plow teams



instead. But these too suffered from the delays: army worms and hailstorms, which tend to arrive late in the season, threaten the youngest plants most. The poorer farmers, having to wait for plow teams, were most vulnerable. But farmers of all zones, and all levels of wealth, said that they would have tilled more land and planted more seeds had the loans arrived on time. Many farmers spent their late loan money on animals. Indeed, in both Luo and Luhya areas, the increase in the local money supply forced cattle prices up sharply in the markets yearly as IADP-SPSCP loans were given out—some informants remembered sudden rises of as much as 50 percent. Although some farmers had bought oxen or bulls for plowing, others had purchased animals to use for bridewealth payments. Some used them to pay existing bridewealth debts. Others, as their neighbors scornfully pointed out, had used loan funds to marry second wives and ended up in debt. Polygyny, alas for these men, was no longer the sound investment it had once been: land was now too scarce to make the extra hands as productive. Many people interviewed interpreted their neighbors’ use of loan funds for marriage cattle as a form of self-indulgent consumption or as a bid for higher status in their neighborhoods. As an IADP-SPSCP loan usually provided only enough to buy one or two head of cattle, the number a Luo can use as a kind of “down payment” in bridewealth, he could acquire a debt to his new in-laws as well as to the government. So some debts proliferated while others were paid off. “Modern” debts also became “customary” or “traditional” debts, and in the process they could sometimes become even bigger and more pressing. Other borrowers used their late loans to finance small-scale business, commonly including maize trade using donkey transport. Several informants said they considered trade a safer means than agriculture for ensuring that one would have the money to repay one’s debt later. Such choices made much sense, given the risks of late planting and the unreliability of input supplies. Finally, some farmers, faced with no pressing farm needs when their cash came, simply spent it on school fees (due for payment in May, which was often when the loans arrived), on house building, or simply on entertainment.29 Men who did not invest the cash quickly in cattle or other animals stood to lose much of it immediately to their wives and children, whose needs and wants reached well beyond farming. Late fertilizers and pesticides, like late cash, posed farmers a problem. Some made the best of the situation by using their late maize fertilizers on crops outside the project (or under other projects) like cabbage, kales, or coffee, which could benefit them later in the year.30 As project administra-



tors were well aware, some farmers, usually poorer ones, simply sold off their borrowed seeds and fertilizers. Indeed, some did so right at the door of their cooperative societies upon receiving them. They sold at varying prices between 50 and 80 percent of market value, often to wealthier neighbors who could afford to keep the inputs to use or resell the following year. Others signed receipts for their full loans, including fertilizers, but took only the cash or the seeds and never returned to collect the fertilizer meant to go with them. On the whole, borrowers seemed to have diverted loan resources to nonfarming purposes more commonly when they were delivered in cash than when they were delivered in kind. It was easier and more tempting. The international and capital-city project designers, grimly determined to prevent “leakages” of loans outside the agricultural “sector,” tried to implement a system limiting loans to vouchers that farmers could exchange only for project inputs at approved suppliers. But their doing so just made it harder for farmers to use their loans at all.31 Farmers eventually got fed up. The problem of late loans and the consequent high risk of indebtedness and confiscation of property (as they perceived it) were the reasons farmers most often gave for discontinuing their IADP-SPSCP participation. To sum up, the loan delays kept recurring as long as the project lasted, and all but those who may have profited secretly deemed them one of their worst problems with the project. Some farmers adapted successfully to the problem by arranging secondary, informal loans of draft animals and plows, or by using chemicals for nonprescribed crops. But the delays seriously damaged the project’s effect in fomenting agricultural change. It was the poorer participants who were helped least, and possibly even harmed in the end. It was they who had trouble obtaining plow teams, and it was they who often planted too late to get good yields. It was they too who were most strongly tempted to sell off their fertilizer and pesticides and spend the borrowed cash on immediate consumption rather than on anything the lenders deemed production or investment. By being unable to ensure a smooth passage of loan funds from Nairobi to the farmers, the development agencies and government lost control of how they were used in the end. To officials of the agencies and government, the loss of control was a bitter disappointment. They deemed farmers to be breaching basic rules about the sanctity of economic “sectors”—a concept that seemed to mean the world to them, but little to farming and herding



people. In the early 1980s, while I was visiting Nairobi after an extended stay in the Luo country, I once spoke with one of the aid agency financiers in charge of the IADP-SPSCP, an expatriate economist, in his office in one of Nairobi’s taller buildings. He asked me about the IADP-SPSCP borrowers among whom I had been living: “Are they still using our farm loans to pay school fees?” Resisting the temptation to answer “and why not?” I simply answered yes, some were. His response was quiet but instantaneous: “Damn!”


Untying a Package Deal Borrowing Green Revolution Technology Like power in any shape, a full stomach always holds a dose of insolence, and the dose expresses itself first of all in the well-fed lecturing the starving. —ANTON CHEKHOV, LETTER, 1891 Pesticides are for greedy people. —OUMA OKECH, OF KANYAMKAGO, 1981


ost internationally financed credit reaching Kenyan farmers has come to them not as money but as a mix of wanted and unwanted materials, accompanied by wanted and unwanted advice. Having seen something of how this pattern evolved, and whom it can connect, we look now into the nature of that mix to understand a hinge—a squeaky hinge—between the financial and material worlds. Financiers, agronomists, and farmers all used trial and error in their different ways to assess the usefulness of new inputs for what they variously understood to mean development. The perennially imperfect communications involved contain lessons about the interstices between official theory and unofficial practice. The Full-Ahead By the early 1970s, when the idea for the IADP-SPSCP was hatched, the Kenya government and all its major foreign lenders and donors had broadly adopted the goal of promoting small-scale farmers’ use of purchased farm inputs. By then the “green revolution” had produced enviable increases in farm yields—if also some unanticipated class polarization and ecological imbalances—in rice, wheat, or maize production in parts of southern Asia, Indonesia, Mexico, and elsewhere.1 In Kenya itself, a major



change was well under way already in the widespread adoption of hybrid maize seeds. And the government pushed all that came with the new agricultural technology. The 1974–78 national Development Plan stated that “the increased output expected from agriculture will be produced only if more farmers intensify production; plant new crops; use improved seeds, fertilizers, and insecticides; employ better methods of cultivation. . . . Very high priority is, therefore, given to . . . helping the farming community to take up these better agricultural methods” (Pt. 1, p. 203). To make it happen, it stated, “a proposed integrated crop development project [the IADP-SPSCP] will be of considerable significance in introducing improved crop production methods” (Pt. 1, p. 198). In many other places, too, the government voiced its favor of technological innovation throughout the project years. As the 1982 national Economic Survey observed, just as the IADP-SPSCP was being wound up, “against a total output valued in the region of K.£ 400 million [K.Sh. 8,000 million], the expenditure on inputs is only about 5 percent of the output value. This proportion probably illustrates the undeveloped nature of small-holder farming methods presently in use more starkly than any other measure. Significantly greater yields from small farms will only be obtained by much greater use of fertilizer, farm chemicals and other inputs” (pp. 118–19). In another light, a low ratio of purchased inputs to output might be considered an achievement, a kind of efficiency. But what had long mattered most to economic program planners was output, not cost or eventual risk to farmers or their environment. In the government’s extension manuals, too, the policy was made plain: the Kenya Ministry of Agriculture’s Field Crops Technical Handbook (1980) recommended new inputs usually without qualification or counterindications. The FAO’s waterproof-covered manual Fertilizers and Their Use: A Pocket Guide for Extension Officers (1970) then in use was full of statements like “Fertilizers do not cost, they pay!” (p. 5). Its final paragraph read, “Fertilizers are the spearhead of agricultural development. Through introducing fertilizers, with your efforts, interest and enthusiasm, you can bring about a real change. You can be responsible for helping to make your region a better place in which to live.” It was with mission spirit, such institutional faith in the potential of



high-yielding technology, that the IADP-SPSCP was designed. The new inputs implied much else in timing, spacing, and so on. Part of the official faith was acceptance of straight rows and even intervals—methods that, in any case, would make agriculture easier for government agents to measure and to regulate, or in James Scott’s term, more “legible” (1998). How then would the message get across? Credit, Extension, and Patronage The “extension” arm of the Kenya Ministry of Agriculture, organized in a hierarchy of officers inherited from colonial government, had two main ostensible duties.2 One was to relay findings and recommendations from state and university research stations to farmers across the countryside. The other was to communicate farmers’ needs and wishes to the government and its research stations and to provide the latter with “feedback” about how their innovations (or farmers’ own, should they be noted) were actually doing on the farms.3 But, alas, this second part, the inward flow of knowledge, was never taken as seriously. The Ministry’s efforts to reach farmers about new farm enterprises, inputs, and methods took several forms. Its officers planned briefings for farmers at the district-level Farmers’ Training Centres (FTCs) and visits to their farms by junior-level extension agents, typically resident already in the sublocations they served. Also planned were publicity and instruction in chiefs’ public meetings (baraza) and demonstrations of techniques on plots of selected farms. The first two modes of extension were expected to reach every borrower without fail; the latter two depended on the farmers’ ostensibly voluntary attendance. Loan delays made the FTC courses untimely. Most borrowers did, however, attend the courses as a prerequisite to borrowing. And most interviewed about them said they liked them and learned new techniques—for instance, about spraying, crop rotation, and budgeting. It was the job of the first-line extension agents, the JAAs, to continue instructing farmers in their own fields during the growing season. This individual contact system had long been the mainstay of government agricultural extension in Kenya, and the IADP-SPSCP depended heavily upon it. Nationwide, Kenya had about one frontline extension agent per 310 “farms” (meaning homesteads), one of the strongest ratios of any of the countries then called “less developed.”4 In theory the agents were numerous enough to allow every smallholder to receive a visit every year, but in practice this never



happened.5 Extension services had always favored uplanders, wealthier and larger landholders, and cash croppers.6 Under the IADP, as planned, government extension services would be improved to end these old biases. Agentto-farmer ratios were boosted to about one per 230 homesteads nationwide by the third year to ensure all farmers got visited.7 It did not work out this way. To begin with, the extension agents were nearly all men, aged thirty to fifty, who lived and farmed in the locations they served. Most were solvent by local standards but not rich, and most had little or no technical training.8 The farmers visited were generally men, too, despite the facts that women do most of the agricultural work in western Kenya and that men in their middle years are often gone as labor migrants. The male bias in extension was due not only to the sex of the extension agents but also to the western Kenyan concept of a male wuon dala (in its DhoLuo variant) or homestead head as the natural representative of the group to the government. Even when women extension agents from home economics or community craft projects visit women farmers at home in Luoland, husbands commonly stay at hand to “supervise”—or seen another way, to meddle. In contrast, when extension agents come to visit men, women are often expected to busy themselves preparing food.9 Although extension agents were expected to visit project borrowers and other farmers repeatedly within every crop season, they hardly did so in practice. By 1981–82, only 76 percent of participants interviewed in my project area samples, and 60 percent of the nonparticipants, could recall ever having had their homes or fields visited, most of these no more than once a year, if that. Some had offered the extension agents gifts, bribes, or something in between to come see them. And some of the “extension” visits were made only to screen loan applicants or to hound farmers for loan repayment. The extension agents were only loosely supervised. Most seemed to keep no written records of visits.10 Unvisited farmers complained bitterly, calling extension agents lazy, corrupt, or simply smug and aloof salaried people.11 In doing so many showed some acute sensitivities about class differences, notwithstanding the extension agents’ being neighbors and farmers too. Extension agents, for their part, called many of these farmers backward or unreceptive to advice. Some cited as evidence farmers’ continuing to intercrop (that is, to plant a single field with mixed crops at overlapping times)—something foreign agronomists had long taught was primitive. The Ministry’s researchers (and others across the continent) were changing their minds about this, though, deciding



there was sense in some of the African farmers’ old intercropping practices after all.12 Persistent extension biases toward richer farmers could be explained partly as a “class alliance,” as some authors have suggested in other East African contexts. Alternatively, it could be seen as the result of a “squawk factor”: extension agents knew that the best-off male farmers would be the ones disposed to complain to the extension agents’ superiors if not visited.13 In this sense the extension agents’ position was analogous to that of the cooperative officials who were afraid not to issue loans to local politicians and their protégés. Chiefs’ and subchiefs’ public meetings (Sw. baraza), like farm extension visits, were mainly male affairs. Some sublocation meetings were entirely male, and women who attended usually sat at the periphery and spoke up far less frequently than men. But many farmers never went at all—more played hooky from such meetings in the Luo country than elsewhere.14 This difference reflected the cool attitude of many Luo toward central government. (Typically a baraza involves much ritual chanting and other public demonstrations of support for government, concealing mixed or negative feelings among the participants, many of whom are afraid not to attend.)15 Government field demonstrations were few and sparsely attended.16 In sum, the extension system in the project years did not effectively involve the smallholding farmers as planned. Other problems became evident before long. Frontline extension agents on foot or on bikes complained of long distances they had to cover (sometimes twenty kilometers’ radius over rough roads—some like washboards— in sparsely settled lowlands), and some became demoralized. Fuel shortages immobilized divisional-level agricultural extension supervisors: officers on motorbikes and district-level staff in Land Rovers. More subtle, but nonetheless real, were the class considerations. Poorer farmers resented being told to save and invest more in agriculture by salaried officials who themselves often seemed to want to get out of the field and into more lucrative ways of earning a living.17 Friction between the lenders and the instructors worsened the picture. Wanting to safeguard for themselves the privilege of grandly dispensing patronage, officers of cooperatives preferred not to solicit the agricultural extension agents’ input in choosing borrowers, or even to pass them the lists of farmers chosen.18 (They did, after all, report to different superiors in different ministries.) Extension agents who fell behind in visits became ashamed to



show their faces on farms. Farmers’ uncertainties about whether extension agents were coming only to hound them for repayments gave debtors cause to avoid them altogether. This was “integrated agricultural development” at its weakest.19 Very much at issue, too, was the usefulness of the technical advice being offered in the first place. Many of the recommendations from Nairobi and the government research centers never reached the frontline extension agents, and whether the approved new inputs and techniques did any good in themselves is another issue still. We look briefly at this technical issue next, using farmers’ own responses as the acid test. Just as we shall see that financial assistance is best set up in such a way that capital flows two ways—that is, that borrowers also be savers and investors in a program—I suggest that so, too, is “extension” best set up so that information flows both ways. Crop Packages and the “Whole Farm” As the first major credit scheme in Kenya to promote more than a single crop per borrower, the IADP-SPSCP rested on the concept of the “crop package.”20 This was a prescription—standard, if carefully composed—of two to four crops, occasionally more . . . all to be planted in prescribed hectarage, with special seeds and chemicals to be used for each, in specified measures and combinations. Specific to districts and altitude zones within them, the IADP-SPSCP packages embodied what Nairobi-based agronomists and planners were calling the “whole-farm approach” to smallholder farm development: an outgrowth of the “farming systems” school in fashion in the late 1970s and early 1980s. Its ostensible aim, for the agronomists and the government, was to understand the farm in all its complexity. Arguably, an underlying aim was to control it.21 But let us go with the flow for the moment. Conscious of constraints on capital, land, and labor, and of the risks and uncertainties of smallholder farming, the Kenyan and expatriate agronomists of the Ministry of Agriculture sought “economic” rather than simply “technical” efficiency. That meant that the quantities of fertilizers they recommended, for example, needed not be those they expected to produce the highest possible yields per hectare, but those they thought would increase yields most in relation to actual capital and labor expenditures. This was a progressive shift for its time. It meant, among other things, trying to take account of seasonal labor bottlenecks, spreading harvests of different crops over the calendar. It



would ideally have also meant paying attention to which crops were tended by whom—that is, by sex and age. For instance, it made sense to ensure that not all the “women’s crops” needed to be harvested at once. For most areas, the ministry agronomists included both cash crops and food crops in the farm recipe. The cash crops were to serve as the program’s financial “anchors,” in that farmers were expected to sell these through designated government buyers and thus repay their loans. Some of the crops included in IADP-SPSCP packages, like sunflowers, were new, or almost, to the farmers in project areas. Designing the package meant selection, and the choices were significant. Most people who farm in western Kenya grow more than three or four cultigens in a year, and many grow a dozen or more, in an effort to accommodate unpredictable weather, cut down risks, spread out peak labor periods, and help balance and vary diets. Some of these plants and foods are practically unknown outside Africa. But the IADP-SPSCP promoted crops suited to northern tastes, not just tropical African ones, and attractive to northern markets. Maize and beans were chosen as the main food crops, and cotton and oilseeds like sunflowers were chosen as the main cash crops. There is a pattern here. Locally popular grains like sorghum and finger millet, pulses like grams, and leafy legumes like kales, cowpeas, or pigeon peas were not given serious attention.22 Nor were inedible but locally indispensable products like wattle for house-building included in crop packages; they did not fit squarely in the agricultural “sector” as bureaucratically conceived, having as much to do with housing as with farming. Likewise, in “livestock” projects at the time, pack animals like donkeys and mules were excluded. These animals had two strikes against them: not only did they hold little interest as potential food for urban or foreign interests, but they also fell into a crevasse of liminality, falling as they did between the agriculture and transport “sectors.” All the project plans and national development plans assumed that farmers wanted higher yields. Surely most did. But some did not wish their own production to rise visibly above their neighbors’, nor did they want to be seen using fancy new inputs their neighbors did not have, as if to get ahead of them.23 When a middle-aged farming man in Kanyamkago once remarked to me that “pesticides are for greedy people,” what he left unmentioned, but what he and all his neighbors knew, was that greedy people become targets of witchcraft accusations and nasty rumors. Farming people also knew that if new inputs obtained on credit boosted their yields noticeably, they would be



expected to share the rewards with needier relatives and neighbors or be exposed to surreptitious night harvests, and they knew they would still need to shoulder the burden of repayment themselves.24 To see how farmers reacted to the IADP-SPSCP crop packages, let us first untie these. In the following pages, the three most important elements of the western Kenyan packages—hybrid maize seeds, fertilizers, and pesticides—are considered individually. Hybrid Maize and Its Catches As Kenya’s main current staple, grown by some 99 percent of agriculturalists in the western provinces, maize (Lat. Zea mais; DhoLuo, oduma) seemed the obvious principal food crop for the IADP-SPSCP packages.25 Farmers in the region had long practiced crop improvement by their own seasonal seed selection, and Luo and others in the region were quickly adopting hybrid maize seeds by the time the project began—highlanders quickly and lowlanders more slowly. The planners of the IADP-SPSCP undertook to convert the rest.26 Luo know hybrids and composites as oduma mar grade (the borrowed “grade” usually referring locally to “upgraded” or European-interbred livestock); some use the English term “hybrid” for either. Available to smallholders in the region since 1964, and coming from national research stations in Kitale (Western Province) and Embu (Eastern Province) that had crossed South African and other exogenous strains, the first seeds released had been best suited for, and most easily available in, the highlands—perhaps not incidentally the zones most populated by settler farmers of European descent.27 But anyone could plant them. Under optimal conditions, hybrid seeds in western Kenya could outproduce local seeds by severalfold.28 Of course, research stations can produce artificially high yields, usually having better soils and getting more constant attention than family farms.29 Still, there was evidence that even outside test stations, hybrids in western Kenya could (and still can) improve yields, particularly upland.30 But hybrids have several catches. One is their cost: an acre’s worth of seed can cost the equivalent of over a week’s casual farm work.31 Another drawback is heightened risk. Developed by the crossing of inbred strains, hybrids produce crops of relatively homogenous plants: the dimensions of the plants and their parts, and their requirements of, and responses to, soil



and nutrients, water, light, pests, and other environmental factors, are very similar, whereas freely interpollinating local strains produce more varied plants. Although hybrids’ phenotypic homogeneity can suit hybrids well to mechanized harvesting and processing (in theory, and where machines are operable and affordable)—it raises risks by narrowing the range of environmental conditions under which a reasonable proportion of the plants will produce. So hybrids require more careful control of growing conditions than do local strains. In western Kenya, the main resulting drawback has been susceptibility to drought. Farmers and extension agents have found that local maize outperformed hybrids in years of poor rains. Local strains may be better suited than hybrids to the second growing season, the “short rains,” in western Kenya.32 Hybrids’ need for high soil fertility limits their usefulness by themselves in lower-altitude areas, where soil erosion has been most severe, and in places where land shortage prohibits crop rotation. Finally, hybrids bring storage problems. Because their kernels are not sheathed to the tip and are softer than local maize kernels, they are more vulnerable to the maize weevil (Sitophilis zeamais). Hybrids therefore require storage pesticides less necessary for local grain. Altogether, the hybrids are a more delicate crop to grow and store than local maize. Although their yields are greater under optimum growing conditions, particularly when other purchased inputs are added, the hybrids introduce new risks. They are best suited to farmers advantaged in both their economic and ecological positions. The IADP-SPSCP and Hybrid Adoption Hybrid maize had already become commonplace in western Kenya by 1976, when the first SPSCP participants took their loans. After its introduction in 1962–63, Kenyans took to it quickly by any standard—and apparently faster than U.S. farmers had thirty years earlier.33 By the project years, probably over half in western Kenya had planted some, although the rate tapered by the mid-1980s.34 Changes in yields are far harder to measure; observers relied mainly on farmers’ oral testimonies and inferences from who kept planting the hybrids.35 Richer farmers and cash croppers tended to try the new seeds before others did.36 Institutional credit had played no big role in the quick spread of hybrids in the first decade of the project.37 As seen earlier, the GMR scheme, other



AFC schemes, and commercial bank credit involved very few farmers in Nyanza. The SRDP, the only other major lending scheme to promote hybrid maize in western Kenya up to 1976, when the SPSCP began, did so only for small minorities of better-off farmers in small parts of two western Kenyan districts, and its evaluation teams had determined that its farmer loans had made only very small differences to uptake there.38 As determinants of adoption and sustained use, agroclimatic zone and wealth mattered more than ethnicity or experience with off-farm work.39 There was nothing inherently conservative about Luo-ness. Now, what about under the IADP? Our sample survey interviews and observations (independent of the government’s) showed that the IADPSPSCP noticeably boosted hybrid maize adoption in the areas studied. We found, though, that its effects did not always last and were accompanied by a general uptake going on anyway. Both borrowers and nonborrowers bought other seeds outside the project for themselves, and borrowers resold and shared those they received on loan.40 In the lakeside lowlands, nearly all the project participants tried the new seeds in the project years, while the proportions of other farmers who did so varied widely from place to place.41 In the upland, better-watered zones, most farmers had used them already, and nearly everyone did by the end of the project regardless of participation.42 Interviews made it clear that the project participants who adopted hybrids did so in the year they actually borrowed, and since most participated only once, it was clear the project had been a key factor in adoption. But wider trends suggested that many of these farmers would eventually have taken up hybrids anyway.43 My data from Kanyamkago, where the project did not operate, show that there too, numerous farmers tried hybrids first anyway.44 So, again, farmers were continuing to try out hybrids afresh, with or without loans to do so.45 In the areas we stayed in and surveyed, most hybrid users found that their yields improved noticeably with hybrids, even (or especially) without synthetic fertilizers. But not all did: in the lower, cotton-growing altitudes, many found hybrid maize yields unreliable and poorer than local maize yields in drier years. Farmers everywhere had noticed bigger problems with creatures deemed storage pests—that is, creatures who found hybrid kernels softer and easier to eat. The changes were not all permanent. Not all farming people who adopted hybrids kept using them yearly as directed. About a quarter of the lowlanders we sampled, and fewer of the uplanders, had stopped using new



hybrid seeds after one trial.46 Farmers who planted the offspring seeds of hybrid maize saw their yields decline in the second and later generations, but some, particularly in the lower altitudes, felt they could not afford to begin buying the seeds more than every few years anyway.47 Wherever we stayed, but especially in the lower zones, farmers had cautiously continued to plant parts of their fields in local strains for at least a year or two after adopting the new varieties.48 Altogether, the reception of hybrids in the lakeside areas had been lukewarm. Farmers were avoiding risks both by continuing to plant hardier strains and by diversifying. Although the IADP-SPSCP did speed hybrid adoption somewhat in the locations it covered, this change did little to reduce regional or local inequalities as planned. Still the uplands benefited most from hybrids: the high-yielding varieties were better suited to these areas from the start. It was still the wealthier farmers who could best sustain hybrid use—where it paid—and the poorer ones who frequently had to lapse out of hybrid use after receiving their first new seeds. Farmers were still vacillating between hybrid and local seeds by 1981, when the last IADP loans were given out. They were still experimenting and hedging their bets. They were adapting to the risks not only of their physical environment, but also of a dicey input. Soil Fertility and “Government Manure” In any part of the world with rural population densities as high and as quickly rising as western Kenya’s, soil fertility is a key issue in economy and ecology. But here it is more. It is also an important element of personal, familial, and cultural self-esteem. It ties directly into issues of human fertility. It does so not just because a rising population can put pressure on less expansible land, but also because the human mind, in western Kenya as elsewhere, ceaselessly creates symbolic metaphors that tie the fertility of land with the fertility and well-being of the people identified with it. A rounded study of fiduciary culture must come to grips with these varied meanings of land and its capacities, for at least three reasons. One is that land is borrowed and lent, over the short term and long. A second is that the animals whose manure has become necessary for its maintenance are constantly being entrusted between individual owners, families, and ecozones. Finally, chemical fertilizer has become a key element—and often the most costly one—in credit packages for farming people.



Luo and their Bantu-speaking neighbors appear not to have spread animal manure as a soil additive in precolonial times. They did, though, recognize abandoned homesteads and their cattle enclosures to be very fertile places.49 Since the early twentieth century, manuring crops has become common practice throughout the region.50 British agricultural officers in western Kenya from the early 1930s on promoted soil conservation keenly, for the future benefit of their empire if not also for that of the locals. They worked hard, sometimes coercively, to promote terracing and contour ridging (keeping furrows perpendicular to slopes) on farms for erosion control, and they instructed farming people about manure and compost use.51 Rising population pressure on land has also induced farmers to seek and accept new ways of keeping soil fertile.52 Nowhere in the Luo country was commercial fertilizer widely used before Kenya’s independence in 1963. But the Kenya government has pushed commercial products—which Luo call mbolea mar serkal, “government manure”—strongly in the western provinces as elsewhere since then, by credit and other means. Unsurprisingly, a large part of the farm debts Luo and neighboring people have accrued have been debts for fertilizer.53 A further word or two about fertilizer and the challenges it can present. The government has imported and subsidized petroleum-dependent products whose prices have sometimes risen as Kenya’s crop prices on world markets fell—as they did in the years of the IADP-SPSCP. The minority of Luo and other western Kenyans who used chemical fertilizers used many nitrogen- and phosphate-rich types, which they bought through both private and public enterprises, mainly in towns. Maize was nearly always the first or only food crop on which they used synthetic fertilizers, except in those upland farms growing coffee where the staple got priority. Most farmers who used fertilizers, particularly without credit, had to transport them to the farms themselves. Although fertilizers were, in themselves, a fairly capital-intensive input, most western Kenyan farmers who applied them did so by labor-intensive methods: many drop spoonfuls into individual seed holes as they plant. In Luo families it is usually men who buy or borrow fertilizer, at least to start, and who supervise its initial use, but women often share the work of applying it. As women do the most time- consuming agricultural tasks, they may well take over unmechanized fertilizer application in time. There are female family heads who pursue fertilizer as actively as anyone, but as female-headed families tend to be somewhat poorer than others, and less



often visited by extension agents, they have had fewer chances to use the chemicals. Farmers in our study seemed to find that synthetic fertilizer raised yields for only one season, while farmyard manure lasted two. Some found the synthetic fertilizer “addictive”: if they stopped using it, they found their yields fell, for at least a year or two, below the levels they attained before trying fertilizer—particularly in the lower zones where farming is riskiest anyway. Fertilizer reduces apparent needs for fallow rotations and encourages plowing every season, which in turn may reduce the soil’s capacity to hold its own nutrients against leaching. The unreliability of input supplies in western Kenya makes these concerns critical, especially in the lower zones, where having only one crop per year (and an unreliable one at that) can make cash for farm investments especially scarce and unreliable around planting time. In all, whether they borrow or buy it, smaller-scale farmers find synthetic fertilizer a risky proposition.54 Fertilizer’s weight and bulk are added disincentives.55 Many Nyanza farmers believe—or at least want to believe—that their soil is fertile enough without artificial additives. This is a matter of personal and family pride. Landholding in Luoland is inextricably tied to lineage: it is the spatial expression of genealogy and a man’s most fundamental inheritance. So to admit that one’s land is infertile is to admit a kind of personal and familial weakness. (Using manure at least gives the farmer the pride of exploiting the family’s own animals, a cherished form of wealth and strength.) These sentiments are easy to exaggerate, but they should not be ignored. Farmers taking up fertilizer have usually relied more on trial and error than on government instructions. Credit scheme borrowers frequently take the fertilizer intended for their hybrid maize and groundnuts, for instance, to try on their local maize, sorghum, or kitchen-garden legumes like kales. In general, Nyanza farmers who apply fertilizer use less than the government-recommended quantities for the hectarage they plant.56 Many apply fertilizer not to whole fields but only to particular spots that they think lack nutrients. Most, however, mix synthetic fertilizer with their own animals’ manure, basing the proportions on their own observations and circumstances. Government instruction manuals have not, at least until lately, advised about mixing fertilizer with manure, as farmers like to do. Nor do many farmers ever learn the government’s technical recommendations in the first place.



In most of the Luo country, synthetic fertilizers by themselves can probably not repay investment, even with hybrid seeds, without being accompanied by a complex set of other changes in crop husbandry techniques—for instance, early planting, row planting with precise spacing, and sometimes extra weeding. Even then they are financially dubious.57 But they remain very much a part of official plans and programs with which Luo and other western Kenyan farming people have had to learn to live. Now we return to our story. Credit had never done much to win Luo or their neighbors over to commercial, synthetic fertilizer. Before the IADP-SPSCP began in 1975–76, synthetic fertilizer, the “government manure,” was used, like hybrid maize seeds, mainly in the higher-altitude, higher-rainfall areas of western Kenya. Few Luo used it on either their other food crops or cash crops.58 The SRDP had lent fertilizer, as part of its hybrid seed package, to smallholders in the Luhya-speaking Vihiga-Hamisi. That action appeared to have little effect.59 In a bold declaration of failure, a subcommittee of the SRDP evaluation team suggested in 1975, on the basis of the Vihiga-Hamisi findings, that a moratorium be declared on all fertilizer promotion projects for smallholders. The findings of the SRDP evaluation team on Vihiga-Hamisi became available in 1975, just before the start of the IADP-SPSCP. But no one took much account of the caveats in preparing the huge new scheme. The IADP-SPSCP planners hoped—or at least penned a hope for the record—that their credit would enable and encourage thousands more to use synthetic fertilizer. To them this input, as much as any other, meant progress. The idea of preserving soil fertility—through minimum tillage techniques, green manuring, and so on—meant less at the time than augmenting it with additives. Even as borrowers, again, farmers in the Luo country showed scant enthusiasm about synthetic fertilizer. In Kagan and West Uyoma, both down in the cotton zone, fewer than 10 percent of the farmers we sampled had ever tried fertilizers, whether they borrowed or not, by the sixth year of the project, in 1981. Even several of the agricultural extension agents refused to use them on their own farms. In (Luhya-populated) East Isukha, up in the coffee zone, the project made a bigger difference—for a while. Project loans, we found, boosted the proportion of (maize) fertilizer users among participants sampled from about 50 to 88 percent, while user percentages rose among others sampled from about 50 to 54 percent between 1975 and 1981. But 59 percent of those who tried synthetic fertilizers before, during, or after



the project years dropped them by 1981.60 Even by the end of the project, in aggregate figures, participation correlated only weakly and insignificantly with fertilizer adoption. In light of earlier projects and studies, the findings on fertilizer adoption under the IADP-SPSCP contained no big surprises. It just was not catching hold. Why did so few farmers take to the fertilizers? Their main objection was the expense, both absolutely and in relation to perceived yield increments. Fertilizers were by far the most expensive inputs issued to IADP-SPSCP borrowers. At the going rate of five shillings per day, a Luo farmer doing casual farm labor for neighbors would have had to work ninety days just to pay for the amount of fertilizer provided in an IADP-SPSCP loan package.61 Even borrowers sometimes deemed their loan fertilizers too valuable not to sell in turn to someone else, and few wanted to have to repay such heavy loans anyway.62 School fees made a better investment, many felt. Synthetic fertilizer’s perceived “addictiveness” to the soil, its lasting only a year instead of two as with manure, its weight and bulk in transport, and its complex ancillary requirements like seed spacing and precise timing (whether prescribed for agronomic reasons or out of subtler political-economic motives of regulation) posed added disincentives. Under the circumstances, the farmers’ refusal to adopt synthetic fertilizers—particularly in the lower zones, where agriculture is relatively risky anyway—seemed sensible and judicious. “Pest Medicine”: Creatures Who Crawl and Their Control Just as plants get defined as weeds by being in the wrong place at the wrong time, or by surviving on the wrong foods, so do animals get defined as pests. Like fertilizers, chemical weapons against small animals have become widespread in western Kenya as across most of Africa, and they have been another central element in the borrowing and lending that have tied the people of the region into a wider financial world. Although parts of the western Kenyan highlands count among the world’s most important producers of the natural pesticide pyrethrum, the Lake Basin has become increasingly dependent upon imported insecticides, particularly for cash crops like coffee, tea, cotton, and tobacco, and credit has helped spread their use around. In the development industry as in commercial manufacturing, it has been customary to define crawling creatures competing for human food and other crops as pests. This simple semantic device helps legitimize an eco-



nomic order, and thus perhaps a political one too. It also helps people forget that many of these animals, like humans themselves, are sentient creatures. “Pest control,” by whatever term, is not a new idea among the Luo. In the past they have used various means, including “supernatural” medicines in the fields, charcoal dust (mirni) and ashes sprinkled both into maize plant funnels and over grain in granaries, crop rotation and spacing, and stubbleburning. The Luo term yath and the Swahili dawa, both used also for medicine, refer to old local pest control substances and new synthetic pesticides alike. The terms suggest not only a close cognitive association between old and new forms but also an element of mystery about their workings. Luo became exposed to commercial pesticides in the late colonial years. Because of low prices for cotton, European agronomists and administrators considered dusts and sprays uneconomical in Nyanza and other cotton-growing areas until after the second world war. But the development of the cheap and highly residual DDT, and its effective use against jassids in the Gezira area of the Sudan in the mid-1940s, led to its experimental use in the Nyanza and Kitui cotton areas in later years. By 1960–63, when the Department of Agriculture offered free sprayings to selected cotton growers they deemed progressive, other chlorinated hydrocarbons, including endrin, aldrin, and dieldrin, had come onto the world market and become available to a few Nyanza farmers.63 Now many pesticides are available, through the same channels as fertilizer, in towns around western Kenya. Some Luo mix older and newer pest control means—for instance, adding ashes to synthetic chemicals in granaries.64 Like fertilizers and most other comparably expensive goods, pesticides are usually procured by men. It is also men who do most of the crop dusting and spraying, particularly when a homestead first adopts the input. As with fertilizers, most farmers who use pesticides apply less than officially recommended amounts, and some poorer farmers team up with others to buy liter bottles, sometimes from credit program borrowers. In western Kenya the use of commercial pesticides, and the pest populations themselves, tend to be crop specific, and pesticides can be highly localized.65 Generally speaking, it is the exogenous cash crops that have involved the most elaborate contrivances for pest control. This is partly because the cash crops are among the crops most broadly susceptible to the smaller pests, which include members of the Insecta (insect), Arachnida (mite), and Nematoda (eelworm) classes.66 The greater complexity and extent of pesticide use on industrial crops also derives, surely, from more intensive institutional re-



search and supervision. While a large and detailed literature on industrial crop plants and their pests was part of Kenya’s colonial heritage, far less research has yet been done for important indigenous Kenyan food crops like sorghum, millets, and grams. The lingo of pest control, like the lingo of “development” altogether, leans heavily on the lingo of war. Combat against insects is equated with combat against poverty, as though either could be defeated with only enough firepower of some sort. Just as military leaders borrow from the world of biology in talking about wiping out “nests” of enemy soldiers—dehumanizing the deed seems to make it easier to pull the trigger—agronomists and veterinary officials borrow from the language of war to build up their own sense of purpose. World Bankers, we recall, travel like soldiers, not on trips but on “missions.” The language of a brave, outnumbered struggle creeps through common parlance. By the 1970s, both financiers and agronomists, in the aid agencies and the government, saw credit as a chance for farmers to reduce pest populations on existing crops, and they knew that new crops and strains would bring new pests in their wake. The humanocentric term pest could mean many things, from worms and insects to moles and monkeys, but the smaller, quicker-breeding creatures—the bugs and other crawlers—got the official attention. The IADP-SPSCP crop packages for the Luo country and nearby areas included field dusts and sprays, for both food crops like maize and cash crops like cotton, and chemicals for treating maize and other foods in granaries.67 In the Luo tongue these all come under yath, meaning plant, herbal medicine, or more loosely, something that works by charmed or mysterious means. The loan project’s effects in promoting pest medicines were hard to assess for several reasons, but they certainly did not produce the lasting impact the official plans predicted. In the early 1970s, before the IADP-SPSCP began, fewer than 10 percent of farmers in Nyanza and Western Provinces were found to use them on maize or other food crops; no one accurately measured their use on cash crops.68 By the late IADP-SPSCP years, pesticide use varied greatly from locality to locality, and from field to field; some farmers had used pesticides intermittently already; and the expense and unreliable supplies of chemicals led borrowers and other farmers to share often.69 Like fertilizers, synthetic pesticides rose steeply in price in the 1970s and early 1980s.70 These rises greatly outstripped crop price rises. By the early 1980s it was hard for farmers buying cotton pesticides to break even.71



Cotton growers who took pesticides in IADP-SPSCP loans felt lucky if they could clear their loans with their harvests. Most who used field pesticides, in the project areas we studied, used them on cotton alone, and this is a crop of only the lower-altitude zones. In only one of three sampled project areas, cotton-growing Kagan, did more than half the sampled farmers adopt field pesticides before or during the project years.72 Here and in West Uyoma, also in the cotton zone, most users had indeed taken their pesticides on loan, in the IADP-SPSCP or other projects.73 Most of these borrowers, however, had either abandoned them as their periods of borrowing ended or planned to do so as soon as they did. As with fertilizers, farmers generally felt that the input, while potentially useful, was too expensive for them to afford with their own savings, or even on loan. Sensibly, poorer cotton growers sometimes formed partnerships of two to four for buying liter bottles jointly. Others simply bought small quantities of pesticides from project borrowers. Most users applied less of the pesticides than recommended, whether to their ultimate gain or not. Those who stopped complained of the expense and time the chemicals took, given crop risks they faced anyway. Farmers who tried food storage pesticides found these hurt the flavor of their maize and beans, a damage that also made the food hard to sell to local buyers. Inputs Combinations, Flexibility, and the Division of Labor The three inputs that project planners expected would be used together to provide dramatically increased yields—hybrid seeds, fertilizers, and pesticides—differed widely in the responses they received on the farms, and farmers’ responses to each varied widely from one place to another. Altogether, the IADP-SPSCP’s effects in promoting new farm technology were discernible but small. Farming people who accepted inputs on loan took them up cautiously and experimentally. Their responses shed much doubt on the assumption that farmers can, should, and will adopt new recommended technology as “crop packages” in large-scale credit schemes like the IADP-SPSCP. Farmers did not take up the new inputs in the planned combinations. Few used them in the approved measures from the start; most experimented gradually. People tried project inputs on non-project crops, and vice versa: some tried maize fertilizer on kales, or tea fertilizer on maize—sometimes



with results they liked. One Kagan farmer even tried using his cotton pesticides to kill ticks on his cattle. (Alas, the cattle died. The case became well known, and no one in the neighborhood tried this again.) Like other farming people, the project’s borrowers picked their own crops and their own inputs each year. They took suggestions, but they did not make leaps of faith. Borrowers made up their own minds about how much land to devote to each of the crops they planted rather than blindly following the project plans. To these small-scale farmers, who must rely mainly on their own experiences, observations, and intuitions in farming—and who, in any case, are seldom visited by government extension agents—the notion of a prescribed crop package did not mean much. Some of the promoted inputs appeared not to give a farmer economically worthwhile increases in yields unless used in conjunction with others, and with a host of other recommended techniques, including precise timing and spacing. Farmers never obtained the yield increases expected from the prescribed combinations, partly because they seldom had the chance or the adequate information to use them in those combinations.74 Nor, given supply irregularities and delays, could many have used them as prescribed even if they had wished. The packages were not designed with enough local flexibility. South Nyanza cotton-zone farmers usually had good reasons why 0.4 hectares of maize, 0.4 hectares of groundnuts, and 0.8 hectares of cotton did not suit their personal needs. (Most had little chance to learn just what size a hectare is to begin with, and some, understandably enough, confused it with an acre.) Even in normal times, Luo farmers base their crop ratios and land allocations on countless diverse considerations like soil qualities and drainage, possible intercropping mixtures, conflicts of seasonal labor demand peaks with other crops and off-farm commitments, distance from market outlets, and conflicting cash needs . . . to say nothing of their personal food tastes. The rigid crop hectarage prescriptions of the IADP-SPSCP seemed to leave little room for adjustments based on factors like these. And since the extension agents seldom visited their fields anyway, borrowers saw little cause to conform. If packages had been designed to let farmers try a little of one recommended input or another and see a small but clear increase in their yields, farmers might, for better or worse, have been tempted to try more on their own.75 Of course, this is easier said than done. In the end, if hybrid seeds, fertilizers, and pesticides are to be desired— by no means a foregone conclusion in western Kenya—then there are only



two ways a seasonal credit scheme can help promote their adoption. One is the strict organization of extension, farmer supervision, and input delivery. (This is the British American Tobacco solution, discussed later.) The other is the design, or choice, of crop technology to accommodate the cautious and experimental nature of smallholder input adoption, and the lapses that occur when supplies are irregular and the farming family experiences conflicting cash needs. The IADP-SPSCP fell short on both counts. The project showed how expensive green revolution inputs really could be for borrowers, as for other farmers. The most popular input, the seeds, was the cheapest—no coincidence, I think, especially given many rural people’s anxieties about being considered greedy or overambitious. More farmers wished to use the new inputs than could, and most used less of them than they would have liked—particularly of the new seeds. The expense of inputs even to farmers who took them first on loan continued to impress project observers. Farmers’ responses were a comment on poverty and on the opportunity costs of capital and labor tied up, as well as on the intrinsic merits of the technology. Timing was critical. Uplanders with two reliable crop seasons per year could better afford cash-intensive innovations than lowlanders without. They could plant right after harvesting, when cash is easiest to obtain. Periodic cash demands such as school fees had also to be taken into account.76 Nor, it turned out, could a new input’s labor demands clash with those of other crops. Cotton pesticide spraying, needing repetition, conflicted with the peak demands of weeding in maize, sorghum, and other major crops. In double-cropping zones, the harvest of “long rains” cotton conflicted with the weeding of “short rains” maize and beans. This brings us to the question of who did the work. Like many projects of its kind, the IADP-SPSCP issued inputs to men for crops grown mainly by women. Correcting the problem would not have been simple since, as noted, it is senior men who usually try to represent their homesteads before the government and conduct the biggest financial transactions. And the bigger the quantities of a crop produced for market, the more men tend to take over . . . at least in the marketing. But the contradiction was clear enough. The gender problem helps explain why some borrowers left their maize fertilizer at the cooperative society stores after signing for it and never returned to pick it up, even though they would be expected to repay its cost with interest. In the lower-altitude, food-importing areas, maize counted mainly for home consumption and was therefore seen as a female responsi-



bility, which helps explain borrowing men’s lukewarm response to hybrids there. In contrast, where men saw potential for bulk marketing, as with highland maize or lowland cotton, they took a keener interest in the new inputs, for it was they who would have first crack at the cash rewards. In parts of Kenya covered by the IADP-SPSCP, the extension service found, farmers adopted new inputs faster for cash crops than for food crops.77 The division of labor and rewards within families may help to explain this nationwide finding. Credit’s and extension’s being biased toward men, and men’s keener interest in crops for cash than for home consumption, made credit and extension likely to influence cash crops more, despite project planners’ attempts to balance food and cash crops in their farm prescriptions.78 Here too, the “multicrop package” appears as an artificial and unrealistic construct of development program planners, pretty meaningless to those who do the farming. Where credit and extension services are geared predominantly for one sex, and some of the enterprises promoted lie customarily in the domain of the other, the adoption of the package components will be selective and uneven. Inputs that must be used in precise combinations are not appropriate for a smallholder credit scheme under circumstances like these. Farm Finance and the Sector Illusion The IADP-SPSCP planners raised hopes that the loans would give farmers a kind of foothold for procuring expensive new inputs. Once farmers participated, it was expected, the raised yields would provide them with capital to reinvest gradually in more of the inputs in a pattern of cyclical “takeoff.”79 The plans thus assumed that farmers would: (1) use inputs in the prescribed combinations, (2) increase their yields, (3) be able and willing to market additional produce harvested, (4) save the cash earnings until the next planting season, and (5) want to reinvest the earnings in the same crop enterprises. While all these assumptions appear unsound in retrospect, the last two were the shakiest, and the most simplistic. For farmers are not simply farmers, but people who commonly have multiple sources of livelihood, diverse cash commitments and interests in consumption as well as production, and, frequently, aspirations for formal education and off-farm work. Program planners’ compartmentalizing the interests or activities of rural people reflected



the rigid sectoral divisions—the categories and the corridors—within aid agencies themselves, and among government ministries. Full-time staffers of agricultural planning bodies wanted to think of agriculture as the paramount interest of those who practiced it. Just as Nairobi loan administrators in charge of the IADP-SPSCP were dismayed to hear that farmers were using late loan funds to pay school fees for their children or other junior kin, they were bitterly disappointed to hear that many others were spending earnings from their project crops on trade. To these officials, such “diversions” meant project failure. They were termed “leakages” to other “sectors”—industry, transport, education—as though “sectors” should somehow remain watertight. But farming people did not see it this way. For them, school fees were an investment with longer-lasting benefits, and trading, a safer one for the short term, was seen as an investment in which assets could more easily be liquidated in emergencies.80 In a sense, the program planners’ expectation of intrasectoral investment and the Luo farmers’ contrary behavior were a curious reversal of an old anthropological model. For it is the tropical African farmers whom international development planners have often expected to adhere to customary ideals of “spheres of exchange” such as those outlined by Bohannan (1955, 1959) or Barth (1967). Here it was those planners who projected their own ideas about spheres of exchange onto tropical African farmers. The crop packages to which the IADP-SPSCP financiers pinned their dreams epitomized the “whole-farm approach,” as we have seen, from the “farming systems” school of the 1970s. Rural people’s re-lending and sharing around their inputs challenged the very notion of a “family farm” as a unit, as did their continuing, cautious use of fragmented holdings. Even if something called the farm could be identified, it was hard to program by formula. That researchers were turning up increasingly complex findings about farmers’ decision-making did not mean that the best plans for action would be the most complex. And while financiers and agronomists were certainly becoming better at identifying the constraints affecting farmers’ decisions about crops, still, neither were in any position to write the grand scheme of the family farm. This part of development planning would remain for farmers themselves.


Debts and Dodges The Moral and the Hazard in Repayment The creditor hath a better memory than the debtor. —SPANISH PROVERB


oral hazard” is how international aid financiers speak of willful loan defaulting. The phrase, like the term default itself, tells no more about borrowers than about lenders, who seem to claim by it an ethical ascendancy. Moral hazard seems always to refer to borrowers, never to lenders themselves. More deeply implicit is an assumption about relative responsibilities: that failure to repay a state agency or international bank hundreds or thousands of miles away is to be judged good or evil in isolation, not in relation to other claims on a borrower’s resources. Intimacy or social distance between borrower and lender is not part of the idea. But borrowers sometimes see these things differently. Recalling the wide and complex network of entrustments and obligations that perennially enmesh rural-dwelling Luo, as described in The Nature of Entrustment, I now discuss loan repayment under the IADP-SPSCP, suggesting how Luo farmers felt about it and drawing further conclusions from a few comparisons. The program designers had little historical grounds on which to expect high rates of repayment. By 1975, when the first SPSCP loans were approved (a year before the IADP startup), both the donor agencies and government recognized seasonal small farm credit, with or without land title security, to be a great financial risk. The World Bank “sector policy paper” on agricultural credit published in May that year stated bluntly that “repayment performance by large and small borrowers on farm loans [in Africa, Asia, and Latin America] is typically poor” (1975: 13) and presented a list of arrears figures, by country, that would sober any credit enthusiast (1975: Annex 12, p. 83). Kenya had seen the GMR and the SRDP, in which only



small fractions had been repaid. The only reason for program planners to be optimistic about “recovery,” as they called it, was the inclusion of the inedible industrial “anchor crops” this time: the crops it was hard to sell without going through state-appointed buyers. But IADP-SPSCP loans too went mostly unrepaid. Scarcely over 20 percent was returned to government coffers altogether by the time the credit schemes were shut down, although the details varied somewhat by subproject, and although inconsistent bookkeeping in the cooperatives left some doubts about the exact percentages.1 The later the loans, the less farmers repaid.2 Proportions of borrowers who repaid nothing at all rose steadily.3 Early defaulters set examples for neighbors, who decided they too could at least postpone repayment with impunity. The international financiers and government officials reacted to the low repayment rates in various ways over the project’s course. Under World Bank arm twisting and with perhaps some impetus of its own, the Kenya government recruited the Provincial Administration and its chiefs, along with new cooperative field assistants, to pursue debtors. The cooperatives began requiring guarantors and witnesses for farmers to borrow. The World Bank regional mission, based in Nairobi, pressed government officials to ensure more timely release of loan funds from that capital city. Although many agency and government officials in Nairobi spoke of “moral hazard,” few went as far as to accuse the farmers openly of widespread, deliberate cheating or immorality. (To do so would have been diplomatically risky for agency financiers and a career gamble for civil servants.) Nor would anyone take personal responsibility for the late loans, the sometimes inappropriate input packages, the lax extension services, and other problems that all knew were hurting repayment. (Indeed, these were no one individual’s fault.) Instead, project officials most often focused the blame on a favorite, anonymous scapegoat: “some unscrupulous politicians.” True, some local officeholders or aspirants had indeed tried to turn the loans into political capital by convincing farmers that the loans were simply grants that they had won them. This made a handy explanation for loan defaults, for it exonerated both the farmers and the project administrators themselves. By the early 1980s, however, no one confused the loans for gifts or grants. All interviewed showed voluntarily that they knew these were expected (officially, anyway) to be repaid. The English word loan was the term rural Luo and Luhya usually used for project financing when speaking their own tongues. As this word choice suggests, they considered the project to be



not their own. But they did understand that the term implied repayment— as well as their lenders did, at least. What public misconceptions existed seemed to be of an opposite kind. Compulsion and Confusion: Some Popular Perceptions “Creditor, n. One of a tribe of savages living beyond the Financial Straits and dreaded for their desolating incursions.” This was the definition penned by Ambrose Bierce in The Devil’s Dictionary.4 Farming people most anywhere know what he meant. The Kenya government’s frequent threats to punish defaulters— threats broadcast on the radio, in the newspapers, in the chiefs’ baraza, in legal notices from the cooperative unions—had reached even the most remote Nyanza homesteads, and borrowers in arrears were rattled.5 Although farmers understood well the mechanics of loan applications, input deliveries, and repayments, few had access to knowledge about how credit schemes worked at the higher echelons of government. Only the highly schooled knew the official names or acronyms of the lending schemes—to other local ears these were meaningless and incomprehensible. Most appeared not to distinguish clearly between schemes in which defaulters’ land could theoretically be confiscated (AFC and commercial bank schemes) and those in which it could not (the IADP-SPSCP and the New Seasonal Credit Scheme, described in Chapter 8, and the SRDP before them). This was indeed hard for them to do, since not all who borrowed from the AFC or commercial banks and defaulted seemed to be losing their lands. Those who saw neighbors borrowing and losing property assumed it could happen to them too. Cooperatives officials could exploit the ambiguity. So by the early 1980s, rural people generally spoke as if sooner or later the government would try to punish cooperative loan defaulters—confiscating livestock, land, or both. And this was the kind of threat Luo farmers do not take lightly. Offsetting the threat, in part, was the weight of gerontocracy. Borrowers tended to be older men than the cooperative field assistants and agricultural extension agents sent to hound them. Asking one’s elder to pay up was awkward. The cooperative unions tried to strengthen their bargaining position and reduce their paperwork by engaging private law firms as collection agents, which of course added their fees to debtors’ arrears and only caused farmers more consternation. Did farmers want to repay, or feel they had to repay? When speaking of



repayment, in structured or in more casual, free-flowing interviews, many farmers mentioned divinity (Nyasaye dwaro, God wills . . .), or good (ber) and evil (rach), but often the same ones spoke of property confiscations, discontinued credit, and other official sanctions. They seemed to feel, that is, a complex and variable mixture of internal and external moral sanctions for which no general statement would suffice.6 It seemed that most of the borrowers in arrears, including the defaulters, sincerely wanted to repay, both to satisfy their own sense of propriety and to avoid possible punishments, but most had not gotten around to it.7 They felt as some academicians feel about casually borrowed books they earnestly intend to return: remiss, but not quite remiss enough to act on their own. The imagined government confiscations were still distant thunder, as no IADP-SPSCP borrower interviewed had lost property to any seizure. In farmers’ eyes, it seemed, project debts ranked too low beside their bridewealth debts, their payments to healers or diviners, their funeral transport and contributions, their ambitions for their children’s schooling, and other personal or longer-term priorities.8 Coloring the choices was the tenuous attachment Luo farmers felt to the state—the product of a checkered history with both the colonial and national governments. More than one experienced AFC field officer generalized that Luo debtors tended to avoid their creditors and to use prayer to protect themselves from confiscations, whereas Gikuyu debtors more often came to the office to work out some arrangement in person. Such stereotypes can be exaggerated, but my observations of Luo in debt suggest his remarks contained some truth. Luo had historically had closer ties with church missions than with central government, whereas Gikuyu, living nearer the nation’s capital, had had closer involvement with government. These histories temper responses to state credit. How well farmers could afford to repay must depend on definition and family circumstance. The median income of Nyanza Province in 1974–75, just before the project began, was officially estimated at about 2,690 shillings, including the value of goods produced for home consumption.9 For most IADP-SPSCP borrowers, turning in one thousand shillings’ worth of maize at official prices (7.7 sacks of ninety kilograms in 1982) from their farms was hard even in a good year, especially without the planned increases in yields. Many farmers expected that their debts would be forgiven if their crops failed, as Luo who rent land from other Luo are sometimes forgiven their unpaid rent upon crop failure. But the extension agents visited them too seldom to know whose crops did how well. When government officers



rescheduled collection deadlines but refused to write off the loans after the worst seasons, many borrowing farmers expressed bitterness. How farmers repaid varied. Most who repaid something repaid between 30 and 60 percent of what they owed, some in kind, and usually in seasonal installments over more than one year.10 Many borrowers repaid from off-farm earnings. Always reluctant to convert wealth “downward” from livestock to grain or cash, Luo men saved this strategy as a last resort. In this respect they showed assumptions much at variance with those of their lenders, who tended to suppose that different forms of property were pretty freely substitutable or “fungible.” Here it is worth recalling the range and depth of meanings that animals, and cattle in particular, hold for Luo people, and especially for elder men.11 Although cattle are sometimes discussed as if they were the indigenous bank accounts, they are never only that. As the source of milk and manure, they are the very essence of nurturance and fertility. As the essential item of marriage payments, they are a crucial means of human reproduction. As the object of major sacrifices, they are a means of solidifying society and communicating with divinity. Even when they are dead, they continue to mark valued social ties and to reaffirm the bonds and barriers between humans, as their meat is divided up and apportioned by precise kinship formula and their hides return home from funerals with specially appointed recipients. Cattle, among Luo and other Nilotic people, remain the essence of value, their blood the lifeblood of society and religion, in the deepest sense. One does not let go of such things lightly. Different Understandings of Interest Charges During early project negotiations, as noted earlier, the World Bank and USAID had pressed for farmer interest rates to reflect as much as possible the “real costs” of lending, but the government had insisted on substantial subsidies—always politically attractive—until figures of 10 to 12 percent per year had been reached. This was a routine pattern of negotiation between the giant aid agency and an African government. Borrowers had good economic reason to postpone repaying as long as possible. Twelve percent was a subsidized rate lower than inflation: it was negative real interest.12 But although economists tend to assume that farmers follow and respond sensitively to interest rates, this was not always so in Luoland under the IADP-SPSCP. Few farmers were gifted enough with



figures to calculate compound interest charges accurately in their heads. Although they usually knew some interest would be charged, most did not know how much. Many were never told the shilling value of the inputs they were receiving, and receiving combinations of cash, seeds, and chemicals (sometimes at different times) obscured the total worth. Some farmers were misinformed by local project officials about what interest charges to expect, either because these men were poorly instructed themselves or because they saw political profit in underrepresenting the charges to farmers. Nearly all Luo and others living around them in the countryside seemed to know well that the shilling was losing value, but currency inflation rates were seldom announced in the Kenyan mass media, and only a few of the most privileged and literate could calculate interest gains and losses in terms relative to inflation. Interest charges not being customary in local lending, many resented having to repay more than they had received.13 Rural people had little way of knowing that the interest charges were subsidized. Moreover, farmers did not necessarily understand or respect the system of “rates” per annum by which their lenders calculated interest. As suggested earlier, this linear function relating time to money is not the most common way of thinking about loan interest in rural East Africa (or West Africa either, in my experience). Farmers familiar with the concept of interest frequently prefer to conceive of it in terms of ratios, or fixed proportions, of interest to principal, which may be renegotiable after a harvest or two if the loan is still unrepaid. The seasonal dimension is important. It is only after harvests that those rural people relying mainly on farming are likely to have enough to repay. The idea of constantly and indefinitely accrued interest debt is unnatural to farming people, at least in equatorial East Africa. While some of the financiers and project implementers in Nairobi may have sensed these things, it was not considered proper to speak of them. The dominant figure of discourse in the aid agencies was the “rational” peasant—the calculating, profit-maximizing individual. To suggest that this person operated under a different logic from that of textbook economics, with different premises about the relation between time and money, was to risk being mistaken as ethnocentric, elitist, or possibly racist. Government functionaries sometimes seemed genuinely torn between the official and unofficial world views to which they had been exposed. They knew the new international rhetoric about farmer rationality, but some, even high in the ministries, were farmers too, and some doubtless knew well that cultural premises about “interest” can differ. At least when foreigners were present,



though, there was no convenient language to discuss modes of economic calculation that might be radically different but equally valid in local context. Safest was to play along with what they thought the foreign aid agents would understand and say it was all a problem of the lack of education in the countryside. Food and Cash Crop Marketing Local markets and “informal” trading habits in western Kenya provide a flexible and in many ways efficient system of exchange for farm products, one deeply imbued with social and political, as well as economic, functions and meanings.14 Food crop marketing in Kenya, and particularly maize marketing, is politically explosive, being the subject of intense struggles between the government and private traders. The state cooperatives and stateowned (“parastatal”) marketing boards are the officially favored buyers. In the early decades after Independence it was government policy that cooperatives must “expand geographically with a view to facilitating the move from subsistence economy to monetary economy and thereby opening up new areas for economic development.”15 “New areas” meant the geographically more peripheral and lower areas—like lakeside Luoland—where farmers have always consumed much of their food crops at home.16 To compete, official buyers need to offer farmers some special advantages, in price or convenience. In Kenya as a whole, government buyers in the late project years got hold of only about 10 to 30 percent of the crops officially expected—for reasons of timing, spacing, price, and possibilities of loan defaulting.17 Up to the time of independence in 1963, cotton buying and ginning in Nyanza Province remained in the hands of “Asian” traders, many of Indian extraction. Nyanza farmers today remember these traders as crafty merchants who cheated farmers by cutting short the springs inside their scales or just by reading and writing. The stereotype may, of course, have derived from envy, like rumors in Kanyamkago that the richest farmers were cattle thieves and father-beaters, or just from prejudice. But it is familiar in Africa. The “minority middleman” or “pariah capitalist” is not always Indian. In Senegal or the Gambia, he—and it is usually a man, or network of men—is usually Lebanese (in the cities) or Mauritanian (in the cities or countryside).18 The point is not the place of origin, or even, for the serious analyst, the cultural ethos of that place. It is a process and a structural position of semi-alienation. It is that these are people who



consider themselves, even after a generation or two, to be living away from their homes; who do not always feel well rooted or appreciated where they are trading; who may not wish, or be allowed, to integrate or intermarry; and who are induced to trust mainly other members of their diaspora. Their alienation from the majority is a self- exaggerating cycle. There is clearly some self-selection in the process, too: the individuals and families who are likely to travel long distances to trade in the first place are likely to be those who have special ambition, individualist outlook, and “hustle.” The majority’s relations with the “pariah capitalist” are usually double edged: dependency for access to essential goods and markets, and resentment about the prices or loan terms offered. High loan interest seems exploitative to some locals and outsiders, but it may be at least partly justified by high risks of default or costs of chasing debtors, high opportunity costs of capital, or high inflation.19 With independence in the 1960s, the government prohibited private trade in cotton, awarding the buying and processing functions to the cooperatives. (A similar shift had been occurring in Tanzania.) In the 1980s Nyanza cooperatives held exclusive rights in local purchasing, transport, and ginning. The parastatal Cotton Lint and Seed Marketing Board (CLSMB) took care of the marketing and (with some private companies) further processing after the ginning. Farmers bagged their cotton and transported it themselves, usually by donkey or bicycle, to the cooperative crop stores, where cooperative officers weighed it and recorded its amounts. The unions trucked it later to their ginneries. Only then did the CLSMB release funds to the cooperatives to pay the farmers. And farmers complained bitterly of delays of several months getting paid. Revealing were farmers’ comments comparing the cooperative cotton marketing system with the old system of Asian private buyers. As I was surprised to see at the time, most said they had preferred the old Asian traders despite their supposed sharp practices.20 The opinions were neither simple nor unanimous; many farmers appreciated cooperative principles even while feeling abused by their own cooperatives. Some doubtless romanticized the past. But one wry Kagan informant seemed to speak for other cotton growers when he said, “You know, sometimes I wish they’d just let those Hindus come back and exploit us.” What the comment meant, I think, was not simply that the farmers wanted a reversion to the old system of unfettered trade. It was that they wanted some balance between public and private marketing. They had seen



the worst of both, at different times; they had gone from the frying pan into the fire. It was surely the farmers’ lack of alternative markets that had made private traders as unscrupulous as they had been and that had later made the cooperatives so sluggish and disorderly. Competition between the public and private channels should make one more fair, the other more efficient. The ballooning of the cooperatives from the 1950s to the 1980s substituted one form of local exploitation with another. It was no longer an endogamous, ethnically and racially distinct set of immigrant traders doing the profiteering in cotton but a more or less exogamous set of local entrepreneurs, still culturally integrated with the producers, and usually producers themselves. “Maize Finds Its Own Market” Since the 1950s, western Kenyan smallholders have sold some of their maize and some other food crops through cooperatives and licensed traders, who have resold to state marketing boards operating on behalf of the state. The National Cereals and Produce Board, known locally as the “maize board,” offered seasonally stable prices under the government’s policy of maize price controls during the last decades of the twentieth century. But the functioning of the state-run system was far from smooth, as the ubiquity of police roadblocks throughout the country, set up mainly to control maize movement, suggested.21 Always controversial in Kenya, and potentially explosive politically, maize pricing and marketing legislation has failed to prevent periodic shortages of maize in the countryside or the major cities. As in other African countries, food prices have been kept below market rates (to pro-market economists, “artificially” low or “distorted”)—in the interests of urban consumers and at the expense of producers. The practice seems frequently to derive from government fears that subversive political forces are most likely to erupt first in the cities.22 Maize controls have failed to keep a lid on the brisk illegal trade, in which very many public and private vehicles, and no small number of public officials, appear to have been involved. Indeed, the controls are what cause the illegal trade to flourish. Such is the extent of the hidden commerce that no available statistics on maize marketing can be trusted on total amounts actually bought and sold.23 Moreover, any simple distinction between public and private sectors of the grain economy would obscure currents of underground commerce linking the two. The IADP-SPSCP plans stated that by selling project crops through the



state cooperatives and marketing boards, farmers would repay their loans and replenish project funds for re-lending to others. Everyone knew farming people would eat parts of their food crops. Hence the special designation “anchor crops” for industrial ones like cotton or sunflower seeds, which were useless to farmers without a market and saleable only through official buyers. The designers also wanted farmers to sell parts of the food crops too through official channels. But maize moved around by mysterious means, as suggested above. Government attempts to control prices, in western Kenya like anywhere else, always meant there was money to be made under the table. Cooperative officers, controlling bulk storage and often transport, and usually being literate, were well placed to profit. False receipts appeared in the study areas and all over Kenya. Truck tracks appeared in strange places in the morning as evidence that some buyers (including licensed ones) kept busy at night, illegally supplying the lakeside areas and the big upland sugar-growing areas where food often ran short rather than turning the maize over to the state maize board. Others who could work deals with roadblock policemen needed not bother moving at night. Any distinction between public and private marketing blurred beyond recognition.24 As Pilista Ogutu of Kagan put it, “maize finds its own market.” The brisk private food trade, impervious to but also fueled by government regulation, gave borrowers ample chance to dodge deductions on maize liens if they chose. Maize and other staple foods proved unsuitable to lenders as security for smallholder credit. Did the official “anchor crops,” the industrial crops, serve the purpose any better? In theory, cash crops make better crop liens than food crops. Cotton and sunflowers were the main industrial crops of the IADP-SPSCP in western Kenya. These “anchor crops,” presumed saleable only to government monopsonies—that is, sole buyers—were the loan fund’s real financial hope. The government’s sunflower campaign flopped for lack of a reliable market.25 More basically, the few farmers who planted the seeds found their seeds devoured by birds or their harvest later in storage by rodents, demonstrating a classic farming coordination problem. Many more would have had to plant sunflowers at the same time for the experiment to work.26 So the financiers’ biggest remaining hope for loan “recovery” was cotton. This posed the lenders a symbolic challenge. In the early twentieth century, cotton was a crop that had been closely associated with tax collection and with the sometimes brutal means that some colonial agronomists, chiefs, and



askari (police-guards) had used to promote its cultivation. Even at century’s end, something of the tainted aura still surrounded the crop. In Luo and western Kenyan minds, it always remained a crop of, and for, outsiders. In the IADP-SPSCP years, cotton’s marketing was always problematic for farmers in the area. The CLSMB had long held a public reputation for mismanagement and “corruption” rivaled only by the cooperatives themselves (which the board used to buy farmers’ cotton), and together the board and the co-ops kept farmers stymied with full storehouses and transport bottlenecks.27 To be paid for their cotton, farmers generally had to wait one to three months, occasionally six or more.28 Although the government charged farmers interest on loans, it did not pay them interest on the reverse debt in delayed payments for cotton. By the early 1980s most farmers were planting as little cotton as they thought they could, many giving it up entirely.29 Payment delays had forced some to withdraw children temporarily from school; others changed plans to pay for land preparation. These delays were a real problem. Why the Lien Crop Matters: The Triangular Trade and Its Sensible Irrationality But there was, of course, a way around: borrowers and other growers could sell their cotton illegally to other, richer farmers or shopkeepers, who paid them on the spot, in cash, albeit well below official prices. These entrepreneurs then resold the cotton to the cooperatives as though they had grown it themselves, and so the loan and repayments formed a triangle. This system gave the producers cash promptly and also let them default on the IADP-SPSCP loans, if they wished, without having to stop growing cotton.30 Farmers belonging to different cooperative societies and unions sold to each other if nearby, the direction of flow depending on which co-op was currently paying first. The Luo have special terms for people who enter triangle trade to dodge repayment. One is agok, literally “shoulder man” (from gok, shoulder), among other meanings.31 In the Luo explanation, a farmer who buys cotton from a project borrower “branches” off him as the arm branches off the torso. Another term, connoting more secrecy, is akuot, literally “one who swells up” (from kuot, to swell or be swollen). The seller swells with profits as he or she avoids repaying a loan. Swelling can also connote shame, as in the expression wich kuot, “head swelling.”



