Within-group heterogeneity and group dynamics: analyzing exit of microcredit groups in Angola

Ivar Kolstad, Armando Garcia Pires and Arne Wiig

Oxford Development Studies, 2017, vol. 45, issue 3, 338-351

Abstract: The effect of within-group heterogeneity on the survival of social groups is theoretically ambiguous. A greater diversity of ideas, experience, and networks can have a positive effect on members’ benefits from group membership, but diversity also creates a potential for conflict. This paper analyzes the relation between heterogeneity and exit of microcredit groups, using data from Angola. The results suggest that the form of group heterogeneity matters. Fragmentation in terms of social identities, or more specifically religious-linguistic fractionalization, is associated with a greater probability of group exit. Within-group economic inequality, however, is associated with a decrease in the probability of exit, but at a diminishing rate.

Date: 2017
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Working Paper: Within-group heterogeneity and group dynamics: Analyzing exit of microcredit groups in Angola (2015)
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DOI: 10.1080/13600818.2016.1243237

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