The Capabilities Model and the
South West Alberta Community
Loan Fund (SWACLF)
Megan Heroux
April 2011
In partial fulfillment of an Applied Study course at the
University of Lethbridge
*Released with student consent to the SWACLF
• Part one- Overview of Microfinance
• Part two- Amartya Sen and the Capability Model
• Part three- Application of Sen’s Capability Model
in the Canadian Context
An Overview of Microfinancing
Concepts
• Microcredit- specific to small loans. Focus on
getting loans to the very poor.
• Microfinance- broader term incorporating
more financial services not just credit.
Microfinance in Canada
• Microcredit in Canada defined as: a loan
given to an entrepreneur of less than $ 25,000
(Horvath, 2001).
• Loans are offered to those who cannot receive
credit through traditional sources.
Microfinance in Canada:
Three types
• 1) Private Organizations- seeking profit.
• 2) Government Organizations- seeking economic
development.
• 3) Non-profit Organizations- seeking to
empower individuals living in poverty.
(Horvath, 2001)
Horvath, S. L. (2001, December). Building community capacity through group loans for minority populations in
Canada. Retrieved from http://https://dspace1.acs.ucalgary.ca/bitstream/1880/39297/1/2001_Horvath.pdf
Microfinancing in Canada:
Community Development
• Participatory
• Bottom-up approach
• Helps individuals take control over their own
lives
• Break the cycle of poverty
•
(Armendariz de Aghion & Morduch, 2005; Littlefield, Murduch & Hashemi, 2003)
Microfinancing in Canada:
Challenges
• Difficult to keep financially stable
• Limited research and best practices.
• Canadian marketplaces are more developed and
competitive.
• Clients may be cut off from government assistance.
•
(Horvath, 2001; Cameron, n.d)
Amartya Sen and the Capability Model
Concepts
• Functionings: Achievement of a person- what
she/he manages to do and values doing.
• Capabilities: A persons ability to achieve and
enjoy different functionings. Reflect a persons
ability to chose between different ways of living.
• A functioning may be thought of as the way a
person chooses to use a capability.
•
(Sen, 1995; Sen, 1990; Sen, 1985)
The Capabilities Model:
Theoretical Underpinnings
• Poverty should be seen as “deprivation of basic
capabilities” –not merely lack of income.
• A lack of capabilities can lead to low income, ill
health, hunger and undernourishment.
• It is inappropriate to make a comprehensive list
of capabilities since they vary so drastically from
person to person.
•
(Sen, 2004; Sen 1999; Sen 1990).
The Capabilities Model:
Theoretical Underpinnings
• Focus less on desire fulfillment and more on
capabilities and functionings.
• Sen relates his theories back to those of
Aristotle, Marx and Smith.
• Aristotle States:
“Wealth is evidently not the good we are seeking;
it is merely useful and for the sake of something
else” (as cited in Sen, 2009, pg 253 )
The Capabilities Model:
Theoretical Underpinnings
• Sen bases his work on giving people the opportunity
to live lives they have reason to value.
• Encourages us to think of people as ends, not
means.
• Freedom:
▫ Intrinsic Importance: Considered important in itself.
▫ Instrumental Importance: Gives people the
opportunity to chose their best option and live the life
they value.
▫
(Sen 2009; Sen 1999; Sen 1990)
The Capabilities Model:
Praise and Critiques
• Furthers the distinction between relative and
absolute needs- human need is based solely on
living a life of value.
• Sen respects the diversity of individuals and
their circumstances.
•
(Dean, 2009)
The Capabilities Model:
Praise and Critiques
• Difficult to implement
• Focus on individual liberty while ignoring the
role of social solidarity.
• Too individualized and liberal- does not account
for our cultures value of interdependence.
•
(Dean, 2009)
Application of Sen’s Capability Model in the Canadian
Context
Applying Sen’s Concepts :
World Bank “Empowerment and
Poverty Reduction”
• Empowerment as “the expansion of freedom of
choice and action”
• Focus on what assets people living in poverty
possess (ex/ social capital and collective capacity)
• Places the burden of responsibility back on the
individual
• Bottom-up and participatory approach
•
(World Bank, 2002)
Applying Sen’s Concepts :
World Bank “Empowerment and
Poverty Reduction”
• Four Key elements lead to empowerment
▫ Access to information
▫ Inclusion/participation
▫ Accountability (from state officials, public
employees and private actors)
▫ Local organizational capacity
▫
(World Bank, 2002)
World Bank. (2002, May 1). Empowerment and poverty reduction: A sourcebook. Retrieved from
http://siteresources.worldbank.org/INTEMPOWERMENT/Resources/486312-1095094954594/draft.pdf
Applying Sen’s Concepts:
Brandon University “Capacity
Framework”
• Recognize the assets that people have available
to them.
• Uncover peoples strengths and assets so that
they may use them to better their lives.
• Networks and social relations are among the
most important assets
•
(Reimer & Tachikawa, 2008).
