Social capital: does it matter in a microfinance contract?

2015 ◽  
Vol 42 (11) ◽  
pp. 1035-1046 ◽  
Author(s):  
Bhawani Singh Rathore
Keyword(s):  
Social Capital ◽  
Group Performance ◽  
Family Members ◽  
Peer Pressure ◽  
Empirical Literature ◽  
Group Lending ◽  
Joint Liability ◽  
Content Type ◽  
Peer Monitoring

Purpose – The purpose of this paper is to evaluate the role of social capital in a microfinance contract. Design/methodology/approach – Systematic review of the theoretical and empirical literature on the role of social capital in microfinance. Findings – The theoretical literature has shown using models of peer selection, peer monitoring and peer pressure that group lending with joint liability overcomes both the informational and enforcement failures present in credit markets for poor. However findings from the empirical literature conclude that social capital should not be taken as a single concept but should be considered in light of its different aspects which may be having different effects on the performance. For example, the trust between the borrowers, cultural and social homogeneity has been found to have more significant affect on repayment performance in contrast to the incentives due to peer pressure. The groups formed by family members and relatives are consistently been reported to have weakening influence on repayment. Practical implications – For a same program the effect of social capital on performance can be different for different geographies and different classification of subjects and thus should be studied before initiating a microfinance program in any social setting. Social implications – The borrowers should be encouraged to form groups with others who are more trustworthy and not with those they are just having an acquaintance with. The borrowers should be encouraged to come to aid of those who are victims of negative externalities. The positive experiences will lead to reciprocity of actions in future. The borrowers should be discouraged to form groups with family members and relatives. Originality/value – It analyzes both theoretical and empirical literature by disentangling different aspects of social capital within groups and their effects on group performance.

Joint liability in a classic microfinance contract: review of theory and empirics

2017 ◽  
Vol 34 (2) ◽  
pp. 213-227
Author(s):  
Bhawani Singh Rathore
Keyword(s):  
Credit Markets ◽  
Peer Pressure ◽  
Empirical Literature ◽  
Future Research ◽  
Joint Liability ◽  
Content Type ◽  
Peer Selection ◽  
Peer Monitoring ◽  
The Poor ◽  
Practical Implications

Purpose The purpose of this paper is to investigate the role of joint liability in improving the repayment performance of a microfinance program. Design/methodology/approach This is a systematic review of the theoretical and empirical literature. Findings The theoretical literature has shown, using models of peer selection, peer monitoring and peer pressure, that joint liability overcomes both the informational and enforcement failures present in credit markets for the poor. However, the empirical literature does not yield a clear answer on how much of the success of microfinance programs can be attributed to the effect of joint liability alone without considering the effect of other instruments used by microfinance programs. Further, it is seen that joint liability does not work in isolation, but its effect is dependent on social, cultural and economic environment. Research limitations/implications An important future research agenda could be to study the roles of different overlapping mechanisms in group lending and to look at their interactions. Practical implications The concept of joint liability works well both in the rural and urban areas, but different social, cultural and economic factors should be analyzed before initiating a microfinance program. In developed regions, focus should be on strengthening peer selection and peer monitoring, as information problems are prevalent. In underdeveloped regions, the major problem is of strategic default, so the focus should be on strengthening social sanctions. Social implications Findings can be used for optimal design of credit contracts for the poor. Originality/value The paper reviews the existing literature on – “whether and how” – joint liability lending works in inefficient credit markets and comes up with practical implications for the microfinance sector.

Optimal group size with joint liability group lending strategy

2015 ◽  
Vol 8 (1) ◽  
pp. 2-18 ◽  
Author(s):  
Shirsendu Mukherjee ◽  
Sukanta Bhattacharya
Keyword(s):  
Group Size ◽  
Upper Bound ◽  
Group Lending ◽  
Cooperative Effort ◽  
Joint Liability ◽  
Content Type ◽  
Peer Monitoring ◽  
Effort Level ◽  
The Social ◽  
Optimal Group Size

Purpose – This paper aims to offer a theory on optimal group size. To overcome the problems of institutional credit facilities to the poor and marginal people, Joint Liability Group Lending (JLGL) is often considered as a better option. However, the literature in the field is surprisingly silent about the issue of group-size. This paper tries to fill the vacuum in a theoretical framework. Design/methodology/approach – Using a standard theoretical model, this paper shows that even with costless peer monitoring, there exists an upper bound on the size of group, and this upper bound is exactly pinned down by the strength of the social sanction. Findings – This paper shows that under reasonable specification of effort cost, as group size increases, both optimal cooperative effort level and the deviation incentive from that effort level rise monotonically for any individual borrower. Thus, given the strength of social sanction, the rising incentive for deviation uniquely determines the optimal group size even in absence of free riding in peer monitoring. Research limitations/implications – The theoretical results derived in the paper require empirical verification which is, however, tricky because of the problems associated with quantifying social sanctions. Practical implications – This paper argues that the group size should be larger in more integrated communities which have better social cohesion among its members. Originality/value – This paper shows that, for a given extent of joint liability the borrowers need to bear, the group size in joint liability group lending should be designed according to the strength of social sanction prevailing in the society to achieve social efficiency.

