Skip to main content

Advertisement

SpringerLink
Log in

Knowledge in Microsocial Milieus: the Case of Microfinance Practices Among Women in India

  • Published:
Journal of the Knowledge Economy Aims and scope Submit manuscript

Abstract

It is often considered that weak ties permit obtaining new information which contributes to successful ventures. However, is this true for all segments of the population? We explore the use of ties in very poor microsocial milieus of people who have resorted to microcredit. We find that strong ties and weak ties are both relevant in different situations for borrowers with different profiles. For the very poor, strong ties are more important in obtaining knowledge of sources of finance. However, more educated people in our sample of microcredit borrowers are able to exploit weak ties better.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Notes

  1. According to this methodology, MFIs cannot charge the interest rate against the loans.

References

  • Abbink, K., Irlenbuch, B., & Renner, E. (2006). Group size and social ties in microfinance institutions. Economic Inquiry, 44, 614–628.

    Google Scholar 

  • Afrin, S., Islam, N., & Ahmed, S. U. (2010). Microcredit and rural women entrepreneurship development in Bangladesh: a multivariate model. Journal of Business & Management, 16, 9–36.

    Google Scholar 

  • Alijani, S., Assadi, D., & Ashta, A. (2016). Can social dynamics be channeled from offline to online communities? Commitment, compliance and cooperation from microfinance to crowdfunding. In D. ASSADI (Ed.), Strategic approaches to successful crowdfunding. Hershey, PA: IGI Global.

    Google Scholar 

  • Amran, A. M., Rahman, R. A., Yusof, S. N. S., & Mohmed, I. S. (2014). The current practice of Islamic micro finance institutions’ accounting information system via the implementation of mobile banking. Procedia - Social and Behavioral Sciences., 145, 81–87.

    Google Scholar 

  • Armendariz, B., & Labie, M. (Eds.). (2011). The handbook of microfinance. Singapore: World Scientific.

    Google Scholar 

  • Armendàriz, B., & Morduch, J. (2005). The economics of microfinance. Cambridge, MA: MIT Press.

    Google Scholar 

  • Asheim, B. T., & Coenen, L. (2005). Knowledge bases and regional innovation systems: comparing Nordic clusters. Research Policy, 34, 1173–1190.

    Google Scholar 

  • Ashta, A. (2013). Contextualising microfinance research. Journal of Innovation Economics, 11, 3–14.

    Google Scholar 

  • Ashta, A., Couchoro, M., & Musa, A. S. M. (2014). Dialectic evolution through the social innovation process: from microcredit to microfinance. Journal of Innovation and Entrepreneurship, 3, 4.

    Google Scholar 

  • Ashta, A., Dayson, K., Gera, R., Hettihewa, S., Krishna, N. V., & Wright, C. (2013). Microcredit as a social innovation. In F. Moulaert, D. Maccallum, A. Mehmood, & A. Hamdouch (Eds.), The international handbook on social innovation. Cheltenham, UK: Edward Elgar.

    Google Scholar 

  • Ashta, A., Demay, I. & Couchoro, M. 2016. The role of stakeholders in the historical evolution of microfinance in Togo. Economic History of Developing Regions, 1–42. doi:10.1080/20780389.2015.1114413.

  • Ashta, A., & Hannam, M. (2014). Hinduism and microcredit. Journal of Management Development, 33, 891–904.

    Google Scholar 

  • Assadi, D., & Ashta, A. (2014). Innovative transposition of trust mechanisms in social lending groups from offline to online (Strategic change: briefings in entrepreneurial finance, Vol. 23, pp. 461–480).

    Google Scholar 

  • Banerjee, A. V., Duflo, E., Glennerster, R. & Kinnan, C. 2010. The miracle of microfinance? Evidence from a randomized evaluation. Universities-Research Conference on Economic Development. http://economics.mit.edu/files/5993 (accessed on 2 October 2013).

