Lending Groups and Different Social Capitals in Developed and Developing Countries

Diego A. B. Marconatto, Luciano Barin-Cruz and Eugenio Pedrozo

RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), 2016, vol. 20, issue 6, 651-672

Abstract: Lending groups (LGs) and social capital are two central elements to the many microfinance solutions operating around the world. However, LG effectiveness in reducing transaction costs and lending risks for microfinance institutions (MFIs) is mediated by institutional environments. Starting from this assumption, we discuss the existent interactions between the institutional environments of developed (Anglo-Saxon and communitarian) and developing countries with different stocks of social capital (individual, network and institutional) and the influences of this interaction on LG effectiveness. In order to do so, we applied the institutional perspective of O. Williamson to build a theoretical framework to examine the interaction of all these conditions, allowing for analysis of their main relations within the microfinance context. Based on this framework, we propose on the one hand that in developing and Anglo-Saxon developed nations, stocks of both individual and network social capital are the most important for an LG's effectiveness. However, in Anglo-Saxon countries, these two stocks of social capital are complemented by formal contracting devices. In communitarian developed countries, on the other hand, the stocks of institutional social capital have a stronger positive impact on LG dynamics.

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://rac.anpad.org.br/index.php/rac/article/view/1194/1190 (text/html)
https://rac.anpad.org.br/index.php/rac/article/download/1194/1190 (application/pdf)

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:abg:anprac:v:20:y:2016:i:6:1194

Access Statistics for this article

RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration) is currently edited by Marcelo de Souza Bispo

More articles in RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration) from ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração
Bibliographic data for series maintained by Information Technology of ANPAD ().