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Group Lending, Joint Liability, and Social Capital

Author

Listed:
  • Antara Haldar

    (University of Cambridge)

  • Joseph E. Stiglitz

    (Columbia University)

Abstract

This article grapples with the causes of India’s microfinance crisis. By contrasting Bangladesh’s highly successful Grameen model with the allegedly “universalizable†version of India’s SKS Microfinance (which precipitated the crisis), trust or social capital is isolated—not just narrowly interpreted within standard economic theory, but more broadly construed—as the essential element accounting for the early success of microfinance. It is argued that the microfinance experience has been widely misinterpreted, in both analytical and policy terms. This article suggests inherent limits in extending the model to for-profit institutions and, in particular, to the pace of scaling up.

Suggested Citation

  • Antara Haldar & Joseph E. Stiglitz, 2016. "Group Lending, Joint Liability, and Social Capital," Politics & Society, , vol. 44(4), pages 459-497, December.
    • Handle: RePEc:sae:polsoc:v:44:y:2016:i:4:p:459-497
    DOI: 10.1177/0032329216674001
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    Citations

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    Cited by:

    1. Joseph Stiglitz, 2018. "From manufacturing-led export growth to a twenty-first-century inclusive growth strategy: Explaining the demise of a successful growth model and what to do about it," WIDER Working Paper Series 176, World Institute for Development Economic Research (UNU-WIDER).
    2. Andrikopoulos, Andreas, 2020. "Delineating social finance," International Review of Financial Analysis, Elsevier, vol. 70(C).
    3. Joseph E. Stiglitz, 2018. "From manufacturing-led export growth to a twenty-first-century inclusive growth strategy: Explaining the demise of a successful growth model and what to do about it," WIDER Working Paper Series wp-2018-176, World Institute for Development Economic Research (UNU-WIDER).
    4. Chavan, Pallavi, 2020. "Women’s Access to Banking in India: Policy Context, Trends, and Predictors," Review of Agrarian Studies, Foundation for Agrarian Studies, vol. 10(1), July.
    5. Ding Chen & Simon Deakin, 2021. "When formal finance meets the informal: the case of Wenzhou," Journal of Banking Regulation, Palgrave Macmillan, vol. 22(3), pages 208-218, September.
    6. Gehrig, Stefan & Mesoudi, Alex & Lamba, Shakti, 2020. "Banking on cooperation: An evolutionary analysis of microfinance loan repayment behaviour," OSF Preprints tmpqj, Center for Open Science.
    7. Christian Kurniawan & Xiyu Deng & Adhiraj Chakraborty & Assane Gueye & Niangjun Chen & Yorie Nakahira, 2022. "A Learning and Control Perspective for Microfinance," Papers 2207.12631, arXiv.org, revised Dec 2022.
    8. Mitoko, Jeremiah, 2021. "Economics of Microcredit-From current crisis to new possibilities," MPRA Paper 108392, University Library of Munich, Germany.
    9. Sun, Sunny Li & Liang, Hao, 2021. "Globalization and affordability of microfinance," Journal of Business Venturing, Elsevier, vol. 36(1).

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