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Self-Help Groups and Income Generation in the Informal Settlements of Nairobi

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  • Eliana La Ferrara

    (Bocconi University; IGIER)

Abstract

The aim of this paper is to understand the functioning and the scope of self-help groups in the informal settlements of urban areas as a means of generating income for poor households. The paper uses a unique dataset collected by the author in 1999 surveying all individual group members from several informal settlements of Nairobi. It studies the individual determinants of earnings within groups and relates group composition to various indicators of group functioning. Sex, age and ethnic identity are among the most important determinants of individual reliance on group income and of access to group loans. Heterogeneity in earnings among members is shown to reduce their ability to borrow from the group as a whole but not from each other. The impact of ethnic and other forms of heterogeneity on the division of labor, choice of compensation schemes, sanctioning technology and recruitment criteria is also described.

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Bibliographic Info

Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 163.

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Date of creation: 01 May 2002
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Handle: RePEc:csl:devewp:163

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Keywords: self-help groups; cooperative; participation; social capital;

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  1. Ghatak, Maitreesh & Guinnane, Timothy W., 1999. "The economics of lending with joint liability: theory and practice," Journal of Development Economics, Elsevier, vol. 60(1), pages 195-228, October.
  2. Jonathan Isham, 2002. "The Effect of Social Capital on Fertiliser Adoption: Evidence from Rural Tanzania," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 11(1), pages 39-60, March.
  3. Narayan, Deepa & Pritchett, Lant, 1997. "Cents and sociability : household income and social capital in rural Tanzania," Policy Research Working Paper Series 1796, The World Bank.
  4. Wydick, Bruce, 1999. "Can Social Cohesion Be Harnessed to Repair Market Failures? Evidence from Group Lending in Guatemala," Economic Journal, Royal Economic Society, vol. 109(457), pages 463-75, July.
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Cited by:
  1. Macours, Karen, 2014. "Ethnic divisions, contract choice, and search costs in the Guatemalan land rental market," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 1-18.
  2. Jonas Hjort, 2013. "Ethnic Divisions and Production in Firms," CESifo Working Paper Series 4449, CESifo Group Munich.
  3. Pande, Rohini, 2007. "Understanding Political Corruption in Low Income Countries," CEPR Discussion Papers 6273, C.E.P.R. Discussion Papers.
  4. Obare, Gideon A. & Mwakubo, Samuel M. & Ouma, Emily Awuor & Mohammed, Lutta & Omiti, John M., 2004. "Social Capital and Soil Erosion Control in Agriculturally Marginal Areas of Kenya: The Case of Machakos and Taita-Taveta Districts," 2004 Inaugural Symposium, December 6-8, 2004, Nairobi, Kenya 9532, African Association of Agricultural Economists (AAAE).
  5. Alberto Alesina & Eliana La Ferrara, 2004. "Ethnic Diversity and Economic Performance," NBER Working Papers 10313, National Bureau of Economic Research, Inc.
  6. Francesco Strobbe & Claudia Olivetti & Mireille Jacobson, 2010. "Breaking the Net: Family Structure and Street Children in Zambia," Brooks World Poverty Institute Working Paper Series 11110, BWPI, The University of Manchester.
  7. Place, Frank & Kariuki, Gatarwa & Wangila, Justine & Kristjanson, Patti & Makauki, Adolf & Ndubi, Jessica, 2002. "Assessing the factors underlying differences in group performance: methodological issues and empirical findings from the highlands of Central Kenya," CAPRi working papers 25, International Food Policy Research Institute (IFPRI).
  8. Place, Frank & Kariuki, Gatarwa & Wangila, Justine & Kristjanson, Patricia & Makauki, Adolf & Ndubi, Jessica, 2004. "Assessing the factors underlying differences in achievements of farmer groups: methodological issues and empirical findings from the highlands of Central Kenya," Agricultural Systems, Elsevier, vol. 82(3), pages 257-272, December.
  9. McCarthy, Nancy & Kilic, Talip, 2014. "The nexus between gender, collective action for public goods, and agriculture : evidence from Malawi," Policy Research Working Paper Series 6806, The World Bank.

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