In cotton marketing, poorer farmers in western Kenya pay a price for being so disadvantaged. Settling for three shillings per kilo instead of 3.8 to get quick cash for urgent needs, project borrowers succumbed to a differentiation mechanism—perhaps a poverty ratchet—built around the edges of the cooperative system. They seemed to take the cut in earnings by free choice, to keep children in school or to make other expenditures not strictly necessary for the day-to-day running of their homesteads. The agok system can thus be construed as a successful adaptation to an inefficient state marketing bureaucracy and as an example of the farmers’ ingenuity and flexibility in making supply and demand meet. But at the same time, it is an exploitation of one emerging socioeconomic class by another. Neither interpretation—one neoclassical in approach, the other more Marxist—gives an adequate picture without the other. The agok system helps farmers as individuals with problems but hurts them collectively by ultimately cutting down their access to state credit. The lesson is important: the same action that is rational for an individual can be irrational for an aggregate. Some crops can secure loans more strongly than others. From a lender’s perspective, the agok system made cotton, like maize, a poor lien or “anchor” for official farm loans under the IADP-SPSCP. To turn the matter around, from a borrower’s perspective, agok dealing helped keep the arm of state creditors at bay. Crop choices for both kinds of planners were crucial. Let us now therefore briefly compare some crops as anchors to see why some ensured repayment more than others. Cooperative societies dealing in coffee collected loans much better than those dealing in just maize or cotton. This was true both within the areas we studied and more generally in western Kenya. In the Luo and Luhya countries, coffee societies commonly reached above 90 percent recovery as opposed to the 0 to 30 percent usually attained by cotton and food crop societies; similar differences arose elsewhere in Kenya.32 That coffee should have proved a better anchor crop than maize or beans is not surprising, since the latter are staple foods. Without strong incentives in price or convenience, small farmers had no reason to turn much of these crops over to state-appointed buyers. Coffee and cotton make a more interesting comparison since neither was consumed locally and since both had state-appointed monopsony buyers. In Kenya, farmers usually sell coffee straight to authorized buyers, while cotton moves in an active, illegal, small-scale commerce. In the international aid agency offices in Nairobi, some analysts attributed the contrast between the



high repayment in coffee and low repayment in cotton to what they considered the differing “progressiveness” of farmers; they assumed that the coffee farmers were more comfortable with credit and state authorities. Others attributed the difference to the relative efficiencies of the coffee and cotton marketing boards. I think neither was the main reason. A more basic reason lies in the nature of the crops themselves. Because coffee is an enduring tree crop, local extension agents or cooperative officers usually know, or can easily find out, roughly how many plants a farmer has and therefore how much coffee to expect at the buying station. A farmer who has taken a loan against coffee knows that turning in much more or less coffee may require some explaining. The farmer fears losing the cooperative market, for this would mean losing a longer-term investment—he or she waited two to five years just for the coffee trees to mature, foregoing other opportunities for the land and labor.33 Cotton, by contrast, is an annual crop. The officials cannot so easily keep track of how much each farmer plants. Nor would a cooperative’s withdrawing marketing privileges be a big threat: the cotton plants die at season’s end anyway, and the farmer can simply switch the land to a different crop the next year.34 Where the farmer expects long delays in payments and low prices, he or she has all the more reason not to care. Comparing coffee and cotton repayment provides a lesson about “anchor crops” as credit liens. For loans to be repaid, the appointed buyer must be able to know about how much each borrower actually produces. And the borrower must have some incentive to stay in the buyer’s good graces. Tree or bush crops work better than annual crops for the purpose. Experiences of other credit projects across tropical Africa bear the lesson out.35 The lien crop matters. Repaying, Repeating, . . . and Disaffecting Who repays, and why? Certain kinds of people are more likely than others to repay government loans. In the absence of immediate threat, local notables set interesting examples under the IADP-SPSCP. Chiefs, assistant chiefs, cooperative officers, and agricultural extension agents borrowed and defaulted with striking regularity. For example, in one sublocation we studied, the farmers who had repaid little or nothing of their project loans, after seemingly ample time, included the three most respected public figures: the current assistant chief and the two living ex–assistant chiefs. (An-



other was an agricultural extension agent’s wife.) In another of our sample sublocations, the absolute defaulters included a cooperative society chairman and secretary manager, the ex-chief, an assistant chief (also an AFC defaulter), and an agricultural extension agent; a further assistant chief and an extension agent both repaid less than 20 percent. The cooperative society chairman had defaulted on two IADP-SPSCP loans, one the largest his society had awarded in its year. The names and arrears, by no means atypical, were clearly listed in cooperative balance sheets, as if the borrowers knew no one would ever chase them down. These community leaders evidently considered “nonrefundable loans” a privilege of office. Loan defaults were not secrets locally. Borrowers knew each other from their training courses, if not otherwise. Lists of defaulters were read out loud in public meetings. People gossiped. The very officials supposed to be enforcing collection were widely known as defaulters themselves. How, then, do wealth and power relate to repayment? Several analysts of credit programs in the tropics have argued that smaller farmers are less likely to default than larger farmers, other things being equal.36 Other analysts, including two writing about the IADP, have concluded that no apparent correlation exists between wealth or farm size and loan repayment.37 Those who have written on this topic have generally looked for linear relationships between these two kinds of variables. But there is no reason to assume the graph to be linear. It might reverse direction. My strong impression, albeit not one I can prove statistically, was that the richest and the poorest borrowers in the areas I visited both tended to default, while those in the middle more commonly repaid their project debts.38 It seemed that the poorest farmers who defaulted did so because they could not afford to repay; the richest did so because they could afford not to repay. The richest either could buy their way out of legal trouble or were never troubled by collectors because of their power or influence. More empirical work on the topic is needed, but emerging worldwide findings that wealth does not correspond directly with repayment challenge traditional notions of “creditworthiness” used to allocate loans. Farmers who repaid did so partly in order to be able to borrow again. Nairobi required 75 percent repayment as prerequisite to a repeat loan. In the countryside, however, neither cooperative officers nor farmers interviewed agreed on what the required percentage was. Records of farmers’ borrowing histories revealed that inconsistent standards applied, even within a single cooperative society. Rural uncertainty about the rules gave coopera-



tive officers room to allocate politically self-serving loans, and it gave chiefs and other locally powerful men the leeway to twist their arms for more. All of this suggests again the propensity of nearly all parties to want to manipulate soft loans to their own social or political ends as well as the great communication gaps between capital and countryside. This, at least, is how things seemed on the eve of the cell-phone era. Whether those new tools shrink the conceptual gaps remains to be seen. Borrowers who repay loans often do so with the prospect of receiving further, perhaps bigger loans in mind. So it was with the IADP-SPSCP. The low overall repayment rates were traceable in part to the late loans, inappropriate crop packages, and weak extension and marketing services. These project shortcomings made farmers not only less able to repay but also less willing. No repayment, no more loans to the borrower—on these issues the cooperative society officers had to carry out strict orders. Farmers’ disenchantments, arrears, and “defaults” severely cut down on repeat borrowing. In each area I visited, interviews and cooperative society records showed that well over half the borrowers (and sometimes nearly all) stopped borrowing after one loan.39 Proportions of repeat borrowers dropped over time. Unsurprisingly, the cooperatives with the lowest repayment rates were those with the lowest rates of repeat borrowing. The cooperatives allowed repeat participants to borrow at increments (700 shillings’ worth on a first loan, 1,030 for a second, and so on). Many borrowers who repaid did so with strategic gamesmanship. They repaid just enough to qualify for bigger loans once or twice and then finally defaulted completely. Farmers who did this knew they would not wish to ask for more loans. Default and disaffection were linked inseparably. To sum up, there were several reasons why farmers repaid as much as they did, and several reasons why they did not repay more. They repaid because (1) They were afraid of land and livestock confiscations (a reason based mainly on misunderstandings). (2) Some wanted further loans, especially in the earlier project years—and other government favors in the future. (3) Permanent-crop planters wished to preserve their markets for these crops. And, to various degrees, (4) borrowers of all sorts felt moved by a mix of internal and external moral sanctions. As for the limits, borrowers refused to repay more than they did, for several reasons again: (1) The project did not produce the great increases in yields expected. (2) Few felt any personal urgency about debts to the state, particularly compared with their many other formal and informal debts. (3)



The government did not follow up its threats of disciplinary action. (4) Borrowers were generally older than the officers demanding repayments. (5) They felt the lenders’ rules to be unfair in the interest charges, debt collections after crop failures, and addition of legal fees to arrears. (6) They could take advantage of negative real interest rates by delaying repayment indefinitely. (7) They saw the examples of local notables who defaulted consistently. (8) They were discouraged by low food prices (relative to those of private buyers) and by inefficient official crop marketing systems involving long delays for payments. (9) No one kept track of their production capacities in temporary crops, making it yet more attractive to enter the triangular trade that let them default. Finally, (10) the many project shortcomings discouraged farmers from pursuing further loans. That so many borrowers felt so little obligation to keep up loan repayments to state cooperative lenders testifies to the single-stranded nature of their ties to them in many cases. Unlike most local people who entrusted them money or other things, these lenders were often only the co-op officers and the faceless, distant financiers behind them. They were people without the pull—moral or coercive—of one’s father-in-law, shopkeeper, churchmate, butcher, soccer teammate, or one who might be several at once. Even if clansmen, they were beyond a horizon of felt responsibility, and claimants to other, often more personal obligations crowded them out. This, then, was the true nature of what the financiers and economists in Nairobi dubbed “moral hazard.” As the project wore on, the public disappointments accumulated, and repayment and repeat borrowing continued to fall. Cooperative societies were cut off by their unions; the unions had their funds curtailed by the Co-operative Bank. And so the project fizzled. The government was never going to force farmers to repay the IADPSPSCP debts, although interest would keep mounting on paper. Forcing collection would have risked alienating chiefs, cooperative officers, extension agents, and others who make up the rural substructure of government. It would have defeated the purpose of patronage, one of credit’s main functions in a government ridden by ethno-political rivalries at all levels. After seeing the IADP-SPSCP cotton marketing dreams dashed, the World Bank and its Regional Mission launched another scheme to rehabilitate the Kenyan cotton industry in the early 1980s. This time it approached the crop not as part of a farm “package,” but as a discrete activity in itself. Under indirect pressure from the United States’ Reagan and



Britain’s Thatcher governments, representatives of the World Bank Group tried in the 1980s to force the Kenyan government to sell off or “privatize” the parastatal marketing boards. The government would indeed shut down the cotton board before century’s end, but the maize board, more central to the interests of Kenya’s ruling elite if not also its rural farming people, would remain in place into the twenty-first century. The pendulum of international development fashion had swung from integrationism to minimalism, and it had also swung from public to private. But credit remained credit. The object of doling it out, for lenders and onlenders, was not just to help its borrowers prosper or to get repaid. It was also to extend patronage, to secure constituencies, to win over swing voters and supporters. Better for all this if some loans did not get paid back.

1. Carrying a headload near lake, with a Luo-style house in background. Kano plains, near Winam Gulf. All photographs by author.

2. A hillside homestead with multiple houses and some cultivated fields. Kanyamkago.

3. Woman hoes while tending children. If lucrative, crops may end up marketed by a husband or father.

4. Men (or occasionally, women without any) plow with teams of up to four oxen.

5. Seeds of local crop strains, here stored under roof, may be well adapted for resistance to plagues.

6. State-promoted seeds, fertilizer, insecticide (with sprayer), shown at an agricultural fair in late IADP-SPSCP years. Migori.

7. Maize (or corn), an exogenous new staple, nearing family harvest time. Sorghum, partly displaced by it, looks similar but differs in bearing its seeds in a cluster on top.

8. Donkeys, long burdened for transport but not ordinarily eaten, receive less official attention than cattle, sheep, or goats, or than motor vehicles.

9. State-controlled crop weighing and buying station, from which maize is trucked to mill. State buyers can deduct loan repayments from prices paid to growers, hence some avoid them.

10. Market women. A small town market affords women valued chances for social interaction as well as a chance to earn cash. Migori.

11. Many growers prefer to market their own maize. Kenyans prefer white varieties.

12. Ridging for tobacco plants. Contract growers energetically engaged in cash crop venture, in its lucrative early years, drawing heavily on family labor. Kanyamkago.

13. New tobacco barn built by farmer contracting with multinational firm. Company provides heating flues and other materials on credit, with much advice and close monitoring. Kanyamkago.

14. Inside tobacco drying barn, a grower checks temperature. Leaf humidity is one determinant of marketability, making the difference between debt and great rewards. Kanyamkago.

15. Tobacco bales in buying and grading center. Exacting specifications and widely varying prices put contracting growers at mercy of technicians grading their leaves. Oyani.

16. A rural self-help group and its startup tree nursery. Some self-help groups listed as “women’s groups” for aid eligibility have involved men too. Kanyamkago.

17. Chemical runoff from farms contributes to fish depletion in Lake Victoria/ Nyanza. Fishermen and marketing women seek work elsewhere. Uyoma.

18. A country matatu, taxi van, loads up in a market town. A favorite investment of rising rural entrepreneurs. An owner typically hires a driver and a young conductor.

19. Some female-owned small enterprises like this one, in a market not far from Nairobi’s skyscrapers, became newly involved with banks toward the turn of the present century.

20. Elders like this one in the countryside, mending a calabash, have heard many promises and seen many projects and programs come and go.


In a White Elephant’s Shadow Reversal and Repetition All there is to say has been said before, but since nobody listens, we have to keep starting over. —ANDRÉ GIDE, LE TRAITE´ DU NARCISSE Knowing the past, one reads the morning newspapers with a sense of fatalism. One believes in the power of markets and reason but not in the perfectibility of lenders and borrowers. —JAMES GRANT, MONEY OF THE MIND


t is a curious paradox of credit, and of tropical farm credit in particular, that both borrowers and lenders can end up feeling burned. So they did in Kenya—but for only for a while, and not unforgivably. The great irony about the IADP-SPSCP is that a project with such a grand and ambitious design, so encompassing in its administrative sweep, so precise in its specifications—ended up passing out of existence in such a quiet, amorphous way, dissipating like a giant cloud. This chapter sums up the IADP-SPSCP experience. It then goes on to discuss some aspects of that experience that seemed to repeat others earlier and to say something about who predicted that repetition at the time. Finally, this chapter offers some brief reflection on some structural and processual reasons why experiences like these tend to repeat as much as they do. In a White Elephant’s Shadow A project as vast and complex as the IADP-SPSCP almost defies summary, but its outcome was different indeed from the plan. This grandest of the aid agencies’ gestures to the rural poor was also the government’s main official attempt to increase those people’s production for themselves. The project’s ostensible aims were bold and certainly commendable: to help



the regions, altitude zones, and economic strata neglected in previous programs, and to do so before land titling was completed. The ulterior motives for which some in power may also have intended the program—to ingratiate a country’s leadership, to patronize farmers and a rural elite, to cultivate markets for expensive farm inputs, to secure raw materials for urban industries, to keep bureaucratic cadres employed, or to satisfy office superiors and committees that money was being moved—did not mean it was not an earnest attempt to alleviate poverty. Neither kind of goal necessarily precludes the other. The great hope of credit for the green revolution in Kenya, the IADPSPSCP, began with a bang but finished with a whimper—a residue of minor quarrels and misgivings between the World Bank and the government, and between the government’s local agents and the farmers—and a skein of debts and uncertainties. Its funders and administrators, and at least one development economist in print, called it “disastrous.”1 Others liked to call it a white elephant. The numbers were indeed unimpressive in that the project had been scaled down. The first phase of the IADP alone, by the time of closure in December 1981, had cost the funders about U.S. $19 million of the $36 million planned. The second (and, as it happened, last) phase, when closed a year later, had cost an unknown additional amount probably just under U.S. $25 million of the $92 million planned. Both phases had been cut drastically in coverage. IADP-SPSCP borrowers were only a tiny fraction of the population in Nyanza and nationwide. Far from initial estimates that numbers of borrowers would rise to about ninety thousand nationwide (IADP and SPSCP combined) by 1980, as it turned out the greatest number for any year was under eighteen thousand (in 1977), and by 1980 fewer than five thousand were borrowing.2 Based on the national census bureau’s enumeration of the country’s “smallholder” homesteads, this figure represented less than 1 percent. To those who experienced it as participant borrowers, the project was no disaster, but it was no big success either. It was a grayish, blotchy picture overall. On this topic our formal surveys and informal conversations revealed sentiments much alike. Speaking about their own farms, most borrowers in our survey samples said the project had raised their production, but many said not by much.3 Predictably, farmers gave rather dimmer assessments of the project’s effects when asked to generalize about their neighbors.4 In each study area, well over half indicated that the loans had helped no more than half the borrowers in their areas. And when asked how much



the loans had helped those borrowers, well over half in each area said only slightly or not at all. Everywhere, some claimed others had been hurt by the debts, although few deemed the project’s effects harmful on the whole. Borrowers who claimed the loans had helped them were asked how. They responded in many ways, but they frequently mentioned having planted larger fields or obtained higher yields. Some who had used loan funds for planting unapproved crops, like sorghum in the early years, reported having so benefited. But some admitted having used their loans to hire their neighbors’ labor just to substitute for their own. No one responsible for the project either predicted or investigated effects of labor hiring on the hired workers’ own production. Strikingly, the planning agencies were more certain of the project’s effects before it began than after it finished. Many agricultural finance programs, including “green revolution” schemes, have been criticized for giving special crops, inputs, and advantages to a few, who thereby become better positioned to exploit the poverty of their neighbors.5 Did the IADP-SPSCP have such effects? Not substantially, I think. Early adopters of the project’s new inputs had no big advantages over later ones, for several reasons. The crops promoted were not under quota systems, as was coffee, for example. No major long-term capital investments were needed for the project’s crops, as they might be in a tree crop program or an irrigation scheme.6 The crop inputs were highly divisible, and poorer farmers were sometimes able to benefit from richer ones’ use by example and by portions of input packages passed along to them.7 Larger farmers, particularly in the hills, enjoyed no big advantages of scale in mechanization (as they do elsewhere with wheat). High-value cash crops can sharpen land hunger, but the project did not successfully introduce any big new ones.8 Most of the project’s crops, including maize, can be grown at least as efficiently on small farms as on large ones, in terms of yields obtainable per unit of land.9 Practically anyone could try them. If the project helped widen any class rifts, it probably did so by other, nontechnical means: by oiling political machinery and bolstering networks of patronage, and by allowing borrowers to substitute others’ labor for their own and thus to free up their own time for other activities. In Retrospect The IADP-SPSCP failed to attain its stated aims not because its loans were unsecured in land but for other reasons—and more than a few. From the outset, the program was transmuted in ways that highly capable



minds in Nairobi and overseas could not control and over which no one was individually responsible in the end. The recurring loan delays, the incomplete input combinations, the quarrels between cooperative and extension officers, and the communication gaps between center and periphery all remained beyond central control. All were symptomatic of the program’s ambitiousness and its great complexity. Credit’s use as a patronage tool was clear enough, as was the concentration of loans among richer farmers (tempered, ironically, by a positive distributive effect of “nepotism”). Among the Luo people, and probably in many African lineage-based societies, the notion of “fairness” as random selection is not very important. Kinship, neighborhood, church membership, gift-giving, and patron-client ties matter more. These principles have shaped, and will continue to shape, Luo farmers’ experience of state involvement in smallholder farming and their response to it. These were, and will remain, social principles with which foreigners intervening among them must learn to live more comfortably. The government’s heavier emphasis on instruction than on listening, and the age and gender barriers to “extension,” became clearer and clearer as the project wore on. So did farmers’ use of “agricultural” credit outside the “agricultural sector”: something that remained a problem only in the eyes of officialdom. The project epitomized most of the problems that occur conventionally in “top-down” development planning (if someone is to be called “top” and someone “bottom”) and of treating rural people as objects, rather than subjects, of development.10 (The project documents were full of terms like “loanees,” “target group,” and so on.) The program designers’ implicit disregard for local crops, inputs, and planting techniques was part and parcel of rural finance, even of the “progressive” sort. “Crop packages” proved a fiction of little meaning to farming people’s minds. The packages were, and will remain, inappropriate for farmers with limited access to extension agents, with unreliable transport and supply systems, and with periodic cash shortages that make them unable to sustain the use of the new inputs. They are inappropriate for farmers whose checkered history with central government has made them cautious and skeptical of national development schemes and who are used to experimenting for themselves. But there were deeper misunderstandings still, about the nature of smallholder agriculture in western Kenya, about appointed buyers, about individual homestead savings, and about reinvestment in farming. The administrators’ bewilderment and dismay at farmers’ “diverting” their loan re-



sources and profits from agriculture into other forms of investment and consumption suggests that they were wedded to an old concept of smallholder farming very different from that held in the farming areas themselves. They tended to envisage a family farm as an entity in itself, separate from both other kinds of economic activities and life activities in which the “family” might be engaged. Ironically, the biggest attempt ever to “integrate” agricultural finance and other services was pre-disintegrated at its core, for no single person or organization in the government was ever put in charge of the program. Although state agriculturalists gave borrowing farmers too little information and advice about how to use the inputs they received, they tried too hard to direct the farmers’ agricultural planning and decision-making in input selection and crop allocations. A similarly unhappy blend of over- and under-direction characterized the marketing and repayment components of the project. Farmers were told exactly where to sell their crops, but they were not given the incentives. Unofficial Luo ways of marketing food crops are highly flexible and in some ways also quite efficient. But the economic dimension is only a small part of the food marketing picture in Luo country. The public marketplaces serve myriad other functions of social and cultural life, especially for women, and with all this the state buyers could not compete. So although farmers did not get their yield increases and multiplied incomes as promised, the lenders did not get their loan “recovery.” In fact, repayment led to some of the greatest misunderstandings between the capital city and the countryside. Farmers were puzzled at having to repay more than they had been lent; they received mixed signals about sanctions for defaulters; they resented suggestions that they might lose some of their most cherished possessions—their livestock—or worse yet, their land and their place with it. The cyclical pattern of disenchantment, default, and defection, not clearly understood but plain enough in the balance sheets, lowered the morale of officials at all levels, until the IADP had become a four-letter word in Nairobi. Program Integration and the Swing Toward Disintegration As the project dragged on, its financiers and managers did—it must be said—attempt many adjustments to benefit farmers’ experience as well as their own. They reduced minimum hectarage requirements, shifted re-



sources into infrastructural construction, sped up loan approvals in the capital, and started requiring guarantors. When in 1981 the World Bank’s regional deputy chief of agriculture learned that loans were arriving in the capillary cooperatives many weeks after planting time, he immediately instructed a loan officer under his charge to see that loan funds arriving late in the primary cooperative societies be kept there for timely issuance in the next planting season. The agencies and central government planners also tried to shift from loans in cash toward loans in kind and adjusted crop packages, and toward the end they experimented with a new extension system. Farmers, for their part, tried hard to adapt to the project’s shortcomings themselves, cleverly linking their own informal modes of oxen- and plow-sharing to the late loans, exchanging project inputs among themselves, using them on different crops, and devising triangular exchanges. But neither the project’s coordinators nor the farmers, in the end, managed to communicate much with each other, and the long series of intermediaries distorting messages played out like a telephone game. By 1982, when the project was being shut down, it was as if there were two projects, one in Nairobi and another in the countryside.11 But that didn’t matter. What John Bennett was to say of the world in 1988 was true already in Kenya: “The heyday of the large, funded, ambiguous, ambitious, naive development project is over.”12 To pause for a moment’s reverie: How might the project have differed if the financiers had simply flown an airplane over the chosen districts and dumped out the money with a bucket? Well, delivery would have been quicker, and maybe more even over the landscape. More of the funds would have reached the real producers and especially women. Administrative costs would have been lower, total repayment roughly comparable, and official data on the project’s effects about as useful. These are all sobering thoughts. The rhetorical appeal of cooperatives, permitting many politicians to win votes and at the same time demonstrate their loyalty to their governments, weathered many failures and embarrassments. Cooperatives were used as a means of incorporating rural people into a market economy and of extending government control over this participation, and they also provided a channel for patronage. That cooperatives seem as often to promote the opposites of their more ostensible goals (trust, self-reliance, efficiency, and so on) was for rural people in western Kenya a bitter lesson of experience. They were a convenient channel for governments to receive foreign funds and a springboard for more than a few political careers. For governments to shut down cooperatives completely might return smallholders to the mercy



of the middlemen that the cooperatives were created to short-cut: effectively sending the smallholders from the frying pan into the fire. The responsible policy aim, doubtless, is to help offer farmers a better set of choices for their own individual or collective decisions. The monopsonistic and monopolistic aspects of cooperatives are what make them inefficient. Ideally, the competition of private traders should make them more efficient, just as having competition from cooperatives should help make traders fairer. From their various vantages, the players in the IADP-SPSCP saw this grand scheme as different things, like the gropers feeling the legs, trunk, and tail of the elephant in the dark and respectively imagining the elephant to be like a tree, a serpent, or a brush. World Bank financiers variously perceived it as an expedient but overextended gesture of diplomacy, an indirect longterm investment, a civilizer, a life ring—and a way to move cash, the surest way to advance careers. Middle-level civil servants in the cooperatives ministry saw it as a credit scheme, a storage depot to locate strategically for their clans—and perhaps a chance to siphon cash for themselves, their bosses, and their dependents. Those in the agriculture ministry treated it as an extension and training program, another set of requirements, outings, and also headaches. For all these people, dealing with it was a job requirement, something not to criticize too sharply. Luo country people and their neighbors, for their part, seemed to perceive it as a rather mysterious, semisweet deal from the state, a bit of a gamble, and as cash, seed bags, and chemicals—sets of things not complete themselves—that some could also procure in other ways. Later they saw it as just another debt. Few ever knew its name, but none was so blind as not to sense a bit of what the others saw in it at the time. By the time of my revisit in 1991–92, everyone’s memory of the IADP-SPSCP was fading. But it seemed sure that there would be other projects much like it sooner or later, for in more than one way, it was the kind of scheme that was too attractive for aid agencies and governments to resist. We have looked at the SRDP and the larger-scale, more ambitious IADPSPSCP as an example of “integrated rural development” and of “integrated agricultural development,” respectively. The very voguishness of “integration” and the grandeur of its claim were what eventually turned the concept into a dirty word among planners and analysts of development by the 1980s. The era of integration had left its vague promises unfulfilled. The ministries had not quite cooperated with each other; the money had not been coordinated with the technical advice; the crop packages had come untied before



delivery; and where they arrived intact, the input supplies were unmatched by the marketing mechanisms. Development professionals began reacting against their earlier integrationism. By the early to mid-1980s it was time to “disintegrate”: to separate out all the components of the giant projects and to try to tackle each on its own.13 Central planners would stop trying so hard to coordinate clinics, schools, feeder roads, and agricultural extension programs in comprehensive schemata. Multi-crop farm schemes would yield to single- crop schemes. Just as the simple term integration had carried a complex bundle of positive overtones, now it began to carry a complex bundle of negative ones. Minimalism—the opposite approach of attacking only a single key constraint— became by the mid- to late 1980s a key word in the conventional development lexicon.14 The pendulum was swinging back with a vengeance. The Repetition of Experience “All there is to say has been said before,” wrote André Gide in 1891, “but since nobody listens, we have to keep starting over.” James Grant, writing on high finance just a century later (1992), brings it closer to our topic as well as our times: “Knowing the past, one reads the morning newspapers with a sense of fatalism. One believes in the power of markets and reason but not in the perfectibility of lenders and borrowers.”15 The IADP-SPSCP story had a familiar ring even in its own time. Although written records have scantly represented the experiences and sentiments of borrowers in “target groups”—and more could be said than is said here—the project’s basic design and its broad financial and technical outcomes had became commonplace in histories of poverty alleviation programs in the “new directions” era. In the following few paragraphs I argue that in those latter ways the story was already known by the time the project began—not just from other countries but from Kenya itself. The lessons were not just hidden in dusty archives but fresh in certain minds. World Bank program designers knew some of these lessons well. Government officials and university researchers did, and so, too, one may be surest, did many rural Luo and other western Kenyan farmers. But the people who understood the story in advance did not turn out to be the ones to make a difference. To note that development finance programs have tended to repeat themselves, and their failures and disappointments have been re-experienced, is not to comment on the intelligence or abilities of the



individuals who design them or carry them out. Instead, what is meant here is more a comment on the momentum of bureaucratic process and on the constraints under which actors in large bureaus work. By the start of the IADP-SPSCP in 1975–76, teams in the World Bank and USAID had already taken stock of the almost worldwide failure of government-supported credit projects for small farmers. In the eighteenth volume of the most comprehensive review ever made of the latter agency’s experiences in rural credit, its editor, economist E. B. Rice, summed it up this way: “Frequent reference in USAID reports from most countries about unacceptably high default rates and operational losses, or about defunct member co-ops, support the evidence presented elsewhere in the Spring Review literature that, in the aggregate, small farmer credit institutions and programs supported by AID demonstrate neither financial viability nor economic justification” (Rice 1973a: 12, his emphasis). Rice criticized the agency for building or propping up credit institutions in developing countries with “the purpose . . . often articulated in terms of the immediate function of a bank—to make recoverable loans—rather than in terms of the expected impact of loans on farm activity” (p. 14). In “supervised” credit projects, farmers had for the most part gone unseen by extension agents in practice (p. 15). Cooperative credit had the worst record of delinquency rates and collapse: “In practice the co-op experiences are most dismal” (p. 17). The “feedback mechanism”—the agency’s ways of learning how its projects were received on the ground—was criticized as “absolutely inadequate” (p. 21). Credit projects for small farmers were characterized as having been aimed at “larger smaller farmers” (p. 24). USAID was chided for ignoring project evaluation reports that had, over the previous decade, showed small farmer credit in general, and “integrated package programs” in particular, to be inefficient (p. 25). Meanwhile, at the World Bank, other publications were appearing with equally clear messages about the kind of project being prepared in Kenya. The Agricultural Credit Sector Policy Paper (1975), the Bank’s handbook for farm loan project design, argued for issuing credit in kind, rather than in cash, wherever possible. It said, in a passage typical of development thinking in its era, “While the approach may seem excessively paternalistic, it is unrealistic to expect farmers who are not accustomed to having a cash surplus or to using purchased inputs to adjust automatically to making the necessary transactions” (p. 62).16 Small farm credit was called expensive and risky (p. 14). There were caveats on cooperatives: “Where there is a strong private



sector, cooperatives are difficult to sustain” (p. 16). And on low interest rates: “Providing subsidized credit to small farmers is open to corruption and political abuse. . . . Frequently, local politicians use their influence to acquire the low-cost credit; political pressure is used to avoid repayments or write off debts” (p. 12). And on delays in loan delivery: “If provided too early or too late, it leads to diversion and loss” (p. 17). . . . “Many smallholder development projects have failed because the inputs have not been provided in time” (p. 62). The handbook noted that when a single credit agency served both larger and smaller farmers, both credit and extension tended to go to richer ones (p. 36). It observed poor rates of repayment in smallholder farm credit projects in general (p. 40).17 The store of sobering experience available in these giant agencies included specific project outcomes from eastern Africa.18 Experience in Uganda, next door, had illustrated several of these points in the 1960s.19 Finally, there were clear signs from within Kenya itself.20 Both researchers and very senior officials themselves were making dismal proclamations on the snags of large state credit schemes for smallholders.21 And not just the Bank and USAID knew of the situation, but so did the United Nations.22 Most of what would be officially known was known already. Even discounting our obvious advantage of hindsight, there was ample knowledge available at the time the IADP-SPSCP began to foresee the main outcomes. More remarkable still is the fact that some of the very members who had written extensively on the pitfalls of large-scale government cooperative credit projects for smallholders were closely involved in the appraisal of the IADP-SPSCP at the outset. The launching of the more ambitious second phase of the project in 1979, albeit in modified form (with much heavier emphasis on market infrastructure), simply demonstrates the point once again. The key decision makers in the large agencies were unwilling or unable to act upon the experience of their own staffs. The same was true in the Kenya government. Hunger can make credit hard to resist, and so, for a new ruler, can the chance of favorable publicity. After a serious national food shortage in 1979, the spirit of the GMR, that old scheme for larger-scale farmers that shut down that year, was resurrected in 1980. This time it took the form of the New Seasonal Credit Scheme (NSCS). Yet another subsidized program, this one was widely publicized under the name of the new president of the republic, Daniel arap Moi, a man who had been handpicked by his deceased predecessor, Jomo Kenyatta. Moi needed ways to win over a watchful nation that had never had a Tugen



Kalenjin, or anyone but its Gikuyu founding president, at the helm. So he had his name attached to it. Attached, that is, while the program still meant credit and not yet debt . . . and before anything else big started going wrong. These NSCS loans, like GMR and IADP loans before them, started out a little hard for most Kenyan farmers to get, but it got easier for them before long. The program lowered its threshold for eligibility, going from fifteen arable acres (the old GMR threshold) to ten by 1981, then again to five from 1982 on. Now, five acres was still a fairly substantial plot or farm by the Nyanza standards—but now ordinary farmers (Luo, Luhya, Gusii, and others) could get in the game, as they had been getting into the IADPSPSCP.23 There were new players, but it was not really a new game. Interest was subsidized again, at AFC rates. Hypothecated crops, the only loan security used, went their own ways instead of coming back through official buyers. The scheme was beset not only with repayment problems but also accounting problems stemming from divided responsibilities of oversight.24 Even after dropping the hard-to-manage crop insurance system previously used and abused in the GMR, the NSCS collectors struggled to get even half of their loan sums repaid.25 Disbursements were declining. A scheme designed along the lines of the GMR and IADP-SPSCP was turning out much like them. In the light of all the government’s accumulated experience with projects of the sort, it strongly suggested the political advantages to be gained through presents to peasants. Similar principles apply at different levels of scale. Compelled at times by their positions, heads of state like to hand out projects, just as cooperative officers like to hand out cheap loans . . . and just as farmers like to hand out the seeds or the beer to their kith and kin. Maize and Malaria: A Hidden Vector Sector? Crop and credit programs can have unpredictable, surprising effects, sometimes unknown before they are long over. One of these must be noted before the story can conclude. A startling link was discovered in the late 1990s and early 2000s between Africa’s largest deadly disease and its newly largest food crop by an interdisciplinary, international team combining African and other participants. It is a link between malaria and maize.26 Here is how it works. The anopheles mosquito larva, a vector of the malaria parasite, feeds eagerly on maize pollen on the surface of standing water. So nourished, it grows into mosquitoes larger, more robust, and longer-lived



than mosquitoes whose larvae were nourished on most other foods available to them in East Africa. Now, pollen does not typically fall far from the plant producing it, nor do mosquitoes typically fly far from where they are born and grow up. So the effects of the inadvertent “mosquito nutrition program” are most severely felt by people who live or work closest to maize plants. These people are more likely (in one Ethiopian test area, over nine times likelier!) to contract malaria than people living farther away.27 Probably something like this is true also in other regions of Africa and the world that grow maize—the question remains to be studied and the experiments replicated. Implications for policy and practice are not fully worked out. They may include limiting maize growing around homes and places of human congregation, as well as the usual preventative measures for malaria. These latter include minimizing bodies of standing water (easier said than done, where rainy seasons can produce torrents and animals leave deep hoof prints); keeping ponds stocked with fish and other creatures who eat floating pollen and larvae; using bed netting, other screening, and long, light-colored clothing; and prophylactic pills. Some will also argue for increased “pesticide” use (coils, sprays, and so on) and for other measures yet to be devised. Whether credit programs have done a lot to spread maize, and thus malaria, is hard to know, since most of the farmers who used the programs described here, and their neighbors, were already growing maize anyway. If, by increasing their yields somewhat for a while, the project encouraged any farmers to plant more maize than otherwise and thus led to an increase in floating pollen, it could be said to have had some such effect. But it was not all or nothing. The emerging maize-and-malaria research offers at least two morals. One is that one “sector” merges into another (here, agriculture and health, or the “productive” and “social” sectors) more than the organization of aid agencies, or the wall-maintenance among academic disciplines (here, agronomy, entomological zoology, and public health) leads its participants to believe. These should not be studied just in isolation. If we need cognitive and bureaucratic divisions like these to function—as everyone must need at times—then minds must remain flexible enough to enough to redraw them flexibly or at odd angles for research (here to allow concerted attention to a “vector sector”). Someone must be able to keep pursuing “integration” even in times when this ideal phases out of style and minimalism has its day. Another moral is that projects and programs involve more unknowns in



history’s contingent pathways than often supposed—yet one more lesson in humility. Whether agencies, programs, and offices that were set up to promote maize growing in tropical countries will be able to absorb the new learning on the dangers of the crop—and just how—remains to be seen. The larger the agencies, the harder it may be to change course. Why the Repetition Two of the more striking features of the history of aid programs in Kenya and Africa have been the process of repetitive project formation in development agencies and the unseen, gyroscope-like inertial mechanism that slows changes in course of action. How and why these operate—and operate despite shifts in rhetoric—deserve more attention than they have received. One clear factor has been the pressures on project planning committees to move money. International agreements stemming from high-level diplomatic agreements involving military or trade agreements are particularly likely to involve rushed project preparation.28 Designing and campaigning for a project that puts big money into an agency’s “pipeline” to a country has been as sure a way as any of getting noticed and promoted in the organization. Conversely, an agency staffer who protests a project in preparation risks being moved, sidelined, or just left behind in annual salary increments or bonuses. Credit moves money comparatively fast. Pressure that agency staffers feel to commit money ties into matters of institutional and professional comfort. People who see themselves as bankers find it relatively easy to design loan schemes as they and their predecessors have done before. In the World Bank in the 1970s and 1980s (as still today), preparing a large project or program involved a series of papers circulated and approved in stages as they rose through the hierarchy. The germ idea of a project might grow in the Bank or in a host country government or collaborating agency, but the World Bank had concentrated its staff heavily in Washington, D.C., rather than in regional and country missions (unlike USAID, long more decentralized in this respect). It was the Bank staffers themselves who tended to do most of the program and project designing. They communicated mostly with each other. Government officials in host countries frequently complained of having been left out of the main planning until only weeks before the Bank needed approval. Within the Bank, as a project plan rose in the hierarchy toward its final (practically pro forma) approval by the president and executive directors, it gained momentum. The changing color



of a plan’s cover, along a set sequence (white, yellow, green, buff, and finally, after authorization at the top, to gray), indicated to all just how official it had become. Egos got invested as the project became known as someone’s baby, and being allowed to skip a color gained that “parent” prestige in the organization as being someone especially competent. Junior staffers knew that the further along the plan, the more conspicuously troublesome (or anti-poor, or even anti-development) they would seem by standing in its way. But at the same time none wanted to be caught looking naive. This mix of motives, complex and variable but usually slanted toward “yes,” often produced an interesting sort of memorandum that one who looks into World Bank and other aid agencies’ internal correspondence sees again and again. One might call this artifact an objection sandwich. Typically it begins with some statement of endorsement in principle, or of moral support: something like “the proposed project is commendable in its attempt to provide the (target group) of (country X)” with (improved goods or services, or stimulus for economic growth). Then the big “however,” followed by a stack of half a dozen or more of what the memo author knows to be impossible conditions or insurmountable barriers: (a) The cooperatives would need to be cleansed of corruption, (b) the marketing board would need to break even or the government persuaded to abolish it, (c) the input supplies would need to be fully coordinated and the inputs designed to produce an incremental yield no matter how combined . . . and so on. The memo ends with a statement like “provided these problems can be resolved in a timely way, I would approve the program to go forward.” The caveats cover the memo author’s flank. The superior officer notes or checks off “approved, with reservations” or something like it on a form. The fuller memo goes into a file drawer, and the project goes forward. Another line of investigation is the effect of staff rotation policies in the giant aid organizations, restricting individual involvement with a particular region (in some agencies, deliberately for this end). In the World Bank, as also in several of the other largest agencies, officers have followed career paths defined more by sector or topic than by regional expertise.29 In the course of their careers, that is, they have tended to work on one set of problems in many countries rather than on many different problems in one country or region. This organizational pattern may subtly bespeak an assumption about the basic likeness of humans everywhere, as well as an institutional penchant for defining problems as technical ones. The pattern’s apologists, in any case, defend it in terms of career development—it being



well known that the way to move up steadily in the agency is to build a wide network of contacts within it by frequent moves—and in terms of fair allocation of “plum” and “hardship” posts. In rotations to regional and country “missions,” three to four years have been a standard “tour of duty,” a phrase inadvertently apt. During this time staffers may have to hunt for housing and cars, find schools for their children, learn whatever they will of a language, campaign for and prepare for their next postings, arrange the travel, and sell or rent the houses or apartments they feel they just moved into—to say nothing of helping cope with the problems of family members who may adjust less well than they. Hardworking or not, they simply have little time. All this ensures, de facto, that project designers and overseers cannot benefit from accumulated experience of local social and bureaucratic systems—as well as making them look arrogant to local people or members of host governments.30 Staff members in the agencies are allowed precious little time to read histories and past reports from the areas they deal with, let alone to interview or live with rural persons with relevant experience. The rotations and constant deadline pressures seem to compress their time horizons so that knowledge documented even just two or three years earlier seems like ancient history. The rotations within the agencies, combined with the host country government’s own shufflings of officials from region to region and from ministry to ministry, prevent the buildup of “institutional memory.”31 The fault here lies, I think, neither entirely with the World Bank nor with the government, but the combination is pernicious. One day the pattern nearly broke. Among the IADP-SPSCP financiers, an agricultural officer stationed in the Nairobi office of the World Bank’s Regional Mission in Eastern Africa was bold enough in the project’s final year to ask a very basic question. It was a time when the Bank had funded some two decades of similar smallholder loan schemes, and he had devotedly tried to help manage this huge one in Nairobi for several years. In 1982, after all this experience, he candidly spoke to a field researcher who had lived among farming people who were borrowing from the project. “You know,” he said, “there’s something we’ve been wondering. How do farmers out there finance things?” It seemed that some essential, inductive rethinking about rural credit, and on the area’s rural economy and finance more basically, was about to take place in the Regional Mission. But by then, that brave officer’s tour of duty was about up. Within a month he was on another continent, replaced by another officer new to Africa.32 Interestingly, some of the Bank’s sternest critics in the late twentieth cen-



tury were found right within it. Some of these and regular Bank consultants politely chastised its own program planners (and client state on-lenders) for overlending and for oversubsidizing loans devoured by elites or used for political patronage.33 Officers of the Bank, like those of other large agencies, actively sought ways to work through private and nongovernmental channels in the 1980s and early 1990s, as we see in our next part. By this time, at least, the World Bank’s rhetoric on rural development projects (if not a great deal of its collective action) had become “participatory,” “bottom-up,” “learning-process oriented,” and generally progressive—indeed, much like the rhetoric heard in private voluntary agencies. Individuals within the agencies did not all want to seem like mechanical bureaucrats implementing prefabricated plans. I have suggested in these pages that the problems with the World Bank and other aid agencies implementing projects like the IADP-SPSCP could not be boiled down to personal insensitivity or ignorance among the staffers. They were problems more of geographical and social remove, of personal wisdom and documented experience overridden by recurrent institutional process, and of weak linkage between the brain and the hand. One who watched the project botchings and fizzlings in the countryside would hardly suspect those projects could have been planned and organized by the same people—the former Peace Corps and VSO volunteers, the sensitive listeners, the clever analytical minds whom one got to know within the agency corridors and offices in Nairobi or Washington, D.C., in conferences, or in transit between. The internal workings of aid agencies and development planning committees in governments have received little attention from sociocultural analysts (nor have they received much here), but they doubtless will in the future.34 Pinstriped, safari-suited, or sari-wearing bureaucrats who move in and out of the power centers are human—no more and no less than filetoothed farmers or beaded herders. They have their own risks, uncertainties, and seasonal labor bottlenecks; they have their own migration patterns and family developmental cycles. In their offices and clubs there are debate and compromise, schism and continuity. The picture of center-periphery relations in African public rural finance is not a pretty one, but neither is it just a matter of monoliths or satanic machines.

Private Agencies and Popular Interest Firms, Clubs, and the Feminizing of Finance

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Wildfire Tobacco Contract Farming “Ndawa mach.” (Tobacco is [like] fire.) —PILISTA ONYANGO, AN ELDERLY LUO WOMAN IN KANYAMKAGO, 1981


f gold-tipped cigarettes, Oscar Wilde’s character Lord Alfred Rufford quips in a play: “They are awfully expensive. I can only afford them when I am in debt.”1 The remark offers wry insight into the psychology of the habit-forming act called borrowing. Humans sometimes consume with more abandon, as Wilde noted, when they feel that their accounts are hopeless—and that what they are consuming is someone else’s, not their own. And what about when they produce? Must indebtedness incline borrowers to reckless abandon, or does it sometimes lead instead to habits deemed more virtuous, such as hard work or perhaps investment? The question is of no small consequence among a people like the Luo, long used to being accused of apathy in farming and of reckless spending and consumption when they get to town. What about when the cash rewards are so great as to induce a whole range of town temptations? And what about when production entails its own consumption—as in tobacco growing, which, for its curing fires, can consume trees and eventually whole forests? If there is a crop that can push the credit story to extremes, perhaps it is tobacco. To judge by the history of aid agency–funded, government-run, seasonal loan schemes for small-scale farmers in the Luo country, it would be easy to conclude that crop credit without land mortgaging can do little to change farming or to affect the lives of farming people there. We have seen that a string of loan programs up to and including the IADP-SPSCP fell short of



attaining their goals, or of satisfying their supposed beneficiaries, for many more reasons than the mere fact that land titles were not used as security. But before generalizing that seasonal credit cannot produce big changes in farming among Luo or other East Africans, or help them, it is good to pause briefly to consider another scheme—one that ran simultaneously with the IADP-SPSCP in the Luo country and that still continues. This one too has required no land titles as collateral. It has involved some of the same farmers, fed up with their cash crops and wary of outsiders who come to meddle in their farming. But this scheme was organized differently. It was— and is still—run by a single company, for just a single, high-value crop. As a privately managed program relying on farmers’ working their own lands with international capital on credit, and under close watch, British American Tobacco’s program is one instance of a movement that has rolled over many areas of tropical Africa in the decades since independence, and that continues to spread. The spread of Africa’s commercial tobacco growing has occurred just as tobacco production has steeply declined in the southeastern United States—and indeed has had much to do with that collapse. North Carolinians sometimes wonder where tobacco went, and western Kenya is part of the answer. And the histories so far, a century apart, have more than a little in common.2 Introducing foreign capital and cash crop technology to farmers on their own lands, and relying heavily on the labor of the growers’ families, “contract farming” is heir in some ways to the plantation system that covered much of Kenyan tea highlands to the east of the Luo country in the colonial period and that has penetrated parts of the Luo country in the form of nucleus sugar estates. Sometimes, as in the cases of sugar and tea, contract farming has accompanied or extended plantations at their peripheries, hence the term outgrowing.3 But in other instances of tobacco farming in the Luo country and elsewhere in western Kenya, there have been no company plantations. The experience of contract farmers can vary greatly from one crop to another, depending on labor requirements, crop seasonality, input costs, and many other things. Contract farming is widely deemed a more felicitous form of foreign corporate involvement in African farming than corporate or state plantations, precisely because it leaves local farmers and their families on their own land. It does not, however, leave those people, their neighbors, or the land unchanged. Borrowing and lending in Luo and East African to-



bacco tie tightly, I suggest, into not just agrarian economy and politics but also kinship, sex and gender, and religious cosmology, too, in ways that can profoundly affect human well-being. Pilista Onyango’s aphorism, ndawa mach, meaning “tobacco is (like) fire,” compresses several observations about the special nature of the crop, combining metaphor and metonym. Tobacco touches fire and becomes it (hence the metonym), but as a crop it spreads like fire (the metaphor). It also—at least where Christian missions have been involved—conjures up imagery of damnation. If credit and debt can play a part in culture and agriculture anyplace—where the roots and leaves of a growing crop tie into cherished values, beliefs, and the imaginative artistry of religion—they will do it in tobacco, and they will do it in western Kenya. Tobacco in the Luo Past: A Crop Charged with Meanings Tobacco has varied uses and meanings in Kenya. Some of these I have described elsewhere, and here I repeat some of these basics to give an idea why it is not deemed merely a crop, industry, or fiduciary investment like any other in western Kenya, but one with rich symbolic meanings and connotations of its own.4 Tobacco has been grown in some form in Luo country for generations. Luo say they and their ancestors have known tobacco (Nicotiana rustica and Nicotiana tabacum; in DhoLuo, both ndawa) for generations. Having spread across the continent quickly after its introduction by Portuguese and Spanish sailors in the sixteenth century, tobacco may have been grown in the equatorial eastern lakeside area since about that time.5 Luo now call local tobacco ndap nyaluo, Luo tobacco, suggesting a long tradition of their own.6 But it was not until well after Kenya’s independence that many people in and around the Luo country had tried to make a big part of their living from the plant. Tobacco before that time was a crop grown in tiny amounts in and around homes and abandoned homes. “A patch of tobacco plants is almost invariably an adjunct of a Kavirondo [here meaning Luo] homestead,” wrote traveler Felix Oswald in 1915 (p. 36), “for both men and women are confirmed smokers, and one can give no more welcome present than some tobacco and a box of matches.” Oswald commented on seeing girls as young as twelve smoking long-stemmed pipes. Luo today recount that tobacco was smoked



mainly by elders, often women. Sun- or fire-dried and rolled, local tobacco has long appeared in local marketplaces, where another visitor in 1946–48 noted its central placement, suggesting “une place importante dans la hierarchie des marchandises au marché”—a high tier in the commodity hierarchy of the marketplace (Waligorski 1970: 12). As German explorer Georg Schweinfurth wrote in 1874, the local East African tobacco has been noted for its “extreme strength and . . . intense narcotic qualities”: qualities to which some of its contemporary smokers attest.7 In the lake basin the plant grows best in highly fertile soils such as those found in and around homestead sites or abandoned ones, where cattle have manured the land, and especially on the sites of old cattle enclosures. This means it grows around ancestral homes and the graves in and around them. Unsurprisingly, then, Luo have long associated tobacco with the ancestors and their spirits. Smoke (L., iro) too does much to promote this association. Tobacco is sometimes used as a gift or offering, and as an object in ritual blessings; some speak of smoke as being like a liquid capable of washing away problems. Smoking strong tobacco (or “drinking” it, as they speak of it with the verb madho) is one of the ways some Luo elders have tried in times past, and especially in times of trouble, to conjure spirits to communicate with, if they dared.8 Selling tobacco grown at home is an act many Luo deem risky, as the money or other wealth it brings can be followed by spirits intent on ensuring that it comes to no good. For this reason or others, such money is deemed tainted; it is called pesa makech, money that is bitter or biting. It must be kept apart from other money (pesa maber, good money) acquired through more acceptable means. Like money from selling patrimonial land, it must be kept separate from transactions concerned with longer-term lineage continuity, notably from marriage payments or payments toward animals to be transferred as marriage dues. Otherwise, some say, fire and smoke like those that procured the bride may sooner or later consume her. These are not all just Luo ways of thinking and treating tobacco; among other peoples around the lake basin and beyond in eastern Africa, related to Luo by proximity or by language, tobacco is used in gifts, blessings, and ceremonies and not treated like just any other commodity.9 Like many other exogenous elements in Luo culture, tobacco has been thoroughly integrated into Luo life in both practice and ideology.10 But not entirely consistently. Tobacco, ndawa, is a potent form of “medicine” (dawa), and like so many other substances perceived to



have spiritual power or associations, it can cut both ways: as Luo people and others in their region speak of it, its use can lead to great good or great harm. And this is not without uncertainty or disagreement. The countless Christian churches that penetrated and multiplied in the Luo country during the colonial and independent periods, and that now claim most Luo as members, nearly all seemed, by the 1980s, to object in some way to growing or using tobacco.11 During the colonial period many Luo influenced by Christianity decided tobacco was not just an ancestral spirits’ crop, but Satan’s crop instead or as well (many using the name Shaetani for both Satan and lesser demons they perceive, who may include ancestral spirits).12 New beliefs interwove with old without eradicating them, and the combined effect has been that many Luo consider the crop to be cursed. It might have seemed as though commercial tobacco growing would be doomed to failure from the start. An Early Attempt At first, it did fail. Under the depression years of the 1930s, the British colonial government in Kenya made a brief attempt to stimulate the planting of tobacco on a scale larger than before.13 The aim was to substitute local for imported cigarette, pipe, and chewing tobacco (most of Kenya’s cigarettes then came from Uganda and Tanzania) and thus to raise money through excise taxes.14 At a government farm at Bukura, then in Marama Location of North Kavirondo District, a Malawian strain called Western Dark Nyasa tobacco was tried. It grew well and, fire-cured, suited western Kenyan tastes. Agricultural officers next tried having it planted in Sagam, North Gem, Seme, and Alego locations (these two mainly Luo-speaking) in Central Kavirondo, and a few hectares in a Gusii-speaking highland area of South Kavirondo, for a total of about sixty hectares in western Kenya. Agricultural officers strictly controlled how much African farmers could plant and where: they allowed it grown only on group farms, at first within easy reach of a supervising agricultural officer, and restricted planting to between 0.1 and 0.25 acres per farmer. Both limitations proved unpopular: farmers wanted to plant it on their own farms, in their own measure. Because of a sharp difference of opinion between S. H. Fazan, the provincial commissioner, and H. Wolfe, the deputy director for agriculture (plant industry) for all Kenya, on whether the purchasing, manufacturing,



and marketing should be licensed to a local or international firm, no company was given a monopsony over tobacco leaf in the province. N. K. Mehta, a well-established cotton ginner with Indian roots, was allowed to set up a cigarette factory at Ndere, Central Kavirondo (later Central Nyanza), through his Hoima Cotton Company, incorporated by 1938 as Kenya Industries Limited. British American Tobacco Industries competed as a buyer, and growers could also sell their tobacco locally for home use. But farmers lost interest in tobacco, finding that government restrictions hedged them in too much and maize yielded a better price at the time. Mehta shut down the factory in 1939. This left international capital to try its hand. By 1954 BAT, with a half-century of experience in other countries, had gained a governmentlicensed monopsony on smallholder tobacco in Kenya through its subsidiary BAT Kenya Ltd.15 In 1966 it bought out a competing Rothman’s subsidiary that was selling cigarettes there. Meanwhile, Tanzania next door, having gained independence in 1961, was nationalizing its tobacco industry, a change that encouraged BAT to seek new land and labor in Kenya. Conditions had changed for farmers there too, as a rising population was making land scarcer and new high-value cash crops more attractive. It was against this background that British American Tobacco launched its campaign for flue-cured Virginia tobacco growing on small-scale contract farmers’ own lands in the southern Luo country in the late 1960s.16 It was this scheme that would test the limits of seasonal farm credit in affecting rural African lives. A Challenging Crop and an Apollonian Regime: Commercial Tobacco Catches On BAT tested the soils in southwestern Kenya in 1967–68. At the time, tobacco was only barely established as a major commercial venture in that country, growing on a few hundred hectares in parts of Kitui District and a few other small areas of the country.17 But the climate and soils of the eastern, higher side of South Nyanza between 900 and 1,500 meters’ altitude suited the crop well. With its new exclusive buying rights, in 1971–72 BAT set up two buying centers in Nyanza, both in South Nyanza District: one at Oyani, in a Luo area between Awendo and Migori and a catchment area covering what I have called the “Kagogo” valley of Kanyamkago, and the other at Tarang’anya, in the Kuria country. (It also set up centers in Western Province and in Meru in Eastern Province.)18



