The Role of Credit Weapon and Income/Wealth Inequality: A Sri Lankan Case Study
The Role of Credit Weapon and Income/Wealth Inequality: A Sri Lankan Case Study

Summary/Abstract: This research paper shows that credit mechanisms sometimes thrive towards strengthening socio-economic power base of the capitalist class and form a mutually reinforcing function, which, from a Marxian point of view, could intensify concentration of wealth aggravating income/wealth inequality in society. We applied a critical ethnographical approach using the case study research design. Empirical data was extracted iteratively from participants and presented as thick-descriptive case studies. We argue that certain credit decisions enhance the socio-economic power base of influential individuals, making them richer and powerful while ordinary credit applicants are discriminated against by strict application of credit evaluation rules. These observations bolster the Marxian claim that credit systems work as an exploitation mechanism towards concentration of wealth. These findings provide insight for policy formulators to design more productive financial capital mobility systems with the help of state-intervention to minimize credit oriented exploitation and growing inequality.

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