On borrowed time: The limits of informal credit for livelihood security in Herat, Afghanistan

Abstract

Informal credit has been consistently highlighted in ten years of livelihoods research at the Afghanistan Research and Evaluation Unit (AREU), the Secure Livelihoods Research Consortium (SLRC) and the Overseas Development Institute (ODI) as a primary source of social protection – and one of the most pervasive social structures – in Afghanistan. However, there is little recognition or understanding of informal credit in policy-making and programming. Within Afghanistan’s deeply socially embedded economy, informal credit is a key mechanism through which markets operate and through which the distributional economy provides access to land, labour and income for rural households. This study undertakes an in-depth examination of informal credit practices in two villages in Herat that differ in size and economy, exploring how credit operates. In particular, it looks at the ways in which credit is used and negotiated, its interaction with livelihood churning, how credit mechanisms are gendered and the extent to which social relations are underpinned by informal credit. This research is part of the Secure Livelihoods Research Consortium (SLRC) programme