In the late 1970s and early 1980s, over four thousand small-scale farmers were locally recruited to grow and dry tobacco, usually about a half-hectare at first, on their own lands.19 Flue-cured Virginia tobacco, used for light cigarettes, was the main thrust; some farmers were contracted instead to grow fire-cured tobacco for stronger, cheaper cigarettes and rolling tobacco. In the sublocation of Kanyamkago where I lived, 128 farmers, representing 7 percent of all homesteads, were registered as growers by 1982, and a high proportion lived in the Kagogo valley, where I lived and where we did our main interviewing. Many more unregistered farmers grew tobacco illegally to sell through them.20 The farmers contracted as growers tended to be somewhat better off economically than others, at least by visible indicators, though some had as little as 1.5 hectares of land or less for all their crops and fallowland.21 Flue-curing farmers were instructed to build their own barns with family labor, using mud and wattle for the walls and thatching over woodpole frames for the roofs. BAT issued its growers loans in kind only: seeds, watering cans, pesticides, flue piping, and other inputs on credit, using crop liens alone— no land titles—as security.22 Farmers planted their tobacco on group seed beds in February and March, transplanted the seedlings to personal plots, sprayed and weeded, and finally, gradually harvested and dried leaves between April and August for sales into October. The crop competed, that is, with maize and other major food crops of the area for the long rainy season. The company collected the baled tobacco leaves on the farms, deducted the loans (usually taking only half the value of each bale until repaid—a point important to farmers), paid the farmers in the buying centers, and sent the tobacco to Thika and Nairobi for factory processing. Until 1984 the company grew tobacco for consumption in Kenya only.23 That year it began to export.24 Tobacco is an unusual crop for Luo. In its high chemical requirements it is capital intensive: in 1982 in South Nyanza, it took four times as much capital to plant a half-hectare in tobacco as in hybrid maize or cotton. Tobacco is also very labor intensive in almost every phase of its production cycle.25 A half-hectare in 1982 took between 2.6 and 4.2 times the work of a similar plot of hybrid maize. But it could give higher profits per unit of land than almost any other crop the Luo grow: for a farmer with an average yield (after loan deductions), about 2.8 times as much profit as for hybrid maize with all recommended inputs, or about 4.6 times as much profit as cotton. In terms of shillings per unit of labor, the average net tobacco profits slightly



exceeded those possible in hybrid maize and exceeded by a factor of about 2.5 those possible in cotton in the cotton zone.26 In sum, tobacco is costly and laborious to grow and cure, but it can be an efficient use of land for profit. Its efficient use of hectarage suits tobacco well to densely populated areas like upper Luo country. And its high value per unit of weight makes it especially practical to grow in very rural places where transport is problematic. As for capital, this posed little problem for the world’s largest private tobacco corporation, a firm which for 1982 announced sales of over four billion pounds sterling worldwide.27 But tobacco is a tricky crop to grow. Its acute sensitivity to human error, as well as its unusual susceptibilities to climatic aberrations and to pests and plagues, require the constant supervision of extension agents and the scrupulous adherence to instructions on the part of the farmers. Factors like the timing of transplanting and priming (harvesting), the spacing of plants, and the frequency of sucker removals all affect the nicotine content of the leaves, a crucial determinant of their marketability, in technical ways few small-scale farmers in equatorial East Africa have means to understand. Nor can farmers easily see why the moisture content of dried leaves must be between 14 and 17 percent. They must take it all on faith. In these ways tobacco is inappropriate for farmers accustomed to relying on their own observations and experiences and suspicious of outsiders’ interventions in their agriculture. Maintaining constant temperatures requires stoking the fires for the drying barns around the clock for a week in each harvest cycle: quite an unaccustomed pattern of work in the Luo country, where life shuts down shortly after nightfall and anyone out and about thereafter is assumed to be up to no good. In short, in growing commercial tobacco, both Luo farmers and BAT have had much to overcome. BAT’s strategy has hinged not just on credit but also on extension. After wresting the privilege of tobacco extension from the Ministry of Agriculture in the early 1970s, BAT established a ratio of one frontline extension worker per fifty farmers—a flood of extension agents, by African standards, and over five times that used under the government-run IADP-SPSCP.28 BAT issued all its extension agents motorcycles, something the government has never done. So, the local young men selected were transformed overnight into community notables. There were sparks: elderly farmers thought the extension agents insufferably proud and arrogant. But BAT supervised its agents very closely, making them enter their remarks in notebooks kept



on the farm, records that their superiors could check. The agents visited all farms every two weeks, like it or not.29 Technically speaking, the strategy worked. Making farmers start out by building their own drying barns was a shrewd move for BAT. Requiring sweat before allowing loans not only makes the growers self-select for either industriousness or solvency, two interchangeable qualities BAT desired, but it also gave these contract farmers an investment in the company that they would risk if they defaulted on their loans. (The IADP-SPSCP had required only plowed fields, and the rule was never enforced in practice.) There may be a lesson in this for those who want to make smallholder credit schemes work. In other respects, too, BAT’s system was Apollonian. Inputs arrived on time, and usually in complete sets. When farmers sold their tobacco, they did not wait for months for the proceeds but were paid on the spot.30 Growers who sold to other farmers to dodge loan repayment by the agok system (through third parties), or who were believed to be doing so, were often caught and publicly disenfranchised.31 BAT used carrots as well as sticks, handing out well-publicized prizes for the highest earners.32 Luo farmers who were growing tobacco for BAT by the time of my extended visits said they had never worked so hard in their lives. In the exacting seed bed preparation, the repeated spraying of pesticides, the weekly priming, the chopping of firewood, and the all-night vigils required to feed it into the drying barns . . . life with tobacco is taxing.33 But most of the farmers seemed, in the early 1980s and early 1990s, to be ridging their seed beds meticulously, weeding their fields thoroughly, drying their leaves carefully, and generally making a clean job of it. The enthusiastic response to tobacco was partly due to the lottery-like unpredictability in the company’s pricing structure and the selective broadcasting of information about earnings. Uncertainty of outcome, which social scientists often take to be a damper on farmers’ productive efforts, may, under some conditions, become a stimulant instead. The rewards, however, can be real enough. As suggested earlier, Luo farmers in the early years made more money in tobacco, per hectare or per hour, than in any other legal seasonal crop they grew. Tobacco profits to farmers rose almost steadily from 1977 to 1982.34 The average South Nyanza tobacco grower’s net profit of K.Sh. 3,400 from a half-hectare in 1982 was enough to buy four bulls or cows, or 1.1 hectares of good farm land. Alterna-



tively, it would pay secondary school fees for 1.6 children for a year, or almost finance an iron roof for an average-sized Luo house.35 In equatorial African farming, this was a fast road. Many Luo and others who had never borrowed from any formal institution took up commercial tobacco growing.36 They learned it by example. In this respect the tobacco story roughly repeated the earlier histories of coffee and tea in Kenya and Tanzania, of coffee and cocoa in Ghana, and other valuable cash crops, legal and illegal, elsewhere on the continent. The point here is not that institutional farm credit is useless—for it clearly has helped establish tobacco in western Kenya and some of these other crops elsewhere—but rather that farming people without it can often come up with surprising means of their own to get in on enterprises they judge rewarding. By East African standards, Luo tobacco yields by the early 1980s were respectable, if not outstanding.37 The yields per hectare of the average registered Luo grower and the top Luo growers about equaled those of the average and top growers in Tanzania and in pre-Amin Uganda.38 Precise comparisons are still difficult with the data at hand, but experience by the 1980s certainly belied old stereotypes about the Luo as apathetic farmers. It had become clear that when given timely credit, adequate extension, and a reliable market with acceptable prices, Luo work about as hard in agriculture as anyone else. Social and Cultural Changes with Tobacco Growing The tobacco credit experiment has brought about several kinds of social, cultural, and economic changes different from anything resulting from the IADP-SPSCP and other schemes of that sort. First, the religious changes. What became of the objections to tobacco? Luo Christianity takes almost infinitely varied forms, and so do the ways of dealing with commercial tobacco production that Luo clergy and practitioners have devised. Some church leaders, by the early 1980s, had resisted the new agricultural enterprise by barring growers from participating in sacraments, particularly communion. This was the stern approach settled on in the Seventh-day Adventist and the Legio Maria churches (or sects), two of the most popular in Luo country.39 But others had found compromises or half-measures to reconcile themselves to new tobacco growers: to admonish but not expel them (the Gospels Church’s approach), to allow lay people but



not clergy to grow tobacco (the Roho Msanda Holy Ghost Church and the Pentecostal Holiness cut it this way), and so on. In some churches, members seemed to be able to soften pastors’ resistance through contributions or by sharing and “socializing” the profits. Farmers who earlier condemned tobacco have involved themselves with it in measure commensurate with the rewards obtainable. Even in the early 1990s, few members of fundamentalist Christian churches allowed themselves to smoke. Many of those who would not smoke it, however, did grow it. And nearly all working-age men with whom I discussed the issue seemed willing, in principle, to take a salaried job with BAT, even if they would not smoke or grow the crop. Neither old nor new cosmology, it seemed, had seriously stood in the way of the new farming enterprise. But in western Kenya, at least, the question of “bitterness” remains.40 Whether ancestral spirits and the Christian demons still follow tobacco and the wealth that comes from it as they followed the old ndap nyaluo, now that tobacco contract farming is big business, is much debated locally. By the 1980s and 1990s, many still thought they did. Some elders said “piny okethore” (the country is being ruined) and pointed to floods, hailstorms, and barn fires as evidence. Money from selling tobacco disappeared faster than other money, many Luo found, and people traced its evanescence to evil forces tied up with it. Where growers’ misfortunes were not attributed to spirits, they were often traced to witchcraft or physical vengeance by jealous kin: as a Kagogo schoolteacher put it while discussing barn burnings, “tobacco growers must be extra nice around curing time.” Tobacco money used in bridewealth, against a Luo idea of propriety, had patently proved destructive, some said: those marriages fall to pieces, the children turn to thieves or catch diseases or murder their fathers. Like selling land, I was often told, selling tobacco and putting the money into family and lineage wealth makes families and lineages suffer. Of course, what people say they ought to do and what they do in fact are often different things. Many tobacco growers in and around the Luo country have indeed used their earnings from the crop to buy animals for marriage payments, instead of using, say, maize earnings or remittances from clean work in towns, which are commonly thought to produce more satisfactory outcomes for families and lineages over the long haul. When tobacco growers were questioned on how they had used their tobacco earnings in the previous year, livestock purchases were indeed the most common response. A likely explanation is that men, being the first to receive the tobacco earnings,



are seeking to preserve part of the wealth as unchallengeable male property. In Ferguson’s terms (1985), they are trying to remove it from the family “domain of contestation” by converting it to livestock; in Parry and Bloch’s (1989), they are removing wealth from a short-term cycle and placing it into a long-term one. But by converting bitter money into lineage property, they are still risking retribution by ancestral spirits.41 How the “new” tobacco wealth fits into an older moral order and what will happen as a result is a subject full of unknowns but intensely debated. Unfortunately, the profits have not been well distributed among the tobacco growers. Profits per hectare vary more widely in tobacco than in any other crop Luo or neighboring people grow. This is because farmers have been paid for tobacco on the basis of its quality, as well as its quantity. Tobacco is graded on a wide scale with fifteen grades, the top and bottom prices differing by a factor of about six. (By contrast, cotton is divided into only two grades, differing by a factor of only two, and food crops, including sugar cane, are usually sold simply by weight or by volume.) In tobacco, quantity is multiplied by quality. The most industrious, careful, or solvent growers; those able to follow complex instructions to the letter; or those who have access to the best soils earn many times as much as neighboring growers, even if they do not devote larger plots to the crop—which, of course, most do. Over the five years ending in 1982, for instance, the top-earning 25 percent of the contracting tobacco growers earned more than 50 percent of the earnings (peaking at 80 percent), while the lowest 25 percent earned well under 10 percent (with a low of 1.4 percent). In short, the advent of tobacco contract farming has established a powerful new force for socioeconomic differentiation among western Kenyan farmers. All licensed tobacco growers, moreover, have some advantage over their unlicensed neighbors. Many are using their barns and their exclusive selling rights to act as middlemen for other farmers who are growing tobacco but cannot get licensed themselves. Luo tobacco growers are engaging neighbors for wage labor in unprecedented degrees, as others elsewhere in eastern Africa have done.42 They rely on it especially for disfavored tasks like tending drying fires at night. Interestingly, though, Luo farmers have also adapted old Luo forms of labor exchange, notably the rika (the small circle of neighbors who exchange labor in rotation), to new tasks, including tobacco baling.43 Tobacco growers appear to be buying food increasingly from nongrowers: a new interfamily division of labor may be emerging.44 At the same time, land values have risen, and a few of the most successful growers have bought up



land from their poorer neighbors in the hard seasons, in the pattern now too familiar in poorer countries.45 The influx of cash from tobacco into the rural area appears to be changing relations between the sexes, and between elders and juniors. From the start of the BAT venture, the money went into the hands of men almost exclusively. In 1982, 96 percent of the 128 registered tobacco growers in the Kanyamkago sublocation that I studied were male. Although men had initially taken charge of nearly every facet of tobacco cultivation, curing, and marketing, the burden of the longer and fuller tasks, especially weeding, was shifting to women. (A good supply of family labor was one of BAT’s official criteria for selecting farmers in the first place, and this usually means wives.)46 So men were being paid for what was increasingly women’s work. Kanyamkago farmers traced several recent suicides to unhappiness over the husbands’ selfish use of new tobacco earnings—sometimes, as in one case known to me, to obtain a second wife (the first wife drank a bottle of tobacco pesticide). Some of the stories were probably embellished, but Luo themselves saw a changing balance in control of household resources. Much, though by no means all, of the men’s volatile new tobacco wealth appeared to go into alcohol, whether for consumption or prestige-building handouts in the town bars. Socially and politically, of course, there is much to be gained by the grand gesture here, just as there is much to be gained from handing out seasonal farm loans. “Look at him,” said a young Luo man to me as we walked past a Migori bar where a tobacco farmer just paid was handing out beers from a stack of crates beside his seat, “now he’s the boss.” In 1982 a Migori beer hall approximately doubled its weekly sales of bottled beer during the tobacco marketing weeks, a pint selling for about seven shillings—two more than a Luo could make in a day’s casual labor on a neighboring farm. Again, it was mainly men who participated, both as sharers and consumers. To be sure, women can get some of their own back, if only indirectly. The many new iron roofs built with tobacco earnings are a good source of clear water, and they lighten women’s water-fetching burdens in the rainy season. It is women who distill and sell chang’aa, the powerful, illegal grain alcohol that many of the tobacco growers drink in the rather lively neighborhood revels that occur daily in tobacco harvest season.47 But few women in the early 1980s could earn more than about five hundred shillings a month by liquor sales: small pickings next to the thousands men made in tobacco. Lodgings in nearby Migori filled to capacity with migrant commercial sex



workers (that is, prostitutes) in tobacco harvest season, in something like the familiar western American boom-town pattern.48 These women could use rural kin ties to spot tobacco-harvesting men in advance, and some sent money home to their mothers on the farm. But here too, the possibilities for female earnings were limited. Male bar owners paid sex workers fixed wages where they could, keeping sizeable profits for themselves. While yielding undeniable economic rewards, tobacco growing was becoming part of an economy that threatened to leave women relatively if not absolutely poorer on the farms, and that tied in closely to the degradation of women in towns and to health risks like HIV/AIDS for both sexes (to say nothing of the health risks for the tobacco’s eventual smokers).49 If tobacco contract farming in recent decades has been widening existing differences between the positions of men and women, it has also been confusing the positions of younger and older men. In Luo society, age and wealth are both traditional determinants of a man’s social standing. Because of the labor-intensive nature of tobacco, however, BAT agents have preferred to recruit younger or middle-aged men, who they felt would have the energy to handle it. Many of these working-age men, it is true, have been able for several decades to earn more money than their fathers, by taking jobs. But in the past they usually had to leave home to do so. Now they can stay home, and the buffer of distance is removed. Elders have complained that some of the junior men seemed to be talking back to them for the first time. If the new wealth allows junior men to buy their own animals for their marriage payments, it may knock out the main pillar propping up elder men’s authority over them. The prospect frightens elders. No one was very surprised when a neighbor of mine in Kagogo, one of the hardest-working farmers around, burned the thatch roof off his son’s tobacco barn after a half-drunk quarrel. Some felt the very order of life was being shaken up. Other Risks Rural Luo face several kinds of new risks in taking up tobacco contract farming. There is little to guarantee the constancy or longevity of the tobacco market. Rightly or not, growers regularly perceive dishonesty in the buying center’s mysterious process of leaf grading, so crucial to their loan deductions and final payments.50 Also to farmers’ consternation, BAT switched its emphasis from flue-cured to the far less lucrative fire- cured tobacco in the Oyani catchment area from about 1989 to 1992, making it



harder for flue-curers to sell their crop—but then, under threat of nationwide competition from a new Kenyan spin-off firm called Mastermind, it began soliciting flue-curing farmers again. Nor was tobacco certain always to pay farmers as well as it had, even with new competing buyers. Farmers have little or no control over the prices they are paid. Exporting tobacco, as BAT Kenya began to do in the late twentieth century, means depending on fluctuating world prices. Competition for farmers among BAT, other companies trading in tobacco, and the local sugar company may end as local supply quotas are filled, making it easier for tobacco buyers to pay farmers less for their leaf. While tobacco has helped pay school fees for some, others have quit school expressly to work on the crop. Increasing amounts of tobacco pesticides are needed as new pest populations are becoming established in the crop and as unlicensed growing between the fields of licensed growers provides bridges for pest populations to spread from field to field.51 Temporary shortages of key imported inputs like thermometers for the farmers’ drying barns have held up tobacco production in some localities.52 The rapid wood consumption in the drying threatens western Kenya’s forests, depleting the local supply of cooking fuel and threatening to worsen problems of soil erosion.53 BAT’s reforestation campaign, praised by cabinet ministers and boasted about by BAT top managers, was in trouble in the ground by the early 1980s, and it remained so in the 1990s. Farmers refused to plant the eucalyptus seedlings at the spacing the company recommended, for a reason quite sensible in their own eyes: they can obtain more wooden poles for their own house building if they plant densely for only a limited tree growth.54 The point in this part of the story is already familiar. Just as in the public farm loan schemes, the distinction between home and farm economies, or between “sectors” like agriculture and housing, makes less sense to farmers than it makes for officials planning agricultural projects. The cognitive partitioning of projects and programs directly affects their outcomes, but not always in the ways their organizers intend. In the 1980s BAT Kenya was chastened for using dangerous chlorinated hydrocarbon pesticides. These had been banned in most northern countries since the late 1960s for their dangerous residual toxicity, had been subsequently dumped on Kenya and other African countries, and have only recently been prohibited there.55 Luo contract growers, at least by the early 1990s, had seldom worn the protective clothing the extension agents were



supposed to instruct them to wear while spraying the pesticides; since the chemical hazards had been invisible, some concluded the instructions were just superstitious. So socially, economically, ecologically, and physiologically, the hazards of tobacco growing have been legion. The farmers are becoming addicted. One hopes that they can bail out of the enterprise as and when prices worsen and other drawbacks become more evident, as some did in the 1930s, and as other western Kenyans did in the early 1980s with sugar cane and coffee when prices turned against them. Experience so far suggests that some in western Kenya are more likely than others to do so.56 And experience with BAT in Kenya and in other countries suggests that farmers cannot always bail out or even easily switch buyers when they wish. Public health scholars participating in the worldwide antitobacco movement have accused BAT of using presidential and other highlevel political connections in Kenya to rig health laws, perpetuate monopoly buying, and keep producer prices below those offered by their potential competitors.57 Reports of occasional farmer demonstrations for higher prices at leaf-buying centers suggest that the honeymoon period has begun to wear off. Nor is there any guarantee the marriage will last forever.58 A giant multinational firm like BAT can comfortably afford to pull out of a region like southern Nyanza any time its directors may choose. The more assiduously its farmers concentrate on their tobacco crop in the meantime, the harder it will be for them to rebuild the skills needed to re-diversify their livelihood. The BAT scheme has had very mixed effects. It may have helped for a while to bring new wealth and some access roads to the countryside, and indirectly helped some Luo and other farming people finance new iron roofs and the relatively clean rainwater these can enable them to collect. And it has directly or indirectly helped them send some children to secondary school. It certainly produces a lightweight, easily moved commodity capable of earning the nation foreign exchange. Unfortunately, it is also depleting trees and wood supplies needed for cooking and soil retention, adding chemical pesticides to water courses, draining labor from food crops, altering the work contributions and the relative earning potentials of men and women, challenging the age structure of authority, probably raising the incidence of alcoholism and prostitution—very likely contributing to HIV/AIDS—and accelerating socioeconomic differentiation among neighbors and among neighborhoods. Damage done by the scheme could last long, and the old women may well be right in predicting that the rewards will only vanish in the end, like smoke in the wind.



Two Stories Compared Let us pause for a brief comparison. The BAT contract farming scheme described in this chapter and the IADP-SPSCP project described just before it both operated among Luo people (among others) and got going at about the same time. Their outcomes—one so dramatic, for better or worse, the other not—suggest some clear contrasts. It would be easy to draw misleading conclusions here. Most important, the two cannot simply be compared as typical private or public enterprises. There are several reasons why not. One project promoted only a single cash crop of high value, the other a mixture of food and cash crops, some of low value. Complicating things further is that BAT was until the 1990s a state-authorized monopoly and monopsony, and that prices of both inputs and tobacco leaves themselves have been subject to government approval.59 Moreover, there are many Luo, particularly elders, who do not perceive any difference between BAT and the government and actually think the BAT is part of the government.60 In a way they are right, for as Muller (1978) and others since have noted, there have been some very close kin ties between top managers of BAT Kenya and high officers of the government. But comparing the two stories is nonetheless instructive. An obvious lesson is the importance of extension, as a complement to credit, where some central authority prescribes “packages” of new inputs for farmers to use together. The strictly supervised BAT extension agents, arriving at each farm biweekly, gave farmers little need to experiment on their own. They also gave them little leeway for agok market dodges: through the agents, the company knew how much tobacco to expect from each grower. By contrast, the slack state extension system under the IADP-SPSCP left farmers on their own, both in the growing season and at marketing time. The farmers paid the price in disappointing yields; the state paid the price by getting little repayment. Another lesson is that the requirement of a capital, labor, or time investment on the part of farmers joining a scheme need not dampen their zeal to participate or produce. It may even deepen their commitment to the project. Having to build a barn to participate in the tobacco scheme gave farmers the same kind of stake in their loan scheme that the use of the slow-growing coffee as an “anchor” gave some upland farmers under the IADP-SPSCP. The BAT story also suggests that small-scale farmers can produce dramatic results from loans issued only in material inputs—that is, in kind, not in



cash—provided that the enterprise being lent for is lucrative enough. That a firm with such long experience lends farmers no cash is perhaps a caution to other agricultural lenders hoping to turn a profit.61 The BAT experience suggests, however, that even seasonal crop credit can function with crop liens as security under certain conditions—in this case, a lucrative crop, a monopsony, and a vigorous extension service—and that it need not rely on titled land as collateral.62 An Irony in Complexity Finally, there is a lesson about complexity of project design. Nationwide in scope, the IADP-SPSCP involved multiple international funding agencies, multiple ministries, multiple input suppliers, multiple marketing boards, and multiple crops. Ambitiously designed to be an “integrated” project, it required coordination at every level of organization. But that integration proved illusory, and the scheme’s enormous scale and complexity only reduced its effect on the ground. The fact that the “crop packages” were designed for the “whole farm” produced a similar backlash: farmers rejected the plans out of hand. The IADP-SPSCP was a product of the development agency world of the 1970s. The BAT approach is the opposite. Here is a project with simple goals: to produce tobacco cheaply and make profits for a Kenyan firm and its giant multinational parent. Here is a project with sharply delimited geographic coverage, a single administrative hierarchy, clearly defined roles and chains of command, and ferocious discipline. Here is a single crop, intended for only a part of each grower’s farm. Here is a project with doubtful moral underpinnings, noteworthy profits, and grave risks for smallholders. Its incentives have proved irresistible, and the project has caught on like wildfire. It is a product of the whole twentieth century in Kenya, starting to be tested for endurance in the twenty-first. The difference between the projects is not the difference between a great success and a great failure. One project was neither, the other has been both. Neither the government scheme nor the private project was the first of its kind. Some of their lessons were already familiar. Perhaps in the future the two strains will be hybridized, and the idealism, cooperation, and “basic-needs” approach of the one will be mixed with the capital, rigor, and precision of the other. It may not happen soon. For the present, an optimist about international development—someone



who feels that aid from afar has a contribution to make with interventions like small-farm credit in rural Africa—may want to see more resources put into projects for single cash crops. They can produce unprecedented wealth, not just in the metropolis but also in the deep countryside, at least for a time—and they can turn an African society upside down. But an international development skeptic—someone who feels that long- distance interventions will only make life in rural Africa more miserable than they already have—may want to see more projects like the IADP-SPSCP, with long chains of on-lenders, multiple authorities in charge, and lots of crops for the whole farm. For this is a kind of project that may add in a minor way to production but that seems barely to scratch the surface of local life.


Self-Help and the Underground Individual Incentive and the Group Guarantee Grain upon grain fills the measure. —SWAHILI PROVERB


he more cumbersome and self-serving the public bureaucracy, and the more rapacious or uncaring the profit-seeking corporation, the greater the intuitive appeal of a third option for organizing development or poverty alleviation across national or cultural boundaries. Private aid agencies, or philanthropics, of most kinds are sparser in rural areas than in towns and cities, and deep in Luo farming country one who stayed around home could go a long time without encountering any of their representatives. But the influence of one or another is felt most everywhere, through churches, schools, clinics, enterprise schemes, or countless other projects and programs, as well as less directly through their activism on policy issues. Luo migrants who circulate to towns and cities get exposed to them there and tell about them back home. Earlier chapters described some governmental and multinational corporate approaches to financing farming in Kenya. In this and the next chapter, on private nonprofit aid agencies and their approaches to financing very small-scale enterprise, the focus shifts to farming’s edges. While some private agencies have involved themselves directly in trying to affect what people plant and herd, and how they do, far more of late have sought to influence the entrepreneurs who carry out the transport, processing, marketing, and input supply . . . or more broadly, to affect what farming people do, in town and country, when not farming. Where land for farming is becoming scarce, as it has been in western Kenya over the past century, people who farm have had to rely more and more heavily on supplemental or off-farm activities if only to keep their families fed, and the small enterprises (and the



migrations and remittances) in which they do so have received ever more attention from private aid agencies as these have become increasingly involved in finance over three decades. The turn of these agencies to microfinance has amounted to something like a revolution in the aid world. It has been a revolution of listening to local needs and emulating local practice, of turning credit into a mix of credit and savings, and of empowering and enfranchising relatively poor women and others with little previous access to institutional capital. But it is a revolution that raises lingering questions, both practical and moral. These two chapters sketch out what it is that the officers of private aid organizations have been watching and attempting to enhance, sometimes transforming themselves in the process, and moving their ambitions around within the triangle whose corners are charity, usury, and fantasy.1 Experiments with Private Aid Agencies While the international private agencies have enjoyed the higher profile and the higher budgets in Kenya as in most of Africa, their tradition is hardly older than that of local self-help groups and provident societies. Nyanza histories of the first decades of the twentieth century are full of both financial and political action organized by groups like the Kisumu-based Kavirondo Taxpayers Welfare Association (Lonsdale 1964), a precursor of the Luo Union (Parkin 1978). Early twentieth-century international private aid agencies in western Kenya were tied mainly to church missions, and they established their presence at first with free charities, a tendency that obtained through Independence and into the 1970s. By the early 1980s the church-based philanthropic organizations had long been joined in the area by a large number of secular private agencies of local, national, and international kinds. Together this quite heterogeneous assortment has acquired several equally awkward and potentially misleading residual designations: nongovernmental organizations (NGOs), private voluntary organizations (PVOs), or not-for-profits (or nonprofits)—terms used herein more or less synonymously, and only for convenience.2 In Kenya as in many African countries, the international organizations whose members answered to such descriptions by the turn of the twenty-first century numbered well into the hundreds.3 Times were changing, and so were development fashions. A new focus on macroeconomic “policies,” in particular the “structural adjustment” pro-



moted by the World Bank Group (and within it, the International Monetary Fund especially), had taken some of the emphasis away from “projects” limited in time and space by the late 1980s. A simultaneous pendulum shift from “public sector” to “private sector,” though, had placed private aid agencies in the limelight. Projects, more than policies, were their business still; the private agencies were too small, competitive, and collectively unorganized to influence government policies much. But being private made them attractive to larger aid donors. The hopes and dreams previously invested in government projects now shifted over to them—and also to enterprise for profit, and “the market” imagined to encompass these. Known charitable and relief agencies like CARE (originally the Cooperative for American Remittances to Europe; later the Cooperative for Assistance and Relief Everywhere), Catholic Relief Services, OXFAM (originally the Oxford Committee for Famine Relief ), Save the Children, and hundreds of other smaller agencies in their model had been accustomed to struggling for public subscriptions to stay afloat. Now they often found themselves being chased by large agencies and showered with funds diverted away from African and other governments. New indigenous African NGOs like the Undugu (brotherhood) Society in Nairobi sprang up, as often as not organized by members of educated urban elites eager, for charitable or other reasons, to get in on the action. Agencies of longer standing, meanwhile, were straining to get out of relief work, their traditional raison d’être, into development work. Among other things, the famines that had peaked in the Sahel and other parts of Africa in 1972–73 and 1983–84 made clear the difficulty of remedying extreme poverty given unpredictable government cooperation, and the wholesale swing in fashion was in part a move of desperation. For the private aid agencies, moving from disaster relief to development meant moving from grants to loans as a main strategy of assisting needy people. Farmers and small entrepreneurs across Africa (and elsewhere) in the 1980s thus found themselves the borrowers for hundreds of experimental new small loan schemes from sources which, if previously known at all, had been known as grant-giving bodies.4 USAID’s budget for microenterprise programs, including loans, training schemes, and other assistance, jumped from $58 million in 1988 to $114 million in 1991 and continued to grow thereafter.5 In rural Africa the changes in the purposes of NGOs from grants to loans would bring misunderstandings between them and populations accustomed to their charity. More basically, they would also find they needed to



know more about what kinds of finance and entrustment were already going on in the communities they purported to serve—and whether they could somehow plug into them. They needed to know more about how indigenous people thought about property, money, and exchange. And about entrepreneurship. Enterprise and Ethnicity Officers of aid agencies converse among themselves often about the entrepreneurial penchants or prowess of particular ethnolinguistic groups. When they do, they often speak in stereotypes. In Kenya, for instance, they speak about “entrepreneurial” or “business-savvy” Swahili, Gikuyu, or Gusii and contrast them at times with Luo, whom some have deemed commercially inept, uninterested, or unprogressive. The aid agents are not alone in this casual talk; they participate in the stereotyping current in the air around them, and stereotypes like these, once they get going, seem to last for generations. Usually, it seems, one group that characterizes another as commercially slow, backward, or inefficient is characterized by the other in return as greedy or deceitful (as some Luo have characterized Gikuyu in the past) or as hotheaded and litigious (as some have characterized Gusii).6 But this is talk, and it carries political risks. Seldom do oral stereotypes about commercial acumen make it into private aid agencies’ printed proposals, solicitations for public funding, or reports where instead individual, enterprise, and territory, but not ethnic groups explicitly, are the usual units of analysis.7 The oral and written diverge beyond recognition. Whatever kernels of truth the oral lore may contain, it is beyond my ability to prove or disprove the ethnic stereotypes about business so familiar to every Kenyan. My aims here are different and more modest. The first is to note that particular ethnic groups’ or diasporas’ conspicuous entrepreneurial accomplishment may have little to do with any innate abilities or proclivities. It is likely to have more to do with the effects of the life-course trauma or energizing effect of migration, or the structural position of being an outsider in a particular community or milieu—often with fewer kin and friends than locally rooted people have around in the new home or travel route to make regular, persistent claims on their earnings. Migration and persecution may also give some people an axe to grind, a yearning to get even in life or just to guard against future upheaval. Trading families sending emissaries in different directions, Rothschild style, can also



benefit from their mutual trust as these can make quick borrowing decisions with each other’s backing, or investment decisions on each other’s behalf, without waiting to communicate, as fleeting opportunities arise. Those individuals or families who stay home, from such supposedly “entrepreneurial” groups, are likely if visited to seem less entrepreneurial, energetic, or commercially successful on the whole than those who have voluntarily left. Selfselection doubtless plays a part making them so, since those who get up and move to travel and trade are not usually a random or representative crosssection of a population.8 In Kenya, the Gikuyu and Gusii people, highlanders who have been shifted off their lands, or at least confined to tightly circumscribed territories where their population densities rose to some of Africa’s highest, have needed to develop commercial skills, and arguably an entrepreneurial ethos more broadly, just to survive. (Much the same might be said of Chagga, Haya, or Nyakyusa uplanders in Tanzania, who, like the Gikuyu and Gusii, have experienced severe rural crowding on fertile but finite volcanic mountainsides.) The relatively early exposure of Gikuyu and Gusii people to cash crops (coffee, tea, pyrethrum) in the colonial period and the early acquiescence to titling of their land as individual property from the 1950s would seem both to have contributed to commercial traditions and to have reflected them. While both these groups, and particularly Gikuyu, are sometimes described as having an individualistic ethos, this is an easier proposition to contradict, since even individuals who seem isolated usually turn out to ally or identify themselves with some other units of aggregation (whether clan, club, ethnic group, or state) rather than just setting themselves apart from society altogether. It is safer just to say that commercial business is relatively well represented among their members’ ambitions and achievements, especially outside their home areas. Particular ethnolinguistic groups in almost any mixed setting develop occupational specialties, and to favor one specialty is likely to favor one ethnic group. In western Kenyan towns, for instance, many restaurateurs in recent decades have been Somali immigrants or their offspring or descendants. In Nairobi, many domestic servants are Luhya or Luo. Occupations like these, growing as they do out of household work, are ones that persons and families from disadvantaged or disparaged minorities, or ones with limited skills in the majority language, have tended to fill, rather as many Chinese immigrants in late nineteenth- and early twentieth-century Los Angeles entered laundry work, as many of the poorer Jewish East Europeans in New York took up



tailoring, or later, many Vietnamese immigrants entered greengrocery. Men in these groups have been willing to accept roles or deal in trades otherwise consigned to women. Riskier jobs like night guarding have gone in urban Kenya to disparaged groups like Maasai, or to Kamba (whose men pride themselves on vigilance and bravery anyway—they are just guarding from a different kind of lions), just as, say, high steel construction work has been performed by Native American men in the United States (who have prided themselves on bravery, calmness, and stoical steadiness anyway). Toward the more privileged end, jewelers near big hotels, or wholesale commodity traders in Nairobi (on Biashara Street, or commerce street, for instance) and the larger provincial cities, seem on casual observation far more likely to be Indians from Gujarat, or Goans or Pakistanis or Arabs, than they are to be Luo from Nyanza or even Gikuyu from the adjacent central highlands that abut Nairobi, whose total populations in Kenya outnumber theirs manyfold. To direct a project toward the tinsmith who makes footlockers rather than toward the wholesaler or jeweler is to favor indigenous worker over immigrant elite, whether project documents ever admit it or not.9 In Kenya, ethnic or religious specialization in enterprises is most conspicuous in towns and cities, but even there it is hard to state any hard and fast rules. Marris and Somerset found in 1971 that 86 percent of businesspeople supported by the parastatal Industrial and Commercial Development Corporation (ICDC) were working among their own “tribesmen,” and only 7 percent claimed to belong to minority religions where they were working.10 In the most rural communities where I have lived in western Kenya, the smallest-scale shopkeepers and market vendors among Luo are mainly Luo, among Luhya mainly Luhya. It is not until one enters the larger villages and small mill towns of several hundred souls or more that the “Asian” or Arab trader with the best-stocked shop, or the Somali restaurateur, becomes rather predictable or commonplace. But Luo or Luhya whose shops and restaurants succeed as businesses seem often to manage it by living away from their natal homes and their kith and kin, just as do those from alien nations or ethnic groups.11 Persons established in any trade who are able to help finance startups in it can be expected to prefer those they deem as being of their own kind.12 Gikuyus, one can predict, will tend to nurture Gikuyus, and Goans abroad Goans—whether one calls it loyalty or nepotism. What makes aid and relief work unusual, in equatorial Africa at least, is that so many of its practitioners are deliberately and explicitly attempting to reach others they deem



not of their own self-defined groups. Aid recipients often wonder what their donors’ and lenders’ motives might be and often imagine the sinister. Usury, espionage, mate seduction, or ethnically targeted population control . . . they must be up to something. When the impetus to aid comes from abroad, and crosses racial or religious divides, suspicions deepen or multiply. These possibilities, when locally seen through as false fears, are ironically part of what makes genuine aid work, including enterprise finance, enthuse so many of its patrons and clients who have taken to it. It is part of their gamble, their sacrifice, and their satisfaction to make the breakthrough. Entrepreneurs in the Mist The development “biz,” as Paul Collier has noted, has a development buzz, within the broader development buzz generated by rock stars and others.13 No word got more buzz in the 1980s and 1990s, in aid agencies large and small, than enterprise. In the new climate it seemed to encapsulate everything good, everything hopeful, about energy, imagination, and free market activity. It also conjured the Emersonian self-reliance beloved of Yankee individualists, the bootstrap populism favored by Reagan Republicans, and that favorite North American ideal that transcends region, party, or period: growth and success from humble origins. And it seemed to avoid everything that had come to look bad about governments. Now enterprise, a word deriving from the Old French entreprise (to take between or undertake), is a word with few easy translations in endogenous African languages. Those in most common use, such as biashara in Swahili (n., from Arabic, buying and/or selling) or Luo loko (v.t., buy, sell, alter, or turn over) and ohala (n., profit, gain), mean simply trade or commerce, without connoting innovation, daring initiative, corporateness, or necessarily even the use of money, as enterprise in English can variously do. The activities that anglophones in equatorial Africa call enterprise run an enormously broad range, encompassing, for instance, beer brewing for sale, bicycle repairing, or saw mill guarding, and sometimes including farming but sometimes not. The term itself, then, can bring to mind almost anything or nothing. It can conjure a political philosophy, a handicraft filière (thread— that is, a chain) from maker to user, or a particular market stall with a particular attendant this morning. Part of what makes it drift toward the abstract is the seasonal or ephemeral quality of many of the activities (if not the



people) filling the category: today a miller, tomorrow a herder and healer; in the weeding season a farmer, in the dry season a fishhook filer. Just as the people who do enterprise come and go, so do the organizations that purport to serve them. Try as one might, the researcher or bureaucrat in a city like Nairobi or Ouagadougou can never keep track of the NGOs any more easily than of the lineages or churches across the countryside. That some of them use multiple names, split apart, or declare independence need not imply anything morally wrong; it may simply reflect government attempts to regulate and tax them, or aid agency attempts to tell them what to do by granting or denying funds. That donor and lender agencies sometimes give their NGOs not just economic mandates like employment or value added, but also political ones like democratization or decentralization complicates the tracking further. But where particular players come and go, patterns persist—and it is some of these that the following pages attempt to sketch. As for the people who would become the intended beneficiaries of all the new attention from private agencies in Kenya, or in neighboring Uganda or Tanzania, they were little known or heeded abroad until the first decade after independence in the early 1960s. But a series of watershed events in the early 1970s helped direct international attention to small-scale entrepreneurs south of the Sahara. Most of the kinds of entrepreneurs destined to receive all the new attention were not in fact new to tropical Africa. Some were indigenous operators who had been suppressed under colonial authority that favored Indian and other Asian immigrant traders and other exogenous businesspeople for much of the twentieth century.14 After independence, in Kenya and elsewhere, “indigenous” or “African” entrepreneurs found new opportunities, sometimes (as in the extreme case of Uganda under President Idi Amin) by the state-organized expulsion of Indian and other immigrant traders. They also attracted new study. The flashpoint was an international conference in Brighton, England, in 1971 that led to the publication of Ian Livingstone’s unprecedented survey on Kenya for the International Labour Office (1972). By this time several anthropologists, sociologists, and some in between had done or were doing studies in depth on small businesspeople in Africa. From kola-nut traders in Nigeria, to palm wine merchants on the Indian Ocean, to tinsmiths in Lusaka, anthropologists and sociologists (here, for once, more or less allied) were laying out pieces of a big jigsaw puzzle of small businesspeople, almost



as if turning over those pieces from the blank side to their vivid, diverse colors for the first time.15 Taking apart the category “unemployed,” new studies asked not just how unemployed these businesspeople are but also, from an opposite tack, what they are doing to busy themselves. What came to light were myriad ways they were keeping busy to stay alive, or even to prosper, without jobs on paper. It was not a new world, exactly, but serious new regard for an old one, now dubbed the “informal economy” (or informal sector). Part of the puzzle, Keith Hart and others made clear, would have to be put together below the table, since not all informal enterprise was legal.16 Variously meaning unregulated, untaxed, and invisible, “informal” became fashionable to developers. In East Africa, jua kali (Sw., lit. hot sun), at first used to describe open-air artisans, would also come to mean cool. The study of women as entrepreneurs, as a scholarly or an official pursuit, had not yet caught up. The women’s movement, in its powerful recent incarnation, was only a few years old in the United States and elsewhere by the early 1970s, and women entrepreneurs, though by no means unknown in Africa, had simply received little attention. Women’s and children’s activities were, as ever, more likely home-based than men’s and, particularly when they operated from home, neither they nor their menfolk might define their activities as work or enterprise the way they might define men’s performing the same tasks. Women like Shirley Ardener, who studied women’s economic achievements in Cameroon, were rarities. African women, it seemed, had to be as conspicuous as the brilliantly clad Ashanti market women in their famously matrilineal part of southern Ghana, or as highly placed as Kenyan president Jomo Kenyatta’s wife “Mama” Ngina with her alleged stolen-car lot on the ground and ivory-smuggling racket in the air, to attract any notice. In the Luo country the emerging literature on women was mostly about agriculture (or child care, or in central Kenya about female genital cutting) and mostly not yet published.17 Few dared wonder how women in equatorial or eastern Africa might run growing enterprises, let alone finance them for other women. In Kenya few organizations beyond the government’s Joint Loan Board had made a practice of lending to very small-scale indigenous businesspeople before this time. Most of these had done it in larger towns or cities as part of broader packages of services that typically included significant training and technical assistance that only some recipients wanted as much as the money. One who looked hard enough could find pioneering initiatives like the (at



first church-organized) Tototo Home Industries, which lent to women in coastal and eastern Kenya (for goat raising, ferry boating, and other activities) from about 1963, with a strong women’s leadership by 1968. In the larger towns and cities one could find Kenya Industrial Estates, lending to rural craftspeople and others countrywide from 1967 with government backing. But organizations like these were scarce, and little known outside Kenya’s borders. All this meant that the myriad programs that started up in the 1980s and 1990s for microenterprises, microfinance, and women’s part in them—especially the ones begun outside Africa—were having to invent or discover their ostensible beneficiaries as they went along. Schooling into Finance The observer who spends time among officers of private aid agencies soon notes some paradoxes. First, noble-purposed organisms are filled with high-minded but also intensely competitive spirits. Whatever the label says, jealousy and territoriality are part of the contents. This is so whether the issue be money from large donors and lenders or glory and gratitude from the public.18 Nor is it uncommon among either to hear spiteful or rueful remarks about the bigger, richer public aid agencies that partly fund most of them: agencies where the salaries are usually higher and jobs more secure. Private aid agency workers, that is, are to a degree entrepreneurs or risktakers themselves, conscious of being closer to the edge than others who patronize their work. Second, while private agencies are known for, and pride themselves on, innovativeness—often rightly—they seem strikingly often to adopt those innovations all at once.19 If they swim freely, they swim in the same currents, sometimes turning in sync, like fish in schools. Most of these agencies, religious or secular at their roots, were by the 1980s and early 1990s schooling out of “relief ” work and into “development,” as noted. The movement might eventually prove cyclical like others, but officers of private aid agencies, at the time, spoke of it as growing up.20 Their staffers increasingly saw their job, in financial matters, as issuing not gifts or grants but loans. A few also saw mobilizing local savings as an important financial task to accompany lending. To reflect the new development aim, many organizations changed their names. Voluntary and Christian Action in Distress (once under the Salvation Army), for instance, became ActionAid; Foster Parents Plan was renamed Plan International.



About the only thing constraining the move from relief into “development,” from grants to loans, was the wish of individual program subscribers responding to magazine ads in the richer countries. They still seemed to want actually to save someone (preferably a sole, named young girl making teary eye contact with the camera). They wanted to “adopt” a child—not a class or a category—at a distance and receive a grateful periodic letter as testimony. They were tempted, in short, to become saviors. This made it hard for organizations wishing to spread their goodies around, or to invest in infrastructure that rescued no one in particular. But private aid agencies could, and did, finesse the problem by carefully rewording the ads to include phrases like “children like Akech (or Juanita, or Vijaya) and their communities.” Most private aid agencies were not well equipped managerially to handle credit and savings programs. They could not afford to pay salaries like banks’, nor did their erstwhile and continuing policy of heavy loan subsidies help their financial viability.21 Finance was only one of a bewildering variety of tasks they undertook (training, marketing assistance, technology dissemination, and so on), and spreading their resources too thin had long been a classic kind of temptation and pitfall for private aid agencies. But partly to address this, and partly to react to the perceived failure of “integrated” development programs of the 1970s, “minimalist” approaches—spotting a particular “constraint” to development and addressing only that—were to gain popularity among many private agencies in the following decade and into the 1990s. More and more programs appeared in which finance (or training, alternatively) was the main or only effort. “The Hottest Thing” The shifts in aid fashion from public to private, from relief to development, and from giving to lending, all taking place at once in the era of Ronald Reagan and George H. W. Bush in the White House and Margaret Thatcher in Ten Downing Street, all created flush times for private international aid agencies hitherto dependent on individual public subscribers, and new opportunities for indigenous operators setting up institutions with financial aims. It was not that “foreign aid” was expanding altogether. (On the contrary, the thawing of the U.S.-Soviet Cold War and in 1991 the dissolution of the Soviet Union led to some serious dips in NATO nations’ aid budgets in the early to mid-1990s; their leaders no longer felt such need to curry



allies worldwide.) Rather, much of what aid was continuing to be issued was getting redirected to new purposes. Unprecedented new money from the World Bank and U.N. agencies, and from USAID and other “bilateral” donors from northern Europe, Japan, and elsewhere, threatened to swamp some enterprise support agencies and render others dangerously dependent. In the 1980s and 1990s, genuinely or spuriously “indigenous” NGOs, some of them organized by well-heeled and well-schooled urbanites—many newly laid off from their government jobs—sprouted up as never before to catch the rain. In aid colloquialism they began to take on categorical monikers like GONGOs, for “government-organized nongovernmental organizations,” and BONGOs, for “[World] Bank–organized” ones. That money was chasing projects, as much as or more than the reverse, was nothing new in development, as we have seen. But many of the channels were new or untested. Also new were many of the intended rural beneficiaries. For women, too, had by now become a central focus—indeed, a vogue—of development circles everywhere, and of the programs or projects specifying a sex or gender in their names (as more and more did), nearly all, from the late 1970s into the new century, designated the female.22 “Trickle-down” theory, and big infrastructure projects like seaports and highways, were now almost universally disparaged among practitioners and scholars alike as old school. Small-scale and “micro” entrepreneurs in production and trade were in.23 Who, if anyone, might lose from the establishment of new enterprises did not seem to matter in the big agencies, as long as the enterprises seemed to help build a “free market.” For all aid agencies that depended directly or indirectly on U.S. and British government funding, this was the era of what I might call the blind faith in the invisible hand. And the hand was dispensing loans. “Micro-enterprise lending is the hottest thing in development since the Green Revolution. Everybody does it,” proclaimed an NGO spokeswoman in the exulting Wall Street Journal.24 Who “everybody” meant depended on where one lived. Most private agencies operated only in particular countries or sets of countries, and there only in particular districts or communities—carving out hegemonic domains just as churches had done since early colonial times. In the Luo country there were several leaders in microenterprise work by the early 1990s.25 They included Partnership for Productivity, ActionAid, the National Council of Churches of Kenya, CARE, several church-based groups, and a private agency specially created as an umbrella for others serving small-scale entre-



preneurs.26 Still other organizations brokered loans or loan information between commercial banks and rural farmers and small-scale businesspeople, specifically aiming at women. The movement was clear, even though the sheer numbers of farming, herding, and fishing people would prevent most from ever borrowing from any of these. Getting Discovered but Not Found Out The trick for rural people who sought finance was semantic as much as anything. It was to get funders to define their groups as women’s groups and their activities as enterprises. Small private agencies approaching USAID and other large donors had to do likewise. New women’s groups sprouted up overnight. In a five-district study on the period from 1978 to 1983, the number of women’s groups registered with the Kenya government mushroomed by 340 percent (from 583 to 2,572).27 Some were what their names said, but not all. Some “women’s self-help groups,” including the one I shall call the Nyanam group, the one active in our Kanyamkago neighborhood in 1991–92, in fact consisted of men, too. Its main activity when I visited it in 1991 was growing seedlings for farmers to establish their own small eucalyptus tree plantations. Since up to this time, in the region, it had been men who had grown these trees and men and boys who cut them, processed the wood for building, and sometimes burned it to make charcoal, no one locally doubted that men would continue to play a big role in the treefarming “enterprises.” But as these groups solicited government or NGO aid, the men’s names and real roles in decision-making were sometimes obscured on the masthead rosters presented to officials in proposals.28 Nor, of course, was the concept of “self-help” to be taken entirely at face value, since in reality many of the new groups seemed to have formed precisely as receptacles for new aid money. On who counted as a small or microentrepreneur or an enterprise, there were almost as many definitions around—by numbers of employees, or amounts of cash turnover—as there were organizations to serve them. It is more fruitful perhaps to ask who actually participated in the programs classed as supporting microenterprises. Most were shopkeepers or other traders, and most of the rest were service providers—for instance, taxi drivers or hair stylists. Lenders’ loan conditions strongly affected who could borrow. Since most programs in Kenya included no grace period between loan and first repayment due, most borrowers needed to have fairly steady



incomes so they could start right away. Farmers, food processors, or manufacturers who could not collect from their wares right away were effectively screened out.29 Ascribing people to economic classes based on income— another term that translates into few languages—is no easier than pinning them into occupations. But what evidence we have suggests that persons who gained official recognition as small or microentrepreneurs did not include most of those officially classed as poor.30 The participants in the microfinance programs were thus a very different clientele from the “target groups” of poverty alleviation programs up to the 1970s, which had been made up mostly of rural farmers and herders. Less of their activity was directly “productive” in economists’ terms, although much could be considered necessary for a smooth flow from production to consumption of goods and services. But such interpretation implied faith in a system, an “economy,” and attention to its both “upstream” and “downstream” flows or linkages. Attention to traders reflected faith in trade. Sample surveys could scarcely take account, let alone keep track, of the movement of traders, or of the multifarious activities that many small-scale entrepreneurs were engaged in simultaneously. Take, for instance, the case of a man who simply called himself a “businessman” when I first met him soon after arriving in Kenya—and his multifold “occupation” it took me years to get to know. His activities included one-room shopkeeping (evidence visible only when the shop was open), gold smuggling (visible only in his pockets, infrequently), unlicensed medical doctoring (evidence only in a carton under his bed), sugarcane crushing by donkey-driven press (done in a field away from his home), and, seasonally, some farming.31 If this quintessential microentrepreneur were ever to get an aid loan, it could hardly be for his real “occupation.” Nor can every small-scale entrepreneur stay put, as lenders typically wish. Some small-scale businesspeople in my acquaintance moved irregularly between country and small towns like Awendo (a sugar-mill town), or country and capital city. They followed the seasonal cycles of their own farms, the supply cycles of their suppliers and clients, the ups and downs of hiring and layoffs in the towns, the health vicissitudes of kin, and the requirements of spur-of-the-moment travel for funerals and other gatherings deemed obligatory. Ones who verged into illegal activities had to keep moving to avoid official inspectors, members of rival gangs, clients of rival patrons . . . or people who were more than one of these. All these things made traders’ and other small entrepreneurs’ movements hard to predict,



and they sometimes disappeared for indefinite periods. Mobility that is hard to track indicates not just shiftiness or fecklessness but alertness and responsiveness. Often observed in settings like Native American reservations and urban slums, this shifting mobility is an integral part of surviving poverty, no less than of investing wealth. Most small-scale trade and transport businesses in Kenya begin with no direct official help at all, financial or otherwise. More often they begin with shared, borrowed, or cast-off equipment (or none at all), plus perhaps some seed capital from a kin or other well-known person, by apprenticeship or by a method of training and selection much underrated: just hanging around, observing, and emulating. Loans of startup equipment from kith or kin carry the advantage that early mistakes may be forgiven more easily than even in the case of loans from rotating savings and credit associations. But most small rural enterprises in my experience begin with very little in the way of physical capital or tools anyway. They begin with a niche—for instance, baskets that need weaving, a granary that needs repair, or a head of hair that needs plaiting before a big date—and someone with the hands available and the patience. Or they begin in an urban alley when government regulations for market stalls, cars, or import licenses become so many and burdensome, and bribes so costly, that a quiet new business in making “official” rubber stamps with a scalpel and a block of rubber is born.32 Underground Finance Much of the excitement about small-scale credit in the 1980s and early 1990s focused on innovative experiments with group-based finance.33 The idea, expressed in a hundred ways by as many international and local private agencies in Kenya, was to learn from indigenous grass-roots voluntary associations and either (for some agencies) to build programs around these groups themselves or (for others) to duplicate their structures and processes in new groups the agencies would set up themselves. In the lingo of the time, in finance as in other activities, bottom-up and sensitive meant politically correct.34 What were the local “grass-roots” organizations available to serve NGOs as models? Even in a single Luo location or sublocation, a careful observer could find an enormous variety. Some were based on lineage membership, some on gender and age, some on church, some on common interests like



dancing or soccer. Among the most common was the children- of-locality welfare association, set up by and for first- or second-generation migrants from one particular area to another. Many of these used old Luo oganda names, as, for instance, did the small Uyoma Welfare Association in the Kanyamkago neighborhood I have called Kagogo, or names of clans. These rural-rural migrants’ associations were smaller, weaker variants of the ruralurban migrants’ ethnic associations like the Luo Union in Nairobi. Although usually called “informal,” even very small neighborhood self-help groups in my experience felt strikingly formal in hierarchy and procedures. They took officers’ titles from government and starchy speech (“Madam Secretary Chairwoman, point of order . . .”) from what members understood to be parliamentary or court room procedure. Unlike most international agencies seeking to learn from them, “grassroots” associations in the 1980s and early 1990s remained as often devoted explicitly to “relief ” as to “development” (dongruok, growth or improvement).35 The “children of (place)” societies, for instance, were mainly emergency funds to get members to the hospital, bail them out of jail, and so on. The aguch masira (accident pot) set up within the Anglican church in the Kagogo valley applied its contributions (five shillings per person per month in 1991) solely to providing coffins for its members on their death. Other “body burial societies” (BBSs, to anglophone Kenyans) served further as insurance for transporting corpses home. This is a function of paramount importance in the Luo country and environs, where social identities revolve around ancestral graves in old homesteads—and where officially recognized insurance companies have until the present new century involved few people in countryside or even city. The case of Opiyo Orwa, a middle-aged Luo primary schoolteacher with a wife and several children, gives an idea of the importance of burials in the Luo world and of the spreading of savings or investments among different institutions as if to spread out the risks of being caught in the end with none that functioned. These were his active memberships in 1991, in the order in which he once listed them for me: (1) a soccer and farm work club, (2) a teachers’ cooperative society for savings and loans, named after an edible bird, (3) the Body and Benevolent Fund, a teachers’ association to which all members of the cooperative above also belonged, (4) a “self-burial” group within his church, belonging in turn to a small, local, independent Protestant denomination—for coffins, shrouds, and other funeral expenses, (5) an



unnamed lineage organization for burial expenses, in his father’s natal home, and (6) a self-help subgroup of his clan (named after the clan itself ), based near his home—a subgroup mainly for funerary and related expenses. No fewer than four of the six groups served mainly as insurance clubs for funeral and burial expenses.36 And of those that had multiple purposes, these were by far the most important.37 One group saved its fund in a post office account but was transferring it to Barclays Bank in case the government collapsed. Governments may come and go, but your burial is your burial, the treasurer reasoned. What I am calling “underground finance” in the Luo country has not just a figurative meaning but a literal one too. Most local voluntary associations, including lineage welfare associations and body burial societies, had remained out of the view of government and international NGOs, let alone the large multinational aid agencies. Neither did the international aid establishment abroad seem to know or want to see, nor did Luo want it to see, how much of their attention Luo (in their own associations) devoted to their own rites de passage, especially marriage and funerals, in many ways the most important events and processes in their lives. Officers of aid agencies large and small were trained to care and speak most about production, and they had always disparaged local ceremonies and marriage payments—with all these mean in life—as “unproductive.” Rotating Savings and Credit Associations, and Why the Rage The “grass-roots” associations that captured the attention of international development financiers in Kenya and elsewhere in the 1980s and early 1990s were not the ones most widespread in the Luo countryside. The excitement was over rotating saving and credit associations. These are essentially self-help groups rather more important and better known elsewhere in Kenya and tropical Africa, and they are most impressive for their elegant simplicity and, for some purposes, efficiency.38 Development financiers were rediscovering what some anthropologists had noted and admired about these organizations since the early 1960s and well before (Geertz 1962, Ardener 1964). Found in patchy distribution in nearly all regions of the world, the rotating saving and credit association (or RoSCA) goes by many other names.39 A few such names are contribution club, pooling or saving society, merry-



go-round or money-go-round in English; tontine in French or, as a borrowed term, in English; or osusu or esusu in Yoruba and a number of other West African languages.40 Where the idea originated is unknown. Some parts of West Africa are thought to have had rotating savings and credit associations before European colonization, but others are not (see Stiansen and Guyer 1999). I have seen no mention in any early written sources in inland East Africa that any were there before money became widespread there in the early twentieth century, nor have I heard any indigenous Luo term for it, but absence of evidence is not reliable evidence of absence. The origins are obscure enough that African people can consider it an endogenous or at least an African institution if they wish, and this is perhaps what is most important for the custom’s survival. Having a finite number of members (anywhere between three and a hundred, but most often between five and twenty), the group typically works on clear and simple principles. Often, as in western Kenya, it is consciously modeled upon rotating labor groups like the Luo rika, a neighborly farm work circle of a few families. Most commonly, all of the contribution club’s members are of comparable status and wealth or income, and they may share more in common—for instance, the same employer in towns or lineage or church membership in the countryside. In one of the simplest and most widespread forms, all members meet at regular intervals (weekly, biweekly, or monthly) and all contribute identical amounts of cash (one or a few shillings per member, in the early 1990s in some parts of rural Luoland) to a pot that one member takes home from each meeting. The transactions take place in full view of all. Members take turns until each has taken the pot (L. agulu), whereupon the group disbands or the cycle repeats. For those who take their haul early in the cycle, the group means credit, while for those taking it later, it means saving—an important point to which we return momentarily. But it can be much more than this. With food, drink, dancing, or just talk, the gathering is a social event (and sometimes political) as well as economic, and borrowing from the club by taking the kitty in an early turn is more an honor than a shame. From the basic model ramify countless variants. With periodic meetings or collections by an individual who makes the rounds instead, fixed or variable contributions, preset or adjustable order of rotation (sometimes with positions auctioned), interest or no interest (none is the usual rural East African way), the workings of contribution clubs can get complex enough for



most anyone. Their essence has long been local and indigenous self-help and autonomous decision-making, and with telecommunication the clubs may spread beyond the local. Several features give rotating contribution clubs their appeal to members and outside admirers alike. Unlike so many traditional banks, they are accessible to women and to poor people, and they are composed of women more often than of men. They need no arduous travel; require no forms to fill out (or other language and literacy problems usual in banks); demand no identity cards, photos, or countersignatures; and pose no minimum deposit requirements. Not ordinarily requiring collateral, they obviate the fear of land losses or other property seizures. Transactions done entirely under group scrutiny leave little room for theft, graft, or demands for bribes. In economists’ terms, these things have all meant low “transaction costs.” What makes a rotating contribution club hold together, and what makes its members who have withdrawn early in the cycle continue to pay in, is peer group pressure. And what makes this work, in turn, is a multiplicity of interconnections among the members beyond membership in the group itself. For any given member, the club is likely to contain others who may variously be kin, neighbors, friends, churchmates, teammates, workmates, market or magic clients, marriage go-betweens, and so on. It is not just “moral solidarity,” a “spirit of cooperation,” or altruism that makes each cooperate (though this may be there) but unseen sticks and carrots—even in bundles. Unlike many institutional loan programs, rotating contribution clubs run little risk of drowning their members in debt and discouragement. Because members are usually socioeconomic peers, and because loan funds come right from other members’ own savings, they self-adjust to what members can afford to pay or repay. There is a subtler advantage to belonging. Being part of a contribution club gives each member an excuse to refuse other claims on her or his cash. In western Kenya no one lacks needy kin or neighbors, and anyone with any money can hardly fail to feel a need for defense against their incessant demands for loans or handouts. Not least among the hazards, for women, are demands by grabbing husbands. Having a duty to contribute to the group sounds better than saving up for oneself—even though these may be ultimately the same. It allows one to save without breaking Rule One of social life in western Kenya: never look selfish. Rotating contribution clubs in western Kenya are not just a stepping



stone to banking, in Geertz’s phrase (1962) a “middle rung” for those without access to formal finance. For in Nairobi and smaller cities and towns, as elsewhere in urban Africa, many salaried persons who bank—including government ministry workers, hotel workers, and bank clerks themselves—also participate in contribution clubs at the same time. (A Maragoli Luhya hotel chambermaid I once interviewed in Nairobi counted six savings and contribution clubs to which she belonged, all within the hotel itself. Nor was she unusual there.) Dividing up one’s cash to save or invest in more than one group not only spreads the risks of loss. It also makes it easier to keep secret one’s total financial “worth.” This too helps enable one to say no politely to other claimants, or to shelter wealth from taxes. But rotating contribution clubs are no panacea for solving African poverty. There are several reasons why not. The groups are poorly suited for financing important farm inputs for rain-fed agriculture, because of the seasonal covariance problem. Just about everyone would want to withdraw at the same time(s) of year.41 In emergencies, it can be hard to withdraw one’s savings in a hurry; at the minimum this can require making a deal with someone whose turn is coming up. Constant meetings do not suit everyone’s liking. While dividing up one’s savings keeps one’s total inconspicuous, savings in a club are hard to keep secret. A group too large means a haul too infrequent for each member (and hard communication among members); one too small means each member’s haul is also small. Dependent on all members’ continued participation, the contribution club cannot easily accommodate periodic labor migration. Gender and age also play a part. Young women who stand to move away upon marriage in mainly virilocal societies, like those of the Luo and most Kenyans, can make dicey cooperators for a continuing commitment. Men, in contrast, seem to compete more for status and leadership within a group and tend to pull it apart through factionalism if not through labor migration. It is married women with fairly steady incomes—for instance, market stall holders in towns—who seem most successful in making rotating contribution clubs work in Luo and most East African settings. The rotating contribution club may have strict rules about attendance and payments, but in other ways it has a flexible feel. Just as its members can consider it an endogenous institution because its exemplars spring up by local initiative, they can deem it an imported one if they prefer because organizations based overseas have been propagating and promoting the idea. Its members can consider it a traditional institution because it is group based,



or a modern one because it uses money and helps them save up for enamel pots, iron roofs, or cell phones that not everyone has. You can see in it almost anything you want. Gender, Ethnicity, and Peer Group Solidarity As the aid world’s attention began to focus admiringly on rotating credit clubs and other self-help financial associations in the 1980s and early 1990s, it was becoming clearer that not all people are equally willing or able to organize themselves into peer groups for financial purposes.42 In Kenya, contribution clubs have seemed to me more common and active in cities and towns, and among salaried or waged workers, than among farming people for reasons just mentioned. And they seem more common among women than men. Whereas men tend to have their natal lineages around them after they marry, women do not. These women must find associations to join, including churches and contribution clubs. Luo people seem to have taken to contribution clubs less visibly than Gusii or macro-Gikuyu (that is, Gikuyu, Embu, and Meru). Why might this be, if it is not just by appearances? Partly because the home areas in the western and central highlands have enjoyed more reliable rainfall, more developed infrastructure, more high-value cash cropping (coffee, tea, pyrethrum, and lately flowers and French beans . . .), and more cash around.43 No less important, I think, is that Luo, having more land and livestock per person, have their animals as an alternative form of savings. The rotating contribution club is far from the only kind of self-help organization with a financial dimension, in western Kenya or anywhere else. I have focused on it here for the clarity with which it illustrates basic principles of sociable group finance. Other kinds collect periodic contributions but do so in a nonrotating way.44 Some are simple emergency funds that build up money or other valuables, from contributions or working hire-outs, and give grants when members are in dire need. Yet others are activity funds that save up for dances, parties, and the like for the groups and their guests to enjoy. In rural western Kenya, as elsewhere, emergency funds seem more important to the middle-aged and elderly, and the dance-party fund more important to people in their teens and twenties, who have dating and mating, more than obsequy contingencies or the anchoring of burial, on their minds. The real heartland of the RoSCA in Africa, up to the present, has been not in eastern Africa but western and central: it is in the more heavily rain-



forested areas between southern Senegal and Angola. The reason for the custom’s popularity there more than in East Africa may well be, I suspect again, that cattle and other large animals in East Africa serve the savings functions that RoSCAs do in the rainforest areas, where the tsetse fly severely limits the population of large animals. The rising density and population pressure on land in eastern Africa, though, and the growth of towns and cities limit the role of large animals in saving and make RoSCAs more attractive. Most of Africa knows of RoSCAs, with or without help from international agencies. So far we have glimpsed a few kinds of microenterprise and microfinance from an almost endless variety available. Most, I have suggested, have not relied on any official help at all to get going. Some small businesspeople— hawkers, beggars—are routinely chased out of city centers by policemen ordered to make the way clear and easy for tourists or to spiff up settings for prospective investors. Indeed, some small entrepreneurs seem to depend on their own illegality, as in the case of grain trading around the edges of state monopolies or gun smuggling across borders. In these cases the openness of their very niche comes from their illegality and from their operators’ ability to work “below the radar” or with the complicity of known or bribable authorities. But even after several decades of attention, many kinds of small enterprises remain unstudied and underappreciated, and responding as they do to demands that may be ephemeral, they may shift forms before any survey or study can catch up and pin them down. The same goes for indigenous forms of financial organization. In western Kenya as across equatorial Africa, individual landlord-moneylenders, as they are famously known in southern Asia, have so far remained relatively unimportant or inconspicuous, at least in the countryside. Farmland rental and share tenancy are still more the exception than the rule, and the concept of a landlord-moneylender seems foreign and too antisocial for some African sensibilities. But many kinds of local groups, named and unnamed, have organized themselves for financial purposes. Some, such as dancing associations, migrants’ home-area welfare societies, and body transport and burial insurance societies, serve purposes far more meaningful to Luo and other equatorial African people than to those who would try to improve these people’s lives from abroad. We have also seen at least one other form of indigenous self-help finance, the rotating contribution club, that is as much Africa’s as anyone’s and that furnishes basic household goods, trade goods,



and other provisions whose value anyone might appreciate. Its power is twofold, in its sociability and its appropriate scaling of its payouts to local abilities to finance them. If it does not deny self-interest, it at least conceals it. It honors, rather than shames, the one who uses it for a loan, and coming from the contributions of members who are in some way peers, it is likely to do so without swamping him or her in debt. Finally, the contribution club helps individuals remove their cash from their own daily temptation while still offering them recourse to it in times of special personal or family need. In all these respects, the club may serve as one model among others for new interventions from afar. This is the point at which to turn back to national and international aid agencies and their efforts to plug into local life.


