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Membership has its priveleges : the effect of social capital and neighbourhood characteristics on the earnings of microfinance borrowers

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This paper examines the determinants of self-employment success for microcredit borrowers. Theories of social capital and neighbourhood effects are integrated in an attempt to account for earnings differentials amongst a unique sample of microfinance borrowers. The paper posits that social capital - social relations that facilitate individual action – is essential for microentrepreneurial success. Based on a survey and data collected by the authors, this study demonstrates that social capital is a positive determinant of self-employment earnings. It also highlights the role that neighbourhoods play in fostering social capital and improving microentrepreneurial performance.

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en

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application/pdf

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http://eprints.lse.ac.uk/361/1/Self_emp_Final_Draft.pdf

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