Banks in the Brazilian Favela: A Study of the Relations Between Bank Branches and Residents of an Urban Region Targeted By ‘Pacification' Policies
Despite their global reach, the processes driving the financialization of social life are many and varied, both in terms of the agents responsible for their formulation and implementation, and in relation to the dynamics and effects that they unleash in different national and local contexts.
In Brazil, the government has played a key role in enabling and promoting these processes through its development of programs and initiatives matching the proposals formulated by institutions like the World Bank and other organizations belonging to the international financial system. According to the latter, increasing access to the financial system is one way of attaining higher levels of social inclusion, leading to an expansion of banking services and the supply of credit to low-income populations.
In a context of growth in formal employment and an increase in the population’s income, caused to a large extent by a real increase in the value of the minimum wage and by the implementation of minimum income programs throughout the 2000s, the Brazilian government has made increasing use of the banking system to distribute welfare benefits and social policies (pensions, allowances, social welfare payments) and persuaded the institutions making up the National Financial System to create services specifically aimed at these sectors of the population. In response, these institutions opened small outlets providing financial services in areas without bank branches, created new simplified bank accounts, and introduced lines of microcredit and payroll loans for wage earners, public employees, retirees and pension holders. Today these policies have led to a substantial increase in the demand for financial services, perceived by public and private institutions alike as a great opportunity to be exploited. To do so, though, they have had to discover better ways of communicating and interacting with a public previously located outside their target groups.
This work takes as its theme the action of financial agents in popular contexts. I look to analyse various aspects of the relationship between financial institutions and low-income populations through the observation of a concrete experience: the opening of bank branches in a peripheral region of the city of Rio de Janeiro, Brazil. These branches arrived at the same time as government initiatives were launched to ‘pacify’ the region: the latter comprised the State’s attempt to gain control of territories previously under the sway of organizations linked to drug trafficking.
In the case under study, therefore, supplying and/or encouraging the use of financial services took place in conjunction with interventions by State agents in an urban territory with a high population density, traditionally perceived to be poor, vulnerable, lacking basic services and extremely dangerous due to the disputes between local organizations over control the drug trade and the conflicts between these groups and the police.
The ethnographic research forming the basis of this article was conducted over the first half of 2013. Public authorities had been intervening in this territory since 2010 in the form of a federal government initiative designed to improve urban mobility, relocatin some of the population to recently built housing developments and opening health centres, schools, sports centres, cultural spaces and so on. Subsequently the State’s intervention involved direct action by law enforcement agencies (termed ‘pacification’ or ‘occupation,’ depending on the viewpoint concerned) and the installation of permanent police stations in the community: the Police Pacification Units or UPPs. All these actions were widely reported by the national and international media, presented as key elements in the endeavour to get the city ready to host the FIFA World Cup in 2014 and the Olympics in 2016.
Although various banks were already physically present in districts considered popular or even impoverished, opening bank branches in a territory known by terms such as ‘favela,’ ‘morro’ (hill) or ‘community’ and, more precisely, opening them in a region perceived to be extremely violent, was considered fairly daring by the financial institutions themselves and by the local population.
The ethnographic research on the bank branches newly opened in this region allowed me to accompany the everyday lives of members of the local population who interacted directly with the branches as account holders, users of bank services (receiving wages and pensions, paying bills, taking out loans) or as beneficiaries of public policies (receiving the Family Allowance, unemployment benefit and severance fund payments). It also enabled me to identify the diverse forms through which the bank employees interact with the local public, including their relations with residents and traders, the diverse organizations operating in the region (associations, NGOs, churches and so on), local leaders, public authority employees, police officers and agents connected in various forms to drug trafficking.
The resulting data obliges us to recognize the importance low-income populations have acquired in the contemporary global economy. Many of the academic works exploring this topic have geared their analyses towards denouncing the expansion of the financial system’s control of economic life, taking as their backdrop the critique of the predominance of the ‘neoliberal’ logic in the contemporary world, but without sufficiently emphasizing the processes that make these phenomena possible. In this work, as in the work of authors inspiring it (Villarreal 2004, Wilkis 2013 & 2014, Bazán Levy & Saraví 2012), my aim has been to examine concrete situations that involve the relationship between the financial system and the low-income population in order to make visible the social processes that cause so-called financialization to assume very diverse configurations.
In the case in question, the increase in the supply of financial services and resources to low-income groups formed part of a government program that conceived this dynamic as a strategy for social inclusion. Furthermore, making this access a reality was conditional on the effects of other State interventions aimed at establishing public order over an urban territory outside or on the margins of its control. Finally, the research showed that the activities of the banks that started operating in the region were heavily dependent either on the mediation of people already embedded locally or on the presentation of the banks as agents distributing benefits provided by the State.