  • Baptista, J. A. G., Ramalho, J. J. S., & da Silva, J. V. (2006). Understanding the microenterprise sector to design a tailor-made microfinance policy for Cape Verde. Portuguese Economic Journal, 5, 225–241.

    Google Scholar 

  • Bateman, M. (2010). Why microfinance doesn’t work? The destructive rise of local neo-liberalism. London, U.K.: Zed Books, Ltd.

    Google Scholar 

  • Bédécarrats, F., Bastiaensen, J., & Doligez, F. (2012). Co-optation, cooperation or competition? Microfinance and the new left in Bolivia, Ecuador and Nicaragua. Third World Quarterly, 33, 143–160.

    Google Scholar 

  • Besley, T., & Coate, S. (1995). Group lending, repayment incentives and social collateral. Journal of Development Economics, 46, 1–18.

    Google Scholar 

  • Boutillier, S., & Uzunidis, D. (2014). L’entrepreneur : Acteur et fonction sociale - une réflexion à partir de comportement économique et structures sociales d’andré nicolaï. http://www.ethique-economique.fr/uploaded/boutillieruzunidistexte-20nicolai-20mai-202014-1.pdf.

    Google Scholar 

  • Bradley, S. W., Mcmullen, J. S., Artz, K., & Simiyu, E. M. (2012). Capital is not enough: innovation in developing economies. Journal of Management Studies, 49, 684–717.

    Google Scholar 

  • Brink, V. D. R. & J.P.Chavas (1991). The Microeconomics of an Indigenous African Institution: The Rotating Savings and Credit Association. Mimeo, Cornel 1 Food and Nutrition Policy Program.

  • Burchardi, K. B., & Hassan, T. A. (2013). The economic impact of social ties: evidence from German reunification*. Quarterly Journal of Economics, 128, 1219–1271.

    Google Scholar 

  • Calton, J. M., Werhane, P. H., Hartman, L. P., & Bevan, D. (2013). Building partnerships to create social and economic value at the base of the global development pyramid. Journal of Business Ethics, 117, 721–733.

    Google Scholar 

  • Campbell, G. (2010). Microfinancing the developing world: how small loans empower local economies and catalyse neoliberalism’s endgame. Third World Quarterly, 31, 1081–1090.

    Google Scholar 

  • Choudhury, M. A. (2002). Microenterprise development using islamic financing and organizational instruments: modality and practicum. International Journal of Social Economics, 29, 119–134.

    Google Scholar 

  • Dusuki, A. W. (2008). Banking for the poor: the role of Islamic banking in microfinance initiatives. Humanomics, 24, 49–66.

    Google Scholar 

  • Duvendack, M., Palmer-Jones, R., Copestake, J. G., Hooper, L., Loke, Y., & Rao, N. (2011). What is the evidence of the impact of microfinance on the well-being of poor people? London: EPPI-Centre, Social Science Research Unit, Institute of Education, University of London.

    Google Scholar 

  • Feigenberg, B., Erica, F. M. & Pande, R. (2010). Building social capital through microfinance. HKS Faculty Research Working Paper Series. John F. Kennedy School of Government, Harvard University.

  • Garikipati, S. (2012). Microcredit and women’s empowerment: through the lens of time-use data from rural India. Development and Change, 43, 719–750.

    Google Scholar 

  • Ghatak, M. (1999). Group lending, local information, and peer selection. Journal of Development Economics, 60, 27–51.

    Google Scholar 

  • Ghatak, M., & Guinnane, T. W. (1999). The economics of lending with joint liability: theory and practice. Journal of Developing Economics, 60, 195–228.

    Google Scholar 

  • Ghosh, C., & Guha, S. (2014). Do micro enterprises choose microfinance institutions to meet their financial needs? evidence from Mumbai Slums. Journal of Developmental Entrepreneurship, 19, 1–17.

    Google Scholar 

  • Ghosh, C. & Guha, S (2015) “Determinants of profitability of the microenterprisesled by women micro entrepreneurs: evidence from Mumbai slums”, Int. J. Entrepreneurship and Small Business,24,No-4,455-473.