scholarly journals Dynamics of Group Lending Mechanism and the Role of Group Leaders in Developing Countries

2019 ◽  
Vol 10 (3) ◽  
pp. 54-71 ◽  
Author(s):  
Obinna Udodiri Nkwocha ◽  
Javed Hussain ◽  
Hatem El-Gohary ◽  
David J. Edwards ◽  
Ernest Ovia
Keyword(s):  
Group Formation ◽  
Group Cohesion ◽  
Group Leaders ◽  
Group Lending ◽  
Joint Liability ◽  
Peer Monitoring ◽  
Entrepreneurial Spirit ◽  
Group Members ◽  
Using Data

Group lending mechanisms have increasingly become popular among microfinance providers in recent years. This is largely due to its ability to leverage joint liability to increase loan repayments whilst promoting an entrepreneurial spirit among borrowers. Meanwhile, a group-lending mechanism is also very important in promoting women's empowerment through cooperative engagements of all group members. However, the effectiveness of the group lending methodology in the delivery of microfinance within a developing country context is largely under-researched. Using data from extensive focus groups interviews of women borrowers held in Nigeria among participants from 150 different groups, this article analyses the dynamics of group lending mechanism (group formation, peer monitoring, pressure and support). The article widens the current narrow literature on group leaders by providing a detailed empirical account of the activities of group leaders in a microfinance intervention. The findings showed that because group leaders are primarily held liable for loan delinquency of group members, they are more highly motivated than other members to monitor and pressure members. The results also suggest that while group leaders were found to perform vital roles, some of these group leaders abused their positions in ways that undermine group cohesion and microfinance sustainability. Lastly, the article introduces the “multiple card phenomenon” in group-based microfinance intervention.

Social capital and national innovation system: a cross-country analysis

2014 ◽  
Vol 21 (4) ◽  
pp. 453-475 ◽  
Author(s):  
Sepehr Ghazinoory ◽  
Ali Bitaab ◽  
Ardeshir Lohrasbi
Keyword(s):  
Social Capital ◽  
National Level ◽  
Innovation System ◽  
Negative Effects ◽  
Content Type ◽  
Research Findings ◽  
Different Dimensions ◽  
The Impact ◽  
Positive Effect

Purpose – In the last two decades, researchers have paid much attention to the role of cultural values on economic and social development. In particular, the crucial role of different aspects of culture on the development of innovation has been stressed in the literature. Consequently, it is vital to understand how social capital, as a core cultural value, affects the innovation process and the innovative performance at the national level. However, to date, the impact of different dimensions of social capital and innovation has not been properly portrayed or explained. Thus, the purpose of this paper is to investigate the influence of four different dimensions of social capital (institutional and interpersonal, associational life and norms) on two of the main functions of national innovation system (NIS) (entrepreneurship and knowledge creation) based on over 50,000 observations in 34 countries. Design/methodology/approach – In this regard, national-level data from the World Values Survey database was employed to quantify social capital. Entrepreneurship is, in turn, assumed to consist of three sub-indexes and 14 indicators based on the Global Entrepreneurship Index. Knowledge creation is also measured through US Patent Office applications. Also, exploratory factor analysis and structural equation modeling approach were used to build the measurement model and investigate the impact that each factor of social capital had on entrepreneurship and knowledge application, respectively. Measurement and structural models were built and their reliability and validity were tested using various fit indices. Research findings suggest the strong positive effect of institutional trust and networking on entrepreneurship. Also, interpersonal trust and networks were shown to have high influence on knowledge development at the national level. Norms appear to have naïve to medium negative effects on both functions. Findings – Research findings suggest the strong positive effect of institutional trust and networking on entrepreneurship. Also, interpersonal trust and networks were shown to have high influence on knowledge development at the national level. Norms appear to have naïve to medium negative effects on both functions. Originality/value – However, to date, the impact of different dimensions of social capital and innovation has not been properly portrayed or explained.

