Social Capital and Repayment Performance of Group Lending in Microfinance
AbstractConventional wisdom associates the success of microfinance group lending with joint liability only. Recent studies have pinpointed the role of social capital, around which the successful implementation of joint liability contracts seems to revolve. This paper brings together all relevant evidence on the effect of social capital on the repayment performance of microfinance group lending. I reconcile seemingly divergent views on the role of social capital by pointing out that authors measure different aspects of social capital. In particular, researchers use different proxies and different methodologies to measure social capital. I emphasize the need for a theoretical framework designed to fit social capital in the microfinance context, and I suggest avenues for future research in this field.
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 12-032.
Length: 41 p.
Date of creation: 30 Oct 2012
Date of revision:
Publication status: Published by:
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social capital; social ties; loan repayment performance; group lending;
Find related papers by JEL classification:
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-11 (All new papers)
- NEP-DEV-2012-11-11 (Development)
- NEP-MFD-2012-11-11 (Microfinance)
- NEP-SOC-2012-11-11 (Social Norms & Social Capital)
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