Introduction, Dale W. Adams and Delbert A. Fitchert taking a fresh look at informal finance, D.W. Adams the rope and the box - group savings in The Gambia, Parker Shipton informal finance groups in Cameroon, Gertrud R. Schreider and Carlos E. Cuevas rural finance in Somalia, Virginia DeLancey informal finance in Niger - lessons for building form institutions, Douglas H. Graham informal finance in Sri Lanka, Nimal Sanderatne informal rural finance in Thailand, Tongroj Onchan informal finance in Papua New Guinea - an overview, Nimal Fernando informal finance in the Philippines footwear industry, Mario B. Lamberte collateral substituted in rural informal financial markets in the Philippines, Emmanuel F. Esquerra and Richard L. Meyer the Kou in Japan - a precursor of modern finance, Yoichi Izumida pawn-broking and small loans - cases from India and Sri Lanka, F.J.A. Bouman and R. Bastiaanssen strengths of informal financial institutions - examples from India, C.P.S. Nayar informal finance in Indonesia, F.J.A. Bouman and H.A.J. Moll evolving forms of informal finance in an Indonesian town, Otto Hospes linking formal and informal finance - an Indonesian example, Hans Dieter Seibel and Uben Parhusip the financial evolution of small businesses in Indonesia, Ross H. McLeod small-scale enterprise dynamics and the evolving role of informal finance, Carl Leidholm formal credit for informal borrowers - lessons from informal lenders, Robert P. Christen regulatory avoidance in informal financial markets, Robert C. Vogel and Robert Wieland contract lending to small farmers in the Dominican Republic, Jerry R. Ladman, et al rotating savings and credit associations in Bolivia, D.W. Adams and Marie L. Canavesi ROSCAs - state-of-the-art financial intermediation, J.D. Von Pischke what have we learned about informal finance in three decades?, U. Tun Wai where to from here in informal finance?, Dale W. Adams and P.B. Ghate.

Adams, Dale W. and Delbert A. Fitchett, eds. Informal Finance in Low-Income Countries. Boulder: Westview Press, 1992, xii + 393 pp., cloth $42.50

This article suggests a framework to study service delivery networks that draws on the theories of collaboration, co-production, and networks combined. We introduce four dimensions of co-production under ‘coproduction-oriented collaborations’. This framework allows us to ‘zoom in and zoom out’ when we study networks. Using the case method approach, the framework is applied to analyse four networks in Singapore. Findings suggest that network process, network structure, and characteristics of actors are crucial to a network’s performance and coproduction’s effectiveness. This article also offers implications for practice that in certain contexts the usage of these concepts is for managerial effectiveness and not for enhancing democratic values.

Collaboration, Co-Production, Networks: Convergence of theories

Are poor able to access the informal credit market? Evidence from rural households in China

There is low financial inclusion across developing countries, especially those in Sub-Saharan Africa including Ghana. This paper examines the determinants of financial inclusion in Western Africa with specific focus on Ghana. The data used in the analyses came from 1000 individual adults across Ghana and included people across the different wealth classes, occupations, geographical locations, gender and generations. Using the logit model, the determinants of individuals’ inclusion in the formal financial market were estimated. The results show that only two in five adults are included in the formal financial sector of Ghana. Age of individuals, literacy levels, wealth class, distance to financial institutions, lack of documentation, lack of trust for formal financial institutions, money poverty and social networks as reflected in family relations are the significant determinants of financial inclusion in Ghana. The implication of this for policy is that there is the need for governments in Western Africa, particularly Ghana and their development partners to formulate a holistic financial framework that seeks to mitigate the negative determinants of financial inclusion and sustained the positive ones. It is recommended that such a policy framework should be politically neutral, economically viable, gender sensitive, socially stable and financially feasible so as to make it sustainable.

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The Determinants of Financial Inclusion in Western Africa: Insights from Ghana

We use a nationally representative survey in Uganda to study the links between social capital and financial access. Our results indicate a positive association between individual social capital and access to institutional credit, but no significant relationship between generalised trust and credit access. The effect of individual social capital is more pronounced for poorer people, in rural areas, and in areas where generalised trust is low. Individual social capital seems to promote access especially to semiformal and informal financial institutions.