Annis, R., Racher, F., & Beattie, M. (Eds.). (2009). Rural community health and well-being: A guide
to action .
Retrieved from Brandon University, Rural Development Institute website:
http://www2.brandonu.ca/organizations/rdi/Publications/Health/RuralCommunityHealth_and_Wellbeing_a_Guide_t
o_Action.pdf
South West Alberta Community Loan Fund. (2010, December 8). Addressing poverty in Alberta. PowerPoint
Presentation
Incorporating Sen into the SWACLF
• Business Preparation program, addressing the
root causes of poverty, aligns well with Sen.
• Respect peoples goals and values while assisting
them to create their own pathway out of poverty.
• Referral network and mentorship programexamples of social institutions that can help
increase economic opportunity in Sen’s opinion.
As we move forward…
• In the implementation phase of this project,
reflect on where you see Sen being incorporated.
• After reviewing Sen’s main concepts, do you see
any gaps in the current SWACLF model where
Sen may fit in?
• How could Sen’s model be used for the
SWACLF while still incorporating the social and
interdependent values of our culture?
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References
Access Community Capital Fund. (2010). Annual report. Retrieved from:
http://www.accessccf.com/uploads/File/annualreports/ACCESS-Annual-Report2010.pdf
ACEM. (2010, December). Activity report.
Annis, R., Racher, F., & Beattie, M. (Eds.). (2009). Rural community health and
well-being: A guide to action. Retrieved from Brandon University, Rural
Development Institute website:
http://www2.brandonu.ca/organizations/rdi/Publications/Health/RuralCommunity
Health_and_Wellbeing_a_Guide_to_Action.pdf
Armendariz de Aghion, B., & Morduch, J. (2005). The economics of microfinance.
Cambridge, Massachusetts: MIT press.
Cameron, S. (n.d.). Community investing in Canada. Retrieved from Canadian
Community Investment Network Cooperative Canada website:
http://www.microcreditsummit.org/papers/Workshops/12_Cameron.pdf Cape
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http://www.capefund.ca/en/about-capefund.html
Carpenter, B., Findlay, C.,Blumell, J., Boyer, S., Cruse, J., & Evenson, C. (2010).
University of Lethbridge: Microcredit community health nursing project.
Unpublished raw data.
Community First Development Fund of Saskatoon (Ed.). (2010, May). The Caring
Neighbor,(9). Retrieved from
http://communityfirstsaskatoon.ca/sites/communityfirstsaskatoon.ca/files/May_20
10.pdf
Dean, H. (2009). Critiquing capabilities: The distractions of a beguiling concept .
Critical Social Policy, 29(2), 261-278
• Hariji, K. (2007, May). The Ottawa community loan fund: A research report on
social impact. Community Economic Development Technical Assistance Program.
• Horvath, S. L. (2001, December). Building community capacity through group
loans for minority populations in Canada. Retrieved from
http://https://dspace1.acs.ucalgary.ca/bitstream/1880/39297/1/2001_Horvath.pdf
• Jubilee Fund. (n.d.). The Fund. Retrieved April, 2011, from
http://www.jubileefund.ca/fund/
• Littlefield, E., Morduch, J., & Hashemi, S. (2003, January). Is microfinance an
effective strategy to reach the millennium development goals/. Focus Note, 24.
Retrieved from http://www.cgap.org/gm/document-1.9.2568/FN24.pdf
• Momentum. About Momentum. (2011). Retrieved April, 2011, from
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http://www.momentum.org/sites/default/files/2009%20Annual%20Report%20Spr
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opportunities [Video file]. Retrieved from http://oclf.org/what-is-oclf/
• Reimer, B., & Tachikawa, M. (2008). Capacity and social capital in rural
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http://revitalization.brandonu.ca/index.php?pageid=A
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http://www.seedwinnipeg.ca/documents/SEED2010ANNUALREPORTREVISED.pd
f
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• Sen, A. (2004, November). Dialougue capabilities, lists, and public
reason: Continuing the conversation. Feminist Economics, 10(3), 77-80.
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scrutiny (Social Development Papers No. 1). Retrieved from Office of
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http://
http://www.adb.org/documents/books/social_exclusion/social_exclusio
n.pdf
• Sen, A. (1999). Development as freedom. New York: Anchor Books. Sen,
A. (1990). Development as capability expansion . In J. Knight & K.
Griffin, Human development and the international development
strategy for the 1990's (pp. 41-58). (Original work published 1978)
• South West Alberta Community Loan Fund. (2010, December 8).
Addressing poverty in Alberta.
PowerPoint Presentation
• St. John's Community Loan Fund. (2010). Annual report.
• Tarsilla, M. (2009, May). Evaluating the social impact of the
OCLF/Alterna community micro loan program: Carleton Centre for
Community Innovation.
• World Bank. (2002, May 1). Empowerment and poverty reduction: A
sourcebook. Retrieved from
http://siteresources.worldbank.org/INTEMPOWERMENT/Resources/4
86312-1095094954594/draft.pdf