Self-Help with Help Banking Between Charity and Usury Tooth fairies and banks: it is in fact true that if you stop believing in banks they will expire. —MARGARET ATWOOD, PAYBACK (2008)


eliefs about finance and economy, like some other beliefs, can grow to take over human thought and experience, but they can also pop like soap bubbles, party balloons, or old-style hydrogen blimps. This chapter discusses, in shortest form, a boom and a bust in banking—a boom so big, with a credit flow so pervasive, it reached into the smallest pile of tomatoes in the smallest marketplace; a bust so precipitous it brought into question some of the firmest faiths and deepest assumptions about markets. The boom and bust were not just a single movement and reversal, though, where the one merely undid the other. It may be that the sort of boom described here outlasts a bust, if its practitioners weather heightened scrutiny. In this chapter about credit and discredit, my first intent is to explain how something as slight, delicate, and nimble seeming as microenterprise and microfinance could become big, official, and bureaucratic—for better or worse—even while charities morph into aggressive, profit-taking banks. A second aim is to trace the fine line between self-help and help-self, and the one between profiting and profiteering. A third aim is to comment on the reach of fantasy in finance. Self-Help with Help In the 1970s and 1980s, as Chapter 10 began to describe, a wave of private aid organizations turned to what they called microfinance as a way of reaching the people they deemed the economically promising poor. A



big question among development program planners in the 1980s, 1990s, and early 2000s was whether aid agencies, public or private, could somehow link up with local financial organizations like contribution clubs to use them as conduits for larger loans or savings than the latter customarily handle.1 The issue was not without ironies. Large institutions were avidly courting small ones (like the Nyanam group in Kanyamkago) whose members formed them partly because these or other big institutions denied them access to begin with as individual clients. They sought to “formalize” and grow groups whose very advantages lay in their small size and informality, or at least their absence of centralized bureaucracy. But the new emphasis on small enterprise was bringing new hope to big aid bureaucracies, whose big old models of aid finance were looking exhausted. Already by the mid-1970s, with big projects like the IADP in Kenya discussed earlier, it became more evident than ever that farming was hard to direct and finance from afar. Disappointments with African governmental and state-controlled conduits for foreign aid were mounting. All sorts of private philanthropic agencies that had been engaged in disaster relief work and non-financial forms of attempted assistance now were turning to the support of micro- and small-scale enterprise through grants or loans (and later, assistance with savings). They did so now with backing from the U.N. agencies, the World Bank, and USAID, among other giant agencies, and with the attention and collaboration of a network of traveling international aid consultants, who trans-pollinated their ideas like bees. Private aid agencies in finance copied not just local people’s methods but also each other’s. In trying to harness the evident power of local voluntary association or to recreate what made indigenous grass-roots organizations work, more and more private aid organizations in Kenya and elsewhere in Africa tried to emulate or adapt models from overseas—particularly one from Bangladesh. The bold initiative in Bangladesh has been attributed to the idea of Muhammad Yunus, a charismatic and well-connected Bangladeshi economics professor-turned-activist, and several colleagues. They called it the Grameen Bank (or village bank). As if for maximum drama, they set it up in 1976–77 for landless rural women—hitherto deemed a hard if not impossible group to reach effectively with credit or other institutional financial aid—in what was then deemed one of the poorest and most vulnerable countries in the world. The trick was to combine principles of individual agency and collective responsibility, and to find the right scale for the basic



units. The Grameen Bank organized into cells of about five members, “solidarity groups,” requiring periodic training meetings (with a wide but rather rigid code of ethics and behavioral strictures) and giving each cell a measure of joint responsibility for repaying loans used by its members as individuals, in gradually increasing sizes. The financial results were astonishing. The reported repayment rates, approaching 100 percent, seemed phenomenal by the standards of previous rural credit schemes in the poorer countries. And membership multiplied exponentially.2 Within just a few years the Grameen Bank had revolutionized development finance by demonstrating once and for all that some of the world’s most disadvantaged people, long assumed unworthy of credit, could, under particular conditions, use loans in ways lenders approved and repay them reliably. None of this meant the Grameen Bank would soon become selfsustaining. It did not. For many years it remained heavily dependent on money poured in at the center from the International Fund for Agricultural Development (IFAD) and other agencies. But the women using it did use the foothold to become more independent in their own way from husbands, landlords, and others. Word of Grameen would continue to spread for three decades until nearly all the world—from Nairobi to New York to Stockholm—would sit up in admiration. Known for being homegrown in a disadvantaged land, for reaching “down” in class, for organizing women, and not least for being simple enough in its essentials to understand, the Grameen Bank, like the Mona Lisa, eventually became famous for being famous. But that does not detract from its deeper effect. It did nothing less than restore the world’s dwindling faith that there was anything in rural development aid that could work at all. The experiment was not entirely unique. In Latin American cities by the early 1980s, the Cambridge, Massachusetts–based Acción International/ AITEC had simultaneously worked similar wonders, or so it at least seemed to many visitors, with graduated loans for comparable “solidarity groups” of small entrepreneurs. Impressed officers of private agencies tried to emulate and adapt the working principles of these organizations for Africa. Many did so with funds from the equally impressed larger agencies—including the World Bank, USAID, and several of the agencies under the umbrella of the U.N. Development Programme, notably the International Labour Office (ILO). International aid agencies in Kenya also began using “solidarity groups,”



under many other names, for small and microenterprise finance from the late 1970s into the 1990s.3 A conventional modus operandi evolved for solidarity group lending, in Kenya and elsewhere, in the late twentieth century. Typically only one or two members of a group were allowed to borrow at a time, and no one else within the group could borrow until these members repaid. It was up to the group members themselves, with this incentive, to find ways to ensure that each borrower repaid; it was not the responsibility of program administrators. Some of the latter, moreover, expected that members of a borrower group would vet each other’s plans for using the loan funds as a precaution to safeguard their own borrowing privilege. As potential borrowers used their own local knowledge and discretion to pick their co-joiners in the first place, this method was essentially character based. With the new group-based lending, numerous private aid agencies also attained unprecedented levels of repayment—financiers’ favorite measure of a project’s success—within the first few years they tried it.4 Commonly reported in the range of 95 to 100 percent, these early repayment rates were rates almost unheard of in African state-controlled credit, enviable to commercial banks too.5 What enabled these programs to collect so well was no inherent magic of nongovernmental organizations. True, their public relations at the local level exceeded those of most other development agencies; they had always been in closer touch. But these private agencies too had some loan schemes choked by defaults, and some state schemes in other parts of the world were showing they could collect well under the right sort of management.6 What seemed to make experiments with solidarity groups succeed as far as they did in securing repayments was much the same as what made rotating contribution clubs and rotating labor (rika) work. (And some of the internationally organized schemes were deliberately modeled on these indigenous associations as well as on foreign institutions like the Grameen Bank.) It was not just the fact of common membership in a borrowers’ unit that made this system of enforcement based on peer group pressure work; it was the other involvements that each member had with the other members’ lives. In marriage and funeral arrangements, in church, sports, magic, or just gossip, neighbors had ways of making life difficult for—or getting even with—others who might try to borrow without repaying. What Max Gluckman and other anthropologists had called “multiplex” ties in rural communities were a big reason why these “solidarity groups” could keep functioning at all. Members were placing their trust not just in each other



as individuals but in complex, weblike systems of social control that would help make each behave acceptably to all. That was not the whole story, though. Some NGO lenders to groups tried to keep tabs themselves on how borrowers used loans, and they kept finding many unapproved uses—a “problem” or (more fairly) misunderstanding familiar to us by now. Some of the endogenous private agencies (for instance, Pride Kenya) did not rely wholly on peer group pressure for repayments; they also arranged with chiefs, police, and other local authorities to help put the screws to defaulters. While program planners in other private agencies hoped that many rural borrowers would “graduate” to bigger commercial bank credit—few seemed to doubt this was a good thing, despite the term’s patronizing connotation—most seemed to find they did not. Many of the “income-generating activities” organized through women’s groups failed to turn their members a profit or indeed to break even. The groups did, however, seem to be able to succeed in cobbling together savings. Rediscovering Savings: The Neglected Half of Finance The new attention to self-help movements, in development finance by the 1980s, meant that smaller private and larger public agencies supporting them began experimenting more than ever before with collecting and mobilizing savings as well as doling out credit. Few program officers in private aid agencies appeared to think saving by itself a sufficient aim for programs for the rural poor. Instead, most aimed to build in savings as a component of programs still conceived mainly as credit schemes. Tying loans to savings was not, of course, a new idea in Kenya or anywhere else. It will be recalled that in rotating saving and credit associations, transactions that are credit for some (the earlier takers in the cycle) are savings for others (the later ones to take the kitty), and this identity principle was explicitly recognized as a model for numerous philanthropic programs in the 1980s and early 1990s. Savings-and-loan cooperatives, in Kenya and elsewhere, had been built on comparable principles since the early 1970s.7 What seemed new was the entry of charitable agencies, with staffs untrained in finance and less well paid than bankers, as financial brokers. Requiring saving as a prerequisite for loans can serve several practical purposes at once for keeping any financial institution going. It can screen out potential borrowers not serious about cooperating, and it can give program participants a stake in the programs and an incentive to help watchdog



the program managers and other borrowers. These are big concerns in any country where roads wash out, where macroeconomic instability and hoarding cause fuel shortages, and where power lines, if they exist, may go dead lacking spare parts—or get turned into pastoralists’ jewelry and tourist trinkets. Most important, though, is that saving and investing allow poor or rural people some pride in active achievement. This is something borrowing and debt alone scarcely instill and can severely damage. A big worry for cash savings depositors was inflation. By 1993, after several years of national political instability, spiraling inflation of the Kenya shilling (reaching 40 percent or more a year) made savers seek ways to dump this money fast.8 High inflation also challenged all kinds of financial institutions to raise interest rates sharply to reflect real costs. The outcomes of most private agencies’ and other saving programs, like most else in the Kenyan economy, were unpredictable. But if saving schemes did not work out right away all over Kenya, they would be pressed ahead elsewhere. By the late 1980s and early 1990s, Burundi, Botswana, the Gambia, Nigeria, South Africa, and a host of other countries south of the Sahara boasted innovative programs using local initiative and management to mobilize savings by, and administer loans to, people variously rural, poor, and female.9 “People’s banking” was in. Long-Distance Links and Branching Beliefs The scramble to emulate local methods and listen to local needs was on, and savings was becoming the essence of it. Arguably, some were seeking to fix what was not broken. But whether the larger institutions ever succeeded in harnessing or plugging into local contribution clubs, they could and can do much to emulate what makes these work among poorer women and other disadvantaged people. Borrower cells and peer group pressure can help keep a financial institution afloat. This has been a lesson of the microfinance experiments in East Africa and elsewhere. Local contribution clubs and the programs that emulate their principles suggest a broader lesson about “development” or poverty alleviation. A financial program, like a training program, is most likely to succeed if its participants deem it their own—whether the germ idea actually sprouted as their own or not. It must demand something of them, whether in cash savings, food, labor, or other things. It must be something in which they feel invested themselves.



The sweep of indigenous financial innovations and rediscoveries, and of international attempts to connect with them, is far broader, and more kaleidoscopic in color and variety, than I have described here. Independent African churches, former relief agencies, civic lodges, unnamed networks and partnerships, and obscure individual rural deposit-keepers all enter the financial picture, and the broader picture of economic entrustment, in their own, sometimes subtle ways. While some have remained strictly independent of officialdom, others, like one of Opiyo Orwa’s several burial societies, have sought out aid agencies or commercial banks themselves and set up accounts on their own behalf. Self-help activities in western Kenya as elsewhere have added up to a movement, from within and without, to put bigger capital in reach of people, including not least rural women who are deemed poor but energetic—and to give them more say over its use and management. This is what Marguerite Robinson (2001) and others have called the microfinance revolution. Like most revolutions, however, the microfinance revolution contained varied schools of thought, some of whose proponents deemed each other counterrevolutionary. Early enthusiasm for the model of the Grameen Bank, based on “solidarity groups,” was challenged by the end of the twentieth century by another model based on the experience of Bank Rakyat Indonesia (BRI) that featured loans to individuals with cosignatures from salaried or other solvent individuals. Against the Grameen Bank’s model of loan subsidies, requiring a continuing inpouring of money from large international aid agencies, the BRI, the Banco Sol in Bolivia, and other institutions favored charging interest rates above those of traditional public programs but below those of private moneylenders, while paying low enough interest on savings to make their institutions financially self-sustaining (Robinson 2001). A key, that is, was the saving-lending rate spread. Cost-covering for sustained viability was becoming a new orthodoxy at the start of the new century. The days of big handouts for small entrepreneurs, as standard practice, seemed close to an end. If the relative newness of microfinance and its explosive growth on the world stage had any reason, it was that before the early 1980s, few people in a position to do banking or quasi-banking had understood that people in poverty would turn out to have been “creditworthy” when it came time to repay. By the last decade of the twentieth century, it was no longer any secret they could. It had become undeniable. But how to ensure the repayment was still plenty debatable. Most who lent to micro- or small-scale entrepreneurs



had agreed that land title collateral was not helpful or necessary, although some continued to demand chattel collateral (movables like farm machinery, animals, or even beds, clothes, and so on). But the question still remained whether to use groups or individual borrowers themselves as the guarantors, and on this point, every organization seemed to have its own strong convictions one way or the other. Kenya was a case in point. By 1990–91, Kenya had a long list of institutions, including CARE Kenya, Kenya Rural Enterprise Program, and Partnership for Productivity, using the group guarantee. Another long list— including, for instance, Kenya Women’s Finance Trust and Undugu Society—used individual guarantors (persons other than the borrowers). Several big banks still required a real estate mortgage guarantee (for instance, Barclays Bank and National Bank of Kenya), and a few other lenders accepted chattel mortgages (including Kenya Industrial Estates and the National Council of Churches of Kenya).10 More and more aid agents and bankers were communicating online, making comparison easier than ever. The game was pick-your-model. Lending organizations seemed to divide pretty evenly between those choosing individuals and groups to guarantee their loans, but some were switching strategies as they compared repayment rates, and the drift in the 1990s was toward group guarantors.11 Churches and charity organizations tended to rely on peer group pressure, individual character, or chattels at most to secure their loans. Only the stodgiest, most conservative commercial banks still relied on mortgages including land or other fixed property when lending to indigenous small-scale entrepreneurs or farmers, something they were reluctant to do anyway. Lenders also varied widely in practices of charging interest. All seemed to calculate it in terms of rates—not timeless ratios—but the rates varied between 0 and 30 percent per year. Predictably, the churches and charities (like the Catholic Diocese of Embu and Food for the Hungry)—which were often the ones with the easiest access to charitable overseas funding— charged at the low end, and ones with words like “productivity” and “enterprise” (like Partnership for Productivity and Kenya Rural Enterprise Program) in their names charged at the high.12 But a new orthodoxy was spreading, in favor of higher interest to cover institutional costs. This meant charges for not just overhead and operating costs (always high where clients are numerous and diverse—until facilitated by computers) but also the costs of default risks and of lost opportunities



for investment.13 Charge high to stay afloat, it went; if you want to build small businesses, be more like a business yourself. Even the churches were listening by the late 1980s and early 1990s, and some were starting to raise rates. That they could should be no surprise, since some churches had run as businesses too, and highly successful ones at that, since medieval times and before, and since the ethics of interest and usury had always been debated in Christian as well as Islamic and Judaic theological circles. But the organizations leading the movement toward cost-covering, and indeed toward profitability, in Kenyan microfinance sprang from different roots. Charity into Bank: Scaling Up Without Selling Out? The cases of two organizations in Kenya illustrate what the quiet microfinance revolution looked like from an institutional standpoint.14 One broke away from its mother organization in the United States and eventually buried those origins in its publicity while transforming from a program to a private aid agency in its own right, then to a bank. The other sprouted homegrown in Kenya. In both, officers of Gikuyu background played key organizing roles—but they downplayed those backgrounds, within and without, as need for cooperation demanded. Both have already been adequately described and admired as case histories elsewhere to obviate extended treatment or encomia here, but both contain features worth note. The first began in 1984 as a five-year project of a Boston-based nonprofit called World Education, Inc., with Kenyan participants. It quickly attracted major support from USAID and by the new millennium grew into a Kenyan organization, nominally and increasingly also financially independent. It was called the Kenya Rural Enterprise Programme, or K-Rep, and from about 1987, it became a semiautonomous umbrella organization attempting to coordinate and funnel international funding from USAID and other sources—as grants and loans, and increasingly the latter—to other nongovernmental institutions doing microfinance in Kenya. It attracted further American funding from the Ford Foundation and from PACT (Private Agencies Collaborating Together), an umbrella organization based in New York City, who were interested in supporting K-Rep’s client agencies. But the organization was changing. In 1990 K-Rep began its own program of lending to, and taking deposits from, very small-scale businesspeople directly. The following case illustrates the kind of success story—if that is what



it is—for which the organization made its name, and it is the kind of narrative with which the more admiring literature on microfinance is filled. A farmer called DT, struggling to feed himself, his wife, and nine children, tried trading potatoes and cabbages but still failed to support them all. In 1991 he borrowed the shilling equivalent of $370 from K-Rep, new to his area. He used it to buy more cabbage and potatoes, and to build on his own land a small house with rental units. With his increased earnings he borrowed again, $545 this time, for more cabbage and potatoes and a hired truck. By the time he took his third loan, of $690, he was supplying vegetables to the army, a hospital, and a university. By 1994 he had saved more than $800 to deposit in a commercial bank, had bought dairy cows, and not only was feeding his family but turning a profit of $36 per month. “Thus in three years DT was able to expand and diversify his household economy from a poor farm to a prospering set of microenterprises.”15 This is a classic tale of pulling oneself up by the bootstraps, with help. But there are things the vignette does not tell us. Was “DT” neglecting his cousins and neighbors or deliberately shunning their requests for sharing, and what did they think of him and his businesses (if this is what they called them)? Was he on the way to becoming an absentee landlord? Was his leased truck putting donkey drivers out of business? Were the soldiers in the army barracks really serving the public? Microenterprise programs like K-Rep’s and the institutions that fund them take a lot on faith. Focusing on family as narrowly defined, and on finite time frames for measuring success, allows them to seem easier.16 To continue the story, from about 1994 K-Rep’s managers decided to loosen its ties to nonprofit organizations and overseas donors like USAID and to turn it into a commercial bank. One of the models for it was Prodem, a nonprofit microfinance fund founded in 1986 in Bolivia. Prodem had grown quickly and, when joined by other partners there in 1992, had given birth to a larger, chartered deposit-taking and lending bank, the Banco Sol, still devoted to microenterprise and serving women as much as men. The change in K-Rep’s case took about four years. K-Rep’s managers, including cofounder Kimanthi Mutua, hired a new cadre of traditional bankers, on a higher pay scale, to handle new tasks of money management. The immediate result, as reported, was a clash of cultures within the bank. On one side were the new bankers who considered money making their job and preferred strict rules and procedures that would exclude poorer clientele. On the other were the older staffers who considered microfinance for



the poor their mission and preferred a looser, more flexible style. To hold the organization together, Mutua and K-Rep’s senior managers arranged something interesting: an exercise in role reversal. They sent the new bankers to the field to learn about microfinance, and they sent the former NGO staffers to work in banks as clerks and tellers. Here, just as in at least one other African experiment like it, the idea seems to have worked—at least in keeping internal peace.17 K-Rep’s microcredit operation gained a banking license in 1999 as it was transforming itself into a limited-liability company. For the next few years it charged, for its group lending, interest at rates nearing twice the standard rates of commercial bank loans.18 No longer calling itself a “Programme,” but K-Rep Holdings Ltd., then K-Rep Group Ltd. and subsidiaries, it now began to attract international banks as financial backers while still serving very small-scale businesspeople as its main clientele.19 Meanwhile, the organization had grown explosively. Between 1991 and 1998 it expanded from twenty-nine staffers to 152, cloning its branch offices from two to over fifteen, expanding its borrower clientele from 1,507 to 11,582.20 The expansion continued despite what some borrowers and observers deemed high interest rates on loans. Under the new self-styled bank, between 1999 and 2003, borrowers rose in number from about 13,636 to 45,379, and savers from none to about 62,643.21 In two decades, K-Rep had bridged, brokered, and in some degree manipulated the cognitive barriers between the public and private, between the profitable and charitable, and between the national and international. Embracing business (and arguably, capitalism) as both a means and an end, it never wavered far in its ostensible purpose from its initial mission of serving—or at least interacting with—the poor. It was always hard to classify. The lending methods that K-Rep used included both group-based methods (based on the Grameen Bank model from Bangladesh that was being emulated around the world) and individual ones. All the methods were given Swahili names to help Africanize them but not tie them to any one of Kenya’s larger ethnic groups—a deft diplomatic move.22 The method for smaller groups, and the one that most closely imitated the Grameen model, was called juhudi (Sw., exertion or determination). First tried in the Nairobi shanty slum Kibera, this method organized groups of four or five (called watano, fivesomes) or so, which were grouped in turn into larger-order clusters of three to eight watano called kiwa. After two



months of training meetings, kiwa groups could begin to collect savings in weekly meetings from their members, who could later borrow from them (in ratios that decreased in proportion to amounts saved).23 Watano members jointly pledged household goods to their kiwa to secure loans. Response was strong, but some members were found to misrepresent themselves as businesspeople, to which the organizers responded by requiring tighter controls and more training.24 Another of K-Rep’s modes of lending, since 1991, was called chikola, referring to a rotating saving and credit association (RoSCA, or merry-goround) plugged into the K-Rep bank as a lender.25 Indigenously formed groups of about twenty members, after enduring a year on their own, were eligible. They set up a joint bank saving account, and as individuals they were allowed to borrow some multiple of the funds in the account for a year or more, using the group as co-guarantors and repaying by installments in monthly meetings. At first, loans were made to entire groups; later in the 1990s, the method was changed to lending to individuals within a group, with the group still acting as joint guarantor for the loans’ repayment. In a third model called kati-kati (meaning in between), groups of five to ten small- to medium-scale businesspeople who proved willing to attend weekly meetings, open a bank account, contribute to a group savings fund, co-guarantee other members’ loans, and put up some sort of collateral of their own were eligible to borrow. In addition to these group-based forms of finance, for persons and enterprises its staffers deemed to have “graduated” from group-based finance and training, K-Rep offered individual loans and business loans against chattel collateral.26 The overall structure of group-based loans for the poorer and individual loans for the richer entrepreneurs seems to have carried with it a subtle cultural message that is hard to put into words but might be something like this: by succeeding with help, you rise to independent personhood. But independent personhood did not quite mean total trustworthiness, since the requirement of collateral did not disappear but indeed became more explicit. And K-Rep continued insisting on its clients’ saving before, or sometimes instead of, borrowing. By turn of the century, K-Rep offered checking accounts, term accounts, automatic tellers, credit cards, and other facilities, just like more conventional banks, but in other ways it still differed radically from them. Still by 2001 it could claim that most of its savings accounts were below $256, most



of its loans were under $320, and half of its users were women. Loans recovered from small-scale borrowers were still recycled to other small-scale borrowers. That is, K-Rep tried to scale up in the size of its own operations without bending over toward the wealthy or much increasing the size of its loans themselves. Interestingly, it did so with the dual rationale that its poorer clients were actually repaying more reliably and that in group-based lending (that is, in juhudi and chikola), smaller-scale participants felt uncomfortable guaranteeing the loans of bigger ones.27 Whether K-Rep could keep holding it down indefinitely, without getting tempted into supporting larger and larger scale businesspeople, remained to be seen. The question is largely a cultural one. By abandoning the image of an aid agency and becoming a bank in name and deed, K-Rep was joining a fraternity of financiers whose assumptions about why to do business in the first place were surely much simpler. It was also exposing itself to new regulators who might seek bribes or other favors—even of a do-good bank with foreign roots, for women as much as men.28 But by now some lessons were clear. An aid agency that wanted to could morph into a bank, and it could do so without selling itself out to rich clients or turning into an exclusive men’s club. Poorer men and women, in city and country, wanted a place to save, not just to borrow. For convenient enough loans, nominally Africanized, they would pay interest (and pay above a rate of currency inflation). A single institution could achieve substantial cooperation among members of competing ethnic groups within its nation, even without proportional representation within. (Several of its top officers came from one ethnic group famed for commercial and financial ambitions and know-how.) And this organization did it through periods of interethnic war in the Kenyan countryside around times of national elections and of regime change. Beyond that, the example shows a single institution can combine funds, and lessons, from more than one continent—and then pick which ones to present to the public as its own. But now let us turn to one that some African people started themselves. Coins Fill the Bowl: A Homegrown Bank Thinks Small and Scales Up Other institutions that formerly served only more prosperous clients have been looking toward microsaving and microborrowing as a new field into which to expand. One such organization, homegrown in Kenya, was



the Equity Building Society (EBS), renamed in 2004 the Equity Bank Limited (EBL).29 At least three things about it deserve special note. One is that it began as a mortgage bank, but its organizers found a locally better adapted, more popular way of doing business in Kenya. This was based mainly on a simple strategy that is no less African or Japanese than “Western”: listening. The second is Equity’s heavy use of electronic means for saving, transfer of funds, and other communication: a big convenience where road transport is expensive and impractical. The third, deriving largely from these, is its extraordinary growth. First set up in 1984 in Nairobi, with the pooled capital of five friends, Equity limped along for a decade as a commercial bank for mortgage finance in central Kenya, headed by two Gikuyu-speaking businessmen. Seeing no growth in their business over their first decade, they redirected their attention by about 1994 toward small- and medium-scale entrepreneurs, smallscale commercial farmers, and salaried workers. Reaching into village shopping areas with small fixed and mobile branch offices—a key to the quick spread and growth—Equity’s organizers prided themselves on a flexible “market-driven” approach, based on careful listening to their clients rather than taking a “product-driven,” cookie-cutter, take-it-or-leave-it approach. What this produced was savings, not just loans, as well as wiring service for remittances—crucial for migrant earners and their families or business partners at home.30 The bank also responded to expressed demand for assisting trading, education, and solar power supplies—and for medical emergency expenses, which not all program designers would have called directly “productive.”31 It offered farm input and crop advances for coffee, tea, and dairy farmers—the sorts who had repaid most reliably in state government schemes, because loan collection could be tied to official marketing channels. It served children and elders, individuals and groups, and offered smaller and shorter-term starter loans than the earlier mortgage loans. With the reborn Equity, in contrast to its earlier incarnation and “mainstream” banks, it was savings and chattels—not land, not homes, not graves—that secured most of the loans. The numbers say people liked it.32 The rate of growth in the decade after 1993–94—if available figures are to be believed—must rank among the more striking in the history of finance, with smooth, steepening upward parabolas in number of savings clients, number of loan clients, value of deposits, value of loans outstanding, number of people employed, and profits.33 Equity also



had millions of customers, dozens of branches, and hundreds of cash machines.34 An Equity finance director and co-author relays one client’s story of successful banking, starting with her first deposit with Equity in 1992. She remembers her housewifely tentativeness, her struggle to maintain a minimum deposit, her consulting with her husband and opening a kiosk next to her house where she could watch the children, her borrowing Shs. 20,000 (then about $667) to buy flour and sugar and such, and later Shs. 50,000 ($1,450) to expand the shop with a rented room . . . then borrowing again to buy out her neighbor’s mini-market . . . then setting her sights on competing with a supermarket franchise (Uchumi) while borrowing and rescheduling payment to pay her children’s school fees and mother’s medical expenses.35 The “success story” is pretty typical in the gray literature of microfinance. The anonymous woman’s having sought her husband’s advice on the way to gaining financial independence may reassure threatened male readers, while her being represented without name, place, or ethnic group makes it easy for anyone to identify with her. The story is noteworthy but not too radical for its likely readers. The story of the man next door whose shop she bought out—choked out by competition?—is not recorded. The rocketing growth of Equity to date is easier to explain than it would have been to predict. Its indigenous leadership and its near abandonment of the ill-suited mortgage model, its door-to-door marketing, and above all its listening gave Equity local appeal, but drawing on German, Swiss, and British “silent partners” for strategic and technical assistance, and United Nations Development Programme and British government aid funding for computerization, gave it reach and efficiency in handling large numbers of small-scale client accounts.36 (It would be joined by other companies using cell phones to allow money transfers from phone to phone.)37 And flexibility too, as it grew, was key.38 Being organized as a business, not a charity, helped avoid misunderstandings of mission—and the reborn Equity took advantage of the pro-enterprise, pro-market swing in aid fashion at its peak. In Kenya though, just as in Indonesia, Bangladesh, and elsewhere, organizations like K-Rep and Equity had taught the world three lessons. One was that the financial institutions in the tropics can be run by people from the tropics as ably as by people from outside (or, as in the case of K-Rep, taken over from the latter without immediately collapsing). A second is that microfinance can be made into a profitable a form of banking, hence institutionally



durable. A third is that it can be scaled up to allow an indigenously rooted organization to serve—or, if the terms of exchange cross over a fuzzy, debatable line, perhaps eventually to exploit—clients numbering into the millions. Into a Different Animal: Microfinance Routinized Like so many other revolutions and charismatic movements, the “microfinance revolution” had not been under way long before it started becoming routinized, bureaucratized, in true Weberian fashion. Already by the early 1980s, bigger organizations—including the World Bank, the U.N. (especially its International Labour Office), and bilaterals, including USAID— had established enterprise support branches or begun multi-million dollar research, training, and grant and loan projects for microenterprise support, multiplying and stretching their acronyms.39 Major newspapers worldwide featured “grass-roots” finance, and service-minded college students in the United States and Europe turned their sights to microfinance careers. In Kenya alone, by 1999, a number of sizeable microfinance organizations had allied to form the Association of Microfinance Institutions of Kenya (AMFI). Within a few years, it had its own General Assembly, Board of Directors, and hierarchy of formal offices, and stated purposes including regulation for its dozens of constituent organizations, if not also for their clients in the millions. Many countries had their counterparts, and other comparable organizations had formed with international reach. A look at the MicroFinance Network Web site in 2004 would show directories of directories, with umbrella organizations, information centers, training courses, investment funds, technology consultants, and so on, all revolving around the concept of banking for the poor. What had begun as a few maverick little initiatives like Acción in and around radical-rich Cambridge, Massachusetts, or as pro bono personal hobbies of wealthy visionary industrialists like the ( Jaime) Carvajal Foundation in Colombia or zealous mom-and-pop organizations like the New York– based Trickle-Up Program, sending money to strangers across the world, more or less on faith—had become an institution, an industry in itself, and more. Microenterprise and its microfinance had become entrenched as orthodoxy, structure, and process: practically as a new world order. By the time the decision was made in the United Nations General Assembly to call 2005 the International Year of Microcredit, there could be little doubt left that this was the new look, and the center stage, of “development.” The next



year, Muhammad Yunus and the Grameen Bank jointly won the Nobel Prize for peace. Little seemed left, by the way of glory and garlands, for microfinanciers to achieve. Microfinance programs were becoming institutions, not just in the sense of bricks, mortar, and letterhead but in the cultural sense of recurrent thought and behavior. Navigating Between the “-isms”: Hazards and Uncertainties Remaining The real effects of the routinized microfinance revolution in the equatorial countryside were still only partly understood as the new century dawned, however. Something was still missing. No one seemed to know yet who was losing, or how. It could not all be good. If small-scale traders bring in new margarine, chewing gum, bottled drinks, or battery-powered sound machines, they siphon out of local communities money that might well, in another era, have stayed circulating longer within. Turning to national currencies makes people more subject to political control, remote control, from capital cities in Africa or commercial centers abroad. If these commodities and currencies improve the quality of life in one way (and rural and small-town people across Africa insist they do), they might yet impoverish it in other subtler or more gradual ones. Some of these effects had to have class implications. It had been clear enough to Marx and Engels in Dickensian London (as it had been two millennia earlier to Chinese court historian Ssu-ma Ch’ien) that people who become wealthier than their neighbors—by cash cropping, trade, manufacturing, or finance—become better able to exploit them. They can do it, for instance, by buying up food or land in lean times and waiting for prices to rise before they rent or resell. Or they hire labor for cash wages (an arrangement many Luo still feel demeans the hired, and maybe always will) and use a queue of unemployed potential replacement workers to screw those wages down to and even below subsistence level, where workers must rely partly on family or friends just to stay alive. Vladimir Lenin opined, “The small enterprise creates capitalism and the bourgeoisie permanently, hourly, daily, inescapably, and on a mass scale.”40 But one need not be a communist like Marx and Engels, or even a socialist revolutionary like Lenin, to recognize that small enterprise might widen class splits—particularly if they grow—or that some of these might result eventually in violence.



In western Kenya as in much of inland equatorial Africa, business is often tied up with magic. One who gets too rich too quickly and easily can expect to be suspected and perhaps openly accused of witchcraft by lessfortunate neighbors—even if, as in one case of one local agricultural innovator I met in Luhya country, whom his neighbors held in deep suspicion— one is generous with sharing knowledge. Persons accused of witchcraft are at risk of becoming pariahs, at the least, and possibly of becoming victim to sorcery attempts or, in times of general economic or political crisis, mob violence. Contrary to the expectations of some trainers, people in East Africa do not seem to stop “believing in” (or put another way, perceiving or knowing) witchcraft and sorcery when they receive schooling or training, in business or other things, from abroad. Instead, they connect their existing ways of understanding how the world works, explaining new developments in terms as familiar as they wish. Even access to training or schooling itself may thus be perceived as being gained by mystical machinations. Typically, too, people who accept the existence of occult forces and designs also perceive alternate lines of explanation (divinity, market forces, political patronage or protection, genetics, and so on) in such a way that there usually remains some uncertainty about which explanation actually applies in any particular case, or whether there is more than one at work. Magic, witchcraft, and sorcery thus adapt, and they yield ground flexibly to other causative schemata, such as to become impervious to disproof themselves. By the turn of the century, the look of economic inequality, though by no means new, had turned an ugly new face in equatorial Africa. Persons pressed into poverty were being affected by an HIV/AIDS epidemic that punished not just them but their lovers, spouses, and children unborn. Ethnic persecution and genocide attempts too were occurring in many places, including western Kenya, a direct (if never sole or simple) result of poverty and unequal advantage.41 Migrations driven by poverty and by civil wars, if vital for survival, threatened to divide families and require wrenching new accommodations for the migrants themselves if not their hosts abroad. Crowds were sporadically persecuting suspected witches.42 Neither all these problems nor their solutions could be attributed to capitalism in general, or to microenterprise and its aid in particular. Microenterprise finance programs were, after all, a kind of compromise between “-isms,” particularly where relying on “solidarity groups” for guaranteeing personal loans. They straddled individualism and collectivism, traditionalism and modernism, localism and globalism.



The Pendulum Still Swinging Rural finance programs were changing character fluidly in the international aid scene in the late twentieth century and the dawn of the twentyfirst as private agencies’ “grass-roots” initiatives took hold. Relief had ceded to development, at least for a time. Grants had given way to loans, and loans were being supplemented by savings—or even replaced by savings—as standard strategy, and as a leading ambition of young recruits to the aid and banking fields. Program integrationism had gone out of style, and while some private aid agencies still aimed for integrated community development, others had set themselves up as minimalists. But this last trend showed signs of shifting back by the early years of the new century. Some international programs with high profile, but local scope, were setting themselves up as all-purpose life-improvement paths attempting to enhance agriculture, trade, health, education, communication, and so on all at once, as purportedly coordinated efforts. One was the Millennium Villages initiative of economist Jeffrey Sachs, of Columbia University, and colleagues. Flying into western Kenyan and other African settings to inject hybrid seeds, clean water, sanitation, malaria mosquito netting, communication with the outside world, and a variety of other things characterized this multisector approach one could call maximalist.43 To anyone who knew any development history, some of this looked familiar. Anyone who knew of the Cornell University Vicos experiment of anthropologist Allan Holmberg, Mario Vásquez, and collaborators in highland Peru in the 1950s, the “community development” programs in India in the 1950s and 1960s, or the SRDP in Kenya could hardly avoid the conclusion that history was repeating. That concentrating so much attention and money (now millions of dollars apiece) on selected communities could produce impressive-looking numbers in this and that index, at least for a while, was no longer in doubt. (The Vicos project and others like it had done much the same, if with smaller budgets.) But there was little to guarantee sustainability or replicability, or to guard against price inflation, skill drainage, or other subtler effects on other local communities around in the meantime. Meanwhile, before the end of the new century’s first decade, something radically innovative, even wildly so, was going on. New electronic links were being formed, giving both borrowers and lenders networked access to each other, “people to people,” just about anywhere, even between countries or continents, with unprecedented ease. One such agency, inspired in part by



the Grameen Bank’s example but no simple clone, was a charitable nonprofit working with major corporate sponsors and collaborators, exemplifying the reach of new partnerships. Founded in 2005 by Matt and Jessica Flannery and based in San Francisco—and on the Internet—it was called Kiva. Using the motto “Loans that change lives,” Kiva took the purpose of linking new, eager lenders and insolvent but able potential borrowers worldwide, as individuals or groups. It did so via dozens of intermediary local “field partner” brokering organizations (each risk-rated by Kiva on a five-star point system) as borrower screeners and as conduits of both money and information—for microloans typically lasting six to twelve months. The borrowers’ ostensible purposes included farming as well as the usual wide array of other activities called microenterprise. The prospective lender browsed profiles of prospective borrowers online with biographies, photos, and project descriptions and rationales, chose an appealing borrower or borrower group, and approved a loan electronically from his or her credit or debit card account. Lenders’ loans could be combined with others’ to fill borrower requests of typically a few hundred dollars apiece. Kiva lenders could team up electronically with other lenders, sorted by identity category or interest. Some of the larger ones were nation based: “Kiva Team Japan,” Germany, or Australia. Others were faith based (“Kiva Christians,” “Kiva Muslims,” “Kiva Mormons,” “Atheists, Agnostics, Skeptics, Freethinkers, Secular Humanists and the Nonreligious”) or even sexually defined, like “GLBT (Gay, Lesbian, Bisexual, Transgender) Kivans and Friends.” Yet others could only be described as interest groups, like “Animal Lovers” or “Stanford Women’s Gymnastics,” or miscellaneous, “Goons Without Borders,” and so on. The motley, fanciful, almost surreal mix of virtual teams could compete to lend if they liked. Lenders chose their borrowers, but not vice versa. Whether all borrowers would approve of all lenders, if they knew just who they were or what they called themselves, is open to doubt—but it was money. In any case, the borrower(s) repaid through the local “field partner” organization. The lender or anyone else online who wished then tracked repayments, again electronically, until the borrower paid off the loan.44 At the click of a button, the lender could then collect or re-lend the principal to another borrower anywhere, again au choix, and again through a field partner agency. That, at the simplest level, is how Kiva worked. It won favorable notice, despite some serious reported problems in flow-through and repayment involving at least two Kenyan partner agencies in the 2008 year that



began so violently in that country.45 Within a few years other “people-topeople” finance organizations had sprung up to serve purposes comparable to Kiva’s, within or between countries.46 In a sense, what was happening to finance in the first decade of the twenty-first century was part and parcel of what has been happening to information more generally. Just as Wikipedia was allowing just about anyone, anywhere (or rather, anyone in the small but quickly growing fraction of humanity who had the know-how and access) to publish and to be read, and “corrected,” by anyone else who had the same, so too were organizations like Kiva beginning to allow just about anyone to reach anyone else with a loan or repayment. Finance, like knowledge, was becoming popularized in the most literal sense. While it still depended on central clearinghouses (like Kiva and its local partners), there was no theoretical limit to how many such clearinghouses might spring up. Now no one could so easily control who reached whom without bringing down the whole telecommunication system. While wikis (Internet databases of pages that visitors can edit live) seemed at first too radical for many to trust, within just a few years they proved to be a versatile and invaluable source of information, relied upon by far more people than admitted it. The dynamic, quickly ramifying, and (at its best) self-correcting nature of wikis threatened to render earlier forms of encyclopedias obsolete, even if it threatened to lower some standards of authority, or to multiply or obfuscate claimants to that authority, in the process. It was becoming no longer unthinkable that open-access, people-to-people organizations and mechanisms like Kiva’s might rise up similarly and render the World Bank’s and other large agencies’ finance for small-scale farmers, manufacturers, and traders obsolete. In the world’s financial centers, meanwhile, other changes were proceeding. The swing of fashion from public to private enterprise had reached an extreme and seemed even to begin heading back. The movement from “top-down” to “bottom-up” finance too seemed to go as far as it could, in rhetoric if not always in action—and as if by some joking ironic design, great bureaucracies had been built upon it. But something more had happened. “Private-private” had not expunged what was “public,” as it had threatened it might do in the 1980s and 1990s. Instead, private had become ever more a part of public, and perhaps vice versa, in finance. The pendulum of fashion was swinging, but in one form or another, credit and debt seemed sure to remain a norm in development culture and a key to intercontinental development politics.



Looking Back on Microfinance International aid work, or what some called cooperation, took on a new look as the microfinance revolution flared up in the late twentieth century and kept burning in the early twenty-first. Large donors and lenders learned that they could build sounder programs by listening to their intended beneficiaries and emulating some of their lending methods. Some adapted group-based finance from local methods, such as the rotating contribution club; others borrowed group-based methods from overseas and adapted them on site. Or, lenders experimented with co-signatures, salary liens, chattel collateral, and other methods, sometimes to equally impressive effect. All of this provided further evidence, as if the IADP and the BAT experiments had not provided enough, that it was unnecessary to convert rural land to private property just to make it usable to secure loans. Titling for mortgaging was unneeded. Women now had new chances to partake of institutional capital. They had proved themselves just as creditworthy as their lenders—if not more. Persons once deemed merely unemployed, in towns and cities, had proved they could scramble for gain and livelihood. That many of the “poor” were even looking for places to save had ceased to be a surprise. It had now become clearer that people will participate in a program more willingly if they think it is partly their own—and that a two-way flow of ideas, just like a twoway flow of capital, can create more lasting partnerships and more valued institutions. Aid finance had been turned inside out. Lenders had learned, too, that charging a higher interest rate than they had previously charged on loans might help them survive as institutions. A few, like K-Rep, had dropped all pretense of being aid agencies at all, begun turning a profit, and simply started calling themselves banks. Most of the institutions that were scaling up and surviving it were using the savings and loans of some richer clients to cover the higher costs of administering programs for the greater numbers of poorer ones, in effect allowing the former to cross-subsidize the latter (Robinson 2009).47 Whether Kenyans and other equatorial Africans would let banks remain in business for the benefit of the poor, or whether to do so these would have to toughen their terms so hard as to make them mere moneylenders with all the ancient stigma attached, remained to be seen. As long as the number of institutions entering microfinance kept rising, the competition among them for clients was likely to helping keep interest rates from rising through the roof, if not also, con-



versely, to keep interest rates for savings high enough to satisfy savers. Something the clients might need to fear then would be an eventual consolidation of the institutions into fewer hands in hard times, as ones more solvent were likely to buy up ones less so—a familiar enough pattern in commercial and financial history. Even three decades after Europeans and North Americans had opened their eyes, at the Brighton conference and elsewhere, to the busy activities of small-scale operators in countless imaginative little enterprises in tropical regions with areas of deep poverty in them, there was no end in sight to either microenterprise or microfinance as central emphases in the international aid world. The largest international aid agencies, whose staffers were frustrated and fed up with African governments and broadly enamored of markets, were still gung ho on microenterprise and microfinance through the arteries and capillaries of private agencies. While African government officials tried to register and regulate private agencies—and harassed the street vendors and others who accosted tourists in cities, on beaches, and elsewhere—the international backing helped protect these agencies and the clients they sought to serve. Private aid agencies, international and domestic, were still experimenting. They could focus on men or women, young or old, or on these people’s farming, manufacturing, or financial services for others in turn. They had wide room to set their own interest rates anywhere between the concessionary rates of state-sponsored patronage schemes and the tripledigit rates of independent moneylenders—or even lend without interest (a grant in disguise). They could tie loans to individual or group guarantors, or try one for richer and one for poorer. Depending on which movies they had seen, about self-sacrificing social workers or hardened repo men, they could play touchy-feely or put on macho airs and boast of their stern collection methods—while wondering, if curious, how close they were to becoming shylocks. Interestingly, though, private aid agencies still tended to swim in schools, emulating just a few models that seemed to show promise. (Such bellwethers were the aid-dependent Grameen Bank model, later the self-supporting Bank Rakyat Indonesia model, and in Africa itself the K-Rep and Equity Bank models that merged right into commercial banking for profit.) Just as most traders and craftspeople around the world seem to get their start in the family business, so the planners in private aid agencies found ready models to emulate and adapt where they could, milking familiar aid channels they



approached in a familiar idiom, increasingly the idiom of business—and diversifying into new niches only when competition compelled. They too were only human. Credit Discredited If what goes up must come down, then the faith, trust, and confidence people place in credit and financiers are no exception. “The usual Trade and Commerce, is cheating all round by Consent,” wrote Thomas Fuller in 1732.48 But he did not say the consent can last forever. In 2007 and 2008, after more than two decades of credit market expansion, and in the runup to an American presidential election, a series of events shook international confidence in credit, mortgaging, banking, and economic enterprise more broadly. The events surrounding this crisis threatened or eliminated the homes, jobs, and livelihood of millions, challenging firmly entrenched ideologies about economy, society, and the good life. They served as reminders of how much of finance had consisted, and maybe would always consist, of collective fantasy—that third corner of our triangle. These sobering but instructive events are too big and recent to try to describe in depth here, let alone to explain—that will have to wait for wiser minds, with more time to reflect back. But nor can they go without mention, since in one way or another they can affect many of the topics in these covers. At the simplest level, what seems to have been responsible for the “credit crisis” and “market meltdown” in North America and other parts of the world was a roughly two-decade trend of overlending, overborrowing, and an unprecedented trading of debts, in turn encouraging more overlending. Together these practices amounted to a collective venture into uncharted financial territory that few participants, and few deemed experts, really understood or still might—and that was all part of the problem. A new layer of complex speculation had arisen in North American and international finance between the early 1980s and the early 2000s. In the past, banks and other institutional lenders, after making loans, had typically kept those loans on their books. Doing so had given them continued incentive to care about their use and actively pursue their repayment. But in the late twentieth and early twenty-first centuries, new financial processes and instruments, facilitated by computers and new software, were devised to allow the easier trading of debts to and among third parties, beyond the initial borrowers and lenders. These included new ways of re-dividing



debts (“slicing and dicing” became the popular culinary metaphor), repackaging them in bundles, and selling or swapping them to multiple buyers and traders near and far—even across oceans. (These new debt-based commodities included “derivatives”—tradable instruments or values that depended on, or derived from, values of other things.) Lenders no longer had such strong incentives to restrain their lending. Borrowers, for their part, were blithe enough—or eager enough to keep up with the Joneses—to play along. They let a bombardment of ads, and the temptation of easy money, seduce them into borrowing over their heads—for instance, for housing.49 What William Wordsworth once wrote was now as true as ever: “No perverseness equals that which is supported by system.”50 Trillions of dollars in promises circulated on paper, many without secure backing or direct relation back to the original borrowers or lenders. Rating agencies with vested interests in their own profits assigned arbitrary and imaginative values to semifictitious commodities whose values could not be easily measured or monitored. Paper value of traded holdings ballooned, while central banks kept printing money, encouraging borrowing with low interest rates and borrowing internationally themselves with devices like Treasury bonds. But then unknown savers and investors somewhere—rather like Jane and Michael Banks in Mary Poppins—let it be known they wanted their tuppence back from the bank and wanted it now. But more than two this time, and more than two pence. Panic time. The speculative boom has been blamed on many human failings, among them greed, deceit, naive ignorance, denial, and personal shortsightedness about longer-term collective effects. And it has been blamed as well on more systemic failures like unrealistic credit ratings and poor regulation. Statists and free marketeers blamed each other, as usual, and indeed there was plenty of blame to go around. Confidence men (not so prominently women) who had built pyramid schemes by enticing others, often members of their own ethnic or religious faith groups, to let them broker their investments, were exposed.51 (The entrepreneur’s new clothes?) These were betrayers of trust— like the ones Dante had depicted being sent to the lowest, chilliest circle of hell—and as such were now vilified by everyone, becoming lightning rods for freer-floating anger. It was a tense, troubled time in the financial centers and institutions deemed most unassailable, and some of the lives most envied, only two years earlier. Not that there had not long been warnings, clearer, of course, in hindsight. We recall George Bernard Shaw’s warning against bankers and busi-



nesspeople who treated credit as a good, as if shoveling it about with a spade. Henry George too, in America, had noted in 1879 that “Increase in the amount of bonds, mortgages, notes, or bank bills cannot increase the wealth of the community that includes as well those who promise to pay as those who are entitled to receive.”52 The point remained just as true in late 2008, when Margaret Atwood, looking over the scene, remarked that “what we seem to have forgotten is that the debtor is only one twin in a joined-at-thehip pair, the other twin being the creditor.”53 The basics of the story as it continued are well enough known. The overoptimistic, overconsuming, undersaving public in North America—and not just there—had overbuilt, overbought, and overmortgaged. When housing prices started sliding in about mid- 2007, and mortgage lenders hiked variable interest rates to cover the losses of property value, millions of borrowers went into default and their homes into foreclosure, with all the pain and hardship involved. Investment banks overloaded with collateral-backed obligations began to go under one by one, until governments began shoveling money their way (by the hundreds of billions of dollars in the United States).54 Other large corporations and people depending on them suffered too. Public sorrow about the rising unemployment rates and home losses was matched only by schadenfreude about some erstwhile tycoons’ new anguish. Every player and pundit interviewed in the media, and maybe everyone else, reached for metaphors. They tended to be simple, down-to-earth metaphors about tangible things, as familiar as the bull and the bear, who had always symbolized the ups and downs of stock markets; or the vultures, those venture capitalists who preyed on weak firms when the bear had come. Body metaphors, too: the toxic securities (usually meaning ones backed by mortgage debt), the economy’s heart attack, the hemorrhaging, and the eventual blood transfusion. Mechanical and automotive metaphors (levers and leveraging, the economy’s having broken the speed limit, the federal government’s not having put on the brakes, and the economy tanking). Hydraulic and boating metaphors, reminiscent of John Maynard Keynes’s favorite image of “priming the pump”—that is, public spending money to get the economy flowing, in the Great Depression of the 1930s—included the ripple effect of subprime (risky borrower) default, the bursting of the housing bubble, the bank bailout, TARP (the hasty and at least initially costly Troubled Asset Relief Program).55 Then there were sports metaphors: the fallen athlete America, bankers holding balls they would not serve over the net (that is, cash they would not lend).56 It was as if any human-sized meta-



phor, any explanatory handle at all, would do—but especially, in investment banking circles, ones involving cars, boats, or tennis. All that everyone could understand, and agree on, was that trust in financial organizations had shattered like glass. From the thick of things, it could seem, as one well-placed journalist summed up apocalyptically at the end of 2008, that “this was the year the financial system stopped working.”57 The international financial market downturn, triggered by the North American and wider mortgage crisis, was only one of several challenges to hit Kenyans in rapid succession. It would have caused enough hardship on its own. Job loss abroad or in cities shrinks remittances from those living away from rural homes. The pinches are felt not just in city and town, but also in the countryside where crowding, erosion, or both have reduced the useful land base, and in homes where age or disability has rendered those left behind most dependent and vulnerable. Kenyans in many parts of the country were still struggling to recover from the episode of violent civil disruption that lasted several months into 2008 after the contested election on 27 December 2007, an episode with a complex mix of not just party but also ethnicity, class, and gender tensions, among much else. The formation of a brittle coalition government in mid-2008 had quelled the violence, at least for a while, but the dislocations would last much longer. Displaced people continued to fear returning home from camps or other temporary accommodations. (What places were home to whom—who belonged in which resettled areas—had been a root issue of the violence in the first place.) For many of the displaced, returning with depleted savings to burned homes and looted shops would mean having to seek loans or grants wherever available for rebuilding or restocking. But they might not find the same loan channels open there that they had known before. Some local microfinance institutions hit by many defaults or other troubles in such places had either vanished or, as in the case of the loanbrokering organization for Kiva in a resettled and contested area near the Uganda border, had their international ties suspended. By mid- 2009, as if to follow a script from the Book of Job, a drought had deepened in Kenya, particularly affecting the already drier northern and eastern parts of the country. These are areas where a heavier reliance on animal herding, and movement of herders with the herds, would otherwise have helped protect these from the effects of the broader national political crisis and international economic setbacks. But the drought thinned out herds, the crop failures and some overselling abroad strained grain reserves,



and all of it exposed vulnerable humans in turn to subsistence challenges (including malnutrition and waterborne disease) as well as financial ones. The violence over land and belonging, the international financial crisis, and the drought all combined as a triple whammy for Kenyans, reaching from inner city to deep countryside at a time already troubled by a protracted public health crisis. Financial institutions dealing with poorer people suffered too in many parts of the country, experiencing rising loan defaults too here or there. But they do not seem very widely to have suffered office ransackings by angry mobs, as many other sorts of businesses did. One reason for this seems to be that enough members of the broader public, including ones who had little to lose otherwise, considered the microfinance institutions their own—felt invested in them—enough to want to preserve them (Robinson 2009). There seem to be some ways in which deposit-taking institutions can be buffered from the worst of the economic downturn, and from civil disruption as well. As a 2009 review of bank activities noted, though, the more traditional commercial banks like Kenya Commercial Bank, Barclays, and Standard Chartered had tightened lending to very small businesses. (Some of their spokespersons sought to justify the banks’ conservative action and continued profitability amid this hard time by emphasizing what they called loan “quality” over volume.) A rise in demand for loans by poorer clients, and the shrinkage of old-fashioned commercial bank credit, widened a gap for newer microfinance institutions like K-Rep and Equity Bank to fill—and perhaps to compete to fill—as they dared. The larger of these seem indeed to have continued flourishing in the process, but these tended to charge higher interest on loans than the “mainstream” commercial banks did.58 Unofficial moneylenders might charge still more. Economic crises make it easier for anyone solvent enough to do so. Kenyan and other equatorial African people had survived other crises before, even combined ones like that of the decade’s end. Their ingenuity and resilience would now have a chance to shine again. (And an unexpected, capricious seeming partial rebound in stock markets overseas in the third quarter of 2009, when few expected it, raised hopes without raising employment tallies—more mixed signals on markets.) But Kenyans wanting to borrow looked likely to have to pay higher interest than most had paid in living memory, or anyway paid to the lenders who had obeyed the usury law left over from colonial times. For people needing money for a family or small business, a loan offered some hope for getting through the hardest times. But because a prudent lender who was to cover heightened risk of default



(or arrest) was likely to hike interest to do so, as lenders tend to do, there was always the chance that the insolvent could end up in one financial hole or another. If few could predict what fate would befall Wall Street and Main Street (as American pundits liked to pair them), fewer still could guess what would befall people in equatorial Africa, or indeed in America, who lived on no street. New options were opening, and new technology was making banking more widely accessible than ever. But there was a new odor about banks and financial institutions—a new stain on the market magician’s cape. Humans might be no more, no less greedy than they had ever been, but public feelings about the powers of credit and commerce, and of supply and demand, to serve the greater good had turned. Whatever the answer to poverty and inequity, within neighborhoods or between continents, no longer would it be just “private enterprise” or “free market.” Financial credit of varied sorts would come back, in all likelihood, even from investment banks and other kinds of institutions that seemed to be capsizing and sinking or needing government relief programs.59 When Walter Bagehot wrote in 1873 that “Credit—the disposition of one man to trust another—is singularly varying,” he added that “after a great calamity, everybody is suspicious of everybody; as soon as that calamity is forgotten, everybody again confides in everybody.”60 Not so abruptly, of course. Confidence is slower to build than to bust; the upswing in lending and borrowing would surely take longer than the down. But there would always be profit to be gained from lending, and power and prestige as well. Amid the despondency, it just took faith to believe it. Finance, as I have endeavored to show, is social, cultural, and moral as well as just economic in nature. The pages in this chapter and the previous one have given a glimpse at the extremes of business lending: from microloans down to a coin to macroloans so big and bulky they can be processed only electronically. Humans think about loans and debts of all sizes using a repertoire of metaphors that tends to make them human sized—conceptual handles we design to fit human hands. Micro- and macrofinance alike depend on trust, both in particular human characters and in broader structures and processes of human devising, including language itself—perceptions and feelings based on beliefs about other people’s perceptions and feelings, which always involve a measure of intuition and guesswork. Shared language, and shared metaphor, can help in this, but language evolves and



diverges quickly. It is easier to trust when everyone else around is trusting too, but this kind of systemic trust takes longer to build than to break. Whether financial assistance to small-scale entrepreneurs meant a cultural imposition from some parts of the world onto others was always an issue in the era of microfinance. It often felt that way in meetings with USAID representatives who insisted that organizations they funded train their participants to keep business and family accounts strictly separate. (What about the days when grandmother was sick and needed pills, or an impoverished uncle needed replacement seed corn?) It felt that way when foreign-trained urbanites insisted that rural farming and trading people learn about linear or parabolic interest rates. It seemed so when nearly an entire vocabulary of stock terms used in aid agencies (even terms like income, investment, or interest, let alone amortization or double-entry bookkeeping) had no ready translations in local tongues like DhoLuo, and people who spoke these found they had constantly to shift back and forth between languages. But Luo, Kenyans, and East Africans had their own ways of Africanizing finance, as they had of economic life in general, to fit their own upbringing and circumstances. New organizations with names like the Undugu (brotherhood) Society, or Kunyri Kendi (bury yourself ) and linguistic descriptors like matatu (taxi van), jua kali (hot sun), or juhudi (exertion), for categories of enterprise or organization, spoke eloquently of indigenous efforts to come to terms with foreign innovation and to make sense of it in their own cultural as well as linguistic idiom. Whatever they supposed, officials of the World Bank, USAID, and the organizations that revolved around them did not ultimately have the power to turn Luo or other East Africans into capitalists (or people more capitalistic than they had always been—which was, in part, very) by microenterprise finance, any more than they did with cash crops or land titles. If they had the power to teach about linear or parabolic interest, they had no power to make these the dominant local idiom of understanding about borrowing and lending. Nor did they have power to ensure that program implementers would not use methods that the subscribers reading the magazine ads, or the funders in the aid agencies, might not condone. A staffer of a North American–based private international aid agency, boasting in a personal conversation at a Boston conference, once said, when I asked him how his agency ensured its loans got repaid: “How do we get our loans back? Oh, we manage. If somebody’s not repaying, I just buy a policeman and have’m break their arm. Then people sit up.”



It was not just in the international agencies, and not just in microfinance, that some conventional lending and collection methods were looking less than scrupulous in the late twentieth and early twenty-first centuries. Credit card use in North America and abroad had helped push a public well into debt as major card-issuing companies devised countless ploys that saw to it they got there and stayed there: low teaser rates; surprise rises, fees, and penalties; and even retroactive surcharges on unpaid bills—conditions spelled out in micro-printed contracts many pages long, challenging even for lawyers to read or understand. Regulatory battles continued, and with them debates about justice and fairness, about jurisdiction and sovereignty, and about powers to proclaim forgiveness.61 This brings us back full circle to the most ancient dilemmas about the ethics of borrowing and lending. At what point does fair credit become usury? Are lenders more responsible to their own kith and kin than to strangers? Who, if anyone, is really in charge of the rules? These questions are no more finally answered now, at the turn of what we are currently calling the Third Millennium, than they were in the day of Babylon. Credit and debt are unlikely ever to disappear entirely from the international aid scene, but I have sought to suggest they do change character. Between minimalist and “maximalist” approaches, between direct projects and indirect policies, between the public and the private, the pendulum of financial fashion has swung and keeps swinging. As one broad development strategy after another disappointed its proponents and sponsors, over the decades bridging the twentieth and early twenty-first centuries, the shared rhetoric of development culture has kept shifting. It may be that the great faith that has been placed in credit, in lending and borrowing, over the past half-century has finally peaked. And yet it seems just as likely that many of the old experiences will, within another generation or two, somehow repeat. So let us begin to sum up.