Social Capital and Access to Credit: Evidence from Uganda

This study analyses the effects of social capital on the repayment behaviour of borrowers in Thailand. In the context of agricultural economics, an innovative data collection approach is used that originates from the field of sociology. A personal network survey is carried out to measure the individual social capital of borrowers. Social capital variables are defined according to: tie strength (bonding/bridging) and social distance (linking) between the respondent and his/her network member. Bonding social capital has a significant and positive influence on repayment performance. However, we find no significant evidence for an effect of bridging and linking social capital.

/pdf/network-based-social-capital-and-individual-loan-repayment-1tn9apltk1.pdf

Network Based Social Capital and Individual Loan Repayment Performance

This paper analyses the effects of different forms of social capital on credit repayment behaviour. In the context of development economics an innovative data collection approach is used that originates from the field of sociology. A personal network survey is carried out to measure the individual social capital of borrowers. We distinguish four social capital variables between the respondent and his/her network members according to tie strength (bonding/bridging) and social distance (bonding link /bridging link ). The effects of social capital vary according to socio-cultural context. For instance, in Thailand bonding and in Vietnam bridging link social capital has a positive effect on loan repayment.

Social capital and loan repayment performance in Southeast Asia

Social capital matters in the economy. This study shows how different forms of individual social capital affect access to formal credit in rural Thailand. Social capital is defined as interpersonal network (ties) resources. A data collection approach is used that originates in the field of sociology and is innovative in the context of development economics: the personal network survey. Four social capital variables are defined according to the tie strength and social distance between the respondent and his/her network members, resulting in four different social capital variables: (1) bonding (strong ties to persons of similar social standing); (2) bridging (weak ties to persons of similar social standing); (3) bondinglink (strong ties to persons of higher social standing); and (4) bridginglink (weak ties to persons of higher social standing). It has been found that bondinglink social capital reduces the chances of being credit access-constrained. Political patronage or nepotism as the driving force behind...

Social Capital and Market Imperfections: Accessing Formal Credit in Thailand

One of the most important issues in rural development is empowerment and entitlement of farmers through participation. Decentralisation and participation are seemingly interdependent. Therefore, the paper begins with a theoretical discussion on the cause and effects of this interdependence. Decentralisation is often advertised as means to better incorporate the views and wishes of local actors. Yet, a decentralization process is no guaranty for political participation of local actors. The state induced decentralisation process in rural Thailand serves as an example to investigate forces that hamper or facilitate political participation. Change and uncertainty are inherent of political systems and the agricultural sector. Hence, this paper focuses in particular, on the last two politically turbulent decades in Thailand and its impact on political participation in rural Thailand. The Tambon Administration Organization (TAO) as one means of and likewise outcome of the decentralization process will serve as an example to discuss the effects of decentralisation on participation in the TAOs, using the concept of accountability. After increasing decentralization at the end of the 90s the last decade was coined by centralization policies. The ongoing political unrest could potentially trigger a new wave of political decentralization. However, the real reason for decentralization is not to distribute power but to maintain central effectiveness. Thus, we expect to see more decentralization without participation.

The Political Economy of Decentralization in Thailand - Does Decentralization Allow for Peasant Participation?

This study shows how different forms of individual social capital affect access to formal credit in rural Thailand. In the context of agriculture economics, an innovative data collection approach is used that originates from the field of sociology (personal network survey). We measure social capital according to: 1. the tie strength between the respondent and the personal network member (bonding/bridging); and 2. the social distance between the respondent and the personal network member (linking). Strong ties (bonding) in combination with access to socially distant network members (linking) reduce the chances of being access-constrained. Introduction Perfect markets are characterized by efficient transactions independent of personal relationships between the market actors. However, markets are never perfect and that is particularly true for developing countries, where economically fruitful transactions may either not take place at all or be rationed because of prohibitively high transaction costs. Nevertheless market imperfections, such as lack of information, which are common in rural financial markets in developing countries, may be overcome by social capital.

Nuchanata Munkung

Papers

Network Based Social Capital and Individual Loan Repayment Performance

Social capital and loan repayment performance in Southeast Asia

Social Capital and Market Imperfections: Accessing Formal Credit in Thailand

The Political Economy of Decentralization in Thailand - Does Decentralization Allow for Peasant Participation?

Individual social capital and access to formal credit in Thailand