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Self-help groups and mutual assistance: Evidence from urban Kenya

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  • Marcel Fafchamps
  • Eliana La Ferrara

Abstract

This paper examines the incomes of individuals who have joined self-help groups in poor neighborhoods of Nairobi. Self-help groups are often advocated as a way of facilitating income pooling. We …nd that incomes are indeed more correlated among individuals in the same group than among individuals who belong to different groups. Using an original methodology, we test whether this correlation is due to self-selection of similar individuals into the same groups. We find that this correlation is not driven by positive assortative matching. If anything, selection works in the opposite direction: incomes from group activities would be more correlated if individuals were matched at random. These findings are consistent with the idea that self-help groups play a mutual assistance role.

Suggested Citation

  • Marcel Fafchamps & Eliana La Ferrara, 2011. "Self-help groups and mutual assistance: Evidence from urban Kenya," Working Papers 401, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    • Handle: RePEc:igi:igierp:401
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    References listed on IDEAS

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    Cited by:

    1. Rachel Cassidy & Marcel Fafchamps, 2015. "Can community-based microfinance groups match savers with borrowers? Evidence from rural Malawi," CSAE Working Paper Series 2015-13, Centre for the Study of African Economies, University of Oxford.
    2. Brian P. Greaney & Joseph P. Kaboski & Eva Van Leemput, 2016. "Can Self-Help Groups Really Be "Self-Help"?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(4), pages 1614-1644.

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    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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