Crossing Back Rethinking Credit Between Cultures Let us all be happy and live within our means, even if we have to borrow to do it with. —CHARLES FARRAR BROWNE (ARTEMUS WARD), 1834–1867, NATURAL HISTORY


ome things shrink as we grow. As an adult, I revisited the golden pendulum in the U.N. Plaza that had so captivated my friends and me when we were young. It looked smaller. No longer suspended over a wide dish of sand, it swung on a shorter wire, in mid-air, above a horizontal metal ring overhead. A leaflet informed visitors it was made of not gold but only a plated iron-copper alloy. It also stated that the pendulum’s movement was aided electromagnetically by a current through the metal ring. Like the grand hopes of international aid for development, the pendulum now seemed reduced, out of touch, and rather forced. Yet the pendulum still swung partly by the earth’s movement, and it still traced daisy petals, shifting its angle a bit on each swing, as trends in aid do. Aid agencies had moved their attention from capital-intensive “modernization” to “basic needs”—but then away again. The focus had also swung from hands-on rural projects like the IADP to hands-off macroeconomic policies like “structural adjustment” implemented through capital cities, and then it had started back toward something more hands-on. Enthusiasm about the public sector had yielded to enthusiasm about the private for a period, government ministries had spent that period in disfavor, and some state-owned corporations (parastatals) that had been originally funded through pressure by international lenders had been sold off or partly dismantled by pressure from those same agencies. Private aid agencies like ActionAid, indigenous women’s groups like “Nyanam,” and even multinational enterprises like British American Tobacco (for all the good and harm it did) were more in



style as the new ways of putting hands on. But private too, as a catch-all concept, had begun to lose luster, and there was talk of major public programs once more. A broader skepticism surrounded international aid as a whole. The economism and the influence of the World Bank, the credit colossus born from the League of Nations and United Nations conference, had been challenged by private aid agencies, by the U.N. Development Programme, and even by several mass demonstrations—of angry humanitarians, ecology watchers, and others concerned—outside the heavily policed barricades of the Bank’s and other international organizations’ annual meetings.1 International development, as organized by the Bank and its partner agencies, evinced few signs of broad success in equatorial Africa or anywhere else in the tropics and few signs of popularity in northern settings. Even “development” as a concept seemed to be passing out of style, replaced by utopian and dystopian talk about “globalization”—another vague idea more than a bit reminiscent of the “modernization” in vogue nearly half a century before, as African countries had sprung independent. All of these ideas—including independence itself—had even begun to seem like someone’s impossible fantasy. All Humbled Financiers and journalists who have discussed tropical African economies at the turn of the twenty-first century have often used the term basket case. Disparaging and alarming if pitying, the medical colloquialism implies extreme need, and also helplessness and dependency. But there is another problem with it. Whatever troubles Africa and Africans may lately have experienced—and few deny there have been big ones in places—no one has yet identified anyone competent to carry the basket. Not European colonial rulers. Africans had decided this for themselves in the late 1950s and early 1960s as one country after another—each set up by Europeans in the first place—hopefully declared itself independent. Some colonial rulers were kinder than others, and some in Africa consider the British to have been among the gentler of the European powers in their methods of administration and extraction, although the matter remains debatable and has become more so. But by the mid-twentieth century, no European powers were welcomed any longer. Not the subsequent generation or two of African-born leaders who stepped into the executive offices, the finance ministries, and the upper



echelons of nationalized banks. Novelists, playwrights, and spirit mediums continent-wide have voiced a groundswell of public resentments of bureaucratic corruption, incompetence, and repression that for three decades few others dared discuss in the open but all could see and feel. And not the World Bank and the International Monetary Fund, those powerful siblings born from the same international convention at Bretton Woods. These agencies, along with USAID and other agencies recruited with varying commitment to their cause, have purported to reform or “structurally adjust” not just the finances but also the governments of countries in the tropics around the globe, with packages of prescriptions strikingly similar from country to country: liberalizing currency, privatizing parastatals, cutting civil service rolls, and other familiar measures. To these, official resistance in African capitals, letters to the editor from the African countryside, and the downward sloping statistical tables published by these agencies themselves made it clear enough by the turn of the millennium that the medicine, often so bitter, had not worked as planned. At least not yet, and maybe never. Histories of African finance, like histories of African economy in general, have looked pretty dismal.2 Typical have been financial credit unmatched by saving, loans delivered tardily and in amounts that shrink as they proceed from city to countryside, subsidies set too high and gobbled by elites, agronomically inappropriate packages of farm inputs, gender biases in loan allocation and extension services, culturally inappropriate requirements about loan collateral, low and falling repayment rates, and rising disaffection and debt. Often both borrowers and lenders, paradoxically, have felt burned. Instead of just starting with plans made in capital cities, seeing how they fall apart in the countryside, and concluding that the “beneficiaries” there are a hopeless basket case, I have proposed in this study and companion volumes an opposite approach: asking what does work locally, and how other initiatives might then fit into it. The volume on Luo entrustment describes what has worked best in Luo country, and the transcendental turn that Luo thinking takes when their best efforts to surmount their temporal problems fail. The volume on the mortgage describes an imported and imposed approach that does not fit in, and why. The current volume shows approaches that have fitted in only partially, being made to serve local interests, and that both help and hurt at the same time. In the pages that follow I attempt to draw together some lessons and add some broader reflections about develop-



ment aid over the past half-century, and discuss how it might be reconceived in the light of what else we know about entrustment and obligation. Credit, Debt, and Concepts of Morality Property reforms and financial interventions across cultures have a long history. It precedes today’s banks and development agencies, and indeed the nations whose governments support them. The social-philosophical assumptions on which institutions lend, and borrowers borrow, have deep roots too. These are culture specific, and often specific to particular religious traditions. Spiritual leaders of the world’s most popular religions (Christianity, Islam, Hinduism, and others) seem to make moral or ethical judgments about credit and debt, as they do about property, sharing, and theft. But even within a nominally identical religious tradition, different cultures may interpret moral precepts differently, as in Christian constructions of “brotherhood” or as in Islamic defenses against riba (usury or unjustified increase). Contemporary developments in finance pose new theoretical challenges (and surely, for many, theological ones). Most of the debates in the past have been about lenders who lend to take, as by collecting interest payments, but some of the world’s biggest lenders have lately been attempting to lend in order to give away, or to convert wealth into political power and prestige. Ancient rules and guidelines about such kinds of lending are scarce. Luo farmers and international aid financiers seldom meet, but the past half century has taught both much about the entrustments that at once tie them together and hold them apart. Projects and programs designed in the capital cannot simply be implemented from the capital; they are debated, reinterpreted, and transmuted by active participants with their own experience and their own wills, to whom epithets like “target group” do little justice. Changes in African farming cannot usually be understood with one-sided theories about the benefits of aid and modernization (in the terms of some) or the penetration of pristine precapitalist systems (as others would have it). The interplay between exogenous and endogenous designs is dynamic and hard for anyone involved to control. The greatest successes may also be the greatest failures, and the most ambitious schemes may be neither. Economic development planners for half a century, and until quite recently, have consistently held up credit as a main hope for African farmers, as



though rural people were too poor to save, and as though they needed loans as a foothold into new enterprises and a world economy. Seldom have loan programs been designed with very deep knowledge about the borrowing and lending, or the saving, already going on among the people concerned. But official credit and the local re-lending issuing from it make up only a tiny part of the existing entrustments and obligations in rural East African lives. The debts are not the only ones rural people have—and these debts are seldom the most meaningful to them. Newer, more distant creditors must compete with creditors who are more familiar, closer by, and better wired into the same social groups, networks, and open categories as themselves. Lenders in the cooperatives and banks must compete with older fathers-inlaw who expect installments on marriage payments, and former school fee sponsors who expect return favors to themselves or their own children. It is partly this deeper, broader context, the hidden economy of entrustment and obligation, that makes further international credit an unrealistic central strategy for alleviating poverty. International development financiers, like local lenders, are motivated to lend not just by altruism but by a complex and variable mix of other motives. Some are political and bureaucratic. Credit is not just credit; it is also debt. It is a power relation as well as an economic one, as in the biblical adage “the borrower is servant to the lender” (Proverbs 22:7). At international, national, and local levels, control over lending is a coveted privilege. The control is unstable, though, and sometimes even reversible. In western Kenya as elsewhere, the politically powerful can sometimes force weaker parastatal functionaries to “lend” to them and their supporters and not to collect. At an international level, the dependency that seems so characteristic of poor countries seems ironically to invert, as the economies of the richer countries become dependent on distant borrowers’ continuing repayments. A Cultural Matter Credit and debt are not just political and economic subjects but cultural ones too: at issue are not only wealth and power but also meanings. Failure and disillusionment are so regular in development finance that theories and ideologies are likely to keep changing, and new variations keep being debated and tried. The historical record of project, program, or policy experiments keeps filling out. More is being learned, and written, all the time. Why, then, does development finance keep failing or going awry? Several



avenues of explanation include the blinkered planning by sector or discipline, the hasty staff rotations in agencies and governments that impede historical and contextual learning, the closely linked arrogance problem, and the pressures to move money in familiar ways for career building. Deeper and less understood are the differences among the cultural categories in the minds of development professionals and those in the minds of the people they presume to serve: the most basic understandings about wealth, time, and the relation between them. Concessionary Usury? Ancient Debates Inside Out Moralists and pragmatists have debated the propriety of loans and interest for millennia, but most of the debates have historically concerned lending as a way of gaining wealth from the borrower. Much less has been written, historically, about lending as charity. Little is understood about loans that transfer wealth to their borrowers but win power or prestige for their lenders in the process. If a lender gains, must a borrower lose, or can both benefit? Moral questions bring economic ones alive. Lenders’ interest charges, if they appear high, may or may not be understood as usury (that is, as unfair lending). Other factors need to be taken into account, including seasonality, inflation rates, the opportunity costs of capital, and the difficulties of administering loans. A loan on soft interest may nonetheless be hard in other ways. The timing, the collateral, the terms of recourse in the event of default all make a difference. Not all these aspects are quantifiable. Can there, then, be such thing as concessionary usury? Loan “interest” is not a universal custom, and it is not everywhere perceived as natural. Time can be money, but not always or everywhere. As we move from one cultural setting to another, it seems, time is not even time, nor is money money. Whether a people construe time (for a given purpose) as linear or cyclical, whether interest is expected to accrue steadily through the year or stepwise after harvests, whether money is expected to be freely exchangeable for other money (let alone for all other things) . . . are never to be assumed. Nor do rural dwellers in Africa necessarily calculate interest in terms of rates in the first place, with the assumption of linear accretion over time. Where interest is a familiar concept, rural people are at least as likely to think about loan in terms of ratios of interest to principal, suspending the question



of time lapse. In rain-fed farming there are long seasons between harvests when nothing is likely to be repaid, and many of the seasonal loans in rural Africa that carry interest are made on the understanding that the borrower will attempt to repay upon the next harvest or, failing that, the subsequent one. But some simply hold the interest charge to a fixed proportion of what was lent, until so much time has passed that the loan is forgiven or deemed dead. Interest is not usually just assumed to keep accruing at a linear rate, as it so often is in industrial settings where machines can keep turning and both owners and workers may keep earning steadily through the year. So, in agrarian settings, calculations based on percentages per annum may or may not coincide with local ways of reckoning debt. Borrowers and lenders may instead conceive of interest in terms of fixed proportions of amounts lent, or even simply as fixed charges—or just as preposterous demands. Many people in rural African settings seem able to use both rate calculus and ratio calculus for different borrower-lender relations and different contexts. But different ways of calculating interest, and of distinguishing fair lending from usury, are a subject of major cross-cultural misunderstandings in Africa that are just beginning to be understood.3 At root are profoundly different assumptions about whether, as Benjamin Franklin wrote to the young tradesman, “time is money.” Intimacy, Strangeness, and Long Distance Hotly debated, ever since Deuteronomic times, has been the question whether it is fair to treat intimates differently from strangers—whether to charge them different interest on a loan, for instance. These questions too need a cultural dimension before they can be answered. What defines kith or kin? Who gets to translate the terms? When loans are meant to bridge continents and vast cultural divides, the possibilities for misunderstandings multiply. For now, the moralist or pragmatist must consider values in not only the quantitative sense but the qualitative one as well: the meanings, the connotations, the symbolism of the words, deeds, and materials involved. The meanings of money. The symbolism of seed and soil. The effect of indebtedness on dignity. The translation of rights and duties, or of agok. Now, even if versed in ancient maxims on credit and debt, both borrower and lender find themselves on uncharted ground. Here, perhaps, the student of culture may have something to say. The approach I have proposed, involving a broad understanding of



entrustment, offers the advantage of not relying on too strict a separation between economic and non-economic concerns. Rather than partitioning the material and symbolic, the market and non-market, or the rational and irrational, into separate spheres of inquiry, the entrustment approach leads us to appreciate something of the complexity and subtlety of human decisions about property, possession, and exchange. Money and materials flow through lives, and lives are lived through them—but lives are not just about them. Credit and debt might seem to some, on the surface, a topic of selfevident truths, as if all loans and repayments should cancel each other out. But the deeper we look into it, the more we see this is not so: the more we see gifts, thefts, and patronage, and the more we see misunderstandings and passions arise. The flows never cease; the ledger is never finally squared. Imbalance is a sign of life, and a precondition for it. Some simple questions— like “Who is morally bound to whom, and why?”—may help us understand why some flows do not flow back. That some of the kinds of loan terms ordinarily reserved for more intimate social ties have been tried out now between strangers communicating only indirectly, between continents, gives the lie to any simple rules about social distance and terms of exchange. Loans between nations, and between international bodies and small-scale farmers, have not in the past half-century always followed the kinds of formulas one might in the abstract have expected of total strangers. Some have been rather easily and quickly arranged, required little in the way of surety or co-signatures, carried low or no interest charges, and when unrepaid, been eventually overlooked, with no sanction of force. But then, more than a few of these have indeed gone unrepaid as new projects started up and older ones were forgotten. Implications for Titling and Mortgaging: More Problems in Farm Credit than Collateral Can Solve Credit programs come in many shapes. Their sequencing, interest rate structures, cash-kind balance, security requirements, and orientation to groups or individuals can all profoundly affect their outcomes. These things act in concert, and their arrangement is certainly an art for planners. No single formula can serve all cultural contexts. In East African settings, however, the surest route to failure and hardship is misunderstanding about loan security, and borrowers’ and lenders’ mistaken use of family, lineage, and



clan land, which contains ancestral graves and abandoned homestead sites full of significance—unless it is the use of cattle, commonly used in marriage dues, in funerals, and in other ceremonies. Dragging these locally meaningladen things into institutional loan contracts in agrarian East Africa is bound to continue contributing to breakdown of financial systems and to social disruption by violating basic understandings about belonging and about entrustment and obligation. Enough attention has been devoted to these issues in the two sister volumes so as to need little further insistence here. But something the present volume shows, in addition, is that borrowing and lending for small-scale farming involves enough problems beside and beyond mere issues of loan security to make it a dubious reason for seeking land collateral (as immovable but marketable security) and thus even more dubious as a central rationale for titling farm and grazing land as individual property. For those who would see credit as an answer to poverty, securing loans is only one problem. As state seasonal credit has evolved in Kenya and East Africa, many, many more problems have developed, particularly where food crops are concerned. Several were already clearly evident in British colonial loan schemes. The supply-led lending, the inattention to savings, the culturally rather inappropriate fixation on individuals, the heavy subsidies, and the dirigisme about loan uses were among the reasons why these schemes produced disappointment after disappointment for nearly all concerned. After independence the donors and lenders changed, but many of the main assumptions and habits of public project planning remained broadly similar. In western Kenya the unbroken series of state projects since independence— the Guaranteed Minimum Returns scheme, the Vihiga Special Rural Development Project, the Integrated Agricultural Development Project and Smallholder Production Services and Credit Project, and the New Seasonal Credit Scheme—together show a trend of relaxed minimum requirements. So, by the 1980s, nearly all adult farmers in the country were technically eligible for government credit. But only a small fraction (in Nyanza, probably well under 10 percent) of farming homesteads had received loans in all. These projects all left similar legacies. They promoted inputs being taken up anyway, failed to promote those that were not, and generally left farmers to make their own technical decisions without much helpful guidance. They also left farming people with demoralizing debts and uncertainties. The IADP-SPSCP, the most ambitious scheme of all, illustrates the great and widely varied difficulties of public farm finance for smallholders in western Kenya. Having summarized it earlier we do not need to go over



it again here. We need only recall that the overcomplex and rather dirigiste design, the neglect of incentives and the optimism about cooperation at several levels, the absence of farmers’ say in the planning, and simplistic assumptions about “household” unity and the agricultural “sector” in Kenya all reduced the scheme’s effects. Different people saw the program as different things. Rural dwellers’ using “maize fertilizer” on tobacco, or “land preparation” money for school fees and marriage payments, shows their resolve to salvage something, however transmuted, from foreign projects gone awry—and to do so on their own terms, rather as they use cut-up truck tires for sandals or oil tins for paraffin lamps. The aid agencies’ and government’s repeatedly setting up seasonal credit projects on similar formulae, despite slim evidence of real benefits to farming, points to some hidden agendas. Governments use aid agency allocations as tools of diplomacy, among other things, and agency staffers perennially operate under ideological pressures beyond their control. At multilateral agencies like the World Bank (as at bilateral ones like USAID), staffers want to move money into a pipeline and to appear to be fulfilling budget allocations energetically. As the common “objection sandwich” memos I have described at the World Bank show, individual staffers want not to be the ones to hold up projects in the works. National politicians know that cheap credit dished out to the right people looks generous and wins votes. Both politicians and civil servants have an interest in propping up the government’s rural substructure. Credit not only means siphonable wealth, but it pacifies or wins over rural power brokers who might potentially mobilize threats to the ruling party or the government. Credit is used for patronage at international, national, and local levels. Simply to dismiss all this as “misallocation” or “corruption” would be to deny the place of reciprocity in human affairs. To disparage state and private bankers’ using their loans to ingratiate and reward their kin, friends, and active or potential political constituents is to deny that work and personal life will always overlap, and that wealth is fundamentally convertible to power— and vice versa. It all comes with the territory. Regardless of what their lenders intend, food crop loans are hard for rural people in rain-fed areas to use. Western Kenyan farmers have been able to make little use of them, whether borrowing from government bureaus or commercial banks, and whether mortgaging their land or not. All this casts doubt on the old argument that credit justifies titling land as individual property.



Cash Cropping Without Mortgages The British American Tobacco experiment in contract farming raises further doubts. Here seasonal credit has helped produce dramatic results among people who farm on a small scale in the Luo country, without land titles’ being used to secure loans. The scheme has overcome some formidable obstacles. Farmers have modified indigenous and superimposed religious beliefs (or knowledge) about tobacco and the spirits to accommodate what they have perceived as a unique chance to make money. The delicate technical requirements of the crop have scarcely stood in the farmers’ way. The BAT scheme may ultimately prove both a blessing and a damnation to farmers, but it does suggest a role for seasonal credit unsecured in land where a highly lucrative cash crop is concerned. Experience with slower-maturing crops shows again that land collateral is unnecessary to induce repayment where other circumstances are right. The best examples are tree and bush crops grown mainly in the betterwatered uplands outside of Luoland; these cannot be discussed in detail here. But coffee (whose use as an IADP-SPSCP anchor crop has already been discussed) and tea, the country’s two largest export crops, have proved powerful forces of economic growth—and arguably of class differentiation— in Kenya.4 Coffee took hold as a smallholder crop in East Africa in the 1940s and 1950s, and tea took hold in the 1960s, without the help of land mortgaging; since that time, many smallholders have indeed achieved notable results without borrowing from official sources at all.5 Where issued, coffee and tea loans have been secured mainly on the crops themselves, through statecontrolled monopsonies, rather than on land titles. In South Nyanza and Kakamega districts, respectively, the sugar contract-farming schemes run by the south Nyanza Sugar Company and Mumias Sugar Company have used only the cane itself as loan security. These cane projects too, while their economic returns for growers have been less reliable than those of coffee or tea, have certainly transformed farming and farm life in their localities—both for better and for worse. While official lenders have never fully controlled the markets for these crops—smuggling and informal brokerage systems like agok always operate to some extent—lenders have certainly held an easier grip on tree and bush crops than on staple food grains. Requiring borrowers to invest time and labor before they can borrow has helped the cash crop loan schemes endure; this in itself helps secure loans. The tea board and tobacco firms were, for



most of the late twentieth century, managed with unusual efficiency. These are the reasons why these schemes have made the differences they have. Kenya’s smallholder cash crop revolution was not based on land collateral. If individual land titling is justified, it must be on other grounds than putting credit within farmers’ reach. These might include dispute reduction in some especially crowded areas. But individual titling does not so much quell disputes as change their character, and in any case this argument does not justify titling land nationwide. Arguments that private titling provides new incentives to conserve and invest in land remain unproven; it may even have opposite effects in some circumstances. Some national development planners have sought to justify titling as a prerequisite for an eventual land tax, but on this point farmers will say they have been tricked, as this has not been one of the arguments widely presented to them.6 Loans between distant acquaintances are likely to lose themselves if not secured somehow, but security need not mean collateral, and collateral need not mean farmland. As we have seen, the promise of another, bigger loan helps secure a starting loan by itself. Group-based sanctions and peer pressure seem to have worked for some kinds of small-scale loans, particularly among women in some of the NGO schemes. Crop liens have proven feasible with industrial crops and tree and bush crops. Off-farm salaries of borrowers or guarantors have been effectively hypothecated. Shops and their supplies can also be tied to secure loans, though they are easy for a debtor to dispose of through the back door when the dreaded day comes. Vehicles and farm machinery can make usable collateral, although a lender risks finding them missing, broken, or in pieces when the time comes to collect. Animals, especially cattle, are not a good idea as collateral in Luoland or much of eastern Africa. The cultural values attached to them are too complex, the social meanings too deep. They cannot be ripped out of corrals where they provide milk and manure, or fields where they provide traction, or social networks where they cement marriages and friendships and form the stuff of collective sacrifices—not, as with land, without risking resistance or violent retribution. Luo Cultural Character and the Economy of Entrustment East African societies vary greatly in the meanings they assign to credit and debt, to money, and to agriculture. Foreign interventions for which Luo find little lasting use may produce radically different results



among Gusii or Kikuyu. The age-old stereotype of the Luo as apathetic and easygoing farmers, held by Nairobi agricultural financiers and many foreigners, and even by some Luo themselves, may have contained a grain of truth in the past. But if so, this would seem to derive from unreliable rains, poor marketing infrastructure, political resentments, memories of abusive extension agents, and so on. The tobacco experiment and other evidence suggest that Luo who live in a favorable farming environment and have access to favorable prices and markets are quite capable of responding to lucrative innovation with enthusiasm. Confronted with land tenure reform and credit projects designed by aliens, Luo have often proved skeptical of official initiatives, but as we have seen, their thinking about these has also proved adaptable in many ways. They have adjusted their patterns of inter-homestead exchange to accommodate late seasonal loans, readily adopted new inputs that suited their needs, improvised new forms of entrepreneurship to cope with late payments, and manipulated their magico-religious ideologies to accommodate a lucrative new tobacco enterprise. Luo responses to agriculture are not governed by some inborn aversion to work or innovation, or some atavistic psychological residue of a (merely presumed) pastoral prehistory. Ideas and practices that look egalitarian often turn out inegalitarian in other ways, and vice versa. Local lending and sharing of land, animals, and plows among neighbors help even out imbalances in domestic resource endowments, but at the same time these exchanges express and cement inequalities between patrons and clients too. Cooperatives that make marketing fairer in one way can at the same time serve their members’ interests unevenly in input supply, and even the older idiom of family or lineage in which they are often fit (as in JokaSociety) can cut both ways. Heavily subsidized credit, ostensibly aimed at the rural poor, ends up devoured largely by the urban and rural rich—to their ultimate gain or not. What some foreigners and many anglophone Luo call “nepotism” and “bribery” (seen another way, aspects of kinship and reciprocity) seem not just to enrich lending agents but also to avail loans to farmers otherwise too poor to be able to procure them—again for better or worse. Splurging one’s loan on beer handouts may impoverish the borrower in one way but empower him in other ways by incurring obligations. It is, as the onlooker said who watched a man do this at a Migori bar, a way to become the boss. Where time is involved, wealth is not just wealth. How and why Luo people and their neighbors shift wealth from one form into another remain



poorly understood in financial circles, but the one-way turnstiles of these resource flows have serious implications for loan schemes. Luo men’s investments in cattle for marriage payments, or in land for their own eventual lineages, shift resources from shorter-term to longer-term uses, from profane to more sacred ones, and from less to more honorable purposes in many local eyes. They make wealth less liquid and lock it into a sphere to which institutional creditors and other official claimants must expect to have little access. An entrustment of cash against a counter-entrustment of family land or cattle is not a square deal in Luo eyes, no matter what a signed or thumbprinted contract might say. When impersonal debts clash with personal ones more laden with multiple meanings, the impersonal ones get edged out. Asking Luo farmers to liquidate their herds or lands to repay loans is no better an idea than asking North Americans to part with their wedding rings to repay theirs. Many misunderstandings in finance across cultures concern the nature of money itself. Lenders from Europe or North America, where individuals have saved and invested large sums of cash through banks and other companies for centuries, may not miss the fact that most individuals in the Nyanza countryside are not as used to handling large sums of cash this way. But, more important, they may misunderstand Luo reasons for wanting to do otherwise. Inflation and the chance of bank collapse in an unstable economy and polity are only the most obvious. More subtle is that cash escapes family control as it hides in individual pockets or bank accounts and that family control in the past has been a major barrier to reckless spending. Large, lumpy cash payments to men—whether in loans, in infrequent cash crop sales, or in compensations for lost land—can scarcely help rural dwellers, particularly women or children, in Luo country or places like it. A Kenyan pound note, like a land title deed, is private property in both senses, and it is easier to part with than other property. Loans and debts are not isolated from the rest of economic life. They link up with, and merge into, gifts, inheritances, sales, thefts, and more. Some of the conflicts or normlessness discernable in farmers’ responses to new systems of ownership and finance may be only temporary. Confused land deals, agok trade, indefinitely postponed loan repayments to collectively owned institutions, and sometimes hastily spent cash crop earnings can be troublesome to Luo and other East African people themselves as well as to some of their creditors near and far. All might suggest a time lag in systems of social control as local society formulates new rules and sanctions, and re-combines



old ones, for new situations. But what, at any time, is a normal or ethical response to a new condition of agrarian life? This is for members of the society itself to decide. The theme of unfamiliarity is a delicate and potentially deceptive one. Luo have known of land sales for at least a century, but they have not all conceived of their own land as readily salable all this time. They always knew credit of one kind or another, but it is only lately that many have had to live with “supervised” credit from Nairobi and overseas. Luo people have known printed and coined money as long as they have known Europeans or longer, but most have not, at least until lately, been individually responsible for many thousands of shillings at one time, in cash, when the resources may in some crucial sense belong to their kin as well as themselves. Many or most Luo have heard by now of loan “interest,” by this or other alien names. But most have not been brought up to assume that “time is money” as a rate in this way, or to suppose that there is anything natural or fair about debts that accrue indefinitely as time passes. These are matters not just of education but of idiom and convention. At the middle of cross-cultural misunderstandings about finance, one finds language. Words like credit, interest, chattels, and moral hazard are all terms loaded with presumptions, just like development, and who gets to control the language is usually a key to who holds the real power. That Luo have no easily translated term for “interest” should not be an irrelevancy to financiers purporting to do business with them. Labeling any surety but a pledge or mortgage a “collateral substitute” tints the verbal picture from the start, since collateral itself is only a substitute for confidence, and there are many ways of establishing confidence. And a fair assessment of intercultural finance might recognize as much “moral hazard” in irresponsible lending as in unrepaid borrowing. Religion, like kinship or language, is seldom discussed directly by financiers in East Africa. But it does not, and will not, stay out of economic life— for farmers or financiers. Persistent Luo concentration on funerals gets translated bureaucratically into “loanee misallocation of funds,” or in the case of officials implementing projects, “office absenteeism.” That rural Luo people organize so many of their own local financial institutions around churches and around funerals and burials points to something profound about their understanding of life and death. It is hard to prescribe just how financial program planners should respond to these enduring realities, except consciously to examine their own ethical presumptions about work, time, and



money, to acknowledge that credit poured in will continue to be absorbed into socially crucial functions, and to respect what is clearly sacred or highly meaningful locally: homes with ancestral graves, travels to clan and lineage gatherings, ceremonial redistributions of food. It helps, too, to understand that much of this “consumption” can at the same time be subtle investment. Solving the problems inherent in rural finance across cultures in tropical Africa is not just a technical exercise. As important as interest rates or repayment schedules are, finance will not be made more useful just by tinkering with parameters like these. A more thoroughgoing reexamination is needed in which the most seemingly obvious needs for capital, and the most basic features of local society, come into issue from the start. In its course, a searching moral and practical rethinking should continually ask: who in this setting is responsible to whom, and why? The question is, if anything, a cultural one. London’s, Washington’s, and Nairobi’s plans for farm credit and land tenure reform—and for linking these up in mortgaging—have been styled on northern examples. To rural Luo people the plans are foreign indeed. The plans come from towering economies with expensive long-distance communication systems, cheap farm chemicals, low inflation rates, elaborate institutions for personal cash savings, and still important industries to absorb farmers who lose their land. They come from cultures that often prefer to conceive morality perhaps more as blind universals than as responsibilities to real kith and kin. They derive from societies with universally spoken languages, more or less isolated nuclear or smaller fragmentary families, little respect for elders, and less for ancestors. They come from peoples with curiously naive beliefs in central government and fixed prices and their own superstitions about printed paper. Through the mediation of Nairobi and provincial functionaries who are cultural as well as financial brokers, Luo people and their international financiers have made major adjustments to each other, but this process has not been constant or cumulative. And as long as Kenyan agricultural policy rests on foreign designs of freehold tenure and credit, both the planners in the capital and the planners on the farms will experience more misunderstandings and hardships still. Contradictions in Credit The argument that rural East Africans are too poor to save up for expensive new inputs or tools is only partly true. Many Luo and neighboring



farming people, like others in East Africa, have pursued these without loans, but loans have also helped expose some new farmers to them, for better or worse. To suppose that new farm loan programs are needed to undercut usurious individual moneylenders would presume too much, at least in Luoland, for these have been much less problematic there so far, as in many other parts of inland East Africa, than in some other parts of the world. The strategy of poverty reduction based on credit contains some inherent ironies and contradictions. To remain afloat, financial institutions must either depend on someone’s continued handouts or collect more in interest from borrowers than they pay out to savers. If borrowing is more expensive than saving, people “too poor to save” are also too poor to borrow. Rain-fed farming is not just risky; it involves long delays between investment and fluctuating return. Sooner or later, steadily accruing loan interest outstrips a borrower’s fluctuating capacity to repay. On the surface, credit seems always to be in demand, but at a deeper level, poverty seems to alter time horizons in human perception. In rural East Africa as most anywhere, it seems to sweeten quick cash and dim awareness of longer-term liability.7 While lenders should listen to borrowers, they should never take expressed “demand” for credit at face value. Financial program planners in Nairobi expect local lenders to choose farmers whom the lenders perceive as being high risks, while in the field, in contrast, the job performance of these lenders has been judged largely on the basis of loan recovery. Concepts like “creditworthiness” mislead. The few farmers most able to repay loans are usually those who need assistance least. They are also those who can afford, by virtue of wealth or position, not to worry about repayment. Gender and age roles in the Luo country present further ironies and paradoxes. Although women do most of the farm work, it is men who are most often spoken of—even by many women—as the natural representatives of their homesteads and thus the right members to deal with institutional lenders.8 Elder men are more likely than juniors to be able to prevail upon lenders to secure loans, by virtue of the principles of seniority and respect sometimes called gerontocratic. But these men are seldom the hardest-working farmers or the ones most receptive to technological changes. The ethics of repayment and default are very much bound up with the social distances perceived between borrowers and lenders. What an urbanbased lender calls “moral hazard” may look to the rural borrower more like



a moral duty: it can all depend on whether a borrower thinks he or she owes the lender anything to begin with, and whether there is someone else with a deeper claim on whatever resources have come that person’s way. Since farmers give debts to distant official lenders a low priority among others they owe to their many other creditors and obligators, farmers seem often not to look upon failure to repay these loans with a strong moralistic concept like “delinquency,” a most disparaging term in English (if technically correct for the purpose). To most, instead, the real delinquent would be one who neglects an agnate’s marriage payment or a school or hospital fee payment to send personal or family money away to a group of virtual strangers in a government office. It is not that rural borrowers do not want to repay their institutional loans. It is that they have so many stronger claims to fulfill and that they have their own “thresholds of responsibility.” Evidence from Nyanza suggests that some lenders may be able to overcome contradictions like these with strict and aggressive regimes of contact between lenders and borrowers: in the BAT case, for example, by a corps of motorcycling extension agents filling out time cards and record notebooks. Such systems are expensive and intrusive. Probably only the highest-value cash crops can financially sustain them, and these are the crops whose risks small farmers need least. The multinational corporations that seem most capable of financing and organizing close extension in Africa are those with the least reason to be interested in the long-term well-being of African farmers. If they fail, they have the resources to absorb a loss and move out. More pragmatically, small loans carry high administrative costs per unit lent. The poorer the borrowers, or the smaller the borrowing groups, the more costly will a program likely be to run. Credit can offer lenders an easy way to move large amounts of money, and it offers, in its arithmetic repayment rates, a clearer measure of “success” than many other kinds of programs. But if the best measure of a project’s success is percentage recouped, should the lending really be done in the first place? There is, in the end, a conundrum in large-scale credit schemes, as in other forms of international development assistance. It appears as though such projects, even when directed toward the poorest strata of society, usually contribute to widening class rifts insofar as they have any effects at all. It is unclear whether there is any way for foreign agencies to channel resources to remote areas of the poorer countries without the benefits’ accruing mainly to the already better-off. Likewise, projects meant for women



seem as often as not to be co-opted by men. (This does not mean, however, that the agencies should stop trying to direct them to needy categories of persons.) Poverty means sometimes having to borrow, but the remedy can soon become the cause. Distress borrowing can resemble drinking seawater, dehydrating the drinker while raising thirst for more. The deeper one’s known debts, the more expensive and usurious the next loan is likely to be. Here the trick, for borrower or lender, is to tell need from want, and in the end neither the insider’s nor the outsider’s viewpoint is sufficient in itself. Credit is debt, but when rural people ask for credit, as they so often do, they are asking for the money, not the debt. While it is tempting to advise both borrowers and lenders of that old anonymous adage, “When in a hole, stop digging,” they are not in equally good positions to respond. Old Lessons Relearned The disappointing outcomes of internationally planned agricultural finance programs since the second world war should not lead the onlooker simply to suppose, as a good number have, that the program planners were simply unintelligent or incompetent. The structural and procedural constraints impinging upon the jobs they do are formidable. Scholars who have spent a decade or two learning about a region, and still know they have only scratched the surface, have little trouble drawing one conclusion. Financial program planners in development agencies need more time. They need it to learn languages and read history—including their own organizations’ histories and the histories of programs like the ones they are designing and implementing. They need it to ask basic questions, to overlap with their predecessors and successors, and to make trusting local acquaintances. They need incentives to rotate not just from one part of the world to the next, but also back again to where they have worked before, or places like them. More time would help them plan with (and not just for) local counterparts, to watch the outcomes of their decisions, and to be accountable for them. It would show they care, and help make them care. The recurrence of history in farm credit is striking. Experience has a way of repeating even though, as with the crisscrossing swings of the golden pendulum, the details always shift, and even though different sorts of movements that can be likened to a pendulum swing at different speeds, reaching their extremes at different times—for there is little to keep them all in sync.



Subsidies, diversions, and defaults have become stock themes in crop credit programs all over Africa.9 Farm land titling and mortgage systems around the continent keep being retried and keep grinding to a halt.10 Staffers of the largest international aid agencies and of government ministries, in Kenya and elsewhere in tropical Africa, have designed financial programs again and again on broadly similar lines, varying their rhetoric more dramatically than their action. Bureaucratic ritual and political incentives never cease to condition the jobs these people do. Across Africa public financiers still continue optimistically to speak of credit as if it were a shoveled farm input, something sure to help more than hinder. How the conventional wisdom of agricultural program planners about credit in tropical Africa has come to diverge so radically from the longerstanding lore of most of their home countries is a mystery that cannot fully be explained here.11 To many anglophones worldwide, the first line of Polonius’s admonitory triplet spoken to the departing Laertes in Hamlet (I, iii, 75–77) has long been a household saying: “Neither a borrower nor a lender be, / For loan oft loses both itself and friend, / And borrowing dulleth edge of husbandry.” Unfortunately, the brilliant reasons the second and third lines offer are not as widely remembered as the first. But the experience of international aid in tropical Africa is teaching us these old lessons again. Loans are losing themselves, and the shallow friendships they establish later turn sour as resented clientships. Shakespeare’s cryptic third line is now, I think, becoming clearer too. As a wise Gambian farmer named Momodou Sanyang’, and later others in Kenya, explained to me, one who has borrowed is no longer working for oneself or one’s own. The deeper the debt, the greater the part of each bag of harvest due to a creditor instead—maybe a stranger. Credit blunts incentives to produce. It may be, moreover, that credit and indebtedness quietly alter the nature of spending and consumption.12 People who expect they can procure loans at will are likely to spend more than ones who do not. Whether or not the kinds of people most likely to borrow in the first place are those most likely to spend rashly, heavy debt itself—and the feeling of helplessness or hopelessness entailed—can sometimes provoke a response of abandon, for consolation or distraction. Still scantly understood, the topic invites a future cultural-economic psychology. At some level, both borrowers and lenders usually know the hazards of a mortgage system for borrowers, if only from hearsay. Urbane Luo knew them during the time of the Kenya Land Commission hearings in 1932.



City financiers who have never touched a hoe or plow know them too—if only from television farces or cautionary camp skits about banker villains and debt-ridden widows.13 A well-known World Bank agricultural economist from Washington, D.C., headquarters confided to me, after a speech, that he saw no reason why western Kenyan small farmers should not mortgage their land for more farm loans. After all, he said, he could not afford his own home in suburban Maryland without a mortgage. Now, at some level of awareness he doubtless distinguished between a rain-fed farming income and a World Bank salary. But what kind of awareness? Ironically, just a few months before he spoke, on 26 June 1991, the grand Mount Washington Hotel at Bretton Woods, New Hampshire, where the World Bank had been chartered in the summer of 1944, fell victim itself to bank credit and was auctioned off after a mortgage foreclosure.14 In the Luo country, the mortgage system has not yet proved robust enough to dispossess borrowers en masse, as has happened during downturns in Britain, North America, and elsewhere. It has been almost as much a curse on lenders. But in the longer term, if institutional lenders of different kinds persevere and dispossess by mortgages increasing numbers of farmers, the story will not be new. A Moral Dimension in Financial Politics Is it ethical to use economic loans as political tools? Credit has probably always been an instrument of politics: used to win votes, secure supporters, quell opposition. In international diplomacy its use for political ends has become increasingly important and overt. Kenya’s case is no exception. It was, in the early 1980s, not hard for skeptics to deduce that the World Bank and USAID had designed their largest farm loan scheme to date for Kenya, the Integrated Agricultural Development Programme of 1976 (Phase I) and 1979 (Phase II), partly to guarantee rights for the ships of the U.S. and its NATO allies, including their warships, to use Mombasa Harbor. Increasingly since the 1980s, the International Monetary Fund and the World Bank have made other kinds of “conditionality” explicit policy. They have insisted not just on internal economic reforms like government staff cuts in social services like health and education and sell-offs of publicly held corporations. They have also insisted on political reforms in favor of democratic elections, free press, release of imprisoned dissidents, and so on—before governments



could borrow or receive loan installments. In Kenya’s case, they have frozen new lending more than once (in 1991 and in 1997, for instance), citing government corruption. This allegation was not just their own. Journalists’ surveys of international businesspeople worldwide in the mid- to late 1990s were beginning to show Kenya to be among five of the world’s countries perceived as most corrupt, and by this time the international press regularly conjoined President Daniel arap Moi’s name with that of President Mobutu Sese Seko of Zaire (later Democratic Republic of the Congo) as epitomizing the concept. Repressive was another adjective usually applied to both. The subsequent governments in Kenya have been less notoriously abusive than Moi’s, so far, but hardly free of accusations themselves. The salient ethical issues on credit politics are three. One is sovereignty. Who has the right—or the duty—to control whom? Is any unit of human aggregation (individual, nation, world) supremely autonomous? Luo popular philosophy on this point is relatively anarchistic in a sense, polyarchic in another (since each homestead of an autochthon has its own wooden stool and roof spire stick to proclaim self- dominion). Formal structures of government are deemed remote, threatening, and suspect. The more natural forms of hierarchy, most seem to feel, are those of age, seniority, and kinship and marriage sequence. Without these, there is little deep reverence for people who rise: not for most politicians, not for financiers.15 The second is order. Should economy be a separate sphere? Is politics in economics to be deemed “matter out of place,” as Mary Douglas, and Lord Palmerston before her, famously defined dirt? (Douglas 1966: 35, W. White 1868: 651). Luo tradition does not ordinarily divide the world into these disciplinary domains. Politics and economics are hard terms to translate into the Luo tongue, and the distinction was never really an issue of “cleanliness” or mental hygiene to begin with. Third is honesty. Should political or military motives behind financial or fiduciary action be concealed or transparent? To Luo and Kenyans who follow current events, there is no such concealment. The East African literati, anything but naive, will usually impute self-interested political motives to anyone not proven innocent of them. Suspicion of grants and handouts is part of Kenyan popular culture too. For instance, American relief shipments of maize in the 1980 food shortage were rumored, in Nairobi and nationwide, to conceal “family planning medicine” to keep the African population in check. (All ate it anyway.) Loan schemes from “above” are



objects of similar if milder resentment. To Kenyans, nothing international lacks a hidden motive. Handouts are power grabs. Concealment is natural, and naturally transparent. Beneath these moral and ethical issues lies another, subtler but no less vital. This is about reciprocity and serial obligation. Whether a borrower’s main responsibility is to his or her lender, or to others who may be more intimately connected, including progeny, is a question right at the heart of entrustment. Lenders who cannot see this, who cannot ask themselves this, should probably not be lending. Creditworthiness Redefined Lenders, like borrowers, can be creditworthy or -unworthy. Shylocks, whatever their ethnic or religious identities, have always been distrusted—Shakespeare’s Merchant of Venice is, if anything, a cautionary tale—but states, banks, and international aid agencies not always. The slide of the World Bank Group into moral disrepute by the start of the late twentieth and early twenty-first centuries has coincided with the rise of its global influence and with its own willful exposure of its policies of “conditionality.” Right or wrong, lending power, when it becomes governing power, is resented abroad. Economists and financiers have conventionally attached the term moral hazard, like creditworthiness, to borrowers alone. This one-sided way of thinking is a moral hazard itself. Lenders, like borrowers, should earn their trust. If the latter must earn it by solvency and repayment record, the former must earn it by broader criteria, admittedly harder to measure: by moderation, by respect for borrowers’ dignity and autonomy, and by ecological responsibility, to mention only three. In the case of Kenya and its largest international financiers, the evidence on all three counts has not been encouraging. All these have been live issues in international and intercultural finance of late. But recent developments in long- distance finance add new moral quandaries, and new twists to older ones. Whether there can be unfair lending on concessionary terms is a question that surfaces only seldom. But in an era of international aid finance, it does arise. Also, as lenders re-toughen their terms in an effort to cover their costs while reaching smaller-scale, poorer borrowers, older and more familiar issues about where usury begins also resurface. Bureaucracy and technology may allow some people to set the terms



of discourse, but they do not make moral issues disappear. If economics, as a product of industrial cultures, sometimes leads us to ignore other codes of ethics, it is because of confidence that somewhere it contains its own. The history of financial ethics suggests that no single authority remains in permanent control of fiduciary norms, and no line between right and wrong practice is likely to remain constant. Ethics about entrustment and obligation arise in particular material and social contexts. Over time and space, control shifts between sacred and secular authorities, between officialdom and the underground, and between local, national, and intercontinental players, to say nothing of ones who slide between. So there may be, at a given time and place, no one to say when enough is enough and do something about it. If over the past half-century, as this work has suggested, borrowers have overborrowed and lenders have overlent, it has alas remained for market crashes to check the trend. As these words were being written, leaders of the world’s largest creditor nations and their advisers were seriously considering blanket proposals of debt cancellation for countries they variously class as “developing,” “third world,” “the South,” or simply countries deeply in debt. Such a blanket write-off, in almost any form, would be welcomed in many quarters and considered long overdue. But such a measure would likely turn out only a temporary palliative, allowing the intercontinental processes of lending and indebtedness to continue as before. To the historically inclined, the proposals at least have a familiar ring. They hark back to a tradition carried on elsewhere in ancient times: the periodic jubilee debt cancellations—and liberations of debt-bonded servants and slaves—announced in some of the earliest inscribed clay and stone tablets from Mesopotamia. The priest-kings who issued the proclamations, perhaps reinforcing the recognition of their own sovereignty by capturing others’ indebtedness—and trust—for themselves, doubtless knew that wealth can convert to power, and either one can convert to prestige. But it has scarcely been in their power, or in the power of the world’s leaders today, millennia later, to alter whatever is human nature or to clear all slates for good. Acquiescing to Asymmetry A few concluding words now about ways of studying credit and debt as part of entrustment and obligation, and as part of economic culture. Perhaps the easiest way to understand long-distance finance is to accept



from the outset that never will all debts be repaid. Many, perhaps most, of what are called loans end up being transfers of other kinds: grants, seizures, and embezzlements, for instance, or transfers with no names in English. Clearing the mind of the assumption or dream that all loans will, could, or should be repaid—that the seas will ever settle—may take work. The human mind seeks tidiness, and for some, to suppose that all debts will one day be “cleared,” all outstanding accounts “squared away,” may be comforting. But it will not happen. Births and deaths (of people and their organizations), currency exchange rate and interest rate change, hardship and clemency, contract renegotiation, refusal and denial, and plain forgetfulness make sure of that. Some lenders want not to be repaid, or to re-lend to the same borrowers the minute they are, to maintain a grip of power or moral leverage over them or keep active ties useful in other ways.16 The tides may change their flow and even reverse, but they will never stop running. Nor, I think, should they. If all poorer borrowers repaid all rich lenders (impossible, of course)—if the birds all took back their own feathers—the world’s wealth would become even more maldistributed than it is. Nations would have less reason to cooperate. The deadened financial circulation of a world settled up would be the nearest thing to death. Curious, then, that the most commonly cited index of credit programs’ success or failure is rate of repayment. Here again, the mind’s quest for simplicity shows through clearly. Complexities reducible to a number become sortable, fileable, comparable, actionable—for better or worse. Programs get cancelled or beefed up, people hired and fired, and decisions rationalized. Teleology gets clouded in this process of bureaucratic and cognitive housekeeping. Credit for whom, repayment for what, become secondary. The process becomes the purpose. Once we accept that not all transfers will be reciprocated, not all creditors repaid, we open our minds to the kind of serial entrustments that help give life meaning. For every action there need not be an equal and opposite reaction; in human affairs the chain reaction, converted, postponed, or modulated according to context, is just as important. It is not just by returning favors from whence they came, but by helping others in turn as we can, that we can discharge our debts. The language of aid is basically optimistic. In official planning documents of all kinds, growth is mentioned more than shrinkage. Credit is mentioned more than debt. Investment is mentioned more than exploitation. Words like beneficiaries occur more often than victims or more neutral ones



like associates. All this despite the historical record of aid that all can acknowledge has been disappointing and even dismal. Hope springs eternal— especially for those whose careers depend on the fantasy of it. To observe that borrowers do not or cannot calculate accurately the risks and rewards of loans, or do not act on purely logical premises in their borrowing, requires risking no ethnic, class, or racial stereotyping, or even a comment on their education. Far from it. This is a question of basic human psychology; it is part perceptual, part semantic, and perhaps not even population or language specific. It is striking how often rural-dwelling people in East Africa (and elsewhere on the continent) respond favorably to the idea of future credit when it is dangled before them. Asked if they want loans, they usually respond yes. Yet when the question is posed another way, whether they want or could tolerate more debts, the answer is usually an emphatic no. The same question posed in different ways elicits different answers. Part of the reason, of course, may be that rural people are betting that repayments will never really be called in. In this they have historical grounds for optimism. But there is more to it than this. What economic psychologists have observed and called “invariance failure”—the asymmetry in calculation about gains and losses, perceptions and calculations swayed by feelings or emotions—lends some oblique support to my admittedly unsystematic observation on the point. Invariance failure, stated more positively, is a kind of denial, suspension, or transcendence of logical or rational calculus, and in some circumstances it appears to be a testable human propensity. Little more can be said about this here, but there is room in the future for more psychological depth and vision in the study of economic culture, and where credit and debt are concerned, the insights could come from both borrowers and lenders alike. . . . and Acknowledging Fantasy A recurring theme in this work, along with usury and charity, has been the role of fantasy in credit and debt, especially over long distances. That imagination is involved in borrowing and lending goes almost without saying, since it is our perceptions of others’ perceptions, and of social bonds, that credit and debt are made of—just as much as they are made of money, seeds, or chemicals changing hands. Money itself is subject to creative imaginings of all sorts, as others and I have sought elsewhere to show. Financial



entrustment and obligation require empathy and second guessing, not just of individuals but of whole populations. We get many of our ideas about money from works of literature that stylize and caricature borrowers and especially lenders. Humans learn by stories, and these narratives and pictures are hard to shake. Human understandings of economy rely heavily on metaphor and simile, and the frequent use of body metaphors for credit and debt—across history, and in different continents—is striking. Imagery of capital (from caput, head), of blood flow and circulation, of capillary banks—and when things go wrong, of vampirism, blocked arteries, or hemorrhaging—are probably inevitable as ways of getting a grip on our topic and reducing it to manageable proportions. Likewise imagery of plants (interest-bearing loans) or homes (banks as “houses”). But our need to search for such metaphor or simile should remind us how little most of us really know about that which we currently call economy (another word with “home” at its own root). Systemic malfunctions like the mortgage crisis of 2008–9 remind us of the same point more clearly than ever. It is good to be aware, too, that the choice of idiom may well form or alter the character of our subject as we perceive it, inclining us toward certain “treatments” (whether practical, political, or mystical) rather than others. That the self-interested “rational” actor, the household or family, the economic sector, and development itself can all have something fantastical about them—at least arbitrary in delineation, and often naively simplistic or optimistic—is something that critical analysts of international aid and finance have acknowledged now for decades. That some in East Africa and elsewhere hold ideas about development that are imbued with ideas about the occult—for instance, about witchcraft and demonism as secret self-interested profiteering at the expense of others’ life force or eventually one’s own life—is less well understood but no less true. Only recently have the people who study literary and oral creations (vampirism, for instance), magical and religious traditions and inventions, and international aid policies and programs begun to be the same people, or the works treating them the same works. Art, science, and practical application need not remain separate scholarly endeavors; a field like this one can perhaps advance only if those who study in it lose their fear of being mistaken for some other category of scholar than they aspire to represent. None of this is to call anyone primitive or unusually superstitious. Many of the ideas and practices that get termed magic, witchcraft, religion, or



demonism are quite modern, and others are more timeless. We humans all have our own kinds of shakily grounded suppositions and superstitions (luck, chance, or providence, say) or topics on which we must point to others we assume better informed to be able to explain at all (for instance, gravity). Few still have yet studied in depth the precise nature of occult ideas about economy and how they arise from, and shape, experiences of life in marginalized positions, in newly stratified social conditions where fortunes change quickly and seemingly capriciously, or in other situations without other easy explanations. But the study is well under way.17 Public, Private, and Philanthropic—Categories in Mixture and Merger The cases described in this work remind us of the limits of any simple public/private dichotomy. First, not everyone in the equatorial African countryside distinguishes these categories the way others abroad do. That some Luo, especially women, spoke of the BAT’s tobacco program as part of the serkal, or government, even after living for years among its plants and planters, suggests a more generalized understanding of officialdom that spans the conventional divide. Government, for its part, is big business. The fact that its offices, in equatorial Africa as elsewhere, have so often served covertly as places of profit (indeed, profiteering) suggests how porous any public/private barrier really is. In practical operations too, the distinction breaks down, sometimes with sharp irony. The “public” scheme studied here, the IADP-SPSCP, took the character it did in part because of market forces and activities. Notable among these were the “private” traders used as suppliers for the material farm “inputs.” Notable too was the agok system, the “private” and rather secret trade in the crop marketing at the “output” end, that prevented loans from being effectively collected in staple food crops. (These their growers were using in effect as cash crops too, complicating another favorite old dichotomy.) Conversely, the “private” tobacco scheme succeeded in generating profit for its company not least through its own local governance—at least for its appointed growers—and governance with a rather authoritarian style at that. Where multinational firms colonize parts of Africa and the tropics, they often replace state authority this way, transplanting their own within their limited territories, selected participant populations, or (as in the BAT case)



both.18 Some of the activities of agribusinesses, mining firms, and other extractive enterprises in contemporary Africa are strikingly reminiscent of the chartered but freewheeling imperial companies that were the precursors of more formal European colonial rule in Africa. Power wielding and profit are also, of course, part of the task that churches set themselves—and have been doing for millennia. They do it avowedly or not, and in league with or in competition with states. Their styles of selfgovernment run the range from democratic to autocratic extremes, their styles of financial management from predatory to saintly. Charity, as grant or loan, is among other things a tool of administration as well as a tool that gets administered. It helps keep people in line, but some would say it also needs to be kept in line. As for the other meaning of “private,” that of closed or secret, well . . . how private are agencies that depend for their funding on soliciting contributions in magazine ads, or on bigger, state-run or interstate aid agencies when they do not? Finally, there are the “self-help” organizations that would not exist without government grants, corporate loans, or philanthropic charities to organize for. The urban “grass-roots” associations led by elites. The rural “women’s groups” led in their internal meetings by men. The places where self-help turns into help-self. Noting such ironic curiosities should not, of course, lead us to disparage more earnest self-help initiatives—we should just be a little careful with labels and headings. All this suggests that whoever wishes to experiment with new “public/ private” collaborations will not likely be breaching any deep conceptual divide in the countryside. The challenges will be more to do with ensuring cooperation among workers who are compensated on different scales and thus with containing envy, resentment, and maybe sabotage. For this, fair pay and allowing grower or worker investment in program successes, if not also co-ownership or a role in program management, are likely to be among the better preventatives. Dividing organizations and activities into “for profit” and “not for profit” presents similar problems when it comes to particular ventures. Charities or philanthropies that run like banks, or as banks, charging market-like interest, are almost as anomalous in world history as the few “not for profit” universities with multibillion-dollar endowments or as foundations to give away corporate fortunes.19 Public, private, and philanthropic are in the end only ideal types or templates. They are heuristics for communicating about, and frames for as-



sessing, the regularity, efficiency, and generosity of whatever we perceive to be regimes, enterprises, or mechanisms of uplift—in whatever combination. Administering programs or regulations involving many people always involves drawing lines to demarcate categories. Public, private. Formal, informal. Cash crops, subsistence crops. Productive sector, social sector. There is no end to the lines administrators draw nor any end to the criticism that scholars and others mete out to them for oversimplifying reality when they do. But scholars divide their disciplines (economics, anthropology), ideologies (capitalist, socialist), and schools of thought (functionalist, structuralist, poststructuralist) with lines no less arbitrary. We need categories to communicate. Those who call others reductionist are usually reductionist themselves in some other way. Nor are there many things in life that cannot be made simpler or more complex. To navigate through the Scylla of simplicity and the Charybdis of complexity, it is important not to get too dependent on particular dividing lines, or to eschew categorization entirely, but to be able to combine and recombine categorical distinctions that cut across each other as may befit the subject people and topic. The distinctions people draw among themselves—for instance, among sexes, ages, classes, or kin categories—are not to be neglected among them. For scholarly disciplines to polarize into positions like qualitative/quantitative, theoretical/empirical, nomothetics (universalism)/idiographics (contextual particularism), or absolutism/relativism makes them artificial endeavors. The people they study then become half-people, hopping around on one leg. When we borrow and owe money, we may be richer in a way but feel poorer in another, and any discipline that considers only one half of this but not the other will become a half-discipline. We must also at times get physical. The social, cultural, and political studies will never be able to understand credit and debt on their own. The material of entrustment also makes a difference. The grand hope of developers in the 1970s and early 1980s, a green revolution in Africa financed by foreign capital, turned out as it did not just because of social, political, and economic relations among its borrowers and lenders—but also because of the very substances it moved. A loan for corn is not like a loan for cotton or coffee. You do not lend for an annual as you do for a bush; you do not borrow for a food staple as you do for a purely industrial crop. The differences are as big for financier and producer as for distributor or consumer. They affect not just how the seeds grow, or whether the crop is digestible, but what gets repaid and who feels responsible.



The slicing and splicing of genetic material offer hope for enormous agronomic advances in Africa as elsewhere, as well as posing dangers of crop diversity loss, and of loss of local control over farming. But the new seeds will be circulated, food harvested and consumed, and industrial crops traded only insofar as the financial and fiduciary mechanisms that involve humans in their use sustain their spread. Someone, somewhere will need to be concerned with the users’ culture and psychology, their family capacities over the seasons and life course, and their dignity. In this, any new “green revolution” is likely to resemble the last, so the lessons may not be lost. Credit Inside Out The deeper one looks into the history of rural credit since the midtwentieth century in Africa, the more one suspects that the industry of development finance there has been operating—at least until lately—on the wrong track. Rather than first approaching rural people with loans, and thus with eventual debts, foreign agencies really wishing to help these people should perhaps first see what resources the latter are already mustering and mobilizing on their own and then, if locally desired, find ways to help them save, conserve, and invest these resources. This does not mean eliminating credit completely—something unlikely to happen in any case. It means putting credit in its place as a measure only for special conditions, and for special places in exchange sequences. The financial systems that work best in rural tropical Africa seem to incorporate savings with credit. Nowhere is this principle clearer than in the rotating saving and credit association (or contribution club), where one member always saves as another borrows. Because all resources lent are ones locally saved up, borrowers do not get flooded in loans too large to repay. Saving gives members an incentive to care about the association and to keep an eye on it. Other principles, too, make the contribution club a particularly effective financial mechanism. It offers each member a chance to save without appearing selfish to kin or neighbors with claims on the cash—a common concern in rural East Africa. Its accessibility, its autonomy, and its freedom from forms and language barriers all add to its attractions. Private aid agencies shifting from granting to lending and savings mobilization have begun taking advantage of group-based finance, as seen, and some have shown promise in some rural settings in Kenya and elsewhere, at least for collecting repayments. But if small is beautiful, small is still small.



“NGO” programs are still labor intensive and expensive to run, at least if a main goal is economic revival or growth. They are also not always well coordinated between agencies. But the trust and good will many private philanthropic agencies have built up in the countryside, drawing on religious roots and on histories of health care, schooling, and free charities, and of listening and collaborating with patience, give them an edge over most other development agencies for hands-on programs. Like other kinds of exogenous institutions in rural Africa, many foreign-rooted aid agencies serve purposes other than those on their labels. Unlikely seeming organizations become financial players or coaches. Some will find yet new functions brokering information to enable financial dealings between rural people and commercial banks, or between banks and other kinds of service organizations. And still others will continue finding ways to broker dealings between individual borrowers and individual lenders at long distances, by electronic or other means. Whether “informal” mechanisms like contribution clubs can somehow be plugged into banks and other “formal” ones, as some rural development financiers in Nairobi and Washington have lately dreamed, is by no means clear. Nor is it so clear they should. Informal mechanisms like contribution clubs are no cure-all, and the advantages they do offer lie precisely in their freedom from official entanglements. But contribution clubs may contain examples to emulate. Group-based responsibility for repayment seems to work particularly well among women who share other social ties to undergird their financial ones. And the simplicity, regularity, and sometimes festivity of indigenous group finance can make it very popular in some settings. I have suggested that credit without savings—that is, one-way lending and one-way repayment—is both morally dubious and ultimately impractical. As with capital, so with information. Agricultural “extension,” in recent decades another central strategy of foreign governments for assisting Kenyan agriculture, has been just as paternalistic. A one-way flow of information and advice between one country and another, or between city and countryside, can hardly help the recipients much in the long run. Just as the best lenders are likely to have borrowed something of their methods from their intended borrowers, so are the best instructors also good listeners. Money and finance are not the answer to all questions on wealth and poverty. Improved methods of crop storage, better facilities for marketing and emergency redistribution, tree planting and conservation, and veterinary care for animal health and well-being are among the many kinds of



actionable ideals all welcome in many parts of the African continent. But projects and programs of finite duration and bounded territorial coverage are not the only solutions. Nor, alas, do good intentions ensure good outcomes. Without patient experiential learning (that is, in daily contact with the people for whom they are intended, in all seasons, and with attention to all stages of the life course and reproductive cycle), they can almost as easily inflict harm. When “aid” concerns measures like forced resettlement—unlike in the interventions described in this volume—lasting harm is virtually guaranteed. That “aid” can do at least as much harm as help raises the question whether concerted opposition to big aid agencies like the World Bank is justified. Increasing numbers of critics make the case it is, and increasing numbers of smaller, locally rooted organizations of indigenous peoples and others have been networking electronically around the world to coordinate their protests and other activities. The more the largest aid and development agencies engage in activities that threaten the basic living of peoples whose life ways are ill known to them and the ecological well-being of the planet (for instance, by reducing biodiversity, advertently or not), the more these groups probably should protest. Something that makes such judgment difficult, though, is that the aid agencies have become structures of governance and that were they to be shut down, someone or something else would be likely to arise to fill the power vacuum left. Whether it or they would be any more patient, considerate, or respectful of diverse ways of living, and diverse species of life, is not to be assumed. Whatever poverty persists in tropical African peoples or nations is seldom to be alleviated in any lasting way just by shifting money and aid goods in from elsewhere. Another approach, radically different, is to work to open up borders of nations having more easily accessible wealth (inside Africa and out) to more African people wishing to travel there, or to send their kith or kin, to work for themselves—and to make it easier for them to remit some of their earnings home if and when they wish. Easing restrictions on movement—by making it easier to obtain passports, visas, and work permits, as well as by reducing the physical threats and harassments at borders, does frighten many in those richer countries, since it can mean sharpened competition there for land, food, or jobs. But it also means more minds and hands to contribute to whatever is deemed production in those same countries—and new ideas on all facets of life. In any case, in my travels in different parts of Africa, no wish has been more consistently expressed to me



than the wish that more people there could travel and work abroad. As one aging Luo man in Kanyamkago expressed the hope to me, when I asked him how his many children and their families would survive on the small, subdivided, and hemmed-in pieces of land he expected them to inherit. “They’ll manage,” he said; “we’ll send some of them to work in America.” Nor is it just about survival. African people, like people anywhere, can appreciate their turn to be explorers, adventurers, discoverers, opportunity seekers, and returning heroes—or at least the chance to be able to make up their own minds about where they would like to settle and live. People from Africa were for centuries exported as laborers in chains. Why should others from Africa not have the chance now to travel and work abroad when they wish? Perspectives Rural Luo people and their neighbors remain distanced from their foreign financiers, geographically, administratively, and not least culturally. We have seen fundamental differences between the ways development planners in distant capital cities have conceived of credit and debt, and the ways rural-dwelling Luo people conceive of them. To many of the former, over most of the second half of the twentieth century, credit has been a resource within a given “sector” of the economy, to be used within that sector and to produce profits that ought to be reinvested in the same sector. But to Luo farmers, there is nothing sacred in “sectors”—particularly not agriculture. International agricultural financiers have tended over this period to view farms, families, or “households” as discrete economic units. Rural-dwelling Luo and other western Kenyans see them differently. To the extent that “farms” exist at all for Luo, they are variously understood as scattered parcels of ground imbued with the spent labor of different kin and neighbors and as melded interests of the living, dead, and unborn. “Households” are usually incomplete parts of homestead compounds, where spouses both cooperate and compete, sharing some kinds of resources but not others. In a rural Luo way of thinking, the most important “sectors” are arguably the male sector and the female sector. But these are not always so clear either: co-wives in the large minority of marriages that are polygynous can be jealous rivals as well as workmates or grain and milk sharers. Families telescope into lineages and crochet into alliances of in-laws and are seen as parts of social networks of kin and neighbors stretching across the countryside. They are parts of net-



works with multiple and overlapping exchanges and complex entrustments and obligations. A farm is not just a farm, nor a household a household. In lending to and indebting people they view to be farmers, in what they perceive to be farms and households, agricultural financiers can easily misconstrue what these people want to maximize or optimize. For “farmers” often have other occupations, too, and dreams in the towns as well as in the countryside. They have their own debts to pay, funerals to contribute to, and prestige to be bought, and many will want to do so with whatever resources might conveniently come their way. “Formal” and “informal” economies are separated by no watertight wall in rural East African entrustment. Nor does anyone necessarily evolve or progress from one to another. There are only overlays and interweavings. Much of what banks or cooperative lenders lend, their borrowers then relend, sell, or give away unofficially, and borrowers in trouble with their mortgages rely heavily on their friends and neighbors to pull them out. An unregistered, untaxed, unregulated economy has its own kinds of formalities in etiquette and rules about reciprocity, just as a bureaucratic one has its own unwritten understandings, casual deals, and secrets. Neither is pure as named, and neither is really the answer in itself. Real people do not live in sectors. Nor do real people remain locked into countries or regions. While aid program planners have tended until lately to look upon Kenyans as Kenyans and to think as if all possible opportunities for them, all incentives, constraints, and punishments, were to be found within district or national boundaries, or brought into them, the people called Kenyans have not thought about things this way. They have anchored some of their highest hopes—financial, political, and cultural—in becoming more able to move in and out, or being related to others who can.20 What is true of space is also true of time. For people living in rural East Africa, the phases of an aid project do not end with a project completion report or completion of an aid agency staffer’s tour of duty. If a project has added fertilizers to their soils, they will need to keep adding it or suffer drastically reduced yields. If it has required tobacco drying, it may eventually leave them not only with cash to buy more cattle and marry more wives and bear more children but also with a fuel wood shortage or with pesticide residues in their lungs. Players in the drama of East African rural finance respond to fashions like most of the rest of us, moving like a pendulum in one way if not in



another. Just as large numbers of farmers sometimes rip out coffee bushes when last year’s prices make maize seem more promising, or vice versa, so do aid program planners seem to shift their efforts in waves between public and private, between relief and development, between formal and informal, or between program integration and minimalism. Usually their real behavior appears much more constant, more inertial, than their talk—bureaucratic constraints make it so—but their imaginations and self-definitions run more freely. Sometimes they seem to change courses almost for the sake of change alone, as if to stand out from what they think is still the herd. So too, of course, do scholars of culture and economy seem at times to move in recursive schools themselves. They shift their ideals from growth to equity and back, or shuttle between modernization theories and dependency theories—never all at once or quite predictably, but certainly in patterns, never randomly—and try as some might to integrate polar opposites, theory never settles to equilibrium. Fashion changes at different rhythms in different professions and disciplines. In the academy as elsewhere, a pendulum’s trajectory shifts on each swing, and half-forgotten movements seem ever to be reborn with stylish new names and interpretations. Farmers, developers, and scholars come out equally human in the wash. If credit and debt convey not just wealth and power, but meaning too, then it will be clear that finance across borders is a fitting subject for cultural as well as for economic and political inquiry. No one discipline’s theory or method is likely to improve the picture all by itself, if tropical African history is any guide. But if the disciplines can openly borrow and lend among themselves, we may keep our minds open to both the absolutist approach that seeks general principles and the relativist one that seeks diverse viewpoints in context. That is not easy, but it is the real hope.