  • Global Envision. (2006). The history of micro finance.

    Google Scholar 

  • Granovetter, M. (2005). The impact of social structure on economic outcomes. Journal of Economic Perspectives, 19, 33–50.

    Google Scholar 

  • Granovetter, M. S. (1973). The strength of weak ties American Journal of Sociology, 78, 1360–80.

    Google Scholar 

  • Greenblatt, M., Levinson, D. J., & Shapiro, A. K. (1959). Placebo effect, social milieu, and the evaluation of psychiatric therapies. Journal of Chronic Diseases, 9, 327–333.

    Google Scholar 

  • Gubert, F., & Roubaud, F. (2011). The impact of micro finance loans on small informal enterprises in Madagascar (A panel data analysis).

    Google Scholar 

  • Guha, S. (2010). Micro finance for micro enterprises: an impact evaluation of self-help groups (Occasional Paper), 55, NABARD.

  • Guha, S., & Ghosh, C. (2015). Institutional framework of mfis and economic benefit to clients in Mumbai Slums. Economic and Political Weekly, 50, 151–159.

    Google Scholar 

  • Guha, S., & Gupta, G. (2005). Micro-credit for income generation: the role of ROSCA. Economic and Political Weekly, 40, 1470–1473.

    Google Scholar 

  • Guinnane, T. W. (2006). State support for the German cooperative movement (pp. 1850–1914).

    Google Scholar 

  • Guinnane, T. W. (2011). The early German credit cooperatives and microfinance organizations today: similarities and differences. In B. Armendáriz & M. Labie (Eds.), The handbook of microfinance. Singapore: World Scientific.

    Google Scholar 

  • Hamid, M. A. (2005). The role of Islamic bank in the development of small entrepreneurs. Journal of Islamic Economics and Finance, 1, 60–83.

    Google Scholar 

  • Harper, M., Rao, D. S. K., & Sahu, A. K. (2008). Development, divinity, and dharma: the role of religion in development institutions and microfinance by rugby. Warwickshire, U.K.: Practical Action Publishing.

    Google Scholar 

  • Hauser, C., Tappeiner, G., & Walde, J. (2007). The learning region: the impact of social capital and weak ties on innovation. Regional Studies, 41, 75–88.

    Google Scholar 

  • Hermes, N., & Lensink, R. (2011). Microfinance: its impact, outreach, and sustainability. World Development, 39, 875–881.

    Google Scholar 

  • Hollis, A., & Sweetman, A. (1998). Microcredit: what can we learn from the past? World Development, 26, 1875–1891.

    Google Scholar 

  • Hollis, A., & Sweetman, A. (2004). Microfinance and famine: the Irish loan funds during the great famine. World Development, 32, 1509–1523.

    Google Scholar 

  • Huff, G. (2011). Finance and long-term development issues in Southeast Asia. Asian-Pacific Economic Literature, 25, 56–78.

    Google Scholar 

  • Hung, S.-C., & Whittington, R. (2011). Agency in national innovation systems: institutional entrepreneurship and the professionalization of Taiwanese IT. Research Policy, 40, 526–538.

    Google Scholar 

  • Kabeer, N. (2005). Gender equality and women’s empowerment: a critical analysis of the third millenium development goals. Gender and Development, 13, 13–24.

    Google Scholar 

  • Kaufmann, A., & Tödtling, F. (2001). Science–industry interaction in the process of innovation: the importance of boundary-crossing between systems. Research Policy, 30, 791–804.

    Google Scholar 

  • Khoi, P. D., Gan, C., Nartea, G. V., & COHEN, D. A. (2013). Formal and informal rural credit in the Mekong River Delta of Vietnam: interaction and accessibility. Journal of Asian Economics, 26, 1–13.

    Google Scholar 

  • Koku, P. S., & Acquaye, H. E. (2011). Who is responsible for rehabilitating the poor? The case for church-based financial services for the poor. Journal of Financial Services Marketing, 15, 346–356.

