Abstract
It has become common to try and increase the effectiveness of microfinance programmes by adding supplementary services to the financial product. However, the added value accruing from this ‘credit-plus’ approach has been little analysed. We hypothesise that the extent of added value from credit-plus depends on the ability of the credit supplier to cultivate trust, or social capital, amongst clients. Applying difference-in-difference estimation, we exploit a natural experiment of two ‘credit-plus’ programmes in Mexico. The findings suggest that credit-plus is not universally effective, but that it is at its most effective, especially with low-income groups, where ‘bonding’ (within-group) social capital exists.
Original language | English |
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Pages (from-to) | 1700-1716 |
Number of pages | 17 |
Journal | Journal of Development Studies |
Volume | 50 |
Issue number | 12 |
Early online date | 21 Nov 2014 |
DOIs | |
Publication status | Published - 2014 |
Keywords
- Mexico
- microfinance
- credit-plus
- social capital
ASJC Scopus subject areas
- Development