| By: |
Luminita Postelnicu |
| Abstract: |
Microfinance Performance and Social Capital: A Cross-country AnalysisThis
paper investigates the relationship between the extent to which social capital
formation is facilitated within different societies, and the financial and
social performance of MFIs. We carry out a cross-country analysis on a dataset
containing 100 countries. We identify different social dimensions that we use
as proxies for how easy social capital can be developed in different
countries, and we hypothesize that microfinance is more successful, both in
terms of their financial and social aims, in societies that are more conducive
to the development of social capital. Our empirical results support our
hypothesis. |
| Abstract: |
Defining Social Collateral in Microfinance Group Lending: Microfinance group
lending with joint liability allows asset-poor individuals to replace physical
collateral by social collateral. This paper provides a theoretical framework
to evaluate the impact of social collateral pledged by group borrowers on
group lending repayment. We take into account the external ties of group
borrowers, i.e. the social ties linking borrowers to non-borrowers from their
community, whereas previous work in this field has looked solely at internal
ties (i.e. ties between group members). Our model stresses the impact of
network configuration on the amount of social capital pledged as collateral.
It shows why the group lending methodology works better in rural areas than in
urban areas, namely because rural social networks are typically denser than
urban ones, which results in higher social collateral. |
| Abstract: |
The Economic Value of Social Capital:Empirical studies on the importance of
social capital for poor households show divergent outcomes. This divergence
may stem from the lack of a conceptual framework for capturing the social
capital dimensions that deliver economic value to individuals. This paper
defines individual social capital from an economic perspective and proposes a
measurement based on the two dimensions of individual social capital that
bring economic value to individuals: (1) informal risk insurance arrangements
and (2) information advantages that arise from personal social networks. Using
this measurement, I present a numerical application to argue that differing
network configurations drive asymmetry of social interactions among
individuals. |
| Abstract: |
Social Capital and the Repayment of Microfinance Group Lending: A Case Study
of Pro Mujer Mexico:In this paper, we investigate how social networks of group
borrowers come into play in joint liability group lending. We use a large,
original dataset with 802 mapped social networks of borrowers from Pro Mujer
Mexico. We are the first to examine external ties, that is, social ties with
individuals outside the borrowing group. We have two main findings. First,
borrowers with stronger informal risk insurance arrangements are in better
economic shape and have a higher capacity to pay than borrowers with weaker
informal risk insurance arrangements. Second, borrowers who pledge valuable
ties as social collateral have fewer repayment problems. We postulate that
borrowers receive effective help from their ties in cases of need. |
| Keywords: |
microfinance; social collateral; social capital; group lending; social capital measurement |
| Date: |
2016–01–20 |
| URL: |
http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/223521&r=mfd |