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Chapter 1. Introduction Epigraph. Walter Bagehot (1873: 75). 1. Parisian physicist Jean Bernard Leon Foucault first documented the movement of such a pendulum in 1851, and numerous science museums now have their own. This one, a twelve-inch, two-hundred-pound ball, has been displayed since 1955 in the General Assembly building, swinging now from a seventy-five-foot wire from the ceiling. 2. The concept of rings of responsibility has a long lineage, leading (along one thread) through Aristotle’s Nicomachean Ethics (1976) and Adam Smith’s Theory of Moral Sentiments (1984) and more recently through Edward Evans-Pritchard’s The Nuer (1940) and Marshall Sahlins’s Stone Age Economics (1974). See Shipton (2007) for further discussion. See Wilk and Cliggett (2007) for one of the more accessible and general introductory summaries of theory in economic anthropology. 3. Fuller’s Gnomologia (1732: 9, adage no. 245). The book contains many aphorisms similarly deserving closer attention in our times. 4. The choices between what I have called legalism and loyalism—that is, attachment to principles and to persons—are discussed in Shipton (2003), on questions of rights as understood between cultures. 5. William James (1902: 128), writing in a different context, on melancholic anguish. 6. For a general treatment and cases of state administrative simplifications from around the world, see Scott (1998). 7. Examples of respected anthropological and other social studies criticizing oversimplification in official development efforts include Croll and Parkin (1992b: 9), Hobart (1993: 13), Scott (1998), Grillo (1997: 26), Cooper and Packard (1997: 20, 30), Crewe and Harrison (1998: 175), Peters (2000: 2), and Arce and Long, eds. (2000: 13, 14, 21). Many other critiques may be found in Edelman and Haugerud (2005).



8. This paragraph sums up some points treated more fully in the first volume of the trilogy (Shipton 2007). 9. This loss of land and with it, sometimes, home and attachment to ancestral graves—and thus to living kin and social identity—is a threat described more fully in the second volume of the trio (Shipton 2009). 10. That none of the projects or programs described in this volume directly threatened anyone with home eviction does not mean some would not have wished to do so—as noted in Chapter 9 on tobacco. 11. Here this work connects right to The Nature of Entrustment, the first volume in the set, on local forms of borrowing and lending, and of entrustment and obligation more generally. 12. The use of the “sector” concept in development planning is discussed in Robertson (1984: 115–20). 13. Development economists’ distinction between formal and informal sectors is often traced to Keith Hart’s use of the concept “informal economy” (1973) and to the International Labour Office’s 1972 publication on Kenya, but the idea carries on older traditions too in Euro-American dualistic thought. In later work, Hart warned against oversimplistic or uncritical application of the dichotomy.

Chapter 2. Context for Credit 1. For fuller general introductions to western Kenya and the Luo people, see Ogot (1967), D. Cohen and Atieno-Odhiambo (1989), Mboya (2001), Shipton (2007, 2009), Francis (2000), and sources cited therein. Among works by well-known politicians, Barack Obama’s widely known memoir (2004) presents an unromantic introduction of both urban and rural Luo, including members of an educated elite, and there is a memoir under the name of Oginga Odinga (1967), first vice president of Kenya and father of Prime Minister Raila Odinga. For economic histories, see Hay (1972) and Kitching (1980). Readers of fiction could do a lot worse than to read novels or short stories by Asenath Bole Odaga, Grace Ogot, or Marjorie Oludhe Macgoye. 2. Counting human and large animal populations is problematic in Kenya and most of tropical Africa. Regional etiquette discourages doing it overtly. Intermarriage, interbreeding, and circulatory migration (something males especially engage in) all make enumeration harder still. Compounding the difficulty, since ethnicity in Kenya is as hot as any sort of political division, is the fact that whatever group is in power has a way of swelling in population on paper if not also in local parlance. 3. Many East African ethnic groups go by more than one name, and some, as commonly recognized, have nested subgroups. Luo have sometimes been called Nilotic Kavirondo, JoRamogi, or other names. Luhya is an umbrella category devised in the twentieth century to cover many named subgroups, speaking heterogeneous tongues. Some groups that can be classed as Maasai also go by Dorobo, Barabaig, and other names, depending in part on their mode of livelihood. 4. The period history in this chapter interweaves with those of Shipton (2009: esp. chs. 6 and 7) on land titling and mortgage finance—for instance, in the role of Mau Mau



in galvanizing policy shifts. Among works cited there on the period in Kenya, see especially ones by J. D. Von Pischke, on financial history more generally; H. W. O. OkothOgendo, on agrarian law; and E. S. Atieno Odhiambo, Bruce Berman, David William Cohen, Tabitha Kanogo, John Lonsdale, B. A. Ogot, and David Throup on political history. 5. Kenya did not settle on its own shilling as standard currency until 1966, three years after independence. 6. E. J. Leslie, for instance, Registrar of Cooperative Societies in 1949, noted local cash hoarding and jewelry buying in the deep countryside (in Ingham et al. 1950: 55–56). 7. Kenya Colony and Protectorate, Annual Report, 1928, 54. For later savings figures, see Hunt (1975) and Killick (1984). 8. Okoth-Ogendo (1978: esp. p. 312) describes the series of paternalist colonial antilending laws. Compare Cowan and Shenton (1991) on the same laws in British colonies in West Africa. 9. Kitching (1980: 298) describes early KFA lending. 10. Minutes, 24 December 1937. KNA 3/1794 (ADM. 7/5/2), Syracuse film 2800, reel 256, sec. 10. Except where otherwise noted, the archival references labeled ADM. (administration) and FIN. (finance) in this section from the KNA (Kenya National Archives) refer to documents readable on reels 256–57 and 325–27 in that microfilm series of “Daily Correspondence and Reports.” See the guide by Lohrentz and Solomon (1975). 11. Circular from Senior Agricultural Officer, Nyanza Province, to all District Agricultural Officers in the Province, 27 December 1937. Labeled Ref. No. FARM/2/127, in KNA 3/1794 (ADM. 7/5/2). Emphasis added. South Lumbwa District, later Kericho, was to be allowed only two loans. 12. KNA 3/1794 (ADM. 7/5/2), Syracuse reel 257. 13. The origin and meaning of the name Mau Mau are unclear. It may derive from the Mau escarpment over the Rift Valley. Shipton (2009: ch. 6, and esp. p. 273n.22) lists a number of basic readings on Mau Mau. 14. Letter from C. M. Deverell, Secretary, Development and Reconstruction Authority (in the Secretariat), to the Commissioner, African Land and Settlement, 16 July 1948. KNA 3/1794 (ADM. 7/5/2), Syracuse reel 256. 15. C. H. Williams, District Commissioner, North Nyanza, to Provincial Commissioner, Nyanza, 17 May 1949. KNA 3/1794 (AGR. 7/1/1, Vol. II), Syracuse film 2800, reel 256. The Member for Agriculture and Natural Resources estimated in 1951 that a rate of 8 percent would have been needed to cover costs; KNA 3/2533 (L.B./3/2/2/1), Syracuse film no. 2800, reel 257. 16. Kitching (1980: 192–95 and passim) describes the changing role of the Local Native Councils. 17. Member for Agriculture and Natural Resources, circular to all Provincial Commissioners. 1951. KNA 3/2533 (L.B./3/2/2/1), Syracuse film 2800, reel 327, sec. 10. 18. In all of Nyanza Province’s (then) five districts, 86 percent of 122 ALDEV borrowers were in arrears, altogether by 39 percent, on a total debt of Shs. 168,000. J. W. Howard, Executive Officer, African Land Development Board (ALDEV), circular to



all Nyanza Province District Commissioners, 5 February 1957. KNA 3/2533 (P&S 3/3/64/118), Syracuse film 2800, reel 327. 19. Not all the world brought about the first or second “world wars” or would wish to be identified with them. Nor were these the first wars of wide scale. From here on, though, I drop the quotation marks. 20. Only about fifty-five people in South Nyanza, or about one in ten thousand, borrowed under the GMR by 1966–67, whereas almost all Kenya’s large-scale farmers elsewhere did (Gerhart 1975: 12). 21. Pala Okeyo found no women among 135 GMR borrowers in Kisumu District, Nyanza, in 1974–75 (1977: 112; 1983: 73). 22. For more on the GMR scheme, see Ingham et al. (1950), Vasthoff (1968), Gerhart (1975: 11–12), Heyer (1976: 356–57), Hinga and Heyer (1976: 231), Okoth-Ogendo (1978: ch. 7 and passim). Some politicians have kept calling for a reinstatement of crop insurance—a popular provision, if one easily abused—up to the time of this writing. 23. Based on the administrative units called divisions (smaller than districts but bigger than locations), the SRDP areas included Vihiga-Hamisi, a mainly Luhya area just north of Kisumu, and (for loans to input stockists only) Migori-Kihancha, a mainly Luo- and Kuria-speaking area with new Maragoli immigrants in southern Nyanza near the Tanzanian border. 24. After the first year, when loans were issued free, the program charged 1 percent monthly interest (less than market rates in that time of currency inflation). 25. In Vihiga, about 927 borrowed, in a population of about 300,000. The average borrower’s estimated monthly non-farm income of 286 Shs. was over twice the 138 Shs. earned by the average nonborrower. Weisel (1974: 5–6; 1976); see also P. R. Moock (1973), IDS (1975: passim), and Chambers (1974: 80–81). 26. In a controlled experiment, about 6 percent of the borrowers were made to put up their land titles. As Peter Weisel summarized the compared repayment statistics, “it cannot be said that requiring security provided a significantly greater incentive to repay than when security was not required” (Weisel 1974: 7; 1976: Appendix I, 2; see also Institute for Development Studies 1973, 1975). 27. The most comprehensive assessments of the SRDP were compiled by the Institute for Development Studies (1973, 1975) and Peter Weisel (1973a,b, 1974, 1976). 28. Elsewhere (Shipton 2009: 134–40) I briefly describe early colonial Kenyan lending initiatives with land title security to “European” settler farmers and eventually “African” ones. Okoth-Ogendo (1991) describes more fully Kenyan colonial land laws and regulations.

Chapter 3. Three Faces of the Loan Epigraph. Bird and feather adage collected by Thomas Fuller (1732: 112, no. 2675.). Morgan quote from Wister (1930)—quoted in Bartlett’s Familiar Quotations, 17th ed., 2002, p. 567. 1. See LeVine et al. (1996) (on Gusii) and LeVine and New (2008) for rounded discussions of childhood and culture in Africa and elsewhere. Early chapters of Shipton



(2007) discuss local and rural-urban entrustment and obligation involving young Luo in Kenya. See Ostrom and Walker (2003), and especially Harbaugh, Krause, Lidav, and Vesterlund (2003) on children, for lab experiments elsewhere involving trust, confidence, reciprocation, and their breach. Cook, Levi, and Hardin (2009) offer more trust experiments. For a lighter yet trenchant treatment, see Atwood (2008: ch. 1). 2. De Waal (2003) is one of many researchers producing mounting evidence of moral sensitivity concerning some kinds of reciprocity, equality, and fairness (these last two are not always the same) among nonhuman species—in this case, chimpanzees. Hrdy (2009) presents a sweeping summary of findings on the role of shared nurturing (“alloparenting,” she calls it) and provisioning of young among humans (including foraging people and others in Africa), compared and contrasted with that among other animal species closely and distantly related. She links this sharing of care—and the need for even infants to be able to judge the characters and likely intentions of potential caregivers—to the evolution of human beings’ concern for the thoughts and feelings of others and ability to predict their responses. She finds this human capacity for mutual concern unusual among “primates,” far exceeding that in chimps or gorillas, for instance. Marmoset monkeys, though, and some of the species genetically distant enough to be deemed “nonprimates” show some patterns more like those of humans, both in shared nurturance and in evident attention to their conspecifics’ thoughts and feelings (be these proclivities inherited, learned, or both). 3. Neuropsychological research of late suggests brain plasticity, meaning, among other things, the ability of innate “wiring” and lived experience to influence each other in turn, such that abilities and functional areas of the brain can grow or shrink. See, for instance, Doidge 2007. 4. Driver and Miles (1956) remains a standard rendition and analysis of Hammurabi’s code. 5. On extended discussions on literacy for political control, in Africa and elsewhere, see Goody (1977, 1987); for the same in Ghana, see Hawkins (2002), much influenced by him, like many others. 6. Readers wishing general introductions to the long history of writing on credit and debt in English, especially in European traditions, can make a good start with Nelson (1949), Brook (2007), and Atwood (2008). These sources represent varied viewpoints. Readers wishing broader geographic and ethnographic coverage could do worse than to start with the pioneering collection of Firth and Yamey (1964). 7. Atwood (2008) too has perceived the moral-economic implications of Aeschylus’s Oresteia trilogy. 8. Adage on birds and feathers collected by Thomas Fuller (1732: 112, no. 2675). 9. All biblical quotations in this book are from the King James Version. 10. The Qur’an (Koran), Part IV, Sura III, “The Family of Imran,” verse 130. Here I have used Pickthall’s explanatory translation (1930). In some other translations or attempted translations, “doubling and quadrupling” appears as “doubling and multiplying.” Some Muslims, in Africa and elsewhere, maintain the Qur’an cannot be translated from Arabic. 11. Plutarch (1874: 412–24), quoted in Brook (2007: 4).



12. Aristotle (1977): I.iii.23: “For money was brought into existence for the purpose of exchange, but interest increases the amount of money itself [and this is the actual origin of the Greek word: offspring resembles parent, and interest is money born of money]; consequently this form of the business of getting wealth is of all forms the most contrary to nature.” 13. Brook (2007) presents one of the more compressed summaries available of theologians’ and philosophers’ views on interest and usury over the centuries and millennia. One must take account, though, of his strong, avowed pro-interest persuasion (pro-“usury” in the term’s old sense, though not necessarily in the new). 14. Fortunately, Nelson, in The Idea of Usury (1949), has saved us the huge task of recounting this history of the so-called Deuteronomic double standard by tracing it right from biblical times to his own. He does so, however, with a general conclusion one can take or leave: that after nearly two thousand years of divisions and disagreements, theologians of Jewish, Catholic, and Protestant faiths pretty much agreed by the late eighteenth and early nineteenth centuries that all such discriminations were bad, and that lenders should exact the same terms of all borrowers. This, as in his subtitle, is the movement from “tribal brotherhood” to “universal otherhood”—phrases with a ring decades ahead of their time. 15. Smith (1776: 146–47). 16. Arguably, neither Marx nor Engels explicitly advocated violence—even against those they deemed parasitic capitalist “vampires”—as part of socialist or eventual communist revolution. (Most of what is today broadly known as Marxism was appended to their philosophies by others—for instance, Lenin, Trotsky, Stalin, or Mao.) Nor did they disrespect supply and demand as principles of economic “law.” 17. Spencer was not by inclination an imperialist, it would surprise some to learn, but British and other European imperialists favoring free enterprise tended to take his texts and run with them in search of new markets for import and export. Elsewhere (Shipton 2009: ch. 2) I further discuss some of the political economists and philosophers discussed here, as influencing land and mortgaging in Africa. 18. In nearly all the United States, however, jailing continues for certain debts—for instance, for alimony, child support, or taxes, or for having committed fraud. 19. More is said elsewhere on Luo terms for borrowing, lending, and loan (Shipton 2007: esp. 78–80), and on some of their connotations. 20. “Where, in any proceedings in respect of any money lent by a money-lender . . . it is found that the interest charged exceeds the rate forty-eight per centum per annum, or the corresponding rate in respect of any other period, the court shall presume . . . that the interest charged is excessive and that the transaction is harsh and unconscionable” (Kenya Money-Lenders Ordinance of 1933, revised 1962, Ch. 528, Sec. 15, para. 1). Note that the statute takes no account of changes in the value of currency over time (inflation or deflation). And never mind who is involved or what the loan is needed for. 21. The difference between “ratio calculus” and “rate calculus” as idioms for conceiving of interest and judging usury is also treated, in the case of Gambian agropastoralists, in Shipton (1991, 1992b). Some of the same principles described there apply in western Kenya too. A big difference, though, is that the Gambia has been more heavily



influenced by Islamic tradition and western Kenya has been more influenced by Christian tradition. 22. What is said here about interest rates and currency value changing over time also applies to movement from place to place, especially crossing borders. 23. Sally Falk Moore’s writings (1984, 1986), amplifying this point, emphasize the manipulability of black-letter law in enforcement and other practice, and the great discretionary power judges and juries so wield. 24. Among the pithiest and most entertaining summaries of fiction writers’ “takes” on borrowing and lending, and interest and usury (especially in the English tradition), is Atwood’s (2008). 25. Other terms for the seesaw principle—one’s gain is another’s loss—include “zero-sum game” and, in the words of anthropologist George Foster, the “image of limited good.” 26. John Stuart Mill (1848: Book III, Ch. 11, p. 31). 27. From George Bernard Shaw, the Fabian gradualist reformer, in The Intelligent Woman’s Guide to Socialism and Capitalism (1928: 247). How many women and men might have benefited by heeding these words? 28. This theme is not new but still undertreated, even after being incorporated into Susan George and Fabrizio Sabelli’s (1994) sharp general critique of the World Bank. 29. Atwood (2008: 81). This novelist on a break perceived much about credit and debt that many specialists miss—perhaps because she had not been trained what not to wonder and say. 30. Brook, again, a proponent of interest-bearing loans for commerce and industry (2007: 2–3). 31. While Adam Smith’s “invisible hand” is a familiar metaphor, not all know that he used it in three different writings, in three different ways. In only the most famous, The Wealth of Nations, does it create wealth from different parties’ self-interest. In the earlier, philosophically more complex book, The Theory of Moral Sentiments, it distributes it. The third usage, in a more obscure study, had a classical religious reference. 32. Robertson (1984: 69–74) details early U.S. aid and development agencies rolled into USAID. 33. Some of the Public Law 480 programs administered under the U.S. Department of Agriculture and the Commodity Credit Corporation (CCC, established 1933 and within the U.S. Department of Agriculture [USDA] since 1939) have involved loans to certain favored governments, though, of food or other agricultural commodities with up to thirty years for repayment (in monetary or whatever form). The 1985 Food for Progress Program (FPP), set up in 1985, is one of these. 34. Kapur, Webb, and Lewis (1997a, b) present a weighty two-volume narrative history and set of thematic essays on the World Bank written largely from outsider perspectives, representing several disciplines. For a few sharper critiques, see those of Payer (1982), Ferguson (1990), S. George and Sabelli (1994), Goldman (2005), or Easterly (2006), to name only a few. 35. This estimate may have originated, though, in only one participant’s report. See Kapur, Webb, and Lewis (1997, vol. 1: 58) and Goldman (2005: 53).



36. This circularity of the World Bank’s way of defining problems in such a technical way that only the Bank can provide technical solutions is a main theme of Ferguson’s critique (1990) and of others later, including Goldman’s (2005) and Easterly’s (2006). 37. Statements like “over a billion people still struggle to survive on a dollar a day” have long abounded in prominent parts of World Bank publications. (This one is taken from its main informational Web site, intro.php.) The statement can be, and has been, criticized on various grounds, including issues of quantifiability, commensurability, and currency choice, as well as of subtler innuendo of belittlement. Critics feel it to be too reductive all around. 38. It might be said that the U.N., too, has a political geography built on inequality because it has a single headquarters in Manhattan—but its having its specialized agencies headquartered in other parts of the world would mitigate the charge. 39. On the McNamara years in particular, see Kapur, Webb, and Lewis (1997a: chs. 4–5). 40. See Needham (1975) for a discussion of the versatile idea of polythetic classification, taken in part from biologist Michel Adanson and from philosopher Ludwig Wittgenstein (who used the term “family resemblance”). This idea is applied to Luo and East African context in Shipton (1989a: esp. 55–57) and to modernization theory in Shipton (2009: 46, 259n.32). 41. Scholarship typifying 1960s modernization theory, much of it influenced by Talcott Parsons, includes works by Neil Smelser, S. N. Eisenstadt, David McClelland, Walt Rostow, Guy Hunter, and the young Clifford Geertz, to name but a few. For metatreatment of 1950s and 1960s modernization theory, as applied to rural development, and of where it fits into intellectual history, see Long (1977) and Robertson (1984). Basically, where it fits is built atop nineteenth- and early twentieth- century evolutionism, following interwar functionalism (which tended to favor stasis and equilibrium), but subject before its end to highly critical “dependency” approaches. 42. Chenery et al.’s famous book that was emblematic of the McNamara-era World Bank was indeed titled Redistribution with Growth (1974). 43. Kapur, Webb, and Lewis (1997a,b) and Goldman (2005), the latter inspired by Michel Foucault, describe many ways the World Bank spread its influence—and “neoclassical” economic hegemony—in this period through an emerging network of development research and consulting bodies it funded, economics departments it helped train with short courses, and ministries whose policies it influenced by loan conditions. 44. The Cornell Vicos project was organized by anthropology professor Allan Holmberg and colleagues, including Mario Vásquez and other Peruvians. They achieved renown as modernizers (as portrayed in the film So That Men Are Free), although before long some neo-Marxist dependency theorists criticized the project for certain presumptions and gambles. 45. Leonard (1977) treats outreach policies and presumptions from a political scientist’s perspective. 46. J. M. Cohen (1980a, 1987) critically discusses meanings of “integrated” in development work, seen from without and within. See also Chambers (1974), Honadle et al. (1980), and Robertson (1984).



Chapter 4. Plans and Dreams 1. Before 1972, USAID had been the world’s largest lender for agriculture. See Bathrick (1981: 23) on the relative positions of the World Bank and USAID. 2. McNamara quoted in Bathrick (1981: 13), World Bank (1975: 7). Other agricultural economists followed the Bank’s call for more credit. See, for instance, Bunting (1970), United Nations Food and Agriculture Organization (1976: 6), and Streeten (1981: 125). 3. As some of the project planning documents on which this chapter is based were shown to me in confidence, not all can be cited individually or their authors named. The funding agencies and implementing ministries do, however, keep their own archives, where researchers seeking more detailed historical particulars may be allowed access. 4. By 31 December 1975, the World Bank Group had extended just over U.S. $521 million in loans, credits, and investments to Kenya, more than to any of these countries: Botswana, Burundi, Ethiopia, Lesotho, Madagascar, Malawi, Mauritius, Rwanda, Somalia, Sudan, Swaziland, Tanzania, Uganda, Zaire, and Zambia. The total for all these countries, plus the East African Community, which consisted of Kenya, Uganda, and Tanzania, was just over U.S. $3.1 billion. Source: World Bank. 5. IADP Phase I and SPSCP initially linked different parts of the country to different international lending agencies for the purposes of accounting at the higher levels. SPSCP loans were first issued in 1976, a year before the Integrated Agricultural Development Project began. The areas covered by the schemes changed somewhat from year to year. In western Kenya, some farmers received loans under one scheme one year, and under the other the next. In this and the following chapters on the program and its component projects, the terms participant and borrower refer to someone who borrowed under either the IADP project or the SPSCP at any time. Nonparticipants are the control group. 6. Editors of government documents about the umbrella IADP “programme” understandably found it hard to keep straight which projects came under it and which did not. The usual convention was to exclude the Cooperative Production Credit Service (CPCS), begun in 1972, but include the Smallholder Coffee Improvement Program (SCIP), begun in 1979. Neither of these is analyzed in detail here. 7. At official exchange rates the Kenya shilling fell from about U.S. $0.124 in 1976 to about 0.083 in 1981. The Kenyan pound, less often used in official calculations, is worth twenty shillings. 8. The World Bank’s official design for the IADP, which incorporated Phases I and II, was ultimately spelled out in Staff Appraisal Reports, but these reports represented only a consensus of many diverse opinions and designs, sanitized of politically contentious content. 9. Kenya (1979: Part I, p. 240). 10. Siaya, Kisumu, South Nyanza, Kisii, Kakamega, Bungoma, Busia, Meru, Embu, Machakos, Kiambu, Kirinyaga, Murang’a, and Nyeri. 11. Siaya, Kisumu, South Nyanza, Bungoma, Busia, Kakamega, Embu, and Machakos.



12. The planners calculated in terms of “families” and “holdings,” estimating an average of 1.25 “families” per holding. 13. According to a World Bank estimate, the IADP and the Smallholder Coffee Improvement Project combined would directly benefit up to a quarter of a million farm families. 14. The application of these rules varied considerably from one district to another. In parts of the most crowded districts, like Kakamega and Kisii, where few farmers had access to as much as two hectares, landholding requirements were apparently waived altogether. 15. Source: World Bank RMEA. The project plans did not spell out how income would be calculated or measured. 16. Source: World Bank RMEA. 17. See the IADP and SPSCP annual Work Plans in Kenya, Ministry of Agriculture (1976/77–1981/82). 18. Compared with the IADP-SPSCP nominal interest rate of 1 percent per month (that is, 12 percent per year, not compounded). In contrast, here are the annual Kenya shilling inflation percentage rates reported in IADP-SPSCP years: 9.9 (1976), 12.7 (1977), 12.6 (1978), 8.4 (1979), 12.8 (1980), 12.6 (1981), 16.4 (1982), 14.6 (1983). Source for latter: Central Bank of Kenya, Economic and Financial Review. 19. See the IADP and SPSCP annual Work Plans in Kenya, Ministry of Agriculture (1976/77–1981/82). 20. At constant 1975 prices. Off-farm and non-agricultural income were included in the latter estimates. Source: World Bank RMEA. 21. The planners estimated that before the project, smallholders concerned were already hiring local hands for an average of ninety-six man-days per year, per holding. The project would increase the figure by 138 percent to 228 man-days per year in the higher-altitude zones and by 231 percent in the lower zones (source: World Bank RMEA). The planners expected most of the land preparation to be done with hoes. They felt that labor was abundant enough to meet the heightened demand. The plans did not state what kinds of people might constitute the large available labor force or how their going to work for the project participants and possibly relying more heavily on cash incomes might affect their own farms and lives. The fact that labor expenses were originally estimated at five Kenyan shillings per man-day, which was close to the minimum casual wage rate in much of rural Kenya during the project years, suggests that the planners had a relatively poor economic stratum in mind. Little attention was paid to the relationships of participants to nonparticipants in general. 22. The plans for IADP Phase I predicted incremental production of some 81,000 tons of maize, 56,000 tons of passion fruit, 36,000 tons of potatoes, 6,000 tons of beans, 2,000 tons of cotton, 7,000 tons of beef, and 34 million liters of milk. Source: World Bank RMEA. 23. The cooperative model can be traced back over centuries and doubtless to many parts of the world, but many twentieth-century cooperatives were styled after the famous Mondragón cooperative set up in 1956 in the Basque country and spread through



Spain. (At least, that model was safer to admire around American-controlled aid agencies than were other close models in socialist countries.) 24. Hyden (1973) treats the successes and failures of cooperatives in Tanzania, as do Bager (1980) and Gyllstrom (1991). Some of the cooperatives’ strongest bilateral government backers and closest academic analysts have been Scandinavian. 25. Bates (1981, 1983) and Hart (1982) offer critiques of state-controlled cooperatives in East and West Africa, respectively. 26. To flash forward, by the early 1980s, when the era of “structural adjustment” began, the Bank and the IMF were attempting to force African governments to dismantle cooperatives and other state- controlled bodies in favor of private enterprises. That the World Bank had helped build up the cooperatives did not much matter. 27. Funds would go first from the Treasury to the government’s Cereal and Sugar Finance Corporation and then to the Co-operative Bank of Kenya, which was under the authority of the Ministry of Co-operative Development. From there they would pass down through the existing hierarchy of the cooperatives, or, for a few better-off applicants, through the Agricultural Finance Corporation (AFC). Farmers would collect their material inputs at their cooperative society offices or with vouchers at the nearest branches of the Kenya National Federation of Co-operatives (KNFC), Kenya Farmers Association (KFA), or other suppliers. Farmers would get their cash from the cooperatives or the AFC. 28. Of the many critics of international development finance who have expressed views like these, Frank, one of the fathers of the Latin-American born dependency theory (1967: esp. Part 5), and Lipton, known for his “urban bias” theory (1977: 297– 303), are perhaps best known. Leys (1975: esp. 65–73), Arnold (1979), Swainson (1980), Payer (1982: ch. 2), and Buch-Hansen and Marcussen (1981) are among those whose criticisms of foreign-biased or urban-biased agricultural aid projects touch on Kenyan cases. The last two focus on activities of the World Bank. 29. Some of the Nairobi government officials involved in the project’s planning and execution were themselves among the farm owners who took IADP-SPSCP loans once the project got under way. Thus it would be difficult to draw any clear distinction between “exploiter” and “exploited” groups. Of course, some of the project planners and administrators in Nairobi or other cities and towns might have profited from the project in other ways. 30. Quote from Bates (1983: 127); see also Bates (1981). 31. According to the most generous estimate for the IADP Phase I, about 40,350 farmers participated by the first quarter of 1980 out of the 70,000 that this phase of the project was originally expected to reach by 1981 (Livingstone 1981b: 11:5). My information from the ministries and donor agencies, and from field observations, suggests that the number of farmers who received full sets of material inputs was considerably lower. Findings obtained for SPSCP were very similar. 32. Source: Kenya Ministry of Agriculture, Monitoring and Evaluation Unit. 33. Source: World Bank RMEA. 34. Source: World Bank RMEA.



35. Of the three IADP-SPSCP settings we studied, Uyoma, being the one of lowest altitude, was the one in which the highest proportions of land and labor time were devoted to cotton and groundnuts, which are lower-altitude, warmer-climate crops. Isukha was the setting where the most coffee and tea, which are higher-altitude, cooler-climate crops, were grown. (Of these crops, tea grows somewhat higher than coffee, although their zones overlap.) Otherwise, most of the crops the three localities grew were the same: maize, sorghum, millet, and beans were main staples in all. Cattle, sheep, and goats were also raised in all, although these animals figured more importantly in the lowland than the highland economies, where steadier and heavier rainfall allowed crops to grow more reliably and where higher human population densities tended to have crowded animals out. 36. Note on sampling method for our study of IADP-SPSCP project areas, within our broader study: the fact that IADP-SPSCP project participants lived scattered throughout their locations required using a special sampling method for the three project locations studied (Kagan, East Isukha, and West Uyoma). Interviewing in every home in a tightly circumscribed area—the method my research assistants and I used in Kanyamkago—would have brought in too few participants in these sites or elsewhere to yield much information about the project, so for these farther areas we chose a stratification method instead. We obtained project participant lists from the cooperative societies or unions concerned. We identified borrowers’ sublocations and homesteads with the help of local cooperative society officers, assistant chiefs, and elders. In each of the three project locations there were more participants than could be visited in the time available. Sample areas were therefore reduced by sublocations or parts thereof until each was a contiguous block containing just over twenty-five participants; these people or other members of their homesteads were then interviewed, in single or repeated visits. Although sticking strictly with borrowers themselves would have meant interviewing men almost exclusively, we wanted a good representation of men and women, including people too old or immobile to have been borrowers. For each homestead with an IADP-SPSCP participant, we interviewed someone in a corresponding homestead belonging to a nonparticipant. We chose someone living in the home nearest to a fixed short distance (sometimes just estimated) from the participant’s, in a compass direction that rotated ninety degrees each time in order to minimize inadvertent ecological or economic biases. (Where following this procedure would have indicated a home outside the participant’s sublocation, however, the direction was reversed to allow us to stay within the sublocation.) These people served as a “control group.” We endeavored to interview comparable proportions of “homestead heads” and others, and of men and women, in the participant and nonparticipant samples. In the Kagan location, a medium-altitude location between the lakeside and the highest hills of the region, and one in which the Luo language predominates, we visited thirty-three project “participants” (that is, members of borrowing homesteads, whether the person interviewed was the actual listed borrower or not) and thirty-three “nonparticipants” (who could as well be called “independents,” as far as the credit project was concerned). In the West Uyoma location, a lower-altitude, lakeside location that was also predominantly Luo-speaking, we interviewed twenty-four participants and twenty-four nonpar-



ticipants. In East Isukha, a higher-altitude, hilly location where the predominant language is the Sukha language within the Luhya language group (classed in turn under the broader Bantu language family) we interviewed twenty-five participants and twenty-five nonparticipants. Totals were eighty-two participants and eighty-two nonparticipants, for a grand total of 164 representatives of homesteads in areas covered by the IADP-SPSCP. (Beyond these men and women whom we interviewed and enumerated as representing their homesteads, we also spoke with other homestead members in many cases, just as I and others assisting me spoke with countless other people outside project areas.) The homes lay at varying distances from roads, shops, cooperative society offices, and other infrastructure; we went wherever our chosen sampling method for studying this project took us. Farmers’ recollections of project participation dates were checked against cooperative records to verify both. To keep the IADP-SPSCP project in perspective, it must be remembered that although it was the government’s and funding agencies’ big attempt to reach those they deemed the rural poor—and many officials in both saw little of these people except through the project—it touched only a small fraction of that population directly. Our sampling method allows us see who those people really were and how their borrowing affected their lives, by comparing them with their much more numerous neighbors.

Chapter 5. Lenders and Lineages Epigraph. John Gerhart’s wry observation (1975: 38), written after experience with the Kenyan Special Rural Development Programme, came out just before the start of the IADP-SPSCP. 1. These cases required analysis by sublocation, since each location contained one cooperative society headquarters. Here again, no environmental or other difference within the societies’ areas seemed to warrant an uneven distribution of loans. 2. Migot-Adholla (quoted in Hyden 1973: 191) had observed the same of tractorplowing services in a Sukuma cotton cooperative in northern Tanzania in the 1960s. Primary society committeemen supervising the drivers used the services as a way of rewarding their supporters, to gain reelection. Migot-Adholla found that the committeemen concentrated the plowing on farms right around their homes. 3. Whereas cooperative officers seemed to lend more heavily right around their homes, a commercial bank lender appeared to have handed out land-tied farm loans in a different pattern, a doughnut ring around his own home, excluding his closer kin and clansmen but focusing heavily on neighbors just a bit more distant. The bank lender may have chosen not to get involved with his kin in eventual land mortgage foreclosures, while the IADP-SPSCP, requiring no collateral, raised no such fear. 4. Hyden (1973: 86) describes an analogous subdivision struggle at the level of the cooperative union in Meru District in 1969. 5. Whether the chairmen or other officers actually “borrowed” more than they recorded, however, is impossible to tell. 6. Social scientists who have tried conducting random surveys with local assistance in segmentary (that is, branching) lineage societies will have encountered an analogous



conceptual difference. To a member of a local lineage, the selection of informants by numbers in a hat, points on a grid, or some similar method can seem irrational. It denies his or her fundamental understanding of how to get help. 7. The question translated to: “In your experience, what determines whether a farmer can receive one of these [IADP-SPSCP] loans?” Of 246 responses, including some farmers’ multiple answers, 28 percent referred to personal connections with officials, 25 percent to farm size, 15 percent to diligent farming, 11 percent to experience with new technology, 10 percent to wealth in general, 7 percent to early application, and 4 percent to other criteria. The proportion of farmers citing personal connections was somewhat higher among borrowers (32 percent of 136) than nonborrowers (23 percent of 110). 8. Like other Kenyans, Luo, speaking Luo or Swahili, use the word chai, tea, to mean a small payment for an expected service. 9. If offered voluntarily, a bribe is, to use Marshall Sahlins’s terms, a form of “generalized reciprocity” or “balanced reciprocity” in a social context where “negative reciprocity” might otherwise be expected (Sahlins 1974: 196–200). 10. The vast literature on landlord-tenant loans in India and other parts of South Asia is full of such desperation borrowing for purposes of consumption. See, e.g., Mitra (1983). 11. In one survey, women numbered about 25 percent of the persons deemed homestead heads in Nyanza Province and 19 percent in Western Province (see Fleuret 1981: 23). Of course, definitions and perceptions of homestead headship vary. 12. See Hyden (1973: 151) on the frequent frictions between young Kenyan cooperative society leaders and elders on their committees. 13. While cooperative society officers and JAAs often claimed that farm size mattered most, they cited their rules inconsistently, and it turned out upon deeper interviewing and cross-checking that in fact they had almost never measured farmers’ fields. Measuring was hard for them to do, since many holdings are fragmented. The extension agents remembered some minimum hectarage requirements, but either never learned or forgot the maximum (8.5 hectares, by the early 1980s) that the Nairobi IADP-SPSCP planners had stipulated. The poorest farmers were screened out, but not the richest. 14. An important index of wealth in the areas studied is ownership of, or access to, means of plowing. In the Kagan sample, 67 percent of the participants owned both plows and draft animals; 57 percent of the nonparticipants owned both. In the East Isukha sample, 52 percent of the participants owned both, versus 43 percent of the nonparticipants. Since my observations were made toward the end of the project, the differences may have been due in part to project participation itself. But because most participants borrowed from the project for only one year, and few seem to have benefited greatly from it, it is unlikely that project participation explained most of these differences. 15. Although the relatively well-off were attracted to IADP-SPSCP credit for several years, in 1980 and 1981 they tended to switch to the New Seasonal Credit Scheme. (Government policy stipulated that farmers could not take loans from two projects at once.) They changed because the New Seasonal Credit Scheme used landholding size



as the determinant of loan amounts and because this scheme had a higher ceiling than IADP-SPSCP. A South Nyanza farmer with four hectares (ten acres) available, for example, could borrow K.Sh. 7,500 in 1980–81 under the New Seasonal Credit Scheme as opposed to a fixed maximum of K.Sh. 1,056 under IADP-SPSCP. 16. In the case of cotton, it was not possible to determine to what extent the higher involvement of the participants by the time of my study was due to the effect of the project itself—cotton was a part of the Kagan and West Uyoma crop packages, and most farmers who grew it had done so sporadically in the past. But coffee and tea in East Isukha were not part of IADP-SPSCP crop packages. These are therefore more useful as indices of the higher involvement of IADP-SPSCP borrowers than nonborrowers in cash cropping, apart from the project’s own effects. Coffee growing correlated strongly with project participation (chi-squared = 4.58, significant at p ≤ 0.05; Yule’s Q = 0.78, a strong positive correlation; n = 49, one case unclassifiable). Tea growing correlated less strongly with participation (chi-squared = 3.68, a correlation insignificant at p ≤ 0.05; Yule’s Q = 0.35, a moderate positive correlation; n = 49, one case unclassifiable). 17. The relation between wealth and cash cropping is not a simple one. Wealthier farmers appeared on the whole to have devoted larger plots (in absolute terms) and larger proportions of their farms to cash crops than poorer farmers did. Poorer farmers appeared, however, to be about as likely as wealthier ones to grow something of the cash crops, even if only in very small scale. In both Luo and Luhya areas there were many relatively poor farmers who grew a few coffee trees, or a few cotton plants, in a small corner of their farms. Thus, while wealthier farmers tended on the whole to be cash croppers, cash croppers were not always wealthier farmers. 18. Here I use the terms bias and skew to mean departure from random distribution, without intending to impute moral lapse on lenders’ or borrowers’ part—something I prefer to leave here to the reader’s own judgment. 19. In lending agencies, a common response to the problem of richer farmers’ monopolizing loans is to shut off the tap. My findings on the IADP-SPSCP suggest that an alternative is to increase the flow of loans, reducing their size if necessary, until they are numerous enough to reach other farmers as well. Of course, this may work only if there are guarantees that larger farmers cannot take multiple loans at once. 20. By the same principle, selection criteria for a random field of borrowers (by birthdays, for instance, if they were evenly distributed and verifiable) might be usable to reduce economic biases in borrower selection. Restricting loans to farmers born from April to June might encourage a more even distribution of loans among rich and poor. 21. Some of the cooperative officers had issued loans to their own wives. 22. That credit could have been distributed this way without reaching many women or young men suggests that questions of equity cannot usefully be addressed by reference to just a single criterion. 23. Figures on loan amounts transmitted are based on CBK and union records. 24. Comparing the reports of the CBK, unions, and societies suggests that the heaviest losses occurred at the level of the unions. 25. The Kakamega District cooperatives were perhaps the most notable example



in western Kenya. Here twenty-two out of twenty-four participating societies were cut off completely from IADP-SPSCP funds by the beginning of 1979, three years after the project had begun. 26. The Co-operative Bank of Kenya cautiously refused to issue loans to the many project cooperatives under its wing that seemed financially unsound, until the Ministry of Agriculture and the government as a whole guaranteed the loans (Leonard 1984: 182). 27. Farmers were asked, “From what you have seen, would you say there are some problems with these loans for the farmers?” (If yes) “What problems are there? . . . Which is the biggest problem?” Of the farmers who said there were problems, 64 percent in Kagan, 78 percent in West Uyoma, and 70 percent in East Isukha cited the delays as the biggest. Participants and nonparticipants tended to respond similarly to these questions. 28. In a series of district maize husbandry trials in western Kenya in 1966 and 1967, A. Y. Allan found that after the rains began, each day of delay in planting could mean a loss of as much as eighty-five kilograms per hectare (seventy-five pounds per acre) in yields in an otherwise good harvest. See Harrison (1970), Gerhart (1975: 6), A. Allan (1971), and Acland (1971: 128–29) for more details. 29. Farmers who had received cash in their loans were asked, with reference to their most recent loans, “Do you remember what you did with the money? . . . What did you do?” Eleven out of thirty-two Kagan respondents, and four out of twenty West Uyoma respondents, indicated having used at least part of their loan funds on non-farming purposes. The true proportions were probably higher. Doubtless some had spent bits on agriculture, bits on clothing, bits on travel, and bits on hospital fees . . . and no longer clearly remembered where it had all gone. Few admitted to spending on commercial sex workers (prostitutes), but then, these were commonplace in provincial town bar-hotels. 30. A coffee cooperative society in southern Kakamega District habitually refused to accept late IADP credit, except top-dressing fertilizer, which its farmers took to use on coffee rather than on maize as prescribed. These loans were repaid almost fully, and the cooperative officers concerned were quite happy with the adaptation. 31. On the tug-of-war between officials and farmers on uses of farm inputs, see also Leonard (1984: esp. p. 180). Note that vouchers are a specialized currency, rather like old-fashioned Tiv brass rods or Luo iron wire that some European development planners have deemed more “primitive” than money because of their restricted uses. Or like theater tickets.

Chapter 6. Untying a Package Deal 1. Pearse (1980) and Bayliss-Smith and Wanmali (1984) survey the achievements and shortcomings of green revolutions in poorer countries, many repeated since. 2. Much of what follows on extension and training holds too, mutatis mutandi, for the livestock ministry, which has periodically shifted in and out of the agriculture ministry. 3. Extension could, of course, mean monitoring and surveillance of rural people’s lives more generally, for whatever salutary or sinister purposes the Ministry or other



branches of government intended. But this line of argument finds easier application in irrigated areas than in rain-fed ones, where settlements are less typically dense and interventions less intensive. The IADP-SPSCP did not in itself add extension staff to the Ministry’s ranks; it mostly gave an added responsibility to existing extension agents. 4. The term farms in government and aid agency documents referred to rural homesteads and fields their members controlled, contiguous or not. The figure of one extension agent per 310 farms was based on a rough estimate of 1.7 million “farms” in Kenya; see Heyer and Waweru (1976: 205) and Gerhart (1975: 8); cf. Leonard (1977: 9–11) and United Nations International Labour Office (1972: 154). Tanzania, by contrast, had only about one agent per 588 farms overall in 1974 (Boesen and Mohele 1979: 126), and Ethiopia had only 124 for a population of 22 million in 1968 (Lele 1975: 67). But the Kenyan overall ratio was low compared with local ratios attained by specialized private cash-cropping agencies in parts of Kenya and other countries. 5. Before the IADP-SPSCP, a 1973 study found 27 percent in the Luo districts and Busia receiving extension visits in a year, while about 40 percent had received them in higher-altitude districts of western Kenya during the same time (Gerhart 1975: 40). 6. Marco Surveys Ltd. (1965: 6), Gerhart (1975: 8), Leonard (1977), and Alila (1978). 7. Although SRDP experimentation suggested group-based extension to be more effective than individual visits, extension services in the IADP-SPSCP years slid back to earlier methods of individual visits. A likely reason was staff discontinuities in the aid agencies and ministries. 8. The JAAs, who did most farmer contact work, normally held no official technical qualifications; their immediate superiors, the locational agricultural assistants (AAs), commonly held two-year certificates in agriculture (see Leonard 1977: 11 ff.). 9. Staudt’s research (1976, 1977) among Luhya in Idakho, southern Kakamega District, showed that extension services had consistently discriminated against female homestead heads despite their appearing as willing as men to adopt innovations. The bias increased with the value of services. It obtained with wealth and landholding size held constant. More direct attention to women, though, has lately been paid as a result of the general women’s movement and new trends in microfinance, discussed later. 10. By contrast, in much of western Kenya, including the East Isukha and Kanyamkago research sites, the Kenya Tea Development Authority, British American Tobacco, and other specialized cash-crop organizations required farmers to keep notebooks in which their extension agents recorded the dates of their visits, their remarks, and their signatures. Higher officers could use these records for spot checks. In the cases of tea in East Isukha and tobacco in Kanyamkago, extension services were much more reliable and more satisfactory to farmers than IADP-SPSCP extension in the areas visited. 11. Bribery may have reduced inequities in the distribution of extension services by allowing some farmers access who would not have had it otherwise (Leonard 1977: 187– 88, after a thesis by Solomon Njooro), just as “nepotism” and bribery may have done in allocation of loans from the cooperatives. But because the rich can afford more and bigger bribes than the poor, “nepotism” makes a better case than bribery. 12. See P. R. Moock (1973: 259) on intercropping in the Vihiga SRDP experiment; cf. Richards (1985) on Sierra Leone.



13. On extension agent–farmer class alliance, see Velsen (1973); see also Chambers (1974: 58). On the “squawk factor,” see Leonard (1977: 177–78, 188–90). 14. In Nyanza Province, 56 percent of 222 IADP-SPSCP participants sampled in the MOA/MEU surveys said they attended no baraza at all in 1978; 68 percent of 204 said they attended none in 1979 (Kenya, Ministry of Agriculture; Monitoring and Evaluation Unit [hereafter MOA/MEU] 1981b: 68). Proportions of nonattenders are higher for Luoland than for the nation as a whole (see MOA/MEU 1981a: 20). 15. Haugerud (1995) examines the baraza as state ritual and locus of political theater. 16. The Ministry of Agriculture’s own survey findings confirm my impressions on this. In Nyanza Province, as many as 87 percent (194) of 222 IADP participants it sampled said they attended no demonstrations at all in 1978; 89 percent (201) of 226 attended none in 1979 (MOA/MEU 1981b: 68). 17. Chambers (1974: ch. 3) provides a sensitive and sympathetic discussion of the predicament of extension agents and their supervisors in Kenya. 18. Similar local communication breakdowns occurred between the Agricultural Finance Corporation and Ministry of Agriculture extension staff under the New Seasonal Credit Scheme. 19. The problems of farm extension services in Kenya, for farmers and government officials alike, have been closely paralleled in other countries in Africa and elsewhere ( J. Wilde 1967; Chambers 1974: ch. 3; 1983; Lele 1975). From 1983, upon the end of the IADP-SPSCP, the Kenya government experimented with the “training and visit” system of extension, a vogue that swept many countries under World Bank influence. Its basic idea was the selection of key “contact farmers” who, being regularly visited, were expected to spread information and advice to their neighbors. (See Benor and Harrison 1977.) The claim in the World Bank News on 16 June 1983 that “about 1.7 million farm families will benefit from the T & V system” under the $21 million scheme would not be borne out in the decade that followed. 20. Livestock were also called farm enterprises. IADP-SPSCP packages included livestock technology in some areas, but not in areas discussed herein. 21. The holistic “farming systems” school of thought, which emanated mainly from Germany and the United States in the 1960s and early 1970s, is explained and exemplified in Collinson (1980) and Shaner et al. (1981). 22. Similarly, in other parts of Africa, cocoyams or arrowroot have not received anything like the foreign attention that rice, or even tomatoes, cabbage, or onions, have received. 23. Feder’s long list of constraints to the rapid adoption of new farm technology in developing countries omits possibilities like these (1982: 1). 24. “Night harvesting” in western Kenya is also discussed in Paterson (1980a: 28). Separately: on the fears of witchcraft accusation, the case could be overstated. Luo farmers who pass a certain threshold of wealth appear to stop worrying about sharing with other homesteads and about possibilities of jealousies and witchcraft. They know that if they become objects of witchcraft, they can hire their own magicians for protection. The British American Tobacco program in smallholder tobacco farming, simul-



taneous with the IADP-SPSCP, showed that many Luo farmers who perceive strong chances for great rises in farm profits will often do just about all they can to attain them. 25. On rates of hybrid maize diffusion in western Kenya, see Gerhart (1975: 22) and Collinson (1977: 11). For a rounded historical study of the crop’s spread across Africa more generally, and of its implications for ecology, nutrition, and health, see McCann (2005). 26. In this study, “adoption” means the use of a new input or method for one or more seasons, unless otherwise specified. 27. Later came other strains for lower zones. The Katumani composite from eastern Kenya, which matured in only about four to five months, was perhaps the most drought-resistant of all the new strains to date. For more on maize types in Kenya, see Harrison (1970), Sprague (1970), Acland (1971: 124–33), Gerhart (1975: 4–5), Kenya, Ministry of Agriculture (1980), and McCann (2005). Produced and distributed by the Kenya Seed Company, Ltd., seeds were available to farmers at controlled prices through the Kenya Farmers Association (KFA) rail outlets, the cooperatives, and private shopkeepers appointed by the seed company and KFA. 28. In Kenyan district variety trials in 1966 and 1967, hybrid seeds produced between 30 and 80 percent higher yields than local seeds, without fertilizers, and over 300 percent when fertilizers were added under controlled conditions. The higher the altitude and the better the rainfall, the greater the differences in yields between hybrids and local maize. See Harrison (1970: 45–47), which is the best single, concise treatment of the data from the A. Y. Allan trials. See also Sprague (1970: 93–94), Acland (1971: 131), Gerhart (1975: 5–7, 23, 26–27, and passim), and Institute for Development Studies (1975: 2-18, 2-19). 29. An attempt to approximate “poor” husbandry in the western Kenyan district variety trials of 1966–67 yielded almost 50 percent more maize per hectare than the average real farm yield! Harrison (1970: 47) and Gerhart (1975: 5). 30. E.g., S. Johnson (1980: 147) and Paterson (1980a: 15). These studies did not control for fertilizer use for this point. 31. We found that in 1981–82, a ten-kilogram bag of hybrid seed alone, enough to plant about one acre (0.4 hectares), sold for K.Sh. 55, about as much as a southern Nyanza farmer could earn in eleven days’ casual farm work. 32. S. Johnson’s Suba survey (1980: 148) determined that whereas hybrids outyielded local strains in the 1976 long rains, the local strains yielded 16 percent more than the hybrids in the short rains (an average of 1,892 kilograms per hectare, as against 1,611). 33. As Gerhart showed with his thorough 1973 survey of 360 randomly selected farmers in eleven districts of western Kenya (Gerhart 1975). Others have confirmed his findings; see Sprague (1970), Hesselmark (1975), Collinson (1977), P. R. Moock (1973), S. Johnson (1979, 1980). The figures on seed adoption are striking. Estimated acreages in hybrids in Kenya rose from less than two hundred hectares to over 300,000 in the first decade (Gerhart 1975: 47); sales of hybrid and Katumani composite maize seeds rose from 3,640 kilograms in 1962–63 to 7,145,000 kilograms ten years later (Kenya Seed Company Ltd. 1984–85).



34. By 1973, Gerhart found, 67 percent of the 360 randomly selected farmers he surveyed said they planted more than half of their maize fields in hybrids (Gerhart 1975: 28). Figures on nationwide hybrid and composite seed sales of the Kenya Seed Company continued to rise through 1984/5, though at a tapering rate; just over eighteen million kilograms were sold that year (Kenya Seed Company Ltd. 1984–85). See also Rundquist’s updating (1984). 35. Gerhart (1975: 5) describes some great problems of yield assessment on Kenyan smallholdings. 36. Leonard’s analysis of government statistics (1977: 175) positively correlates cash cropping and “upgraded” cattle ownership, on the one hand, with hybrid maize uptake, on the other, in western Kenya by 1970. P. R. Moock (1973) likewise correlated such technological innovation to salary earning among home dwellers in South Maragoli. See also Anthony’s political critique (1988) of East African maize and machine use. 37. Gerhart concluded the same (1975: 12–13, 50–51). 38. Institute for Development Studies (1975: chs. 2, 7); Livingstone (1981a: 323); S. Johnson (1980: 262). The SRDP promoted hybrids in Vihiga and Hamisi Divisions in southern Kakamega District and the Migori subdistrict (composed of three divisions) in South Nyanza District, composing about 10 percent of their respective provinces, Western and Nyanza. In only one of these two areas, Vihiga-Hamisi, were loans actually made to farmers: the Migori-Kihancha scheme merely supplied seeds and fertilizers to stockists. In Vihigi-Hamisi, where the proportion of hybrid users rose by 39 percent between 1970 and 1973, no more than 3 percent of the homesteads could have received loans, and most of these had hybrids and fertilizers before the project had begun (Institute for Development Studies 1975: ch. 7, esp. p. 13). 39. Gerhart (1975: 28), Hesselmark (1975: 55), and Leonard (1977: 174). Gerhart and Hesselmark define “adopting” hybrids as planting over half one’s maize hectarage in them. 40. In our survey on the IADP-SPSCP, maize farmers were first asked what kind of maize they planted. Those who indicated local maize were asked whether they had ever tried hybrid seeds. Farmers who said they had tried hybrids were asked in what year they had first planted them. Where possible, their answers were verified against known historical events, like the building of a local rural access road or a local crop storage depot. The farmers’ answers were later compared with their individual loan records, as kept by their cooperative unions and/or societies, to determine whether adoption of the input coincided with project participation. In the figures that follow, from our survey on IADPSPSCP input adoption, the numbers represent not just the individuals mentioned but their homesteads as well (we asked about other members beyond those actually being interviewed). A finer breakdown, strictly to individuals, would bring out further differences, not least by sex (or by gender) and by age, as discussed elsewhere herein. 41. Our Kagan and West Uyoma sample areas typified the lower, lakeside areas in that most farmers had not yet tried hybrid maize by 1975–76, when the SPSCP, the first part of the IADP-SPSCP implemented, began. In Kagan, during the six IADPSPSCP project years from 1975 to 1981, percentages planting hybrid maize seeds rose from about 24 to 97 percent among participants, and from about 25 to 84 percent among



nonparticipants. Rates of adoption picked up as the project began in 1975–76, tapering off only around 1980, when nearly everyone had accepted the innovation. We observed a similar pattern in West Uyoma, in Siaya District. From the start of the project in 1975, percentages using hybrids rose from about 25 to 100 percent among participants and from about 8 to 46 percent among nonparticipants. 42. Our Luhya sample area of East Isukha, in higher, wetter Kakamega District, was fairly typical of its agro-climatic zone in that hybrids had already become quite popular before the project began. Here about 72 percent of the participants and 76 percent of the nonparticipants had adopted hybrid maize by the start of the project. Here all farmers interviewed, participants and nonparticipants, had done so by 1981, the sixth year of the project. 43. Aggregating the results of the three IADP-SPSCP project areas we studied allowed comparisons over time between participants and nonparticipants. It showed that borrowers were not much more likely to have tried hybrid maize already (40 percent had done so) by the start of the project in 1976 than were farmers who did not borrow (36 percent of these had). Thereafter, participation and hybrid adoption were more closely related (51 percent of the borrowers, as against only 33 percent of the ones who had not borrowed, adopted hybrid maize during project years). By the time the project ended in 1981, 99 percent of the participants and 78 percent of the nonparticipants had adopted hybrid maize. (N=159 maize growers. Thirteen, or 8 percent, of these had adopted hybrids at unknown times.) These numbers and other quantitative and qualitative information from our interviews made it clear that the project had indeed induced some to try the input for the first time. Again, though, project participants and their homesteads made up only a small part of the population. 44. In our Kanyamkago sample (outside the IADP-SPSCP areas), whereas about thirty-five (35 percent) of 101 maize-growing farmers interviewed had tried hybrids by 1975 (the year before the project began elsewhere), about sixty-two (61 percent) had tried them by 1982. Among all the areas we sampled, Kanyamkago is in an intermediate altitude zone. 45. Those who had not used hybrids gave several reasons why not, in addition to misgivings about the seeds’ technical merits: their high cost (for buyers) and high resale value (for borrowers), local unavailability at times, and perceptions that stockers (for instance, Arab or Indian traders) had given them the wrong strains on purpose or by misunderstanding. 46. We asked hybrid users how they acquired the maize seeds they planted in the respective years following their adoption. About 24 percent of responding users in West Uyoma, 23 percent in Kagan, and 6 percent in East Isukha reported having reverted to local seeds or planted offspring of hybrid seeds instead of buying or borrowing new hybrid seeds. Farmers who had planted hybrids were also asked how they got their maize seeds in the “long rains” season before their interviews. Forty-three percent in Kagan, 15 percent in West Uyoma, and 9 percent in East Isukha said they had used their own stored seeds (local or hybrid offspring) instead of obtaining new ones from the authorized distributors. The true figures may well be higher, as “recycling” hybrid seed was embarrassing for a farmer to admit.



47. Studies have shown that yields from hybrid offspring may drop as much as 20 percent in the second generation alone (Gerhart 1975: 4). 48. See also Paterson (1980b: 5); cf. Gerhart (1975: 22). 49. Pearse (1980: 227–28) lists husbandry techniques useful as alternatives to manufactured fertilizers. 50. Estimates of proportions of farmers manuring food crops in Luoland in the 1970s run from about 27 percent (Hesselmark 1975: 55) to 62 percent (Collinson 1977: 10). My observations in South Nyanza in the early 1980s suggested proportions at least as high as the latter. 51. See Hay (1972), Lonsdale (1964), Fearn (1961), and Butterman (1979), all on Luoland; see also Kenya Ministry of Agriculture, Animal Husbandry, and Water Resources (1956). 52. Boserup’s well-known theory (1965) that rising population density is an important root of technological change in agriculture is becoming broadly accepted, as a qualifier to gloomier Malthusian predictions that demographic growth is bound to outstrip food resources (see, for instance, Netting 1993). But some of her social- evolutionary conclusions are not so easily acceptable. Nor does anything guarantee that populationinduced technological innovation can keep up with needs. 53. Fertilizer henceforth refers only to synthetic types unless otherwise noted. 54. Other common complaints about synthetic fertilizer are that it dries up the soil and that it stimulates the growth of the common weed Striga hermonthica. The etiology of these claims is obscure. 55. In western Kenya, most fertilizer comes in fifty-kilogram sacks—too big for a headload—while maize seed comes in ten-kilogram bags. Most fertilizer moves to farms by taxi, bicycle, or donkey. 56. Boesen and Mohele (1979: 99–100) list reasons why farmers use less than prescribed amounts of fertilizer on tobacco in Tanzania. They include farmers’ knowledge that the risk of burning out a crop with too much nitrogen is worse than the risk of losses from using too little fertilizer. 57. See Kenya, Ministry of Agriculture (1980: 116–22), for more specific government recommendations. See also Harrison (1970). 58. Gerhart’s 1973 survey found that in his lakeside zone (nearly all of Luoland, and most of Busia), only 4.2 percent of the sampled farmers were using some fertilizer on maize, as opposed to 61.5 percent in the higher neighboring districts of Kakamega and Kisii (Gerhart 1975: 28). Hesselmark’s survey a year later gave very similar results (1975: 55). 59. A survey in the Vihiga-Hamisi SRDP area found that the proportion of homesteads using fertilizer there rose gradually from about 30.0 percent in 1969 to 39.9 percent in 1973, by which time three years of loans had been issued. But just as with hybrid maize seeds, most borrowing farmers who used the fertilizer were found to be ones who had used it already (Institute for Development Studies 1975: ch. 7, pp. 13–14). 60. Only two of twenty-four in the participant group received fertilizers under the project and kept using them up until 1981. 61. A typical crop package for cotton farmers in South Nyanza in 1980–81 included



one hundred kilograms of formula 20-20-0 fertilizer, officially valued at K.Sh. 280, for 0.4 hectares of maize, and fifty kilograms of triple superphosphate, valued at K.Sh. 168, for 0.4 hectares of groundnuts: a total value of K.Sh. 448 (Kenya, Ministry of Agriculture 1980/81: 44, 46). 62. Farmers wealthy enough to have taken up fertilizer without credit had financed it in a variety of ways: by selling food crops, industrial crops, or livestock, or by using off-farm earnings. But some who wanted to use it every season had to skip years. 63. The pesticide revolution in eastern Africa in the 1950s and early 1960s is documented, from European points of view, in numerous articles of the period in the Empire Cotton Growing Review. 64. See Owen (1933: 241) on older anti-pest “medicines” and Collinson (1977: 21) on newer ones in the Luo country. 65. From here on, the terms pesticide and insecticide refer to packaged types unless otherwise specified. 66. While there are, for instance, only a handful of recognized species that commonly attack groundnuts or finger millet in East Africa, the lists for cotton (or coffee) can go on for pages (e.g., Pury 1968: passim; Acland 1971: 81–84, 103–6). 67. Some required knapsack hand-pump sprayers costing K.Sh. 350 to 850 in 1981. As few farmers owned these (see Kenya, Ministry of Economic Planning, Economic Survey 1982: 120), some cooperative societies and agricultural extension agents offered spraying or sprayer rental services. 68. Gerhart (1975: 28) and Hesselmark (1975: 55). 69. In the parts of our surveys that touched on this topic, farmers were questioned in this basic manner: “Did you ever use pesticides [L. yath, Sw. dawa; and qualifiers to distinguish from other ‘medicines’] on any of your crops?” (If yes) “What kind? . . . Can you tell me how you first decided to try it, and who introduced you to it? . . . Have you continued using it up to now, or did you stop?” (If continued) “How many times did you spray your (cotton or other crop) in the last season? . . . What kind of pesticides did you use? . . . Pesticides are expensive. How did you finance the pesticide the first time you used it? Do you remember?” (If continued using) “And how did you finance it this year?” Of course, information learned outside surveys was at least as useful. 70. Between 1972 and 1980, Kenya’s imports of pesticides remained roughly constant in quantities but rose in value about fivefold (Kenya, Ministry of Economic Planning, Central Bureau of Statistics, Kenya Statistical Abstracts, 1981: 69, 73). In the South Nyanza KFA outlets, prices of most commonly used brands rose by between 70 and 110 percent between 1979 and 1982. 71. In 1982 a liter bottle of the common cotton pesticide cypermethrin, enough for a season of five sprayings on 0.4 hectares, retailed at K.Sh. 175, the equivalent value of thirty-five man-days of casual farm labor in South Nyanza. Alternatively, the price represented the value of about forty-six kilograms of AR (top grade) seed cotton, at the official price of K.Sh. 3.80 per kilogram. Data on cotton plantings or yields are scarce, but information from the Cotton Lint and Seed Marketing Board (CLSMB) indicates yields of between 89.1 kilograms per hectare in 1980–81 and 194.8 kilograms per hectare in 1978–79 (cf. Obara 1979: 28; Etyang 1979: 63). Estimated real yields came nowhere near



the ideal of one thousand kilograms per hectare (assuming good husbandry) listed in the Ministry of Agriculture’s Field Crops Technical Handbook (Kenya, Ministry of Agriculture 1980: 103) or the targets of eight hundred to 1,200 kilograms per hectare listed for the Nyanza cotton-growing districts in the IADP-SPSCP Work Plans. 72. In the East Isukha location, where no cotton is grown, fewer than a third of the farmers in either participant or nonparticipant groups adopted pesticides by the end of 1981. The use of pesticides on coffee, tea, or other cash crops not included in IADP-SPSCP crop packages is not considered here. If these uses were included, the figures for East Isukha would be much higher. About half of the farmers here who tried pesticides later abandoned them. 73. In the aggregate of the three sample areas, we found a statistically significant correlation between participation and experience with pesticides by the end of the project (chi-squared = 9.01, significant at p < 0.02; Yule’s Q = 0.46, a moderate positive correlation), but this is probably not due entirely to the effect of the project itself, as some participants were chosen partly on the basis of past experience with these or other purchased inputs. 74. This judgment is based on my own interviews. The Kenya Ministry of Agriculture’s Monitoring and Evaluation Unit failed to measure changes in land use and yields under the IADP-SPSCP, and it is therefore hard to judge the technical merits of the inputs promoted. 75. Cf. Gillette (1980: 184–86) on Digo and Kamba of coastal Kenya. 76. As must tax demands in some countries. Kenyan smallholders not taxed directly are taxed indirectly. See Simiyu (2000); cf. Roitman (2005) on taxes. 77. Swanberg (1981: 9), summing up the findings of the agricultural extension service’s project monitoring and evaluation unit. 78. None of this necessarily means men are more “innovative” than women. The question may depend on the nature of the crop and the expense of the input, among other things. 79. For a World Bank staffer’s perception of this “takeoff,” see Feder (1982: 14). 80. Luo farmers have at times converted notable amounts of their agricultural assets into other kinds. Some of my acquaintances have sold their oxen and plows, or substantial parts of their family land or food supplies, to pay secondary school fees for their offspring. (See also Collier and Lal [1980: 50], on Kenya as a whole.) An economy of declining urban opportunity, though, makes doing so a bigger gamble.

