Managing Everyday Living: Microfinance and Capability



This chapter is about research carried out to examine the perceived impact of a No Interest Scheme (NILS) loan on the financial capability of people on low incomes in Queensland, Australia. Seventeen NILS participants who have completed repaying a NILS loan were interviewed to explore how participants used NILS, their attitude towards money, their money management style; the unfreedoms participants experienced; and the perceived impact of NILS loans on participants’ money management skills. We argue that in order for microfinance programs to achieve maximum benefit, building financial capability for their participants is as important as providing financial access. However, what the study reveals is that while participants acknowledge the usefulness of no interest loans, there is little evidence that such loans contribute to their overall financial capability.


Microfinance NILS Financial inclusion Capability approach 


  1. ASIC. (2011). National financial literacy strategy report 229. Sydney: Australian Securites and Investments Commission.Google Scholar
  2. Australian Government. (2015). Budget 2015 part 2: Expense measures (continued) social services. Retrieved November 10, 2015, from
  3. Bateman, M. (2010). Why doesn’t microfinance work? The destructive rise of local neoliberalism. London: Zed Books.Google Scholar
  4. Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101.CrossRefGoogle Scholar
  5. Byrne, N., McCarthy, O., & Ward, M. (2007). Money-lending and financial exclusion. Public Money & Management, 27(1), 45–52. doi: 10.1111/j.1467-9302.2007.00554.x.CrossRefGoogle Scholar
  6. Cabraal, A. (2010). The impact of microfinance on the capabilities of participants. Ph.D., RMIT University.Google Scholar
  7. Clark, D. A. (2005). The capability approach: Its development, critiques and recent advances. GPRG-WPS-032 Global Poverty Research Group, Swindon: Economic and Social Research Council. Google Scholar
  8. Comim, F., Qizilbash, M., & Alkire, S. (2008). Introduction. In F. Comim, M. Qizilbash, & S. Alkire (Eds.), The capability approach: Concepts, measures and applications. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  9. Commonwealth Bank Foundation. (2010). Improving financial literacy: Benefits for all Australians. Melbourne: Monash University and Ipsos-Eureka Social Research Institute.Google Scholar
  10. Connolly, C. (2014). Measuring financial exclusion in Australia. Sydney: Centre for Social Impact for National Australia Bank.Google Scholar
  11. Corrie, T. (2011). Microfinance and the household economy: Financial literacy, social and economic well-being. Melbourne: Social Policy Research Unit.Google Scholar
  12. Corrie, T. (2012). Measuring the impact of microfinance “Money Conversation” on financial capability: A trial study, methodological report and pilot findings. Victoria: Good Shepherd Microfinance.Google Scholar
  13. Dale, M. C., Feng, F., & Vaithianathan, R. (2012). Microfinance in developed economies: A case study of the NILS programme in Australia and New Zealand. New Zealand Economic Papers, 46(3), 303–313. doi: 10.1080/00779954.2012.687543.CrossRefGoogle Scholar
  14. Deacon, A., & Mann, K. (1999). Agency, modernity and social policy. Journal of Social Policy, 28(3), 413–435.CrossRefGoogle Scholar
  15. Deb, A., & Kubzansky, M. (2012). Bridging the gap: The business case of financial capability. Cambridge: Citi Foundation.Google Scholar
  16. Dixon, M. (2006). Rethinking financial capability: Lessons from economic psychology and behavioural finance. Norwich: Institute for Public Pension Policy Research sponsored by Norwich Union.Google Scholar
  17. Elo, S., & Kyngäs, H. (2008). The qualitative content analysis process. Journal of Advanced Nursing, 62(1), 107–115.CrossRefGoogle Scholar
  18. Financial Literacy and Education. (2013). Measuring financial capability: A new instrument and results from low-and middle-income countries. The World Bank, International Bank for Reconstruction and Development.Google Scholar
  19. Gries, T., & Naudé, W. (2011). Entrepreneurship and human development: A capability approach. Journal of Public Economics, 95(3–4), 216–224. doi: 10.1016/j.jpubeco.2010.11.008.CrossRefGoogle Scholar
  20. Hesse-Biber, S. N., & Leavy, P. (2011). The practice of qualitative research (2nd ed.). Thousand Oaks: SAGE.Google Scholar
  21. Holzmann, R. (2010). Bringing financial literacy and education to low and middle income countries (Pension Research Council Working Paper) (Vol. 38). Philadelphia: The Wharton School, University of Pennsylvania.Google Scholar
