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Closing the gap: the link between social capital and microfinance services

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  • Lopez-Rodriguez, Patricia
  • De la Torre Garcia, Rodolfo

Abstract

The social capital has strengthened the solidarity funds when the legal mechanisms and institutions for monitoring and assistance would not have been present. The aim of this paper is to analyze the effect of social capital on productivity and performance of the Mexican solidarity funds. For this it is obtained an estimator indirectly associated with inequality, through which it follows that if the social capital rises 1% the loans number increases by 0.2877% and the savings number increases by 0.4598%, and for each additional producer that activate his social capital with his partners they will be generated increases in loans recoveries amounting to 597.41 pesos. In this sense, a greater investment in social capital will recover a larger amount of borrowed funds and will increase savings and loans to poor producers

Suggested Citation

  • Lopez-Rodriguez, Patricia & De la Torre Garcia, Rodolfo, 2000. "Closing the gap: the link between social capital and microfinance services," MPRA Paper 22974, University Library of Munich, Germany, revised Jun 2009.
  • Handle: RePEc:pra:mprapa:22974
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    File URL: https://mpra.ub.uni-muenchen.de/23220/2/MPRA_paper_23220.pdf
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    References listed on IDEAS

    as
    1. Kondor, Yaakov, 1971. "An Old-New Measure of Income Inequality," Econometrica, Econometric Society, vol. 39(6), pages 1041-1042, November.
    2. Besley, Timothy & Coate, Stephen & Loury, Glenn, 1993. "The Economics of Rotating Savings and Credit Associations," American Economic Review, American Economic Association, vol. 83(4), pages 792-810, September.
    3. Esteban, Joan & Ray, Debraj, 1994. "On the Measurement of Polarization," Econometrica, Econometric Society, vol. 62(4), pages 819-851, July.
    4. Atkinson,Anthony Barnes & Micklewright,John, 1992. "Economic Transformation in Eastern Europe and the Distribution of Income," Cambridge Books, Cambridge University Press, number 9780521438827.
    5. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    6. Robison, Lindon J. & Hanson, Steven D., 1995. "Social Capital and Economic Cooperation," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(01), pages 43-58, July.
    7. Beatriz Armendariz & Jonathan Morduch, 2007. "The Economics of Microfinance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262512017, January.
    8. Johnson, Paul & Temple, Jonathan, 1996. "Social Capability and Economic Development," Vassar College Department of Economics Working Paper Series 37, Vassar College Department of Economics.
    9. Samuel Bowles & Glenn C. Loury & Rajiv Sethi, 2014. "Group Inequality," Journal of the European Economic Association, European Economic Association, vol. 12(1), pages 129-152, February.
    10. Heller, Patrick, 1996. "Social capital as a product of class mobilization and state intervention: Industrial workers in Kerala, India," World Development, Elsevier, vol. 24(6), pages 1055-1071, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Keywords: social capital; microfinances; financial cooperatives; market failures; asimetric information; relationships; networks.;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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