Chapter 7. Debts and Dodges Epigraph. Recorded in translation by James Howell in Paroimiographia: Proverbs, 1659. 1. The most informed estimates by 1983 were 20 to 23 percent repayment on IADP Phase I and SPSCP loan principals due nationwide to the Co-operative Bank of Kenya, and 26 to 28 percent on principal due under the (smaller) credit component of IADP Phase II nationwide. Nyanza Province, by the end of 1981, had repaid about 28 percent of its IADP Phase I loans and 24 percent of its SPSCP loans. (Compiled from

NOTES TO PAGES 103 – 105


various sources provided by the World Bank RMEA, Kenya Ministry of Co-operative Development, and Kenya Ministry of Agriculture. See also Livingstone 1981b: Ch. 11, p. 15; Swanberg 1981a: 6.) Estimates of farmers’ repayments to their cooperative societies nationwide varied between about 16 and 24 percent. Repayment rates given in this section refer to principal plus interest unless otherwise specified. 2. Briefly, in the Kagan society, repayment rates rose from 40 percent for 1975–76 loans to 47 percent for the following year, then fell steadily to under 20 percent for 1979– 80. In the West Uyoma society, they fell from 26 percent for 1976–77 loans to 7 percent for 1979–80 loans. In the East Isukha multipurpose (maize) society they fell from 22 percent for 1975–76 loans to 14 percent for 1977–78 loans, the last there. The East Isukha coffee society had a different pattern, a dip from 61 percent for the 1975–76 loan to 33 percent for the following year, to 50 percent for 1977–78, the last there. On the surface, the broad trend toward lower repayment can be explained in several ways. Earlier borrowers were pursued first. By the project’s end they had longer to repay. Also, weather had worsened during the course of the project. 3. The only cooperative society studied in which percentages of defaulters did not rise steadily was the East Isukha coffee society. 4. Later republished as The Enlarged Devil’s Dictionary. Also from Bierce (1967): “Debt. n. An ingenious substitute for the chain and whip of the slave-driver.” 5. An example of the unremitting harangues was energy minister John Okwanyo’s publicly berating his home district, South Nyanza, for having the greatest number of loan defaulters in Kenya (Daily Nation [Kenya], 1 December 1981). Okwanyo was voted out of Parliament in the next election. 6. Ruel (1965) discusses the mix of internal and external moralities among Kuria, southeastern neighbors to the southern Luo. He finds a concept somewhat similar to “sin,” which they see as a disordering of relations. Kuria people strongly value “straightness,” a quality they associate with healthy growth. 7. Experimental economists exploring the psychology of transactions by game exercises are finding mounting evidence that people around the world tend to feel moral scruples—or perhaps something more like aesthetic disquiet—about unreciprocated transactions. People seem moreover to be willing to make personal financial sacrifices to see that loans get repaid and other scores get settled evenly—that is, that no party in a mutual agreement get away with a rip-off. See Ostrom and Walker’s collection (2003). Of course, the methodological problems, not least those of translation, in transporting such experiments across cultures are great. See Barr et al. (2009) on networks. 8. The idea may be understood in terms of a “cognitive map” like those discussed in Bailey (1971) or Sahlins (1974: 196–205). In the latter’s terms, the lenders were far enough away from each other, in distance and in social structure, so that borrowers fancied their reciprocity as “balanced” or even “negative.” 9. According to the Integrated Rural Survey of the Central Bureau of Statistics, in Kenya, Ministry of Economic Planning, Central Bureau of Statistics, Kenya Statistical Abstracts (1981: 119). Because Kisii District had higher per capita income than the three Luo districts, the average for the latter would need slight adjustment downward. Cf. Kenya, Ministry of Economic Planning, Central Bureau of Statistics, Rural Household


NOTES TO PAGES 106 – 110

Survey, Nyanza Province, 1970–71 (1977: 36) for comparable figures with district breakdowns. No official income statistics for rural Kenya are very trustworthy. 10. Based on records of the cooperative union and societies serving the sample areas. They repaid in cash, in kind, and both together; the choice was theirs. Cooperatives handling coffee, cotton, or other inedible cash crops appeared to collect more in kind than in cash; those handling only food crops did the reverse. 11. The many, complex, and deeply rooted values Luo people, especially elder men, attach to cattle, and ways they use these in exchange, are discussed more fully in Shipton (2007) and sources cited therein. 12. As measured by Kisumu consumer price indices, inflation between 1976 and 1981 averaged between 13 percent (by June 1981) and 18 percent per year (by December 1981). As measured by Nairobi consumer price indices, inflation reached a peak of 22.3 percent in 1982. Source: Kenya, Ministry of Economic Planning, Central Bureau of Statistics, Economic Survey (1986: 45–47). 13. These attitudes contrast with those I have encountered in the Gambia and Senegal, where, having been exposed for generations to merchants’ moneylending at high interest, farmers expect state credit schemes to charge interest as a matter of course. 14. I discuss this subject in “Luo Entrustment” (Shipton 1995). 15. National Co-operative Development Plan, 1976–1980, p. 16; quoted in Bager (1980: 28). 16. Kenya, Ministry of Finance and Planning, Rural Household Survey, Nyanza Province, 1970–71, 1977, table 4.3. Cf. S. Johnson (1980: 156); Kenya, Ministry of Economic Planning, Central Bureau of Statistics, Kenya Statistical Abstract (1981: 125). In Nyanza maize and beans are by far the biggest food crops sold through cooperatives. 17. See R. Bates (1981: 40) and sources cited there. 18. See Hyden (1973: 128–29) on popular disdain for Arab and Asian traders on the Kenyan coast, Hyden (1980: 59) on Tanzania, and Hart (1982: 114) on West African governments’ attempts to promote the image of Lebanese traders as unscrupulous. The journal Ethnic Groups has devoted much space to discussions of the “pariah capitalist” phenomenon. 19. Points discussed further in Von Pischke et al. (1983) and Adams and Fitchett (1992). 20. Compare Hyden’s earlier finding (1973: 130) that Kwale District farmers considered cooperatives more exploitative than private traders. 21. In the early 1980s, when we did our research on the IADP-SPSCP in situ, it was illegal to transport maize across district lines in quantities of over twenty-five kilograms, the weight of a large head load, without a license. Sometimes roadblocks around the country gain entirely different meanings, as during the August 1982 coup attempt, as well as in 1991 and in several later periods during episodes of violent ethnic purging around election times. 22. See R. Bates (1981: 38–44; 1983), and Hart (1982: 92–93 and passim); cf. Heyer (1976). Kenya’s government appears to have settled for smaller food price “distortions” than some other African governments. 23. See Heyer (1976) for further discussion.



24. The two richest men in my East Isukha sample had grown beans with IADPSPSCP loans. Both had defaulted completely on these government loans by selling their beans to unauthorized buyers in ad hoc agreements. But the buyers, it turned out, were government schools and hospitals. Food reached those who could pay, but not how the government had planned. 25. The cooperatives distributed the seeds, but East African Industries, the company that the government appointed to purchase and process the crop for oil manufacture, refused to buy the crop because of a price collapse of 43 percent in 1978–79 (see Livingstone 1981b: Ch. 11, p. 6). 26. The principle was simple, as farmers noted. Birds love sunflower seeds. When only a few brave farmers planted them at once, all the birds in the district would flock to their few fields. Only a multitude of simultaneous planters, by keeping the birds spread thin, could produce decent yields for any one of them. The problem is getting enough farmers to begin at the same time. This problem kept East Isukha farmers, at the edge of the Kakamega forest, from planting major crops in that area’s ample short rains, though agronomic conditions were fine and many farmers wanted to do so. There were too many birds, monkeys, and wild pigs to allow a few farmers to succeed without the others. Behavior irrational for an individual was rational for a collectivity. We see momentarily that individually rational action can conversely be collectively irrational. Olson (1971) theorizes on “collective action” paradoxes like these. 27. Cotton production in Kenya more than doubled from 16.1 to 38.1 metric tons from 1975 to 1980 (Kenya, Ministry of Economic Planning, Central Bureau of Statistics, Kenya Statistical Abstract, 1981: 102). Official producer prices rose from K.Sh. 1/92 in 1975 to 3/80 in 1982 for AR (high-grade) seed cotton. Because these price rises did not keep pace with inflation, rising production might also have been due to rising cash needs for school fees or other purposes. 28. Hyden had also found cooperatives a decade earlier that were slow in paying farmers for produce (1973: 130). 29. In a survey of Busia District cotton growers in 1977–78, Etyang (1979: 82) found a strong negative correlation between the length of time farmers waited to be paid for their cotton and their use of pesticides the following year. Evidently, either long delays rendered farmers unable to afford the pesticides, or farmers just got fed up and decided the crop was not worth the investment. 30. This triangular trade reappears in a later discussion of tobacco marketing. Moore (1986: 128) also describes comparable coffee sales in Chagga cooperatives (where they were probably easier to control than the trade in annual crops elsewhere). She notes that these sales can occur together with informal credit with the crop as collateral. 31. Agok also means peninsula, or a buttress or reinforcement—for instance, for a wall. The common idea is that something is added onto what is already there. 32. See also Livingstone (1981b: ch. 11, pp. 9–12, 16) and Leonard (1984: 183). The only Kenyan cotton cooperatives substantially bettering 30 percent recovery in the IADP-SPSCP years were those of the expatriate-managed Machakos District Integrated Development Programme (MIDP), which ran special mobile buying stations. The MIDP reported about 63 to 73 percent repayment of cotton-secured loans issued in


NOTES TO PAGES 114 – 120

1980–81 (sources: Machakos District Co-operative Union; Overseas Development Institute [hereafter ODI] 1982: 7, 8; James Tenbrink, personal communication). In Kakamega District, the cooperative societies with the highest repayment rates dealt in coffee or milk. Nationwide, by the start of 1983, the Co-operative Bank of Kenya had collected about 81 percent of its loans under the Smallholder Coffee Improvement Project (under the umbrella of the IADP as a “program” but separate from the projects discussed here) (sources: Co-operative Bank of Kenya, World Bank). 33. Tea, grown under the Kenya Tea Development Authority, strongly resembles coffee in this respect. Here again, there seems to have been very little illicit trade in the crop during my stays. 34. Farmers apply the same reasoning to tobacco, another seasonal crop with a lively agok system, as discussed later. 35. A World Bank report (1978; quoted in Hart 1982: 172n.) states that in Africa south of the Sahara, “Irrigation, tree crop and livestock projects performed quite well (average rate of return: 21 percent). With one exception, rain-fed annual crop projects performed poorly (average rate of return: 6 percent).” A further relevant factor is the differences in the values of the crops. In Kenya, tea, coffee, sugar, and the annual pyrethrum and tobacco crops (the last discussed later) have enjoyed world prices high enough to sustain the labor of closer and more careful “extension” and monitoring services than cotton has sustained, even though all the world prices have fluctuated. 36. E.g., Kim (1978), Lipton (1980: 244), Mitra (1983: 120–22, 153–54), and ODI (1982: 0.7.11). Cf. Gerhart (1975: 13), Von Pischke (1977: passim), and Paulson (1984: 155–56). 37. Gachanja (1979: 96) and Swanberg (1981: 7). Gachanja concludes, however, that family size, the use of purchased inputs, and crop yields affect repayments “significantly” (pp. iv, 91–96). She analyzes data from early Ministry of Agriculture surveys with multiple regression techniques. 38. An examination of data presented by Mitra (1983: 153 and tables) on cooperative credit in Orissa, India, suggests that such a curvilinear relationship may exist—the richest and the poorest borrowers most often default—although he does not identify it as such. 39. Of participants who began borrowing early enough to have more than one year to borrow, the following proportions stopped after only one year: in the society serving Kagan Location, 69 percent (of 311); in the West Uyoma society, approximately 90 to 100 percent (records incomplete); in the “multipurpose” (maize) society serving East Isukha, 94 percent (of 135); in the coffee society there, between 63 and 77 percent (of 124).

Chapter 8. In a White Elephant’s Shadow Epigraphs. “Toutes choses sont déjà dites, mais comme personne n’écoute, il faut toujours recommencer” (Gide 1891). James Grant (1992: 442). 1. The economist was Ian Livingstone (1981b: Ch. 11, p. 26), whose writings influenced aid agencies’ shift toward small enterprise development initiatives, in Kenya and worldwide.

NOTES TO PAGES 120 – 121


2. Source: World Bank RMEA, Kenya Ministries of Agriculture and Cooperative Development. 3. Borrowers in our study were asked whether, all in all, the loan(s) had helped or hurt them and their families, and if so, how much. Data in the agriculture ministry’s official mid-term IADP reports also suggested borrowers’ cultivated hectarage and yields rose only slightly, if at all, under the project in Nyanza and nationwide. In 1979, after four project years, borrower cropland had grown by less than 7 percent in Nyanza and less than 5 percent nationwide. In Nyanza maize production rose by less than 5 percent of the base year (1976) in the best year (1977) up to 1979; by 1979 it was down to 12 percent below the baseline (Kenya, Ministry of Agriculture, Monitoring and Evaluation Unit, hereafter MOA-MEU, 1981b: 58–63, 1981a: 10, 15). In the 1979 MOA-MEU survey, 47 percent of Nyanza participants reported their “incomes” unchanged by the project, 33 percent indicated theirs had risen but by less than 25 percent, and only 11 percent reported their incomes increased by over 25 percent. But neither the official statistics nor my own reliably indicate actual planted hectarages or yields. 4. Among other approaches we took, we questioned participants and nonparticipants in this manner: “Speaking generally about the farmers around here who have taken these [IADP-SPSCP] loans, would you say that the loans have helped them or hurt them?” . . . (If helped) “How many of the borrowers have they helped?.” . . . “And how much have the loans helped these farmers?” That farmers painted a brighter picture of the project’s effects when talking about themselves than when talking about other farmers is no surprise, since many clearly wished to boast diligence or wisdom in how they used the loans. (This is why one must pay attention to the second type of information as well as to the first.) 5. See, for instance, Mason and Asher (1973: 653, 672, 712), J. M. Cohen (1974), Lipton (1977: 150, 153, and passim), Scott (1976: 208), Pearse (1980), and Payer (1982: 216–17). 6. Leonard (1977: 179) discusses the quota system in Kenyan coffee. As Leonard notes here and elsewhere, early crop or input adopters may not acquire a permanent advantage: (1) where a crop is grown mainly for home food, (2) where it takes no long-term capital investments, and (3) where the crop is so specialized to a region that even late adopters find broader market demand for it (1977: 180). See also Kitching (1980) for a fuller study of trade and rural class stratification in central and western Kenya. 7. This sort of diffusion of innovation was also noted by Gerhart (1975: 44). See also Ruttan (2001) for broader discussion on agricultural innovation, especially that “induced” by shortage of land and labor—an old theme of Ester Boserup’s, too. 8. See W. Allan (1965: 369–74) and Uchendu (1970: 484–85), among other sources available, on how high-value cash crops can also strengthen an individual’s claims in land as against those of lineages, villages, or other kinds of landholding groups. 9. Debates on farm size and efficiency are endless, but much recent literature suggests that small farms have the edge in the way mentioned here. Analyses on Kenya appear in United Nations International Labour Organization (1972: 167), Herz (1974: 157–72), J. M. Cohen (1980b: 25), McCarthy and Mwangi (1982: 39–40), and R. Cohen (1988).


NOTES TO PAGES 122 – 128

10. Pearse (1980: 190), Chambers (1983), A. F. Robertson (1984), Ferguson (1990), and Goldman (2005) exemplify criticisms of “top-down” planning—even though most of these authors would reject the stratigraphic premise behind the phrase. 11. Just as the extension system informed farmers scantily, the project Monitoring and Evaluation Unit gathered little information of use to Nairobi project managers in the government or aid agencies. The problems recapitulated those of the project as a whole. Staff members had too many bosses and questions to answer, the farmer questionnaires were too long and complicated, and the “enumerators,” like the extension agents, saw contact farmers too seldom. 12. J. W. Bennett (1988: 19). 13. My remarks on this disintegrationist phase are influenced by Leonard (1984), who pointed it out right while it was happening. 14. The “minimalist” approach was the hallmark of Management Systems International, a pro-market development consulting firm based in Washington, D.C., in the 1980s. 15. André Gide (1891), James Grant (1992: 442). 16. Of course, what transactions were “necessary” was something on which program planners and farmers could, and did, often disagree—particularly if they were charged with looking after different “sectors” like agriculture, trade, and health. The shift from credit in kind to credit in cash was typical of “development” programs worldwide in the 1980s and 1990s (Robinson 2001). 17. The Bank’s policy paper advised that because of low repayment rates and for other reasons, borrowers must be more carefully “supervised” than they had been (World Bank 1975: 40)—a debatable contention even if the rather presumptuous wording were accepted. 18. Uma Lele, a World Bank staffer, published in 1975, about at the start of IADPSPSCP, a book reviewing several state farm loan projects in Ethiopia, Kenya, Malawi, and other countries. She found bigger farmers tending to monopolize cheap credit and defaulting disproportionately (Lela 1975: 93 and passim); cumbersome, tedious, and burdensome credit procedures (p. 97); and poor extension (p. 97). She plugged “participatory” rather than “paternalistic” approaches to planning (p. 99). 19. In Uganda the Co-operative Credit Scheme of Lango and Masaka Districts, in the 1960s, was documented by economist Diana Hunt (1972, 1975). As in the Kenyan IADP-SPSCP to come, a national hierarchy of cooperatives was used to hand out small, cheap loans for mixed cash and food crop enterprises to farmers with two acres or more. Hunt found poor record-keeping in cooperatives (1975: 206), wealthier-farmers devouring loans (p. 218), loans arriving late (p. 216) and maybe half getting diverted from farming (p. 225), and much of the rest of the loans used to substitute others’ labor for borrowers’ own (pp. 215–16). Hunt found scant evidence of expanded farms or improved husbandry and doubted that prices for some crops, especially cotton, merited farmers’ extra effort (pp. 227–28) given delayed payments from the Cotton Lint Marketing Board and ginneries (p. 217). Extension efforts failed and loan default rates rose consistently from 1962 to 1966. Cooperatives collapsed. Taken together, the parallels to

NOTES TO PAGES 128 – 129


the IADP-SPSCP are striking. Hunt’s summary of the project outcome was available in Nairobi in article form as the planning for the IADP-SPSCP began, and in book form before the first IADP-SPSCP loans were lent. 20. We have seen ways the IADP-SPSCP reran and amplified the experience of its predecessor, the SRDP, and earlier, colonial schemes: the failure to include farmers at the planning stages, wealth biases, the late loans, farmers’ selective responses to farm inputs, farmers’ avoidance of appointed buyers, and so on. A USAID-sponsored 1970 study of Kenyan farmer credit found that “the arrears on most of the government loan programs is fantastic, ranging from 8 per cent to 73 per cent of the amount due” (unpublished report, “The Tootell Mission on Agricultural Credit—Report and Recommendations on Credit for Kenyan Farmers,” cited in Leys 1975: 95n). If the SRDP experience was not quite clear yet in 1972–73, when the IADP-SPSCP planning began, the technological disappointments, low repayment, and other results were known by 1976 when its first loans went out. 21. At the FAO’s 1975 conference on agricultural credit for developing countries in Rome, it was a World Bank vice president who summed up the Bank’s experience and recommendations. He stressed locally tailored technological packages and the importance of timing (“Delivery too late is, of course, pointless”), of involving farmers in planning, of close extension, of concern for farmers’ risk avoidance habits . . . (United Nations Food and Agricultural Organization 1976: 7–9). Made just as the IADP-SPSCP was being launched, the speech would have passed as a postmortem for that program seven years later. 22. The United Nations Research Institute for Social Development (UNRISD) had publicly taken stock of the deficiencies of cooperatives as lenders by this time. The UNRISD’s eight-volume series (1975) summed up some forty cases of cooperatives from Africa, Asia, and Latin America before concluding that, for credit and extension, “Rural cooperatives have seldom achieved the development goals set for them by economic and social planners” (UNRISD 1975: vol. 8, ix, 6–7, 10, cited and quoted in Laar 1980: 193–94). 23. Under the NSCS, farmers borrowed from the AFC (in 95 percent of the cases) or the cooperatives (in 5 percent), again for maize or wheat production, the credit limit being 750 Shs. (about $94 in 1981) per acre up to 1981 and 1,000 Shs. thereafter. Interest was charged at the AFC’s subsidized rates—under government pressure, as in other programs. 24. One close analyst explained the accounting problems this way: “Because the government forces AFC to administer the seasonal crop credit program on an agency basis while the fiscal burden remains with the Cereals and Sugar Finance Corporation [the government financing body], [and] collection responsibility is with the marketing boards and policy formulation is in the Ministries, the scheme has never functioned well. The accounting problems at all levels of the scheme make it difficult to even trace the flow of funds for the program” (Paulson 1984: 115). 25. By June 1983 about 40 percent of the NSCS funds disbursed since 1980 were reported to be in arrears (Paulson 1984: 114; World Bank).


NOTES TO PAGES 129 – 134

26. Maize is an exogenous crop from Mesoamerica, as noted. The link to malaria was suspected by public health entomologist Andrew Spielman, and maybe others too, by about a quarter-century before careful historical-geographical analysis and lab trials really began demonstrating it to be true. 27. On the startling maize-and-malaria link, see McCann (2005: ch. 8, esp. p. 194) and sources cited therein. The team included entomologists, public health specialists, historians (including McCann), and others in the University of Addis Ababa, Boston University, and Harvard University. It was funded partly by the Rockefeller Foundation, hitherto deeply involved in hybrid maize diffusion through the International Maize and Wheat Improvement Center in Mexico and elsewhere. This is all a good sign that there are still big new things to learn in the world and that aid agencies can keep open minds or change them. 28. Judith Tendler (1975) and Allan Hoben (1980) studied the money-moving pressures within aid agencies, from inside as well as outside. Zaki Laïdi (1990) has drawn attention to the military and strategic pressures from outside. 29. These comments on staff rotations at the World Bank and allied agencies are based on impressions formed over many years; whether any aspects are changing now is harder to say. 30. Staffers of bilateral agencies like USAID are moved about partly to prevent their forming closer ties to the aid-receiving countries than to the donor countries for whom they work. Some insiders there call it “localitis.” 31. Frequent rotations among ministries appear more typical of civil services in anglophone than francophone African countries. 32. It is not that the World Bank is alone among bureaucracies in “top- down,” supply-driven, or repetitive credit project planning. Many within the Bank in the 1970s and 1980s criticized credit, extension, and other hands-on efforts, in favor of macroeconomic policy reform in “structural adjustment.” Bank farm credit through governments persisted, but having made up about 26 percent of its total agricultural program from the Bank’s inception up to 1992, this credit declined to about 13 percent of an agricultural total, also on the wane, by the last year of that period. Source: World Bank, Operations Evaluation Division. 33. Works by J. D. Von Pischke, Dale Adams, John Bruce, and Shem Migot-Adholla are among others who, with insider perspectives, have delicately taken issue with some aspects of Bank policy to try to adapt it better to African needs and conditions. 34. The ball is moving. Tendler (1975), Hoben (1980, 1984), Van de Laar (1980), Apthorpe (1984), and Robertson (1984) gave it strong pushes. More recent efforts include Bennett and Bowen (1988), Cole and Huntington (1997), Crewe and Harrison (1998), Peters (2000), Robinson (2001), Goldman (2005), and Easterly (2006). The Institute for Development Anthropology’s monograph series affords many chapter-length glimpses into aid agency cultures. When socially and culturally aware western Kenyans like Shem Migot-Adholla have gone to work for periods in the World Bank in Washington, D.C., it is tempting to turn around the Bank’s own phrasing and call their work “supervision missions.”

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Chapter 9. Wildfire 1. Lord Alfred to Lady Stutfield, in Oscar Wilde’s play, A Woman of No Importance (1894), Act I. 2. Whereas North Carolina’s tobacco production, like Kenya’s, has been based mainly on small, independently owned farms, adjacent Virginia’s and South Carolina’s have been based more heavily on larger-scale plantations. The difference between the American states’ histories derives in part from Virginia’s and South Carolina’s better access to deep water seaports and thus to long-distance trade and investment. 3. Particularly in tea-growing zones, contract farming or “outgrowing” has supplemented and begun to replace plantation agriculture as the main system of foreign involvement in Kenyan agriculture. See Ayako et al. (1989) on contract farming programs in Kenya as analyzed by economists, and Little and Watts (1994) for other examples in tropical Africa. 4. Some of the basic information in these pages on tobacco in the Luo country has previously appeared, in different form, in Shipton (1989a: 31–34), where the focus is on the perceived “bitterness” of money earned. 5. See Brooks (1937: vol. 1, 41–42) and Akehurst (1968, 1981: 7–13). Two of the most extensive collections of documents available on the history of tobacco are the Arents collection in the New York Public Library and a collection in the Library of Duke University (an institution founded on one of the world’s biggest family tobacco fortunes). 6. The DhoLuo noun ndawa is probably of foreign origin, however. It may be a cognate of the Swahili dawa, medicine, or of the Spanish tabaco or English tobacco. Most African languages south of the Sahara seem to use foreign terms for tobacco. 7. Schweinfurth (1874: vol. 1, 254). He also noted bhang, or marijuana, being smoked in what was later to become South Nyanza and is now Homa Bay District. 8. For archaeological findings on Luo pipes, see Trowell and Wachsmann (1953: 132) and Ocholla-Ayayo (1980: 64); cf. Oswald (1915: 36), Waligorski (1970: 14), and Acland (1971: 224). Tobacco has also long been used as snuff in much of Kenya. 9. Tobacco is used in suitor and marriage gifts (although it is taboo to some), benedictions, offerings, purifications after murders, among other things, in the lake basin and a wider region. S. Johnson (1980: 216) on Suba, D. Johnson on Nuer (1994: 297), R. G. Abrahams (field notes and other pers. comm.) on Unyamwezi, Paula Hirsch Foster (field notes) on Acholi, and Murray (1981: 21) on Lesotho. 10. Such “indigenization” of exogenous novelties like money, guns, and paper— their endowment with local meanings beyond the ken or control of their foreign introducers—is a main theme of Hutchinson (1996), on Nuer. 11. Tobacco, being a “New World” crop, is absent in Judeo-Christian bibles, but some Luo and other East African people adhering to a wide variety of Christian churches find ways to relate biblical teachings to it (briefly discussed in Shipton 1989a: 33), just as members of some of their Catholic and Protestant mother churches have done in, say, Virginia and the Carolinas. But in some ways they have gone beyond these or followed their own independent routes and rationales in classifying tobacco production, exchange,



or use as evil, sinful, or dangerous. But some churches have taken a harder line than others. Suzette Heald’s 1985 research among Kuria near Tarang’anya revealed twice as high a proportion of Roman Catholics among tobacco growers as among other farmers sampled (n = 94) (pers. comm.). 12. Harries (2007), versed in both English and African Christian traditions, explains Luo and English terms and translations for concepts of bad and evil (for instance, rach), including for Shaetani (Satan or demon). He finds many and deep miscommunications, and much avoidable mutual misunderstanding, among language communities (and some among speakers of cognate European tongues, too) surrounding terms for moral evaluation. 13. My information on the 1930s attempt to grow tobacco in western Kenya comes mainly from Maxon (1991). 14. See Boesen and Mohele (1979) and Hutton (1973) for brief accounts of the BAT histories in Tanzania and Uganda, respectively. 15. British American Tobacco Industries dates from a joint venture of the American Tobacco Company (then based in Durham, North Carolina) and its British rival, the Imperial Tobacco Company, in 1902. Over the next half-century it expanded its operations in China—until the 1949 revolution. Cochran (1980) details BAT’s historical methods in China and elsewhere, assessing, in the process, the concept of economic imperialism. Swainson (1980: passim) recounts its history since 1907 in East Africa; the Institute for Development Studies (1975: 3–8) recounts BAT’s start in western Kenya in the 1960s and early 1970s. In 1982 the international holding company owned 59 percent of BAT Kenya (British American Tobacco Industries, Annual Reports and Accounts, 1982: 47). 16. It was not by BAT’s own choice that it went into contract farming rather than establish a plantation with its own land in western Kenya. It could not get government cooperation for mass evictions of the sort that the South Nyanza Sugar Company—a Mehta firm—had effected. “We’d love to,” confided a BAT official. 17. The Kenya 1974–78 Development Plan (Kenya 1974) evaluated the nation’s local tobacco production in 1972 (excluding sales in small local markets) as £31,000 (Pt. 1, p. 243), stating that demand far exceeded local production. 18. In the late 1960s the company relied upon government extension services and government cooperative marketing; by the mid-1970s it used its own. 19. About 2,700 were signed on, about 2,000 of these actively growing, in the Oyani catchment area by about 1982. By the same year, about 2,400 of the 3,000 registered contract farmers in the Kuria-speaking Tarang’anya area were also growing tobacco (source: BAT). As South Nyanza subdivided at the time of writing, Oyani lay within the newly forming Homa Bay District and Tarang’anya within Migori District. 20. Along with the flue-cured tobacco that was BAT’s main thrust in the Oyani catchment area, BAT contracted farmers to grow fire- cured tobacco, a less-delicate but less-lucrative crop used for pipes and some cheap cigarettes, and also a very small amount of burley (air-cured) tobacco. Higher proportions of Kuria around Tarang’anya grew fire-cured leaf. By 1981 South Nyanza District reportedly produced about 1,600 tons of flue-cured leaf, 860 of fire-cured, and 20 of burley (source: BAT). 21. Data from our 1982 Kanyamkago survey showed that tobacco contract farmers

NOTES TO PAGES 143 – 145


tended to have somewhat larger landholdings (as titled in the district land registry); were more likely to have ox plows, iron roofs, and cement floors; and were more likely to be using outside labor and to have tried hybrid maize than other farmers who had not grown tobacco. But tobacco contract farming itself had already helped some acquire these things. Separately, Suzette Heald’s 1985 survey among Kuria around Tarang’anya found flue-curing growers much more likely than others to have polygynous marriages and to have larger homestead families, and to be more likely to grow hybrid maize (pers. comm.). Her information is gratefully acknowledged. 22. The total values of inputs varied between about K.Sh. 2,000 and 4,300, excluding the initial loan of barn fixtures (worth about in K.Sh. 2,800 and estimated to last five years) in 1982. 23. Most smokers in rural Kenya today use hand-rolled or commercial cigarettes. Luo men smoke cigarettes in the Western fashion, with the burning end outside the mouth, but women normally smoke them with the burning end inside the mouth, suggesting a Freudian metaphor. (Cf. Lebeuf 1962: 17 on sexual metaphors for pipe smoking among the Kotoko of Cameroon.) Cigarettes are often purchased individually rather than by the packet. Adults of all ages now smoke. 24. The Weekly Review (Nairobi), 11 May 1984, p. 12. 25. Thomas Jefferson, plantation owner, once observed that tobacco had been “productive of infinite wretchedness, as it impoverished the soil and required constant labor.” Letter stored in Jefferson Museum of Albemarle County, near Monticello, in Charlottesville, Virginia. 26. Based on 1981–82 estimates of real inputs and outputs, from BAT and the South Nyanza District Agricultural Office. These figures must be treated with caution. See Boesen and Mohele (1979) for Tanzanian figures. Acland (1971: ch. 34) surveys the basic technical requirements and procedures of tobacco growing in East Africa. See also Akehurst’s tome (1981) on the crop, also informed by East African experience. 27. BAT, Staff Report, 1982. 28. In our 1982 survey most farmers who had been visited by tobacco extension agents had been visited seven or more times in the preceding year—a stark contrast to government agricultural extension services. See Institute for Development Studies (1975) on the government’s unsuccessful early tobacco efforts in South Nyanza. Cf. Boesen and Mohele (1979: 126) on Tanzania, where tobacco has also called for especially heavy ratios of extension agents to farmers. 29. As seen earlier, the IADP-SPSCP had no such system for checking up on extension agents’ visits. 30. BAT shareholders’ reports in the 1980s frequently cited BAT Kenya as an example of efficient management. See also Lipton (1977: 80). 31. Oyani Leaf Centre managers believed their agents could estimate the expected yields of any field to within 10 percent accuracy. 32. BAT was able to exploit farmers’ uncertainties about possible yields by offering prizes as small as a wheelbarrow for highest earnings—an inexpensive form of local publicity for the company and crop. 33. Having helped in some of these tasks, I can agree. See also Hutton (1973: 153)


NOTES TO PAGES 145 – 148

on parts of Uganda, and Abrahams (1981: 84) on the Nyamwezi country in western Tanzania. 34. Hutton (1973: 117) shows a comparable rise in the early years of the BAT “Master Growers” contract scheme in the West Nile District of Uganda in the early 1960s. If any crop exceeded tobacco in earnings (per hectare or per hour), it was probably cannabis, but figures on this illegal crop remain scarce. 35. Unfortunately, the farmer accounts in the BAT regional office available to me by special permission during my 1980–83 visit were not open in my 1991–92 visit, a time when the company was threatened by competition by the new Mastermind tobacco company. To approach the profitability question from another angle, BAT Kenya announced pre-tax profit for 1992 at 754.7 million shillings, with a total turnover of 5.05 billion shillings, of which 3.08 billion went to excise duty, corporate tax, and value-added tax (Weekly Review [Kenya], 30 April 1993, p. 29). 36. In our 1992 survey of a subsample of Kanyamkago, 27 percent of the farmers who said they grew tobacco had not received BAT loans. Probably some growers did not admit to growing it. 37. While average Luo yields were only 80 percent of the yields per hectare of nearby Bantu-speaking Kuria and northern Luyha peoples (source: BAT), the differences may be explained by the fact that these peoples have lighter soils (advantageous for flue-cured tobacco) and larger landholdings less likely to have been exhausted by previous cultivation. The Kuria response to tobacco has been especially notable in view of Kuria men’s notably stronger interest in livestock than in farming in the past. 38. In 1982 the Luo averaged about 1,200 kilograms of cured leaf per hectare, the highest producers turning in about 2,000 kilograms in their best years (source: BAT). By comparison, the average yields in the West Nile District of Uganda were about 1,100 kilograms per hectare by about 1969, and yields of top farmers in that district and in Iringa District, Tanzania, were about 2,000–2,200 kilograms per hectare (Acland 1971: 223, 229). 39. It is not as if evangelical Christian churches are uniformly against tobacco, let alone new agricultural enterprise. Norman Long, studying the Lala of Zambia, found that Jehovah’s Witnesses were often among the first to adopt a new commercial Turkish tobacco crop (Long 1968: 242). He attributes agricultural innovativeness to the individualistic ethic of enterprise that he finds characterizes this and the Seventh-day Adventist churches there. His argument draws on Weber (1904–5). 40. These points are also made in Shipton (1989a: 33–34) in the context of a broader discussion of the concept of “bitterness” in Luo thought. 41. Some growers who have sold tobacco to buy animals for bridewealth have tried to “launder” the money by exchanging these first animals for other animals—a dodge some elders say will fool no spirit or divinity. An interesting question for further research would be whether women perceive a “category interest” in upholding beliefs and perceptions about bitter money as a way of indirectly gaining back a share of tobacco earnings, having invested their own labor in the crop. 42. For instance, the Lala tobacco farmers studied by Norman Long (1968: 22–26) in Zambia, already noted. Long traced other wide-ranging social changes to tobacco

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growing there: conversions to Jehovah’s Witness religion, blurred sexual division of labor, newly individualistic attitudes toward landholding, a spreading of new wealth into shops and other enterprises, and a weakening of village and matrilineage. 43. As Abrahams (1981: 85) notes on Nyamwezi in Tanzania, however, tobacco is a crop that can benefit from cooperative work in seed-bed preparation, drying, and the provision of drying barns and storage facilities. For more on the Luo rika, see Shipton (2007: ch. 5). 44. Not yet known is whether tobacco growers’ new earnings inflate local food prices and thus make it harder for nongrowers to buy the marketed foods on which they too partly depend. 45. In our 1992 Kanyamkago survey subsample, tobacco-growing domestic groups turned out more likely to be land buyers than others did (22 percent of growers claimed that someone in their homesteads had bought land in their current locations, as against 5 percent of others). More nongrowers than growers reported having sold land. The nonagricultural land market has become particularly active in Migori, the market town near the Oyani Leaf Centre. According to officers of the District Land Registry, the town by 1982 had probably the most active land trade of any in the district. 46. Heald (1991) compares commercial tobacco growing among Kuria in South Nyanza District and Teso in Busia District. Distinguishing opposite reactions to a sharp income decline in 1985 following a steep climb, Heald puts the difference down to contrasting family structures among the two groups as they have changed over cyclical and lineal time. 47. Chang’aa can be dangerous. But economically speaking, this form of alcohol consumption is far superior to bottled beer drinking for the rural communities, as the money stays in local circulation. It is also not taxable. 48. Some of the prostitutes come from the nearby sugar plantation town of Awendo. 49. Whether tobacco, sugar cane, and other cash crops ultimately help or harm nutrition is a question much debated. Extensive quantitative studies by the International Food Policy Research Institute (IFPRI) in South Nyanza, and by Pauline Peters and Harvard colleagues in tobacco-growing areas of Malawi, suggest the net effects to be less dramatic than many suppose, as new cash earnings help substitute purchased foods for diminished food crops and thus become part of nutritional strategy, especially for wealthier domestic groups (Cogill 1987, Rubin 1988, Peters, Herrera, and Randolph 1989, Peters and Herrera 1994). A key intervening variable is the gender of the domestic group head or member making the allocation decisions (Kennedy and Peters 1992). 50. Contract farmers for South Nyanza Sugar Company likewise see crookedness in the weighing of cane they turn over to the Awendo sugar factory. Such claims, always hard to evaluate, have been heard since colonial times, when, as we have seen, they were leveled at Indian and Arab cotton buyers. 51. Or, to turn the matter around, the licensed growers are providing bridges for “pests” between formerly scattered plots that were in abandoned homestead sites. 52. Some of these input shortages are traceable in turn to government restrictions on Kenyan and multinational companies’ holding and using foreign exchange. Kenyan policies on this were shifting erratically as of 1993.



53. Rugumisa (1982) and Boesen and Mohele (1979) discuss these and other risks in tobacco production in Nyamwezi areas of Tanzania. Separately, North Carolina experienced substantial deforestation in the early to mid-twentieth century, its tobacco heyday. Since tobacco’s local decline later in the century, though, much of the former farmland has regrown as forest. 54. The BAT tree nurseries, of which there is one at Oyani growing eucalyptus and other seedlings, were praised by the Kenyan minister of finance in his national budget speech in June 1981. The company’s “Statement of BAT Industries’ Tobacco Interests in Developing Countries,” presented at the company’s annual general meeting on 9 June 1982, noted that over 9.5 million trees had already been planted in the Kenya nurseries but said nothing about the rate at which trees are burned in tobacco drying or about spacing. 55. See New Scientist, 17 March 1983, p. 705. 56. Heald (1991) suggests, as noted earlier, that response to price or productivity shocks can vary strikingly by ethnic group. Ethnicity itself is probably not, however, the operant factor, since in comparing two places, all other things (historical, demographic, economic, political . . .) are never equal. See Cochran (1980) on BAT farmers in China in the 1920s and 1930s. For a general social history of tobacco production and consumption in the United States and worldwide, suggesting its cultural complexity, see Goodman (1993). 57. Three public health specialists, after reviewing documents in BAT’s own Guildford depository and conducting their own interviews, summed up their findings this way: “BAT enjoys extensive high-level political connections in Kenya, including close relationships with successive Kenyan presidents. Such links seems to have been used to influence public policy. Health legislation has been diluted and delayed, and when a competitor emerged in the market, BAT used its contacts to have the government pass legislation drafted by BAT that compelled farmers to sell tobacco to BAT rather than to its competitor. BAT was already paying farmers less than any other African leafgrowing company, and the legislation entrenched poor pay and a quasi-feudal relationship” (Patel et al. 2007: e1). Sharply critical voices from some tobacco growers and visitors in southern Nyanza were increasingly reaching mass media. One tobacco grower, Ronald Ojwaya, lamented that “for meagre returns of Shs. 70,000 [about U.S. $935] per harvest, tobacco farmers are paying a heavier price in poisoned soils and food shortages, which have transformed them into perpetual beggars.” Quoted in Dann Okoth, “Golden Leaf Barren Harvest,” The Standard (online ed.), 24 October 2009. The article’s author went so far as to accuse the tobacco industry of spreading food crop diseases (as tobacco mosaic spread to cassava and potatoes as well) and sharply reducing food harvests, degrading “huge swathes of forestland and water catchments,” and drying up rivers. Conflating the effects of tobacco growing with those of broader drought, Okoth’s article shows how a resented foreign company or introduced crop—rather like a villainous moneylender or a suspected witch—can easily become a lightning rod for generalized anger about exploitation, or a vent for frustrations about rural powerlessness. See also Campaign for Tobacco Free Kids (2001) for a still broader indictment of the industry worldwide, with a similar title. A challenge for the scholarly analyst is to disentangle the

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economic, political, psychological, and environmental causes of anger and frustration, and to qualify the hyperbole sometimes found in activist reports, without dismissing the reasonable criticisms of the crop or enterprise, or abandoning caution about its possible longer-term effects. 58. The experience of North Carolina provides warning. Much of tobacco-growing North Carolina had regrown to forest by the early 2000s. Durham, once a thriving city of tobacco wealth, had become by then something more like a ghost town, with large warehouses and factories being converted into condominium apartments, and an impoverished population of former tobacco growers and cigarette makers looking for new work. 59. Together, Kenya and Tanzania offer adequate material for useful future comparisons of state versus private tobacco enterprises. Boesen and Mohele (1982: 141–43) describe the nationalization of tobacco industries in Tanzania; their findings reveal some of the same problems experienced with state agricultural projects in Kenya—e.g., late inputs and late payments for crops. They find state production impressive but question the distribution of rewards. Both they and Feldman (1970: 18) compare tobacco production on settlement schemes with that on individual licensing schemes. Abrahams (1981: 84–85) briefly compares individual and collective tobacco projects in the Nyamwezi country. 60. The very elderly will speak of the new tobacco as ndawa mar serkal, government tobacco, as opposed to ndap nyaLuo, Luo tobacco. 61. Not only does the company have little need to dispense money as patronage loans to farmers, as public lenders do to win votes, but it has enough “problems” of resource “diversion” already with farmers’ using replanted trees for their own house building rather than tobacco drying (something not a problem in farmers’ eyes). A lesson about lending only in kind would be easy to overgeneralize, however, since some kinds of rural banking experiments elsewhere have shown promise with programs dealing in cash only. The next chapter discusses some of these programs. 62. This last point is not intended as a comparison with the IADP-SPSCP, since it did not require land collateral either, but with the land mortgage programs of the AFC and commercial banks.

Chapter 10. Self-Help and the Underground Epigraph. Swahili, Haba na haba hujaza kibaba: “grain upon grain fills the measure.” Alternate translations: “Many a little (pickle) makes a mickle” (F. Johnson 1942: 185) or, in a context of Kenyan discussions finance in English, the proverb is sometimes converted to coins and a bowl. (See Wright and Mwangi 2004: 4.) 1. By way of disclaimer, the parts of my field studies most directly involving town and country entrepreneurs (traders, artisans, tailors, carpenters, taxi drivers, et al.), and the periods most directly studying aid agencies serving such people, have been done at largely different times. On some points, interviews involving recall, and others’ work as cited, have been used to fill in gaps and bind the findings together. 2. On the terminology: some reserve the designation PVO, private voluntary organization, for international aid organizations, and NGO, nongovernmental organization,


NOTES TO PAGES 157 – 161

for national or local ones. But for most they are interchangeable. Since most of these organizations’ officers are salaried, they are not strictly “voluntary.” As for the term NGO, not only is it a trifle degrading to be defined by what one is not, but nongovernmental might as well describe a university, drug syndicate, or multinational oil firm. 3. Standard tallies of NGOs in Kenya by the late 1980s totaled between four hundred and six hundred, of which, by one count, about one hundred were international (Ng’ethe 1989: 30–31), but since the smaller ones shaded into countless grass-roots voluntary associations, any count was arbitrary. For reference, the Technical Assistance Information Clearing House (TAICH) directories (e.g., 1983) and the Union of International Organizations’ Yearbook of International Organizations have listed international NGOs in East Africa and elsewhere. 4. A sampling of these loan projects and programs (including the Grameen Bank), variously combined with training schemes, appears in Mann et al. (1989). 5. Wall Street Journal, 7 June 1991, p. B2. 6. For a more systematic treatment of mutual stereotyping among western Kenyan peoples including Luo, see Sytek (1972). 7. It is true too of the larger donor agencies. In a Washington, D.C., meeting of researchers on small-scale enterprise in the late 1980s, I heard an officer of one such agency, referring disparagingly to Mauritanian immigrant traders in Senegal, say behind a cupped hand, “I never let anyone lend to the Naars.” 8. See Sulloway’s monumental tome (1996) on the effects of functional birth order (place among siblings growing up) on parental favor, and on travel and certain kinds of rebellion and innovation among laterborns—studied through aggregate statistics. Questions like his remain to be adapted and systematically tested in Africa. Separately: It is not impossible that the genetic (selected) and learned genetic heritage of the offspring or descendants of migrant entrepreneurs may somehow become more conducive to entrepreneurial exertion or success than the makeup of the offspring or descendants of those who stay in place. Too little is yet known to say. 9. Just as with ethnicity, so too with sex or gender. To favor fishers and netmakers in the eastern Nyanza/Lake Victoria basin is directly to favor men, but to favor fish processors and headload transporters is to favor women. Only when the scale of a processor’s or transporter’s operations gets large (as with, say, commercial tobacco too) can men be expected to try to take it over. 10. Marris and Somerset (1971: 57–58). Of course, these findings may be in part a result of whom the ICDC and its officers supported in the first place—for instance, if these were themselves members of the more populous ethnic or religious groups where they worked. The finding on ethnic identities is also predictable where land collateral is required. The ICDC has issued small business loans since 1965, using land title security. 11. D. Cohen and Atieno-Odhiambo (1989: 53–56) describe a rising Luo elite that has used resettlement areas near the former Indian “sugar belt” as a safe haven from the demands of kin at home for sharing. 12. V. S. Naipaul’s famous novel A Bend in the River, about a young Indian generalgoods trader venturing alone into communities along the Congo River, describes vividly the avuncular patronage for a startup apprentice turned free. Its protagonist, a classic

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“minority middleman” or “pariah capitalist,” prospers by local standards yet feels precarious—and indeed, in real life, others like him were expelled “wholesale” from Idi Amin’s Uganda. The book’s pessimism and stereotypes about Africa, though, strike some African readers as racist. Game tests in Habyarimana et al. (2009). 13. Collier (2007) is among others who have used these terms together already. 14. See Shack and Skinner’s collection (1979) on Asian and other “stranger” entrepreneurs (the kinds called minority middlemen, pariah capitalists . . .) in East Africa, and Mann et al. (1989: ch. 1) for a brief summary of other discussions. 15. Pioneering studies attempting to systematize understanding of small enterprise in Africa included those of Clyde Mitchell and a set of Manchester-trained anthropologists fanning out of the Rhodes-Livingstone Institute in Lusaka, Northern Rhodesia (later Zambia), beginning well before independence in 1964. For a few early postindependence studies on African small entrepreneurs and their networks, see Abner Cohen (1969) on urban Nigeria (cattle and kola-nut trade), David Parkin (1972) on the Kenya coast (copra trade, palm wine provision, land speculation), and economists Peter Marris and Anthony Somerset (1971) and Peter Kilby, and educationalist Kenneth King (1977, 1996), on Nairobi and elsewhere in Kenya. For fuller bibliographies on Luo, Kenyan, and African entrepreneurship than can be offered here, see Kitching (1980), Mann et al. (1989), and Francis (2000). 16. Keith Hart’s article on “informal” income opportunities in urban Ghana, published in 1973, made a splash in both academic and policy circles partly because so many of the activities it described from firsthand observation flouted existing laws. He reflects further, and more broadly, on newer forms of money and exchange circumventing state control in Hart (2000). See also Roitman (2005) on Cameroon. 17. Margaret Jean Hay (1972) and Achola Pala Okeyo (1977, 1983) were among the first women to study Luo women’s economic activities systematically. They and others later (for instance, Elizabeth Francis 2000) devoted more explicit attention to women’s small-scale rural enterprises. See also Abwunza (1997) on Maragoli Luhya. 18. By one theory (also sometimes applied to university departments) the private agencies are so competitive because the stakes are so small. 19. Judith Tendler (1982) noted this irony in comparing private aid agencies worldwide. 20. Tendler (1982) and Gorman (1984) describe private aid agencies’ attempts to move from relief or welfare to development orientations during the late 1970s and 1980s. 21. See Mann et al. (1989) for case studies of private aid agencies seeking to improve their financial management. 22. Not that earlier projects had been less gender specific—they had just been less ostensibly so. Private international and local aid programs for Kenyan women in the mid-1980s are catalogued in the Mazingira Institute’s directory (1985). 23. Mann et al. (1989: esp. chs. 1, 2). As discussed there (ch. 1), definitions of “small” and “micro” enterprises vary widely, but microenterprises have conventionally been defined as family based, with limited numbers of participants (some draw the line at five or ten) and amounts of fixed capital, working capital, or turnover, also in round numbers like U.S. $100 or $1,000.


NOTES TO PAGES 167 – 169

24. Gabriela Romanow of Acción International, quoted in the Wall Street Journal, 7 June 1991, p. B2. 25. Sources: Aleke-Dondo (1991) and research done under the ARIES project for USAID. Other organizations financing microenterprises, though not all comparable to the private agencies discussed here, included the Kenya Industrial Estates (KIE), begun in 1967 as a subsidiary of the Industrial and Commercial Development Corporation; several non-bank loan companies; the government’s Joint Loan Boards, established under British authority in 1955; and its Lake Basin Development Authority. 26. These were some organizations leading the wave of small and microenterprise finance in Kenya: Partnership for Productivity (PfP) Kenya, an offshoot of the Quakerfounded, Washington, D.C.–based PfP International, in western Kenya from 1970; Voluntary and Christian Action in Distress, later ActionAid, at first through the Salvation Army from 1976; the National Council of Churches of Kenya (NCCK), formerly the National Christian Council of Kenya, in Kisumu since 1975; the (Anglican) Church of the Province of Kenya (CPK), from the early 1980s; the Kenya Rural Enterprise Program, from 1984; Women Enterprise Development, in Kisumu from 1986. CARE Kenya, present from 1968, shifted into granting and lending for women’ groups in 1989 in Siaya and Baringo. 27. Njonjo et al. (1985: 23). The districts were Kitui, Bungoma, Kisii, Kiambu, and the capital Nairobi. None is a mainly Luo district. 28. International feminist finance forces joined local ones as Women’s World Banking, a New York–based private lending and guarantee organization founded in 1979–80 and serving small-scale businesswomen in some forty countries by 1990. 29. A 1999 survey of microfinance institutions in Kenya by Jeanne Koopman broke down their clientele this way (Koopman 2001: 6): about 75 percent were classed as traders, including open-market vendors, itinerant traders, and small shopkeepers. Another 15 percent were taxi owners, hair salon operators, or other service providers. About 5 percent were farming or herding (dairy, poultry), mostly around cities. Fewer than 5 percent were manufacturing, most of these tailoring. The point about cash flow and screening is Koopman’s. 30. Useful again for Kenya is Koopman’s 2001 study, summarizing her own survey data from 1999 and other data from 1997 (by the University of Nairobi Institute of Development Studies and the Center for Development Studies at Bath University). Koopman used the official poverty line from Kenya’s Central Bureau of Statistics as a point of reference: an income level defined as able to provide minimum food, shelter, and other basic needs. While 29 percent of urban residents and 47 percent of rural ones lived below the poverty line by this definition, only about 20 percent of microenterprise owners fell below it, and only about 5 to 9 percent of microfinance institutions’ clients did. At the richer end of the spectrum, about 20 percent of the clients were classed as “wealthy,” having annual incomes of over two hundred thousand shillings (U.S. $2,660). Sixty percent fell somewhere in between (Koopman 2001: 6–8). These figures must be taken with caution, again, since some kinds of “income” (for instance, homegrown food) are hard to count or measure. But they do point toward a simple conclusion: the traders

NOTES TO PAGES 169 – 176


and others who participated in the programs of microfinance institutions were mostly not the poorest people around. 31. See Francis (2000: pt. 2) and Shipton (2007: ch. 3) for more on Luo occupational pluralism. 32. Most of the best descriptions of small-scale enterprise in Kenya and tropical Africa are in fiction. See, for instance, Macgoye’s Street Life. 33. Because private aid agencies’ financial projects directly reaching my main Kanyamkago research site were few by the time of my last visit (1991–92), more of this particular information is based on interviews and readings on such projects elsewhere. 34. Of course, terms like “top-down” and “bottom-up” in a sense only reinforced an assumption of natural inequality between program planners and the public supposed to be served. 35. Some analysts of private aid agencies had come to the opinion, by the late 1980s, that relief and development ought to be inseparable, but this was not yet the conventional view. 36. If he belonged to more associations than most, it was probably because his teacher’s salary allowed him more regular contributions. 37. Most of the groups were mixed sex and took periodic contributions (usually monthly, in one case yearly). The only exception was one group that took contributions whenever one member died. 38. See the admiring discussions of contribution clubs in Massing (1978) and sources cited therein; Von Pischke et al. (1983), Von Pischke (1991: 14–17), United Nations Inter-Agency Panel on People’s Participation (1984), Kropp (1989), and Adams and Fitchett (1992). 39. The topic of rotating savings and credit societies has also been discussed in Shipton (1991, 1992b, both on the Gambia; 2007, on Kenya). 40. Geertz (1962) and Ardener (1964) provide classic comparative anthropological studies of rotating saving and credit associations. See Adams and Fitchett (1992), among many other available sources, for contemporary cases and comparisons. The French and English term tontine derives from Lorenzo Tonti, who devised one kind of shared annuity. 41. In the Gambia, a country with a single growing season, I have observed rotating contribution clubs that cease functioning each year in the “hungry season,” when too few members have money to contribute. 42. Light’s 1972 study of financial self-help groups among ethnic minorities in U.S. cities revealed striking differences between the organizing propensities of populations he called Chinese, Japanese, West Indian, and American-born Blacks (see Light 1972: esp. pp. 35–44). Some differences observed, easily misinterpreted as racially biased, are hypothetically traced in part to losses of some particular aspects of African cultures during slave relocations and in part to later conditions in which slave descendants lived. 43. See Thomas (1985, 1988) on Gikuyu and other central Kenyan women’s selfhelp groups and Mwaniki (1986) on the Mbeere of Embu, close linguistic kin of Gikuyu. These, and Udvardy’s findings (1990) on Kilifi District, contrast strikingly with Chai-


NOTES TO PAGES 176 – 184

ken’s findings (1990) on Luo women, whose contribution clubs she found short lived. Differences in research methods leave room for further comparison. 44. These nonrotating groups are sometimes known in aid circles as accumulating, or regular, savings and credit associations (ASCAs or ReSCAs). See Robinson (2001: esp. 241–42). For a collection comparing various kinds of local saving mechanisms around the world from anthropological and sociological angles, see Lont and Hospes (2004).

Chapter 11. Self-Help with Help Epigraph. Atwood (2008: 205n.). 1. For discussions of actual and potential ties between larger, long- distance aid agencies and small local financial institutions like contribution clubs, see Haggblade (1978), Seibel and Massing (1974), Johnny (1985), Kropp et al. (1989), Von Pischke (1991), and Adams and Fitchett (1992). 2. Calavan et al. (1989) describe the Grameen Bank’s early years. Subsequent literature has grown voluminous, including numerous books on or by Muhammad Yunus himself. 3. Examples of aid agencies experimenting with “solidarity groups,” under whatever term, were Partnership for Productivity, Kenya; the Kenya Rural Enterprise Program (later K-REP) with its Juhudi credit scheme; the National Council of Churches of Kenya; and in Nairobi, Pride. 4. An example was Partnership for Productivity (PfP), operating in several African countries. Although this international organization was closed in the mid-1980s for (unrelated) financial irregularities in its headquarters, PfP Kenya had declared independence by then and continued operating, with a branch in Kakamega serving parts of Western and Nyanza Provinces. 5. Aleke-Dondo (1991) reports NGO loan repayment rates as of 31 December 1990. These were among those attaining rates above 95 percent for group guarantee programs: Adventist Development and Relief Agency (100 percent), CARE Kenya (96.5 percent), Council for International Development (100 percent), Kenya Rural Enterprise Program (100 percent), National Council of Churches of Kenya (100 percent), PCEA Chogoria (100 percent), Tototo Home Industries (100 percent), Women Enterprise Development (96 percent). Some of these figures, though, are just self-reported and used to attract funds from larger agencies; independent evaluations were scarce. That group- based methods could secure high repayment in some circumstances, though, was no longer in doubt. Some American banks—for instance the South Shore Bank in Chicago—had begun emulating the Grameen and other group-based lending models. 6. Notably efficient in this respect was the Bank Rakyat Indonesia (People’s Bank of Indonesia—BRI), a government scheme with village capillaries, for saving and credit. It revealed a great rural demand for places to save money. Robinson (1992, 2001) documents its history. 7. As had profitable (for some) savings-and-loan banks long before that across the United States. 8. In this period of high inflation, Ugandan and Tanzanian shillings had become

NOTES TO PAGES 184 – 189


sought after—to the amazement of East Africa–watchers everywhere who had assumed Kenya’s economy sounder than its neighbors’. 9. Farther afield was the important example of the Bank Rakyat Indonesia (BRI), mentioned earlier. 10. Based on surveys by C. Aleke-Dondo in 1990–91 (1991: 15) and later by Jeanne Koopman in 1999 (2001). Koopman found that among the bigger lenders, K-Rep (Kenya Rural Enterprise Program), Faulu (Sw. for succeed), and Kenya Women’s Finance Trust had all switched from individual to group guarantees (Koopman 2001: 2). 11. Among those using group guarantees, rates varied between 74 percent (Partnership for Productivity) and 100 percent (K-Rep), while among those using individuals, rates varied between 56 percent (Upweoni Community Development Project) and 89 percent (Imani). (Aleke-Dondo 1991: 15, table 1c). 12. Based on Aleke-Dondo’s 1990–91 study (1991: 20). 13. Among the more important proponents of this new orthodoxy of rate raising had been a group of agricultural economists at Ohio State University, including Dale Adams and Douglas Graham, who had gained the ear of many officials at USAID, the World Bank, and other agencies. 14. Or at least from the capital city and abroad. My information on K-Rep is based on interviews conducted in the late 1980s and early 1990s in Nairobi and Washington, D.C., and reports latterly including Rosengard et al. (2000), Koopman (2001), and John Nyerere and Maviala (2006), as well as occasional reports on the MicroFinance Network Web pages. 15. Case from Robinson (2001: 114), based on Davalos et al. (1994: 37–38). 16. Not that such open-ended questions are lost on Robinson (a thoughtful and experienced anthropologist), on Davalos et al. (some of whose co-authors were decadeslong Kenya residents), or even on the officers of USAID and the World Bank who commissioned or published their reports. 17. According to the admiring account of John Nyerere and Maviala (2006: 210–11), the role reversal exercise (along with joint stock ownership and biennial get-togethers) helped maintain K-Rep “as one family with a single development vision” (p. 211). It may be compared to the role-swapping strategy of peace building between representatives of cultures at loggerheads, pioneered in “culture drama” by Jon Kirby and coworkers at the Tamale Institute for Cross-Cultural Studies in northern Ghana in the early 2000s. Participants, as protagonists of particular ethnic groups, volunteer to act out each other’s parts—as cultural characters—each with the observation and criticism of the counterpart(s) from the other side being imitated. All then discuss. 18. K-Rep’s interest rates on group loans varied mostly between about 30 and 33 percent in the 1990s and early 2000s ( John Nyerere and Maviala 2006: 216). K-Rep had charged high interest rates up to 10 percent a month, or 120 percent per year, during a brief period of high inflation in the late Moi years (Koopman 2001: 5). 19. By 2006 K-Rep Group Ltd. encompassed K-Rep Development Agency (a limited company registered as an NGO), K-Rep Advisory Services Ltd. (a private, forprofit consulting firm), and K-Rep Bank Ltd. (a private, for-profit microfinance company jointly owned with others). See John Nyerere and Maviala (2006: 201–3).


