Social Capital and Repayment Performance of Group Lending in Microfinance

Luminita Postelnicu

No 12-032, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: Conventional 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.

Keywords: social capital; social ties; loan repayment performance; group lending (search for similar items in EconPapers)
JEL-codes: D71 G21 O12 O17 Z13 (search for similar items in EconPapers)
Pages: 41 p.
Date: 2012-10-30
New Economics Papers: this item is included in nep-dev, nep-mfd and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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