  22. Horton, J., Macve, R., & Struyven, G. (2004). Qualitative research: Experiences in using semi-structured interviews. In C. Humphrey & B. Lee (Eds.), The real life guide to accounting research: A behind-the scenes view of using qualitative research methods (pp. 339–357). Amsterdam: Elsevier.CrossRefGoogle Scholar
  23. Howell, N., & Wilson, T. (2005). Access to consumer credit: The problem of financial exclusion in Australia and the current regulatory framework. Macquarie Law Journal, 5, 127–148.Google Scholar
  24. Hulme, D., & Arun, T. (2009). In D. Hulme & T. Arun (Eds.), Microfinance: A Reader (pp. 1–6). London: Routledge.Google Scholar
  25. Karnani, A. (2011). Microfinance needs regulation. Stanford Social Innovation Review, 9(1), 48–53.Google Scholar
  26. Keeney, M., & O’Donnell, N. (2009). Financial capability: New evidence for Ireland. Dublin: Central Bank of Ireland.Google Scholar
  27. Landvogt, K. (2006). Critical financial capability: Developing an alternative model Occasional paper 2/2006. Mornington: Social Policy Research Unit, Good Shepherd Youth and Family Service.Google Scholar
  28. Landvogt, K. (2008). Money, dignity and inclusion: The role of financial capability. Mornington: Social Policy Research Unit, Good Shepherd Youth and Family Service.Google Scholar
  29. Ledgerwood, J., & Gibson, A. (2013). The evolving financial landscape. In J. Ledgerwood, J. Earne, & C. Nelson (Eds.), The new microfinance handbook: A financial market perspective. Washington, DC: The World Bank.CrossRefGoogle Scholar
  30. Ling, C., & Dale, A. (2014). Agency and social capital: Characteristics and dynamics. Community Development Journal, 49(1), 4–20.CrossRefGoogle Scholar
  31. Marston, G., & Shevellar, L. (2014). In the shadow of the welfare state: The role of payday lending in poverty survival in Australia. Journal of Social Policy, 43(1), 155–172.CrossRefGoogle Scholar
  32. McQuaid, R., & Egdell, V. (2010). Financial capability-evidence review. Edinburgh: Employment Research Institute, Edinburgh Napier University.Google Scholar
  33. Muoy, B. (2010). Just credit, good practice. Case studies about building financial capability with microfinance loans. Collingwood, Victoria: Social Policy Research Unit.Google Scholar
  34. Palafox, J., & Ayres-Wearne, V. (2005). NILS small loans—Big changes: The impacts of no interest loans on households. Collingwood: Good Shepherd Youth & Family Service.Google Scholar
  35. Proske, C. (2010). Expanding the microfinance footprint. InFinance: The magazine for Finsia member, 4, 24–25.Google Scholar
  36. Russell, R., Doan, M. P., Cattlin, J., Godinho, V., & Fang, J. (2012). MoneyMinded summary research report: The reach and impact of MoneyMinded in Asia Pacific 2010–2011. Melbourne: RMIT.Google Scholar
  37. Saith, R. (2001). Capabilities: The concepts and its operationalisation (QEH Working Paper Series 66). Queen Elizabeth House, University of Oxford.Google Scholar
  38. Sen, A. (1985). Commodities and capabilities. Oxford: Elsevier.Google Scholar
  39. Sen, A. (1993). Capability and well-being. In M. Nussbaum & A. Sen (Eds.), The quality of life (pp. 30–53). Oxford: Clarendon Press.CrossRefGoogle Scholar
  40. Sen, A. (1999). Development as freedom. Oxford: Oxford University Press.Google Scholar
  41. Sen, A. (2009). The idea of justice. London: Allen Lane.Google Scholar
  42. Sherraden, M. (2010). Financial capability: What is it, and how can it be created? (CSD Working Papers 10–17). Washington University: Center for Social Development, George Warren Brown School of Social Work.Google Scholar
  43. Taylor, M., Jenkins, S., & Sacker, A. (2011). Financial capability, income and psychological wellbeing. (ISER Working paper series No. 2011–18) Essex: Institute for Social and Economic Research, University of Essex.Google Scholar
  44. The World Bank. (2012). The little data book on financial inclusion 2012. Washington: The World Bank.CrossRefGoogle Scholar
  45. Tseng, C. C. (2011). Microfinance and Amartya Sen’s capability approach. Ph.D., University of Birmingham, Brimingham.Google Scholar
  46. Voola, A. P. (2013). The sustainability of what? The challenges for microfinance in Australia. Third Sector Review, 19(1), 127–146.Google Scholar
  47. Willis, L. E. (2008). Against financial literacy education. Iowa Law Review, 94, 197–285.Google Scholar

Copyright information

© The Author(s) 2017

Authors and Affiliations

  1. 1.School of Nursing, Midwifery and Social WorkUniversity of QueenslandSt LuciaAustralia
  2. 2.Community Development, School of Social ScienceUniversity of QueenslandSt LuciaAustralia

Personalised recommendations