    Google Scholar 

  • Kramarz, F., & Skans, O. N. (2014). When strong ties are strong: networks and youth labour market entry. Review of Economic Studies, 81, 1164–1200.

    Google Scholar 

  • Ledgerwood, J., & White, V. (2006). Transforming microfinance institutions: providing full financial services to the poor. Washington D.C.: The World Bank.

    Google Scholar 

  • Legleye, S., Beck, F., Maillochon, F., & de Peretti, G. (2008). Usages de drogues en France parmi les hommes et les femmes : une question de milieu social. Revue d’Épidémiologie et de Santé Publique, 56, 291.

    Google Scholar 

  • Lybbert, T. J. 2008. Exploring the role of spiritual capital in poverty traps and microfinance. Faith and Economics, 51, 57–79.

  • Mceachern, M., & Hanson, S. (2008). Socio-geographic perception in the diffusion of innovation: solar energy technology in Sri Lanka. Energy Policy, 36, 2578–2590.

    Google Scholar 

  • Mcmahon, D., & Thorsteinsdóttir, H. (2013). Pursuing endogenous high-tech innovation in developing countries: a look at regenerative medicine innovation in Brazil, China and India. Research Policy, 42, 965–974.

    Google Scholar 

  • Milana, C., & Ashta, A. (2012). Developing microfinance: a survey of the literature. Strategic Change: Briefings in Entrepreneurial Finance, 21, 299–330.

    Google Scholar 

  • Mogale, M. T. (2007). Local governance and poverty reduction in South Africa II: the role of micro-finance. Progress in Development Studies, 7, 345–355.

    Google Scholar 

  • Mokhtarnia, S. (2011). Language education in Iran: a dialogue between cultures or a clash of identities. Procedia - Social and Behavioral Sciences, 15, 1998–2002.

    Google Scholar 

  • Ngo, T. M.-P., & Wahhaj, Z. (2012). Microfinance and gender empowerment. Journal of Development Economics, 99, 1–12.

    Google Scholar 

  • Okten, C., & Osili, U. O. (2004). Social networks and credit access in Indonesia. World Development, 32, 1225–1246.

    Google Scholar 

  • Othman, M. B. (2015). Role of women in achieving shared prosperity: an impact study of Islamic micro finance in Malaysia. Procedia - Social and Behavioral Sciences, 211, 1043–1048.

    Google Scholar 

  • Périlleux, A. (2013). Strategic governance lessons from history for west african microfinance cooperatives. Strategic Change, 22, 95–106.

    Google Scholar 

  • Piot-Lepetit, I., & Nzongang, J. (2014). Financial sustainability and poverty outreach within a network of village banks in Cameroon: a multi-DEA approach. European Journal of Operational Research, 234, 319–330.

    Google Scholar 

  • Pitt, M., Shahidur, M., Khandker, R., & Cartwright, J. (2006). Empowering women with micro finance: evidence from Bangladesh. Economic Development and Cultural Change, 54, 791–831.

    Google Scholar 

  • Pitt, M. M., & Khandker, S. R. (1998). The impact of group-based credit programs on poor households in Bangladesh: does the gender of participants matter? The Journal of Political Economy, 106, 958–996.

    Google Scholar 

  • Reed, L. R. (2013). State of the microcredit summit campaign report 2013. Washington, D.C.: Microcredit Summit Campaign.

    Google Scholar 

  • Reed, L. R., Marsden, J., Rivera, C., Ortega, A., & Rogers, S. (2014). Resilience: state of the microcredit summit campaign report 2014. Washington, D.C.: Microcredit Summit Campaign.

    Google Scholar 

  • Roodman, D., & Morduch, J. (2009). The impact of microcredit on the poor in bangladesh: revisiting the evidence (CGD working paper). Washington, D.C.: Center for Global Development.