Social identity and family business: exploring family social capital

2015 ◽  
Vol 5 (2) ◽  
pp. 157-181 ◽  
Author(s):  
Torsten Schmidts ◽  
Deborah Shepherd
Keyword(s):  
Social Capital ◽  
Social Identity ◽  
Family Business ◽  
Social Identity Theory ◽  
Identity Theory ◽  
Family Members ◽  
Content Type ◽  
Family Social Capital ◽  
The Family ◽  
The Impact

Purpose – The purpose of this paper is to use social identity theory to explore factors that contribute to the development of family social capital. Effects are investigated both for the family and the business. Design/methodology/approach – A single in-depth case study focussing on the family unit was coducted within a fourth-generation family business involved in the arts retailing. Findings – The findings suggest that social identity theory is a useful lens to explore the development of family social capital. The six themes identified highlight that there is a normative and an affective dimension, leading to family members’ desire to uphold the status of the business. Evidence suggests that the normative factors may be both positively and negatively related to the development of family social capital, due to their potentially restrictive nature. Originality/value – The paper’s findings imply that social identity can contribute to understanding family dynamics. Evidence highlights various factors for family members that are not involved in the family business to uphold its status. This is attributed to the emotional significance of the business to the family’s identity. Furthermore, this paper suggests that the strong focus on norms and values, which developed gradually, may have adverse effects on the identification with the business and the willingness to uphold its status. Propositions are offered to provide guidance for future research to investigate this controversial evidence regarding the impact of value orientation on family social capital.

The role of entrepreneurial families in entrepreneurial ecosystems: the family social capital approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Claudia Benavides-Salazar ◽  
Cristina Iturrioz-Landart ◽  
Cristina Aragón-Amonarriz ◽  
Asunción Ibañez-Romero
Keyword(s):  
Social Capital ◽  
Design Methodology ◽  
Content Type ◽  
Entrepreneurial Ecosystems ◽  
Family Social Capital ◽  
The Family ◽  
Depth Interviews ◽  
Entrepreneurial Dynamics

Purpose This paper aims to investigate how entrepreneurial families (EFs) influence the development of entrepreneurial ecosystems (EEs) by using the family social capital (FSC) approach. Design/methodology/approach For this paper, the authors analyzed the Manizales EE as a case study. The authors used a variety of data collection procedures, including in-depth interviews with 26 entrepreneurs and mentors. Findings The authors established how EFs affect EE development, identifying how the FSC bridging mechanisms impact the EE’s social and cultural attributes, boosting entrepreneurial dynamics. Originality/value The results indicated the relevance of EFs’ embeddedness and the degree of the FSC institutionalization in promoting of entrepreneurship within the EEs.

The role of public libraries in the development of social capital in local communities – a theoretical study

2021 ◽  
Vol 42 (3) ◽  
pp. 184-196
Author(s):  
Maja Dorota Wojciechowska
Keyword(s):  
Social Capital ◽  
Social Engagement ◽  
Social Life ◽  
Public Libraries ◽  
Local Communities ◽  
Social Needs ◽  
Content Type ◽  
The Social ◽  
The Impact

PurposeSocial capital, understood as intangible community values available through a network of connections, is a factor in the development of societies and improving quality of life. It helps to remove economic inequalities and prevent poverty and social exclusion, stimulate social and regional development, civic attitudes and social engagement and build a civic society as well as local and regional identity. Many of these tasks may be implemented by libraries, which, apart from providing access to information, may also offer a number of services associated with social needs. The purpose of this paper is to present the roles and functions that libraries may serve in local communities in terms of assistance, integration and development based on classical social capital theories.Design/methodology/approachThe paper reviews the classical concepts of social capital in the context of libraries. It analyses the findings of Pierre-Félix Bourdieu, James Coleman, Francis Fukuyama, Robert Putnam, Nan Lin, Ronald Stuart Burt, Wayne Baker and Alejandro Portes. Based on their respective concepts, the paper analyses the role of the contemporary library in the social life of local communities. In particular, it focuses on the possible new functions that public libraries may serve.FindingsA critical review of the concept of social capital revealed certain dependencies between libraries and their neighbourhoods. With new services that respond to the actual social needs, libraries may serve as a keystone, namely they may integrate, animate and engage local communities. This, however, requires a certain approach to be adopted by the personnel and governing authorities as well as infrastructure and tangible resources.Originality/valueThe social engagement of libraries is usually described from the practical perspective (reports on the services provided) or in the context of research on the impact of respective projects on specific groups of users (research reports). A broader approach, based on original social theories, is rarely encountered. The paper draws on classical concepts of social capital and is a contribution to the discussion on possible uses of those concepts based on an analysis of the role of libraries in social life and in strengthening the social capital of local communities.

