Social sanctions or social relations? Microfinance in Mexico

Denis Griffin and Bryan W. Husted

Journal of Business Research, 2015, vol. 68, issue 12, 2579-2587

Abstract: Microfinance is a vital source of funding for micro-entrepreneurs in emerging markets and underdeveloped nations. The emphasis in the literature on social sanctions as a mechanism for ensuring high repayment rates may be misplaced. We propose that the construct of harmonious social relations needs to be added in order to explain repayment rates and that high repayment rates foster increased capital formation for micro-entrepreneurs. Using a sample of 182 respondents drawn from a microfinance institution in Mexico and structural equation modeling, the results support the main hypotheses. Unexpectedly, social sanctions had a negative impact on repayment rates.

Keywords: Microfinance; Social capital; Solidarity; Peer-group pressure; Joint liability; Social sanctions (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148296315002544
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:68:y:2015:i:12:p:2579-2587

DOI: 10.1016/j.jbusres.2015.06.023

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().