Conventional social behaviour amongst microfinance clients
4pm, room 2.07B in the Humanities Bridgeford Street building.
This research considers the role of conventional social behaviour amongst microfinance clients in terms of influencing groups' success or failure. Collective credit in question is subject to an adaptation of the Grameen Bank lending methodology in Mexico. An analysis has been made on the close interplay between institutional norms, i.e. repayment conditions imposed by the microfinance institution (MFI), and emergent cooperation or penalisation strategies that are entirely handled by clients to meet targets for managing debts and defaulters.
In this case, a sociological and financial fieldwork has been completed through surveying 600 MFI clients, their 2404 loans, 35 credit officers plus the MFI board of directors. This took place in the southernmost state of Chiapas, from September 2007 to February 2008, and analysis was carried out during that period until July 2009. All findings obtained in this process were discussed with relevant policy makers and this proved key in providing influential insights that helped improving the regulatory framework of the MFI. Main results include the following:
In this case, a sociological and financial fieldwork has been completed through surveying 600 MFI clients, their 2404 loans, 35 credit officers plus the MFI board of directors. This took place in the southernmost state of Chiapas, from September 2007 to February 2008, and analysis was carried out during that period until July 2009. All findings obtained in this process were discussed with relevant policy makers and this proved key in providing influential insights that helped improving the regulatory framework of the MFI. Main results include the following:
- insights backed by up-to-date data that helped to adapt existing MFI credit policies by taking into consideration the predominant social norms in successful microcredit groups;
- evidence deemed as reliable by the stakeholders, and that guided the development of a descriptive model for simulating how microcreditgroups deal with debt in adversity.
Individual agent decisions and memory properties in the simulation model are represented descriptively using a matrix data structure, which contain vectors chronologically organised with outcomes of endorsed events between members. A reactive model has also been developed to highlight issues such as sensitivity to initial conditions and how such such path-dependency can a priori influence results.
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