Social capital in the theory and research of LIS professionals in the light of the literature on the subject. Review of current knowledge

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Maja Dorota Wojciechowska
Keyword(s):  
Social Capital ◽  
Current Knowledge ◽  
Future Research ◽  
Content Type ◽  
Individual Social Capital ◽  
Rural Libraries ◽  
The Subject ◽  
The Moment ◽  
The Impact

Purpose The purpose of the paper is to present the latest scholarly trends in the field of social capital in libraries, to review research concepts published by LIS professionals and to suggest further research possibilities in this area. Design/methodology/approach This paper presents a review and critical analysis of literature associated with research on social capital in libraries to highlight its importance for the development of LIS and its impact on the functioning of environments linked with various types of libraries. The goal of literature analysis was to determine the current condition of research on social capital in libraries. The main trends were identified and the need for further qualitative analyses, which are missing at the moment, was confirmed. Findings It was determined that, so far, LIS professionals have focussed mainly on the role of municipal libraries in developing social capital, the problem of building trust, especially in immigrant circles and the impact of libraries on promoting a civil society. Academic libraries, rural libraries, organisational capital in libraries and individual social capital of librarians were a much less frequent subject of research. The role of libraries in developing social capital in educational (primary and secondary education) and professional (non-university professionals) circles is practically non-existent in research, and it will require in-depth studies and analyses in the coming years. Originality/value This paper constitutes a synthetic review of the latest research concepts concerning social capital in libraries. It identifies the most important research trends and areas that so far have not been explored and suggests research methods to help LIS professionals design future research in this area more effectively.

Effect of social capital on agribusiness diversification intention in the emerging market

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Le Dang Lang ◽  
Abhishek Behl ◽  
Nguyen Trung Dong ◽  
Yama Temouri ◽  
Nguyen Hong Thu
Keyword(s):  
Social Capital ◽  
Global Economy ◽  
Structural Equation ◽  
Emerging Market ◽  
Measurement Scale ◽  
Equation Modeling ◽  
Group Discussions ◽  
Content Type ◽  
Depth Interviews

PurposeCoronavirus disease 2019 (COVID-19) has seriously affected the global economy. How agribusinessmen are overcoming this crisis is being noticed in emerging markets. Using social capital to diversify agribusiness for getting more customers is a useful solution for the growth of agribusiness. However, there is a lack of evidence on the aggregate measurement scale of social capital and the influence of behavioral goals on the intention toward agribusiness diversification. Therefore, this study aims to develop an integrated measurement of social capital and investigate its effect on agribusiness diversification intention using the expanded theory of planned behavior (TPB).Design/methodology/approachA mixed-methods approach is used, including four in-depth interviews, three focus group discussions and two surveys. Structural equation modeling is applied to a sample of 484 respondents to test the proposed hypotheses.FindingsThe study shows the role of social capital in influencing the intention to diversify agribusiness under the premises of the resource-based view (RBV). The scale of social capital is also developed, which is the first integrated measurement of this asset. The findings contribute significantly to the existing knowledge of social capital, the TPB and diversifying agribusiness.Originality/valueThis is the first study to explore the comprehensive effect of the facets of social capital on behavioral intention through behavioral goals and determinants of the TPB under the premises of the RBV. The findings will help emerging economies, for example, Vietnam, where most farmers are family business owners or microscaled entrepreneurs in agriculture.

Impact of organizational citizenship behavior on job performance in Indian healthcare industries

2017 ◽  
Vol 66 (6) ◽  
pp. 780-796 ◽  
Author(s):  
Eeman Basu ◽  
Rabindra Kumar Pradhan ◽  
Hare Ram Tewari
Keyword(s):  
Social Capital ◽  
Job Performance ◽  
Organizational Citizenship ◽  
Organizational Citizenship Behavior ◽  
Superior Performance ◽  
Citizenship Behavior ◽  
Healthcare Organizations ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to explore the relationship between organizational citizenship behavior (OCB) and job performance. It also examines the mediating role of social capital in influencing the relationship between OCB and job performance. Design/methodology/approach The study explores the dynamic relationship among the variables of OCB and job performance and social capital. Data were collected from 501 respondents working in 15 healthcare organizations in Kolkata, India, through questionnaire survey. Likert-type rating scales of OCB, job performance and social capital with sound reliability and validity were used to carry out the survey. The data were analyzed using structural equation modeling. Findings The results of the present study show that OCB significantly predicts job performance in healthcare organizations. Social capital found to be a significant mediator between OCB and job performance. Research limitations/implications The findings of the study have a number of implications for organizations in acknowledging and leveraging social capital and encouraging OCB to facilitate superior performance of employees. The generalization of the findings of the study should be restricted to the healthcare organizations in Kolkata due to its own style of functioning, workforce and work environment. The role of demographic variables in influencing the outcome measures has not been considered for the present study. Further research on these aspects may reveal more interesting results with regard to the dynamics among organizational citizenship behavior, social capital and job performance. Practical implications Employee-friendly management practices should be adopted in organizations to facilitate the formation of network building and development of social capital which serves as an asset to organizations and creates competitive advantage. Originality/value The research findings enrich our understanding of voluntary social participation and citizenship behavior of employees for influencing performance at work. The study also provides useful and unique insight on the benefits of networking in healthcare organizations particularly helping employees to cope with emergency situations. The findings as well as methodology used in this study are original and unique.

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