NOTES TO PAGES 189 – 192

20. Rosengard et al. (2000: 2, 10, 14). As of the end of 2001, K-Rep Bank reported assets of U.S. $15 million (up 53 percent since the previous year) and a total loan portfolio of some U.S. $9 million disbursed to 15,911 borrowers, of whom 52 percent were women, receiving an average loan of U.S. $576. (From the MicroFinance Network Web site, The 2006 K-Rep Annual Report and Accounts announced rising total assets of K.Sh. 5.2 billion, customer deposits of K.Sh. 3.3 billion, and after-tax profits of K.Sh. 101 million. 21. By 2003 K-Rep loans totaled the shilling equivalent of $20,389,000 and averaged $449; savings deposits totaled $15,481,000, averaging $247 ( John Nyerere and Maviala 2006: 212). 22. At the times I have visited K-Rep’s offices, and to judge by the latest available annual report (2006), K-Rep has always maintained a management of mixed ethnolinguistic groups (including Gikuyu, Kalenjin, Luo, and other Kenyan, African, and European groups, among others). Gikuyu speakers, predominating around Nairobi, have probably been in plurality, but maybe not always in a majority, in the upper ranks. 23. The loan/savings ratio decreased, for instance, from twenty times the amount saved for a loan of K.Sh. 15,000, to five times savings for a loan of K.Sh. 50,000. 24. Rosengard et al. (2000). 25. The term chikola does not appear in any of my older Swahili dictionaries. 26. Some might have objected to terms like graduation, but the growing numbers of clients seemed to suggest that these did not represent intolerable indignities. 27. Rosengard et al. (2000: 14–15). 28. The K-Rep Web site did not mention the Boston-based funding and consultation with which it had begun, but it represented the organization as a Kenyan-begun venture, as of 6 October 2008; content&task=view&id=46&Itemid=85. 29. I thank Marguerite Robinson for first bringing the importance of Equity and its growth to my attention at a time when I was out of Kenya. A fuller treatment than mine of Equity’s history appears in Cook (2006). Equity Building Society was renamed Equity Bank as its shares went public on the Nairobi Stock Market. 30. The demand for means of remittances led Equity Bank to a sub-agency partnership with Western Union wiring service. 31. The bank was not licensed to offer checking or foreign exchange services. 32. Between 1995 and July 2003, the number of EBS’s depositors grew from some 18,000 to 187,000, deposits rose from K.Sh. 123 million (about $2.4 million) to 2,600 million ($35 million), the number of borrowers grew from 347 to 57,000, and outstanding loans grew from K.Sh. 97 million (about $1.9 million) to 1,500 million ($35 million). In 2003 the EBS was 84 percent owned by over 2,400 Kenyan shareholders and 16 percent owned by AFRICAP (a consortium of the International Finance Corporation, the European Investment Bank, and other investors). Source: MicroFinance Network, http:// By 2008 the (renamed) Equity Bank’s loan portfolio included about 250,000 loans, and its staff numbered about 2,500 (Grammling and Holtmann 2008). 33. Cook (2006), Wright and Cracknell (2008: 1).

NOTES TO PAGES 193 – 197


34. In 1993, by one account, “nonperforming loans were 54% of the portfolio, and accumulated losses totaled Ksh.33 million ($570,000), on a paid up capital of Ksh.3 million. Deposits were being used to meet operating expenses. Equity’s liquidity stood at 5.8%, far below the required 20%” (Cook 2006: 179). By 2008 it held over $250 million in shareholder funds and served “more than 2 million customers, through 76 branches, and more than 350 ATMs, with continued expansion planned” (Wright and Cracknell 2008). See also Wright and Mwangi (2004). 35. Anonymous Kenyan woman user of Equity Building Society, quoted in Wright and Mwangi (2004: 4). As Mwangi was at the time of writing the finance director of EBS, the quotation and story could be deemed part of Equity’s publicity, successfully picked up and amplified: the story-in-a-box is repeated in at least one publication of the World Bank (Cook 2006: 186). 36. Equity chose guarded, bulletproof, radio-contacted branches on four-wheel drive, appearing weekly on market days: accessible, moving mini-forts. 37. A leader in this movement in Kenya was Safaricom, which took to mobile banking, or m-banking, with a system it called m-pesa (pesa being money in Swahili), allowing cell-phone users to transfer money to other cell-phone users by coded messages. For a comparison of Tanzanian, Mauritanian, and Botswanan cases of the spread of rural telecommunications in the cell-phone era—showing very different rates of uptake and coverage—see Okpaku (2006), who strongly favors electronic innovation. 38. The Equity Bank’s loan sizes and terms were flexible. In 2005 loan sizes ranged from about U.S. $6 to over $30,000, with annual interest charges from 21 to 53 percent (Pearce and Reinsch 2005: 5). In 2004, in conjunction with the NGO Pride Africa, Equity started offering small farmers growing commercial crops or dairy farming a savings account requiring no minimum balance. All of this was meant to reach poorer yet reliable savers and borrowers. 39. Joining the World Bank with its Consultative Group to Assist the Poor (CGAP) were twenty-nine bilateral and multilateral “donor” agencies (including lender agencies, like the Bank itself ). The United Nations Development Programme had established its Capital Development Fund (UNCDF), financed or co-financed by other international organizations, governments, and private companies. USAID had established its Office of MicroEnterprise Development as part of its Bureau for Economic Growth, Agriculture, and Trade. Below the office were a host of other programs and initiatives with labored acronyms like AIMS (Assessing Impact of Microenterprise Services) and PRIME (Program for Innovation in Microenterprise)—part of a long naming tradition by then, including zodiacal project monikers like ARIES (Assistance to Resource Institutions for Enterprise Support), PISCES, and GEMINI, all projects for microenterprise development. (What would they think of for Sagittarius?) 40. V. I. Lenin, Works, vol. 25, p. 173, quoted by Joseph Stalin (1932: 48). 41. For a general discussion on violence recurring around election times, see Shipton (2009, ch. 8). 42. Ogembo (2006) and James H. Smith (2008) treat contemporary witch-hunting and its local rationales in western and eastern Kenya, respectively. 43. The Millennium Villages project involved a dozen “hunger hotspots” in (ini-


NOTES TO PAGES 198 – 203

tially peaceful) parts of eastern and western Africa in the early 2000s. One of its chosen communities was the sublocation of Sauri, with a population of about 55,000, in Luospeaking Siaya District, Nyanza Province. Backed by the Earth Institute of Columbia University, the Millennium Promise, and the United Nations Development Programme, and drawing on resources from the Government of Kenya, the program’s publicity materials described it as bold and innovative. Three big questions unanswered were how long the program would last, how much resources these efforts were drawing away from other comparable communities around (or how much higher they would inflate prices there), and how replicable these results might be on a larger scale. 44. Kiva processed “people-to-people” long-distance loans as small as $25. Sponsored by a number of large corporations as well as individual lenders, it used for some transfers the services of PayPal, a highly profitable money-transfer organization for which its president, Premal Shah, had previously worked as a product manager. Although borrowers paid interest, this money was not transmitted to lenders but meant to cover costs. As of 29 January 2009, Kiva advertised a default rate of only 2.5 percent for some $22 million in “ended loans” and more than twice that amount in total loans ( I thank Christian Thorau for bringing Kiva to my attention. 45. Among the broadcasters who spread favorable word of Kiva in its first years in the United States were the New York Times and former president William Clinton on his speaking tours. 46. Other organizations offering long-distance “person-to-person” financial services comparable in one way or another included DonorsChoose, Lending Club, MicroGiving, Prosper, The Fish Pool, and Zopa. 47. Robinson (2009). Several of the points made in these pages about the rise of microfinance institutions are also made in Robinson’s publications in 2001 and 2002 and other presentations, based on her decades of ethnography and advising of microfinance institutions. Among the points she has emphasized are the need for savings to accompany or lead credit; the importance of listening to clients; the demand for easy, confidential, and secure saving mechanisms that keep their accounts accessible to savers for emergencies; and the need to cross-subsidize small accounts with large if institutions are to reach big numbers of clients. She also notes the self-respect and optimism that having an officially recognized account can confer a young or new saver. 48. Fuller (1732: 208). 49. Bitner’s account (2008) of the “subprime” mortgage heyday and meltdown combines vivid firsthand reminiscence and confession (as a mortgage lender and company manager who bailed just before the collapse) with clear basic explanation and searching criticism. 50. Wordsworth 1908: 513 (orig. c. 1815). Though meant as a comment on the overzealous piety of some poetry critics and censors, Wordsworth’s fuller remark is phrased so as to have a special, recursive aptness for our topic too: “For to be mistaught is worse than to be untaught; and no perverseness equals that which is supported by system, no errors are so difficult to root out as that which the understanding has pledged its credit to uphold.”

NOTES TO PAGES 203 – 209


51. Two of the better-known investors accused of and indicted for having organized or co-organized multibillion-dollar pyramid schemes were New Yorker Bernard Madoff (convicted and sentenced to one hundred and fifty years in prison) and Texan Sir Allen Stanford (jailed and awaiting trial as of 1 October 2009), but these were by no means the only people alleged to be engaging in this kind of activity at the time. 52. So Henry George warned in 1879 (1990: 40) against considering loans as wealth or productive capital when they would need to be repaid by someone. An increase of such wealth, as in his subtitle, came with increase of want. 53. Margaret Atwood, “A Matter of Life and Debt,” New York Times, 22 October 2008. She expands on this more in her 2008 book Payback. 54. Lehman Brothers, filing for bankruptcy protection on 15 September 2008, was the first of the major investment banks on Wall Street to be allowed to go under in this wave. Bear Stearns, Merrill Lynch, and numerous famed others failed or were forced to sell out at yardsale prices before federal aid helped save others. 55. In one of the more embarrassing episodes in U.S. financial history, at a pressured moment of severe economic downturn, lawmakers in late 2008 committed up to some $700 billion of federal funds to buying “troubled” mortgage-backed and other assets from banks and other financial institutions, half from 3 October 2008 and half from 15 January 2009, to give them the means to re-lend—but at first they forgot to make them sign anything saying they would. 56. No one metaphorized more freely about the economy, as the market collapsed, than investment superstar Warren Buffett. “The domino started falling,” he said looking back, and now Americans, scrambling for low-yield Treasury bonds, were practically “putting their money in the mattress.” Generalizing that “trust . . . has been lost,” he spoke of “an economic Pearl Harbor . . . this really is one” (interview on National Public Television, 1 October 2008). 57. Floyd Norris, “A Year of Chaos in Finance,” New York Times, 19 December 2008. 58. By late October 2009, microfinance institutions’ rates were averaged at 14 to 18 percent and the traditional commercial banks’ at 25 to 30 percent (Aron 2009). Inflation was officially reported at an annual 9 percent “underlying” rate—that is, one adjusted for unusual temporary shocks—and an annual 23 percent overall (Central Bank of Kenya Web site, http://www.centralbank.go.k59). In April 2009 a group of leading statesmen from richer countries, known as the G20, met in London and resolved to triple their commitment to the International Monetary Fund to about a trillion dollars. Could the IMF’s sister, the World Bank next door, be far behind? 60. Bagehot (1873: 75–76). He was writing mainly of London and Britain, as before. 61. In May 2009, under the new Obama administration in the United States, Congress passed federal law for reform of credit card practices to reduce banks’ and other financial institutions’ abuses deemed deceitful or otherwise unfair or usurious. The abuses barred included various kinds of false advertising, sharp rate increases and other surprise charges, penalties considered disproportionate or unreasonable, and retroactive fees, among other strategies of profit taking. Many of the provisions were scheduled to go into effect within a year; others called for further studies.


NOTES TO PAGES 211– 229 Chapter 12. Crossing Back

1. A turning point in public demonstrations over international agency work was the 1999 “battle in Seattle” over a meeting of the World Trade Organization. In some ways it was emulated in demonstrations in other cities around the world around meetings of officials from the World Bank and International Monetary Fund. 2. Among sources commonly cited are USAID (1973), Donald (1976), Von Pischke et al. (1983), Von Pischke (1991), Howell (1980), and White (1993). 3. Elsewhere (Shipton 1991a) I discuss these principles as they play out in Gambian rural finance under local understandings of Islamic, Christian, and secularist traditions. 4. The stories of these cash crops are told, with various theoretical slants, in Melville (1970), Heyer (1976: 341–46), Heyer and Waweru (1976: 195–99), Buch-Hansen and Marcussen (1981), Paul (1982: ch. 4), and Kitching (1980), among many other available sources. 5. Kitching (1980: ch. 11), and Shipton (1989b: chs. 9–10) discuss these points further. By 1973 schemes for tea and pyrethrum had nationwide repayment rates of about 99 percent, the highest of all major farm credit schemes in Kenya (Von Pischke 1973: 62). Von Pischke and others have attributed these high rates to the fact that the loans were issued only in kind (mainly in fertilizers) and to the fact that the buyers had effective monopsonies; others have cited strong managers in the statutory boards concerned. The conclusion on credit in kind agrees with my findings on the IADP-SPSCP in Nyanza and Western Provinces. 6. These points are discussed further in Haugerud (1983, 1989) and Shipton (1988, 1989b: chs. 9–10), and other sources they cite. 7. A look at the classified advertisements in the back pages of any lower- class American newspaper (Loans! Loans!) reminds one just how tempting, if not also necessary, poverty can make credit become. 8. This statement, though, can no longer go unqualified. See Hodgson (2001) on Maasai for a nuanced feminist perspective on what constitutes “natural” family representation. 9. Donald (1976), Von Pischke et al. (1983), Adams, Graham, and Von Pischke (1984), Von Pischke (1991). 10. Riddell and Dickerman (1986), Shipton (1992b). 11. How many diverse sages have repeated in their different ways the biblical injunction “Be not made a beggar by banqueting upon borrowing” (Apocrypha 18:33)? How many parents have told their children what Thomas Jefferson wrote to his daughter departing for school, “Never spend your money before you have it” (letter in Albemarle County Museum, Charlottesville, Virginia)? 12. John Ruskin’s 1866 remark in The Crown of Wild Olive that “borrowers are nearly always ill-spenders, and it is with lent money that all evil is mainly done” (Ruskin 1895: “Work,” Sec. 34) now sounds hyperbolic, sanctimonious, and prissily Victorian. Yet it and Oscar Wilde’s more wryly expressed sentiment quoted in Chapter 9, about how easy and tempting it is to spend on luxuries like gold-tipped cigarettes when in debt, do share something in their drift.

NOTES TO PAGES 230 – 244


13. The French proverb “Credit supports the farmer as the hangman’s rope supports the hanged” (Mitra 1983: 85) is echoed with a bit of hyperbole in a statement by B. Chango Machyo of Makerere (1969: 104): “In every age and in every country the mortgage system has been the curse of the peasant holder.” 14. Grant (1992: 429). Other dramatic overmortgagings that came to light at the time included New York’s Plaza Hotel, nominally owned by Donald Trump. As Grant summed up the American financial scene in the 1980s, “Lenders and borrowers, it was clear enough, had overdone it” (p. 436). 15. Barack Obama enjoyed exceptionally enthusiastic support in western Kenya, as in the nation and Africa generally, during his presidential campaign and the beginning of his administration, up to the time of this writing. 16. Margaret Atwood has put it well. “To wipe the slate clean . . . is based on something in real life: the slate in bars and pubs. . . . A dirty slate is dirty because it’s smeared all over with debts, of one kind or another; but it’s dirty for both debtor and creditor alike” (Atwood 2008: 80). 17. See, for instance, Geschiere (1997) on the modernity of witchcraft, White (2000) on vampirism in rumor, Isichei (2002) on imaginative constructions of economy in popular culture, and works by a number of students of John and Jean Comaroff, including James H. Smith (2008) for Taita of Kenya, on development, capitalism, and the occult in Africa. 18. James Ferguson (2006: esp. chs. 1, 8), among other sources, discusses vivid examples of international firms in mining and other extractive industries, once licensed or otherwise allowed entry, imposing their own political order surprisingly freely within confined spaces. Noting that capital does not “flow” across the globe but hops to particular places, he notes the common heavy use of hired security forces—or mercenary police or paramilitaries—to defend corporate and other specific, and specifically sited, interests. With Ferguson and others of like mind more locally minded, this all becomes part of ethnography’s expanded purview. 19. Phasing matters too. Who has not seen manufacturers, lenders, or marketers take losses in new ventures—“loss leaders”—to attract new clientele from which later to gain? These are charities that turn inside out. 20. Schwartz (1989) relates the history of Luo migrations to their hopes for continued mobility and also to their hopes for religious transcendence. My observations concur with hers on these things.

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Numbers in italics indicate figures. Acción International/AITEC, 181, 194 accumulating savings and credit associations (ASCAs), 290n44 ActionAid, 165, 167, 210–11, 288n26 activity funds, 176 Adams, Dale, 291n13 Adanson, Michel, 254n40 Adventist Development and Relief Agency, 290n5 adverse selection, 42 Aeschylus, 38 AFC. See Agricultural Finance Corporation Africa: economies in, external views of, 211– 12; ethnic groups in, naming of, 248n3; finance in, history of, 212; governments in, using agricultural policies to bankroll armies and police forces, 62; independence coming to, 211; languages in, terms for interest, usury, and loans, 41–42; leaders of, resentment against, 211–12; nation-states of, as arenas of intense factionalism, 62; poverty in, responses to, 3, 242–43 African District Councils, 33 African Land Development Board (ALDEV), 33 African Land Utilization and Settlement authority, 33 agok (shoulder man) system, 112, 113, 145, 220, 237 agricultural assistants (AAs), 263n8

Agricultural Credit Sector Policy Paper, The (World Bank), 127–28 agricultural finance; British policy toward, 29–30; criticisms of programs for, 121; disappointing outcomes of programs, 228. See also credit; finance; loans Agricultural Finance Corporation (AFC), 33, 59, 60, 89, 104 agricultural output, focus on, of economic program planners, 81 Agricultural Trade and Development Assistance Act of 1954, 47 aguch masira (accident pot), 171 agulu (pot, for RoSCA), 173 aid: distinctiveness of, in equatorial Africa, 161–62; harm resulting from, 242; optimistic language of, 234–35; recipients of, suspicion among, 162 aid agencies: career paths in, 132–33; holding view of the “rational” peasant, 107; seeking to work through private and nongovernmental channels, 134; staff rotation policies in, 132–33. See also private aid agencies aid budgets, national, reduced at end of Cold War, 166–67 aid programs, repetitiveness in, 131–34 AIMS (Assessing Impact of Microenterprise Services), 293n39 akuot (one who swells up), 112 aldrin, 95



Alighieri, Dante, 44 AMFI (Association of Microfinance Institutions of Kenya), 194 Amin, Idi, 163 ancestors, attention paid to, 26–27 anchor crops, 103, 111, 113–14 animals: as alternative savings source, 176; range and depth of meanings relating to, 106 Arab Bank for African Economic Development in Africa (BADEA), 56 Ardener, Shirley, 164 ARIES (Assistance to Resource Institutions for Enterprise Support), 293n39 Aristotle, 45, 252n12 Asian Africans, resentment toward, 25–26 Association of Microfinance Institutions of Kenya (AMFI), 194 Atwood, Margaret, 45, 204, 297n16 authority, centralization of, in capital city, 29 Bagehot, Walter, 207 Banco Sol, 185, 188 Bangladesh, adapting microfinance approaches from, 180–81 bank: charitable organization scaling into, 187–91; charities run as, 238; homegrown, 190–94 Bank Rakyat Indonesia, 185, 201, 290n6 baraza (Sw., public meeting), 82, 84 Barclays Bank, 186, 206 BAT. See British American Tobacco BAT Kenya Ltd., 142–43, 151 Bates, Robert, 62 BBSs (body burial societies), 171–72 Bennett, John, 124 Bentham, Jeremy, 40 biashara (Sw., trade), 162 Bierce, Ambrose, 104 birth order, functional, effect of, 286n8 bitter money, converting, to lineage property, 147–48 Body and Benevolent Fund, 171 body burial societies, 171–72 BONGOs (Bank-organized nongovernmental organizations), 167 borrowing, as a habit-forming act, 137; investing before, 220–21. See also credit; finance; lending; loans brain plasticity, 251n3 Bretton Woods meeting, 47 BRI (Bank Rakyat Indonesia), 185 bribery, as aspect of IADP-SPSCP loans, 70

bridewealth, laundering tobacco money for, 282n41 British: policy of, toward agricultural finance, 29–30; rural modernization agenda of, 31; tight control by, over money lending to African farmers, 34–35 British American Tobacco, 12, 99, 138, 142, 210–11, 220; considered as part of the government, 153; demonstrating simple goals, 154; experience of, compared to IADP-SPSCP, 153–55; freedom of, to pull out of a growing region, 152; governance by, 237–38; influencing public policy in Kenya, 284n57; issuing loans in kind, 143; mixed effects of farming scheme, 152; offering incentives for highest-earning farmers, 145; requiring farmers to build their own drying barns, 145; roots of, 280n15; strategy of, hinged on credit and extension, 144–45; using crop liens as security, 143 Brontë, Emily, 44 Brook, Yaron, 45 Buffett, Warren, 295n56 bureaucracy, tendency of, to dichotomize, 9 burials, importance of, 171–72 Burton, Richard, 41 Calvin, John, 40 capital expenditures, fertilizer use relative to, 85–86 CARE, 158, 167 CARE Kenya, 186, 288n26, 290n5 Carvajal Foundation, 194 cash cropping: correlating with IADP-SPSCP participation, 72; without mortgages, 220– 21; wealth related to, 261n17 cash crops, as food liens, 111 categories, necessity of, 239 Catholic Diocese of Embu, 186 Catholic Relief Services, 158 cattle: financial and ceremonial value of, 218; not useful as collateral, 221; range and depth of meanings relating to, 106 CBK (Co-operative Bank of Kenya), 75 cell phones, used for money transfers, 193 CGAP (Consultative Group to Assist the Poor), 293n39 Chagga people, 160 chamo asoya (taking a bribe), 70 chang’aa (local liquor), 149 charities: scaling into banks, 187–91; run as banks, 238. See also nongovernmental organizations; private voluntary organizations

INDEX charity, 4; credit as, 46–51; resentment and violence resulting from, 8; as a tool of administration, 238 chattel collateral in mortgages, 186 Chenery, Hollis, 49–50 chikola (RoSCA), 190 children-of-locality welfare association, 171 Christianity, prevalence of, among Luo and Western Kenyans, 27 churches: concern of, with power and profit, 238; in Luo country, objecting to tobacco growing or using, 141; raising interest rates, 187 Church of the Province of Kenya (CPK), 288n26 cicatrization (scar decoration), 23 class, splits in, resulting from small enterprise, 195 class alliance, 84 Clinton, William, 294n45 CLSMB. See Cotton Lint and Seed Marketing Board coffee: better loan collection from farmers in, 113–14; as engine of economic growth, 220; loan repayments for, compared to cotton, 113–14 collateral, types of, 58, 221. See also anchor crops; hypothecated crops; mortgage guarantees collection methods, unscrupulous methods of, 208–9 Collier, Paul, 162 commercial bank credit, 89 community leaders, defaulting regularly, in absence of threat, 114–15 compost use, 91 concessionary usury, 43 conditionality, 230–31, 232 conflicting inequalities, principle of, 73–74 Consultative Group to Assist the Poor (CGAP), 293n39 contour ridging, 91 contract farming, 138, 150–52 contribution clubs, 172–78, 240, 241; heartland of, 176–77; suggesting lessons for development or poverty alleviation, 184; varying interest in, among different groups, 176; women’s participation in, 174, 175, 176 cooperation, new look of, at turn of twenty-first century, 200 Co-operative Bank of Kenya (CBK), 75 Co-operative Credit Scheme of Lango and Masaka Districts, 276–77n19


Cooperative Production Credit Services (CPCS), 255n6 cooperatives, 60, 61; appeal of, weathering failures and embarrassments, 124–25; approved as loan conduits, 33; engaging lawyers as collection agents, 104; inefficiency of, 125; involvement of, in cotton market, 109; mandated to expand geographically, 108; poor public reputation of, 112; serving as springboards for political office, 69; shortcomings of, as lenders, 127–28, 277n22; subdivision of, 67–68; substituting one form of local exploitation with another, 110; viewed as corrupt and inefficient, 76 Cornell Vicos project (Peru), 51, 197, 254n44 cosignatures, 185 cotton: as anchor for loans, 111–12; in hands of Asian traders before independence, 108–9; illegal sales of, 112; loan repayments for, compared to coffee, 113–14; poorer farmers of, paying a price for being disadvantaged, 113; posing symbolic challenge for western Kenyan farmers, 112; private trade in, prohibited after independence, 109; triangular trade for, 112–13 Cotton Lint and Seed Marketing Board (CLSMB), 109, 112 Council for International Development, 290n5 CPCS (Cooperative Production Credit Services), 255n6 CPK (Church of the Province of Kenya), 288n26 craftspeople, rural, lending to, 165. See also microenterprise and microentrepreneurs credit: altering nature of spending and consumption, 229; as answer to poverty, problems with, 218; becoming a mix of credit and savings, 157, 240; blunting incentive to produce, 229; as charity, 46–51; colonial-postcolonial continuities in, 29–35; connotations of, 6; contradictions in, 225– 28; cultural aspects of, 214; dependent on functions of human imagination, 44, 45; ethical issues related to, 231–32; faith in, subject to change, 202; as fantasy, 43–46, 235–37; irresistibility of, to lenders and borrowers, 4; as item of faith, 45; meaning debt, 6, 14, 228; metaphors for, 236; mystical belief in, 45; as political tool, 219, 230–32; programs for, many shapes of, 217– 19; religious approaches to, 213; seasonal, problems with, 219; as standard response of international aid agencies, 3; as usury,



credit (continued) 37–43; without savings, 241. See also entrustment; finance; loans; microfinance credit crisis, worldwide (2008–), 202–5 creditor, Bierce’s definition of, 104 credit programs: centrally planned, difficulty of managing, 34; large scale, conundrum in, 227–28; methods of organizing, 4; rural, programmers’ desire to establish, 14. See also finance; loans; microfinance credit/savings imbalance, 29 creditworthiness, redefining, 232–33 crop hypothecation, 58, 220–21 crop insurance, 33 crop packages, 85–86, 122; not designed with enough local flexibility, 98; not meaning much to small-scale farmers, 98 crops: failure of, perceived as reason for forgiveness of debt, 105–6; introduced, resentment toward, 284n57 culture drama, for reconciliation, 291n17 currency inflation, setting maximum interest rates against, 42 dawa (Sw., medicine, charm, powerful or dangerous substance), 95, 140–41 DDT, 95 debt: cancellation of, 233; connotations of, 6; cultural aspects of, 214; fantasy’s role in, 235–37; integrated with other aspects of economic life, 223–24; metaphors for, 236; presuming nonpayment of, with long-distance finance, 233–34; prompting additional production, 137; related to credit, 6, 14, 228; religious approaches to, 213; trading of, 202–3 debt-based commodities, 203 debtors: enslavement of, 37–38, 41; pursuing, 103 default, 102; ethics of, 226–27; linked to disaffection, 116; richest and poorest farmers more likely to, 115; smaller farmers less likely to, 115 defaulters, known publicly, 115 delinquency, 227 derivatives, 203 development: buzz surrounding, 162; concept of, passing out of style, 211; as industry, 6; motivations for, variety of, 214 development aid, buzzwords of, 14 development finance: persistent problems of, 214–15; programs for, repeating approaches and outcomes of, 126–27

development work, move to, from relief work, 158 Dickens, Charles, 44 dieldrin, 95 dirigisme (centrally planned direction), 29 distress borrowing, 228 divination, 27 dongruok (growth, development), 171 DonorsChoose, 294n46 Dostoevsky, Fyodor, 44 Douglas, Mary, 231 dualism, bureaucracy’s tendency toward, 9 EBL (Equity Bank Limited), 192 EBS (Equity Building Society), 192–94 economy: East African, related to kinship, religion, and social and cultural life, 15; inequality in, effects of, 196; occult ideas about, 236–37; productive and social sectors of, 50–51; relation of, to politics, 231; relation of, to religion, 44–45 elites, urban and rural, in Kenya, 25 “emergency,” the. See Mau Mau emergency funds, nonrotating, 176 endogamous enclaves, resentment toward, 25–26 endrin, 95 Engels, Friedrich, 40, 195, 252n16 enterprise: buzz surrounding, 162; connotations of, 162–63; defining, 168–69; and ethnicity, 159–62; organizations supporting, 163. See also small-scale entrepreneurs enterprises, defining activities as, 168 entrepreneurs: success of, placed in context of family and culture, 188; tropical African, increased attention to, 163–64; women as, 164 entrustment, 217; ethics about, 233; examination of, 2–3; intimacy affecting, 7; material of, relevance of, 239; understanding, approaches to, 213 equality, distinguished from fairness, 43 Equity Bank Limited (EBL), 192, 201, 206 Equity Building Society (EBS), 192–94 esusu (rotating savings and credit association), 173. See also RoSCAs ethnicity, entrepreneurship and, 159–62 ethnolinguistic groups, engaging in particular occupational specialties, 160–61 exchanges: children engaging in, 37; terms of, and social distance, 217. See also credit; entrustment; finance; lending; loans exchange spheres, 101

INDEX experimental economics, games in, 250–51n1, 271n7 extension: importance of, 153; paternalistic approach to, 241; “training and visit” system of, 264n19 extension agents: 82–83, 144–45 extension services: agents for, 82–83, 144–45; biases in, toward richer farmers, 83, 84; demoralization among agents, 84–85; friction in, between instructors and lenders, 84–85; gender bias in, 83; infrequency of agents’ visits to homesteads, 83; questionable usefulness of technical advice from, 85; tensions between farmers and agents in, 83–84 Fabian Society, 40 fairness: children’s sense of, 37; distinguished from equality, 43; as random selection, in lineage societies, 122 families, in western Kenya, viewed by outsiders as discrete units, 243–44 fantasy, 4; acknowledging role of, in credit and debt, 235–37; credit as, 43–46 farm credit, recurring history in, 228–30. See also credit; finance; loans farmers: approach of, to repayment, 104–5; attempting to adapt to IADP-SPSCP shortcomings, 124; desiring balance between public and private marketing, 109–10; discontinuing IADP-SPSCP participation, 78; interests of, IADP-SPSCP compartmentalizing, 100–101; investing in a scheme, effect on production, 153–54; Kenyan government’s efforts to reach, 82; knowledge of, never taken as seriously, 82; not wishing for production to rise too much, 86–87; repaying project debts a low priority for, 105; unaware of true amounts of interest charged, 106–7; using technology in unrecommended ways, 97–98; in western Kenya, having other occupations and obligations, 244. See also agriculture Farmers’ Training Centres (FTC), 82 farming systems, as school of thought, 58–59, 85, 101 farm loans, pushed into rural Kenya, 32–33 farm products, system of exchange for, 108 farms, in western Kenya, viewed by outsiders as discrete units, 243–44 Faulu, 291n10 Fazan, S.H., 141–42 feedback mechanism, inadequacy of, 127


Ferguson, James, 297n18 fertility, linking land and people in metaphor, 90 fertilizer: challenges of, 91–92; commercial, 91; expense of, 94; farmyard manure, 92; little enthusiasm for, 93–94; recommended to increase yields relative to expenditures, 85–86; synthetic, 92, 93–94; trial-and-error methods used for, 92 fiduciary culture, xiii. See also entrustment fiduciary processes, human understanding of, 46 finance: Africanizing of, 208; differing cultural understandings about, 223–25; discussion of, using animal and body metaphors, 45–46; swinging pendulum of, 209, 210–11; theoretical challenges of, 213. See also credit; entrustment; loans; money, culture-bound ideas of financial aid programs, history of, in western Kenya, 29–35 financial downturn, worldwide (2008–), 13, 202–5 financial entrustment. See entrustment financial intervention, long history of, 213 financial politics, moral dimension in, 230–32 financial program planners, needing more time, 228 fishing, among the Luo, 25 Fish Pool, The, 294n46 Flannery, Jessica, 198 Flannery, Matt, 198 food crops: government buyers of, 108; marketing of, politically explosive nature of, 108 Food for Peace, 47 Food for the Hungry, 186 food prices, in Africa, kept below market rates, 110 food trade, private, 111 forced labor, underground resistance movement resulting from, 31–32 Ford Foundation, 187 foreign companies, resentment toward, 284n57 Foster Parents Plan, 165 Foucault, Jean Bernard Leon, 247n1 Franklin, Benjamin, 216 free charities, 157 freehold-mortgage system, xiv Fuller, Thomas, 8, 201 game exercises, 250–251n1, 271n7 GEMINI, 293n39 generalized reciprocity, 260n9



genetically modified crops, 240 George, Henry, 40, 204 gerontocracy, working in favor of borrowers, 104 Gide, André, 126 gifts, long-distance, 8 Gikuyu: characterized for their business prowess, 159; as debtors, handling of loan repayments, 105; developing commercial skills, 160; involved in banking, 192; involved in Mau Mau, 32; involved in scaling charities into banks, 187 globalization, 211 Gluckman, Max, 182 GMR scheme. See Guaranteed Minimum Returns GONGOs (government-organized nongovernmental organizations), 167 Gospels Church, 146 government: business of, 237; positions in, used for personal development, 68. See also public credit programs government manure, 91, 93 Graham, Douglas, 291n13 Grameen Bank, 180–81, 201; early enthusiasm for, challenged, 185; as model, 189; winning Nobel Prize for peace, 195 Grant, James, 126 grant-giving bodies, 158 grass-roots funding organizations: devoted to relief and development, 171; rotating savings and credit associations, 172–76; variety of, 170–72 green revolution: adoption of, for food and cash crops, 100; criticisms of schemes for, 121; effects of, 80; expense of, 99; gender problem involved in, 99–100; Kenyan government promotion of, 81 group-based finance, 170–72, 182–83, 190, 240, 241 group guarantee, 186 Guaranteed Minimum Returns, 33–34, 88– 89, 102–3, 218 guarantors, individual, 186 Gusii: characterized for their business prowess, 159; developing commercial skills, 160 Hammurabi, Code of, 37 Hart, Keith, 164, 248n13, 287n16 Haya people, 160 healing practices, 27 Hebrew Bible. See Old Testament

high interest, effects of, 42 high-interest charity, 43 high-value cash crops, allowing “Africans” to grow, 32 Hoima Cotton Company, 142 Holmberg, Allan, 197, 254n44 households, in western Kenya, viewed by outsiders as discrete units, 243–44 Hunt, Diana, 276–77n19 hybrids: continuing use of, 89–90; cost and risks of, 87–88; for maize, 87; quick adoption of, in Kenya, 88–89; results from planting, 89–90; wealthier farmers better able to sustain use of, 90. See also green revolution hypothecated crops, 129, 221. See also anchor crops; collateral, types of IADP, 230; negative impression of, in Nairobi, 123. See also IADP-SPSCP; Integrated Agricultural Development Project IADP-SPSCP, 12, 56–64, 104; adjustments attempted during course of, 123–24; administration of, deeper misunderstandings in, 122–23; ambitiousness and complexity of, 122; assumptions of, for success of the program, 100; boosting hybrid maize adoption, 89; borrowers’ experience of, 120–21; borrowers in, types of, 71–74; bribery in loans of, 70; choosing districts for, methodology of, 65–67; communication lacking in, 124; complexity of organization, 154; cotton as anchor crop under, 113; designed with high-yielding technology in mind, 81–82; designed for individual contact with farmers, 82–83; designed to reach poorer strata of farmers, 61, 74–75; development agencies and government losing control of funds from, 78; dispensing loans for, privilege of, 69; distribution of loans from, 65, 66–67; early adopters of new inputs from, 121; experience of, compared to BAT scheme, 153–55; falling rates of participation in, 71; farmers discontinuing participation in, 78; farmers responding to late delivery of loans, 76–78; funds from, shrinking in process of distribution, 75; geographic scope of, 65–66; granting loans for pesticides, 96–97; illustrating difficulties of public farm finance, 218–19; increase in local money supply from, forcing up cattle prices, 77; junior agricultural assistants in, 68–69; leaving little room for local adjust-

INDEX ments, 98; lenders favoring themselves, 68; loan repayment rates under, 102, 103; loans delivered late, 75–77; loans distributed by human hands, 75; loans distributed where local lenders lived, 66–67; loans made on concessionary terms, 62; loans used for nonagricultural purposes, 77–78; local notables likely to default completely on loans, 72; main industrial crops of, 111; market forces affecting, 237; minimal participation in, 120; motives of the donors and planners, 61–63; no one singly in charge of, in government, 123; outcome of, different than planned, 119–20; over- and under-administration of, 123; perceptions of, varying among people involved, 125; phases of, 63–64; plans of, for selling project crops through state cooperatives and marketing boards, 110–11; poorer farmers helped least, 78; possible motives of, 120; potential borrowers for, choosing, 68–71; progressive scaling down of, 120; promoting crops and livestock projects suited to northern tastes and markets, 86; promoting the “crop package,” 85–86; promoting synthetic fertilizer, 93; pursuing debtors, 103; quiet passing of, 119, 120; researching the effects of, 64; results of, 63–64; sampling method for study of, 258–59n36; shortcomings of, reasons for, 121–23; small effects of, in promoting new farm technology, 97; technical assistants in, 69; unhappiness with the system resulting in lower repeat borrowing, 116; wanting to convert farmers to growing hybrid maize strains, 87 IBRD. See International Bank for Reconstruction and Development ICA (International Cooperation Agency), 47 ICDC (Industrial and Commercial Development Corporation), 161 IDA. See also International Development Agency; International Development Association IFAD. See International Fund for Agricultural Development IFC (International Financial Corporation), 48 imagination, impact of, on credit, 44, 45 IMF. See International Monetary Fund indebtedness: altering nature of spending and consumption, 229; varying perceptions of, 41 India, community development programs in, 197


indigenous businesspeople. See enterprise; entrepreneurs individual loans, 190; lending favored for, 29 Industrial and Commercial Development Corporation (ICDC), 161 informal credit, linked with institutional system, 76 informal economy (sector), 164, 248n13 insecticides, 94–97 institutional credit programs, ease of lending in, 8 Integrated Agricultural Development Project (and Programme) (IADP), 11–12, 56, 57–59, 218. See also IADP-SPSCP; Smallholder Production Services and Credit Project integration: reaction against, 126; unfulfilled promises of, 125–26 integrationism, 50–51, 61 intercropping, 83–84 interest: calculated in terms of rates or ratios, 107, 186–87, 215–16; covering institutional costs, 186–87; differing cultural perspectives on, 107–8; legal, moral, and spiritual questioning of, 39; methods of charging, 186–87; in money, not common in local Luo lending, 107; not paid on delayed payments for crops, 112; not perceived in terms of rates, 42; persistent debates about, 215–16; raising or lowering rates of, economic effects of, 42–43; rates of, charged to intimates and strangers, 39–40; as unnatural form of exchange, 39. See also usury international aid: new direction for, 55; new look of, at turn of twenty-first century, 200; shifting approaches to, 1–2; skepticism surrounding, 211 International Bank for Reconstruction and Development (IBRD), 47, 48, 56. See also World Bank; World Bank Group International Cooperation Agency (ICA), 47 International Development Association (IDA), 48, 56. See also World Bank; World Bank Group International Financial Corporation (IFC), 48. See also World Bank Group International Fund for Agricultural Development (IFAD), 56, 181 International Labour Office, 163, 181, 194 International Monetary Fund (IMF), 47, 158; making conditionality part of policy, 230– 31; resistance to, 212. See also World Bank Group



international programs, setting up as life-improvement paths, 197 international public finance, 46–51. See also credit; finance; loans International Year of Microcredit, 194 Internet, allowing new links between borrowers and lenders, 197–98 intimates, treated unlike strangers, 7, 216–17 invariance failure, 235 invisible hand, 167, 253n31 Islam, in Luo country, 27 Isukha Luhya, 67 JAAs (junior agricultural assistants), 82 James, William, 9 Jefferson, Thomas, 281n25, 296n11 jodak (land clients), 67 Joint Loan Board, 33 JokaSociety, 67 jua kali (Sw., hot sun), 164, 208 jubilees, 38 juhudi (Sw., exertion, determination), 189, 208 junior agricultural assistants ( JAAs), 68–69 kati-kati (in between), 190 Kavirondo Taxpayers Welfare Association, 157 Kenya: civil disruption in (2007–8), 205; corruption in, 231; Cotton Lint and Seed Market Marketing Board, 61; counting population in, 248n2; crops of, 24; deepening drought in (2009), 205–6; distribution in, of IADP-SPSCP funds, 57; effects in, of financial downturn (2008–), 206–7; endogamous enclaves and networks in, 25–26; ensuring loan repayment in, methods for, 186; as favorite country for international lenders and donors in eastern and central Africa, 56; government of, threatening to punish defaulters, 104; independence of, changes in loan practices following, 33–34; inflation in, 184; Joint Loan Board, 164; landholdings in, contrasts between types of, 25; languages of, 19–21; loan repayments in, under GMR and SRDP, 102–3; loans to, frozen because of government corruption, 231; Ministry of Agriculture, 59, 66, 81, 82, 85; Ministry of Co-operative Development, 59, 60, 66; Ministry of Livestock Development, 60; Ministry of Planning and National Development, 34; National Cereals and Produce Board, 61; national development plans,

calling for better agricultural methods, 58, 59, 81; as nation of interest for the World Bank, 50; occupations of residents, variety in, 25; population of, 20–21; racism in, 26; Special Rural Development Programme, 51; suspicion of grants and handouts as part of culture in, 231–32; urban and rural elites in, 25 Kenya, western: history of financial aid programs in, 29–35; map, 22; religion in, 26– 28; rule of social life in, 174 Kenya Commercial Bank, 206 Kenya Farmers Association (KFA), 30–31, 60 Kenya Industrial Estates (KIE), 165, 186, 142, 288n25 Kenya National Farmers’ Corporation, 60 Kenya Rural Enterprise Program(me), 186, 187–91, 193, 201, 206, 288n26, 290n3, 290n5, 291nn10–19; 292nn20–28. See also K-Rep Kenyatta, Jomo, 128 Kenya Women’s Finance Trust, 186, 291n10 Keynes, John Maynard, 204 KFA. See Kenya Farmers Association KIE. See Kenya Industrial Estates Kikuyu. See Gikuyu kinship bias: linked to gender bias, 74; negative connection of, to economic bias, 73 kinship systems, among the Luo people, 26 Kirby, Jon, 291n17 Kiva, 198–99 kiwa (clusters of watano), 189–90 Koopman, Jeanne, 288–89nn29–30 K-Rep, 189. See also Kenya Rural Enterprise Program K-Rep Group Ltd., 189, 291n19 K-Rep Holdings Ltd., 189 kula ring, Melanesian, 8 Kunyri Kendi, 208 laboratory game experiments, and trust, 250– 251n1, 271n7 labor expenditures, fertilizer use relative to, 85–86 Lake Victoria, eastern side of, diffuse leadership in, 26 Land and Agricultural Bank, 33 Land Bank, 33 land collateral, 217–18, 221. See also hypothecated crops, mortgage landlord-moneylenders, 177 land titling: justifications for, 221; unnecessary for inducing repayment, 220

INDEX League of Nations, 47 leakages, 78, 101 legalism, contrasted with loyalism, 9 Legio Maria Church, 146 Lele, Uma, 276n18 lenders, earning trust, 232 lending: addressed in literature, 44; biases in, favoring wealthier smallholders, 29; British regulation of, to “African” people, 30–31; control over, as coveted privilege, 214; focus on, related to taking, 38; power of, resented when it becomes governing power, 232; profitable, dimly viewed until after the Protestant Reformation, 40; unscrupulous methods of, 209 Lending Club, 294n46 Lenin, Vladimir, 195 liminality, crevasse of, 86 limited good, image of, 253n25 lineage, attention to, 27 lineage welfare associations, 172 literature, addressing borrowing and lending, 44 Livingstone, Ian, 163, 274n1 “loan,” adoption of term, by rural Luo and Luhya, 103–4 loans: annulment of, 38; characterized as grants, by officeholder and aspirants, 103; defaulting on, 102 (See also default); fairness of, 43; forgiveness of, 38; FTC courses as prerequisite to borrowing, 82; funds used to finance small-scale businesses, 77; funds used to purchase animals for bridewealth payments, 77; after independence, becoming smaller and more numerous, 35; to individuals, 190; integrated with other aspects of economic life, 223–24; long-distance, 8; persistent debates about, 215–16; programs for, common problems among, 34–35; programs rarely addressing existing culture among borrowers, 213–14; promise of, helping to secure initial loans, 221; for rural people, centrally planned and authoritarian approach to, 29; schemes for, conducted without threatening homes or individuals’ freedom, 19; subsidization of, under SRDP, 34; subsidized, diverting to other purposes, 43; terms of, social distance and, 7; terms tailored to interpersonal relationships, 7–8; tying to savings, 183–84. See also credit, finance, interest loans in kind, for tobacco growing, 143 Local Native Councils, 31, 33


loko (trade), 162 low interest, effects of, 42–43 loyalism, contrasted with legalism, 9 Luhya (Luyia), 20, 67 Luo country, 21; Christian churches in, objecting to tobacco growing or using, 141; cool attitude in, toward central government, 84; difficulty in, of borrowing large sums from close kin, 8; economy of, 24–25; gender and age roles in, 226–27; microenterprise work, leaders in, 167–68; rural population density in, 24–25; subdivision of, 67 Luo language (DhoLuo), 20, 21 Luo people, 19–21; adaptability of, 222; changing way of life for, financing of, 5; credit and debt among, many types of, 10; crops, 23–24; cultural qualities of, 21–23, 26; diet of, 23–24; dissent among, causes and effects of, 28; farming practices of, 23; fishing’s importance to, 25; increased awareness of, 19; industriousness of, 146; lending and sharing among, 222–23; livelihood of, 23; livestock of, 24; manuring crops, 91; matters of pride for, 28; occupations of, variety in, 25; patrilineal and virilocal culture of, 26; perceived attitudes toward commerce, 159; polygyny among, 26; referring to cooperatives in a kinship idiom, 67; residential proximity among, corresponding with kinship proximity, 67; responding to lucrative innovation, 222; response of, to foreign intervention, 221–25; skeptical of official initiatives, 222; story of the lost bead, 38; tobacco farming among, history of, 139–41; using prayer to protect themselves from confiscations, 105; violence among, 28; war heroes among, 28 Luo Union, 157, 171 Luther, Martin, 40 Macgoye, Marjorie Oludhe, 248n1 Machakos District Integrated Development Programme (MIDP), 273–74n32 Machyo, B. Chango, 297n13 macroeconomic policies, 157–58 Madoff, Bernard, 295n51 magic, 236–37; business linked to, 196; growing of, 87 maize: hybrids, use of, 87–89, 266–67nn42– 46 (See also hybrids); malaria linked with, 129–31; marketing of, politically explosive nature of, 108; movement of, controlled by



maize (continued) police roadblocks, 110; mysterious distribution of, 111; price controls on, 110 malaria, linked with maize, 129–31 Management Systems International, 276n14 manuring crops, Luo approach to, 91 market inefficiencies, governments’ stake in, 62 Marshall Plan, 47 Marx, Karl, 40, 45, 195, 252n16 Mastermind, 151 matatu (taxi van), 208 material concerns, interrelated with mental concerns, 9–10 Mau Mau (the “emergency”), 31–32 m-banking, 293n37 mbolea mar serkal (government manure), 91 McNamara, Robert, 49–50, 55 meaning, 5 Mehta, N.K., 142 mental concerns, interrelated with material concerns, 9–10 merry-go-round, 172–73 metaphors, 44; for credit and debt, 236; for financial matters, 45–46; for financial crisis, 203, 204–5; understanding physical reality through, 10 microenterprise and microentrepreneurs: defining, 168–69; private aid focused on, 167. See also craftspeople; small-scale enterprise and entrepreneurs, activities engaged in, variety of; traders microenterprise finance groups, as compromise of –isms, 196 microfinance, 13; bureaucratization of, 194– 95; institutional consolidation in, 201; new look of, at turn of twenty-first century, 200–201; private aid agencies turning to, 157, 179–80; programs of, participants in, 168–69; turning into profitable form of banking, 187–93 microfinance revolution, 185, 195 MicroGiving, 294n46 Mill, John Stuart, 40, 45 Millennium Villages, 197 minimalism, 126, 166 minority middleman, 108–9 mixed farming, development of, loans for (1930s), 31 mobile banking, 293n37 mobility, as element of surviving poverty, 169–70 modernization, 49

modernization theory, 254n41 Moi, Daniel arap, 128–29, 231 Molière, 44 Mondragón cooperative (Basque country), 256–57n23 money, culture-bound ideas of, 15; as bitter or tainted, 147–48. See also credit; finance; loans; interest money-go-round, 173 moneylenders, individual, 13 money lending, connotations of, 37 moral hazard, 102, 103, 117, 226–27, 232 moral sensitivity, among nonhuman species, 251n2 mortgage guarantees, 186. See also collateral, types of; hypothecated crops mortgage systems, hazards of, for borrowers, 229–30; misfitting agrarian tropical Africa, 10; unnecessary for cash cropping, 220–21 Mount Washington Hotel (Bretton Woods, NH), 230 movement, easing restrictions on, 242–43 multicrop package, 100. See also crop package Mumian Sugar Company, 220 Mutua, Kimanthi, 188–89 Naipaul, V. S., 286–87n12 National Bank of Kenya, 186 National Cereals and Produce Board, 110 National Council of Churches in Kenya (NCCK), 167, 186, 288n26, 290n3, 290n5 NCCK. See National Council of Churches in Kenya ndawa (tobacco), 140–41 negative reciprocity, 260n9 nepotism, in IADP-SPSCP loans, 68, 73–75 New Seasonal Credit Scheme (NSCS), 128– 29, 104, 218, 260–61n15 Ngina, “Mama,” 164 night harvesting, 87, 264n24 nonfarming activities, 156 nongovernmental organizations (NGOs), 157– 59, 241. See also not-for-profits; private aid agencies; private voluntary organizations not-for-profits (nonprofits), 157. See also nongovernmental organizations; private voluntary organizations Nyakyusa people, 160 Nyanza Province, map of, 22 Nyanza Sugar Company, 220 Obama, Barack, 19, 248n1, 297n15 objection sandwich, 132, 219

INDEX obligation: ethics about, 233; felt to people, groups, networks, and other categories, 9; intimacy affecting, 7 occupational specialties, development of, among ethnolinguistic groups, 160–61 Odaga, Asenath Bole, 248n1 oduma mar grade (hybrids; composites), 87 off-farm activities, 156 Office of MicroEnterprise Development, 293n39 ogendni (locations), 67 Oginga, Oginga, 248n1 Ogot, Grace, 248n1 Ogutu, Pilista, 111 ohala (trade), 162 Old Testament, discussing interest/usury, 38, 39–40 on-lending, 60, 75 Onyango, Pilista, 139 osusu (rotating savings and credit association), 173 Oswald, Felix, 139 outgrowing, 138 OXFAM, 158 PACT (Private Agencies Collaborating Together), 187 Palmerston, Lord (Henry John Temple), 231 parastatal, 108 pariah capitalist, 108–9 Partnership for Productivity (PfP), 167, 186, 290n4; PfP Kenya, 288n26, 290n3 patrilineal culture, 26 PayPal, 294n44 PCEA Chogoria, 290n5 peace, in African reputations, 28 peer group pressure, 184 Pentecostal Holiness Church, 146 people’s banking, 184 people-to-people finance organizations, 197– 99 pesa maber (good money), 140 pesa makech (money that is bitter), 140 pest control, 95–96 pesticides, 94–97, 151–52 pests, defined, 94–95, 96 PfP International, 288n26. See also Partnership for Productivity philanthropics, as lenders, 4; 156; church-based, 157; run as banks, 238. See also nongovernmental organizations; private aid agencies; private voluntary organizations


physical reality, understanding, through metaphor, 10 PISCES, 293n39 Plan International, 165 plowing, means of, as index of wealth, 260n14 Plutarch, 39, 45 political economy, 62 politicians, 46 politics, related to economics, 231 polygyny, 26 polythetic classification, 254n40 pooling societies, 172 population density, rise in, related to technological change in agriculture, 268n52 Post Office Savings Bank, 30 potlatch, North Pacific Native American, 8 poverty: affecting perceptions of time, 226; African, responses to, 3; alleviation programs for, target groups for, 169; connotations of, 3; strategy for reduction of, based on credit, 226 power, 5, 238 Pride, 290n3 Pride Kenya, 183 PRIME (Program for Innovation in Microenterprise), 293n39 private aid agencies, 156; adopting innovations simultaneously, 165; continuing experimentation of, 201; endogenous, 183; entrepreneurs working for, 165; experiments with, 157–59; ill equipped to handle credit and savings programs, 166; involved with group-based finance, 240; minimalist approach of, 166; moving from relief work into development, 165–66; officers of, paradoxes among, 165; popular time for, 166– 68; turning to microfinance, 157, 179–80. See also nongovernmental organizations; not-for-profits; philanthropics, as lenders private credit programs, 4. See also credit; finance; loans private finance, becoming part of public finance, 199 private sphere, approach of, to loan scheme, 12 private voluntary organizations (PVOs), 157. See also nongovernmental organizations; not-for-profits Prodem, 188 program subscribers, wishing to become saviors, 166 project design, complexity of, 154–55 property: confiscating, threats of, 104; reform, long history of, 213. See also collateral, types



property (continued) of; hypothecated crops; land collateral; mortgage guarantees Prosper, 294n46 provident societies, 157 provincial commissioners (PCs), 31 public credit programs, 4. See also credit; finance; goverment; loans public meetings, 82, 84 public/private dichotomy, limits of, 237–38 pundits, economic, 46, 204–5 PVOs (private voluntary organizations), 157. See also nongovernmental organizations; not-for-profits; private aid agencies pyrethrum, 94 Qur’an (Koran), 38 rates, interest construed as, 42, 215–16 “rational” peasant, 107 ratios, interest construed as, 42, 215–16 reciprocity, 37, 232, 260n9 regular savings and credit associations (ReSCAs), 290n44 relief work, distinctiveness of, in equatorial Africa, 161–62 religion: relation of, to economy, 44–45, 224– 25; in western Kenya, 26–28 religious groups, specializing in certain occupations, 161 repayment: borrowers’ desire for, 105; ensuring, among people in poverty, 185–86; ethics of, 226–27; Grameen Bank experience with, 181; inconsistent standards for, 115–16; increased, from group-based lending, 182–83; as index of programs’ success or failure, 234; lagging, in early loan programs, 33; likelihood of, dependent on type of borrower, 114–18; moral sanctions regarding, 105; partial and irregular, 29; postponing, borrowers’ reasons for, 106–7; as prerequisite for repeat loan, 115; rates of, for different groups, 290n5; reasons for, 116; refusal of, reasons for, 116–17; related to peer-group pressure, 182–83, 184; terms of, tailored to interpersonal relationships, 7–8; various methods of, 106 ReSCAs (regular saving[s] and credit associations), 290n44 resettlement, forced, 242 Rhodes-Livingstone Institute, 287n15 ribā (unjustified increase; usury), 38 Ricardo, David, 40

Rice, E.B., 127 rika (farm work circle), 148, 173 rings of responsibility, 8, 247n2 Robinson, Marguerite, 185 Roho Msanda Holy Ghost Church, 146–47 role reversal, 291n17 RoSCAs (rotating saving[s] and credit associations), 13, 172–77, 183, 190, 240 rural credit, altering the approach to, 240. See also credit; finance; loans rural people: seeking finance, semantic trick for, 168; treated as objects, 122 Ruskin, John, 296n12 Sachs, Jeffrey, 197 Safaricom, 293n37 Sanyang’, Momodou, 229 Save the Children, 158 saving: entrustment of, to others, 30; incorporating with credit, 240; first colonial institution established to encourage, 30; methods of, 30; rediscovery of, 183–84; tying loans to, 183–84 saving-lending rate spread, 185 savings banking, 30–31 savings and credit associations, rotating. See RoSCA savings-and-loan cooperatives, 183 savings/credit imbalance, 29 saving societies, 172 school fees, loans used to pay for, 77, 79, 94, 101, 219 Schweinfurth, Georg, 140 Scott, James, 82 seasonal credit, strict organization of, 99; financial risk of, 102–3. See also credit, finance, loans sectors: artificiality of, in discussing African farming economy, 14–15; merging of, 130; perspectives on, 243–44 seesaw principle, 44 Seko, Mobutu Sese, 231 self-burial groups, 171–72 self-help groups, 4, 157; created as receptacles for new aid money, 168; local, 13; seeking out aid agencies and commercial banks, 185; turning into help-self, 238. See also ReSCAs; RoSCAs serial obligation, 232 Seventh-day Adventists, 146 sex workers, following the tobacco harvest, 149–50 Shaetani (Satan, lesser demons), 141

INDEX Shah, Premal, 294n44 Shakespeare, William, 44, 229, 232 Shaw, George Bernard, 45, 203–4 small enterprise. See small-scale enterprise and entrepreneurs, activities engaged in, variety of Smallholder Coffee Improvement Program (SCIP), 255n6 Smallholder Production Services and Credit Project (SPSCP), 12, 56, 218. See also IADP-SPSCP small-scale enterprise and entrepreneurs, activities engaged in, variety of, 169; attracting and encouraging big aid bureaucracies, 180; business start-ups of, 170; mobility of, 169–70; private aid focused on, 167. See also entrepreneurs; enterprise; microenterprise and microentrepreneurs; microfinance small-scale farmers, first loans available for, 34. See also credit; finance; loans Smith, Adam, 40, 41, 45, 253n31 smoke, associated with ancestors and their spirits, 140 social distance, loan terms and, 7, 216–17; bribery and, 69–70 soil-conservation measures, British campaigns for, 31. See also fertilizer; manuring crops, Luo approach to; terracing soil fertility, 90–94 solidarity groups, 181–83 sorcery, 27–28 sovereignty, 231 space, culture-bound ideas of, 15 Special Rural Development Programme (SRDP), 34, 51, 104, 197; lending fertilizer, 93; loan repayments under, 102–3; promoting hybrid maize, 89 Speke, John Hanning, 41 Spencer, Herbert, 40–41 spheres of exchange, 101 squawk factor, 84 SPSCP. See Smallholder Production Services and Credit Project SRDP. See Special Rural Development Programme Ssu-ma Ch’ien (Sima Qian), 195 Standard Chartered, 206 Stanford, Allen, 295n51 stereotyping, of ethnic groups’ business acumen, 159 storage pests, 89 strangers, treated unlike intimates, 7, 69–70, 216–17


structural adjustment, 157–58, 278n32 Suba people, 20–21 subsidy, in input supply schemes, 62; in rural lending, 29, 215 sunflowers, unsuccessful campaign for, 111 Swedish International Development Cooperation Agency (SIDA), 34 Swynnerton, Roger, 32 Swynnerton Plan, 32, 62 Tamale Institute for Cross-Cultural Studies (TICCS), 291n17 Tanganyika, British annexation of, 30 tea, and economic growth, 220 technical assistants (TAs), 69 terracing, 31, 91 time, culture-bound ideas of, 15. See also interest titling, xiv. See also land collateral; mortgage guarantees titling program, first nationwide in tropical Africa, 32 tobacco: associated with ancestors and their spirits, 140; BAT recruiting farmers for production of, 143; capital- and labor-intensive production of, 143, 145; causing rising land values, 148–49; changing relations between the sexes and between generations, 149; churches’ responses to production of, 146–47; considered cursed, 141; contract farming of, resources of, 280–81n21; deforestation resulting from farming of, 284n53; earnings from, uses for, 147–49; farmers becoming addicted to tobacco production, 152; farming of, having widespread political, economic, religious, and social effects, 138– 39, 146–49, 282–83n42; growers of, buying food from nongrowers, 148; leaf grading, 148, 150; licensed vs. unlicensed growers, 148–49; Luo production of, history of, 139– 46; production moving to western Kenya, 138; production of, initial strict controls on, 141–42; profitability of production, 143–44, 145–46; profits from, unevenly distributed among growers, 148; questions remaining about engaging in business of, 147–48; risks of, in contract farming, 150–52; selling from home, viewed as risky, 140; treated different from other commodities, 140; trickiness of growing, 144 Tomkinson, C., 31 Tonti, Lorenzo, 289n40a tontine, 173. See also RoSCAs



Tototo Home Industries, 164–65, 290n5 traders, 169–70 transactions, psychology of, 271n7 transport businesses, 170 triangles, framing present volume, 4–5 triangular trade, for cotton, 112–13 Trickle-Up Program, 194 underground finance, 172 Undugu Society, 158, 186, 208 unfamiliarity, with aspects of finances, 224 United Nations, 47; awareness in, of state lending failures for small farmers, 128; Capital Development Fund (UNCDF), 293n39; Development Programme, 181; headquarters of, 1, 210; involved in loans to small-scale farmers, 34; involved in microenterprise support, 194; Monetary and Financial Conference (Bretton Woods meeting), 47; Research Institute for Social Development (RISD), 277n22 United States, involved in loans to small-scale farmers, 34 U.S. Agency for International Development (USAID), 34, 47, 56, 181; awareness in, of failure of government-supported credit project for small farmers, 127; financial outlay of, for microenterprise, 158; involved in microenterprise support, 194; money from, going to private aid agencies, 167; Office of MicroEnterprise Development, 293n39; pressing for farmer interest rates, 106; providing support for World Education, Inc., 187 usury, 4; concessionary, 215–16; credit as, 37–43; hazards of, British colonial servants’ perception of, 29–30; not perceived in terms of rates, 42; persistent debates about, 215–16. See also interest; money lending, connotations of Uyoma Welfare Association, 171 Vásquez, Mario, 197, 254n44 vector sector, 130 Vihiga-Hamisi, Special Rural Development Project in, 34, 93, 218, 250nn23–36; fertilizer promotion in, 93 virilocal culture, 26, 74 Voluntary and Christian Action in Distress, 165, 288n26 wage labor, in tobacco production, 148 watano (fivesomes), 189–90

wealth, 5; cash cropping related to, 261n17; converting, into political power, 213; found alongside poverty, 3; leading to exploitation, 195; related to worrying about witchcraft, 264n24 weg dala (homestead heads), 71, 83 Western Dark Nyasa tobacco, 141 Wharton, Edith, 44 whole farm planning, 12, 58–59, 85–86, 101 wich kuot (head swelling), 112 wikis, 199 Wilde, Oscar, 137, 296n12 wiring service, for remittances, 192 witchcraft, 27–28, 147, 236–37; linked to business success, 196; related to greed, 86; worrying about, related to level of wealth, 264n24 Wittgenstein, Ludwig, 254n40 Wolfe, H., 141–42 Wolfe, Tom, 44 women: discriminated against, as homestead heads, 263n9; economic activities of, 26; effects on, of tobacco’s success, 149–50; as entrepreneurs, 164; fertilizer use by, 91–92; important role of, in Kenyan farming, 23, 58; involved in Grameen Bank, 180–81; involved in tobacco growing, 149; lending to, 165; participation of, in rotating contribution clubs, 174, 175, 176; private aid focused on, 167, 168; prominent role of, in farming, 83; roles of, related to green revolution, 99–100; support for, 26 Women Enterprise Development, 288n26, 290n5 women’s groups, registered with the Kenya government, 168 women’s movement, 164 Women’s World Banking, 288n28 Wordsworth, William, 203 World Bank, 45–46, 181; acknowledging poor repayment performance for farm loans, 102; awareness in, of failure of government-supported credit projects for small farmers, 127; career paths in, defined by sector or regional expertise, 132–33; change in mission of, 49–50, 55; composition of, 48–49; conducting the IADP, 12; and Consultative Group to Assist the Poor (CGAP), 293n39; expanding scope and influence of, 46–47; focus on loans, 3; focus on nation-states, 48; influence of, challenged, 211; initial mission of, 47–48; internal critics of, 133–34; involved in micro-

INDEX enterprise support, 194; launching attempt to privatize parastatal marketing boards for cotton, 117–18; macroeconomic policies of, 157–58; making conditionality part of policy, 230–31; method of, for defining problems, 254n36; money from, going to private aid agencies, 167; objection sandwich at, 132, 219; opposition to, 242; as planet’s largest creditor for agriculture, 55; planning documents of, 55–56; pressing for farmer interest rates, 106; project design in, 131–33; resistance to, 212; searching for technical solutions to problems, 48; seeking


to work through private and nongovernmental channels, 134; set up as lender rather than donor, 48 World Bank Group, 46–50; reputation of, 232. See also World Bank World Education, Inc., 187 wuon dala (homestead head), 71, 83 yath (plant, medicine, charm), 95, 96 Yunus, Muhammad, 180, 195 zero-sum game, 253n25 Zopa, 294n46