A case study of social capital, household livelihood strategies, and Guatemalan microcredit borrowers
(Book - Regular Print)

Proquest Document Id. No. 840632028

Advisor : Rushbrook, Dereka

Thesis (M.A.) -- Prescott College, 2010

Increasing references to microcredit within the international development community suggest that credit access alone offers a path to financial sustainability: key to success is the manner in which microcredit groups catalyze and create social capital. This study uses a livelihoods approach to explore the role of social capital in household strategies used by microcredit borrowers, and asks whether chosen strategies lead to opportunity or constraint. Women who have borrowed small amounts of money from a prominent microfinance institution (MFI) in Guatemala comprise the study population. Findings suggest that improved well-being for many of the women in this study is not reliant on social capital bonds internal to the small credit groups, but on the linkages and bonds to other people and the resources they control, as well as on embedded social norms that nurture opportunity. Additionally, societal norms and the absence of linkages to broader social networks can limit the choice set of borrowers. The research raises questions about the role of social capital in microcredit programs. While practices of MFIs vary immensely, the findings of this case study suggest that improving economic well-being for poor borrowers depends not only on credit access, but also a weave of horizontal and vertical social links, and a broad repertoire of actions.