    Google Scholar 

  • Sa-Dhan. (2014). The Bharat microfinance report 2014. New Delhi, India: Sa-Dhan.

    Google Scholar 

  • Sakai, M. (2010). Growing together in partnership: women’s views of the business practices of an Islamic savings and credit cooperative (Baitul Maal wat Tamwil) in Central Java, Indonesia. Women’s Studies International Forum, 33, 412–421.

    Google Scholar 

  • Sanyal, P. (2009). From credit to collective action: the role of microfinance in promoting women’s social capital and normative influence. American Sociological Review, 74, 529–550.

    Google Scholar 

  • Seibel, H. D. (2008). Islamic microfinance in Indonesia: the challenge of institutional diversity, regulation, and supervision. (cover story). SOJOURN: Journal of Social Issues in Southeast Asia, 23, 86–103.

    Google Scholar 

  • Sharma, M., & Zeller, M. (1997). Repayment performance in group-based credit programs in Bangladesh: an empirical analysis. World Development, 25, 1731–1742.

    Google Scholar 

  • Sinclair, H. (2012). Confessions of a microfinance heretic. how microfinance lost its way and betrayed the poor. San Francisco, CA: Berret-Koehler Publishers, Inc.

    Google Scholar 

  • Slavec, A., & Prodan, I. (2012). The influence of entrepreneur’s characteristics on small manufacturing firm debt financing. Journal for East European Management Studies, 17, 104–130.

    Google Scholar 

  • Smith, L. R. (1999). Intercultural network theory: a cross-paradigmatic approach to acculturation. International Journal of Intercultural Relations, 23, 629–658.

    Google Scholar 

  • Song, L., & Chang, T.-Y. (2012). Do resources of network members help in help seeking? Social capital and health information search. Social Networks, 34, 658–669.

    Google Scholar 

  • Stiglitz, J. (1990). Peer monitoring and credit markets. World Bank Economic Review, 4, 351–366.

    Google Scholar 

  • Thouez, J.-P. (1984). La mortalite differentielle par cancer suivant le milieu social: Le cas de la region metropolitaine de Montreal, 1971. Social Science & Medicine, 18, 73–81.

    Google Scholar 

  • Valentinov, V. (2014). The complexity-sustainability trade-off in Niklas Luhmann’s social systems theory. Systems Research & Behavioral Science, 31, 14–22.

    Google Scholar 

  • World Bank 2006. Micro finance in South Asia: toward financial inclusion of the poorhttp://siteresources.worldbank.org/SOUTHASIAEXT/Resources/Publications/448813.

  • Wydick, B., Karp Hayes, H., & Hilliker Kempf, S. (2011). Social networks, neighborhood effects, and credit access: evidence from rural Guatemala. World Development, 39, 974–982.

    Google Scholar 

  • Yunus, M. (2003). Banker to the poor: micro-lending and the battle against world poverty. New York: Public Affairs.

    Google Scholar 

Download references

Acknowledgements

Thanks to Burgundy Regional Council (PARI2) for cofinancing and to Dimitri Uzinidis for suggesting the topic.

Author information

Authors and Affiliations

  1. Univ. Bourgogne Franche-Comté, ESC Dijon-CEREN, Banque Populaire Chair in Microfinance of the Burgundy School of Business, Dijon, France

    Arvind Ashta & Frank Lentz

  2. West Bengal State University, Kolkata, India

    Chandralekha Ghosh

  3. School of Management and Labour Studies, Tata Institute of Social Sciences, Mumbai, India

    Samapti Guha

Authors
  1. Arvind Ashta
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Chandralekha Ghosh
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Samapti Guha
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Frank Lentz
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Arvind Ashta.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Ashta, A., Ghosh, C., Guha, S. et al. Knowledge in Microsocial Milieus: the Case of Microfinance Practices Among Women in India. J Knowl Econ 12, 146–165 (2021). https://doi.org/10.1007/s13132-016-0372-x

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s13132-016-0372-x

Keywords

JEL codes

Search

Navigation