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Closing the gap: the link between social capital and microfinance services

Lopez-Rodriguez, Patricia and De la Torre Garcia, Rodolfo (2000): Closing the gap: the link between social capital and microfinance services.

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Abstract

The social capital has strengthened the solidarity funds when the legal mechanisms and institutions for monitoring and assistance would not have been present. The aim of this paper is to analyze the effect of social capital on productivity and performance of the Mexican solidarity funds. For this it is obtained an estimator indirectly associated with inequality, through which it follows that if the social capital rises 1% the loans number increases by 0.2877% and the savings number increases by 0.4598%, and for each additional producer that activate his social capital with his partners they will be generated increases in loans recoveries amounting to 597.41 pesos. In this sense, a greater investment in social capital will recover a larger amount of borrowed funds and will increase savings and loans to poor producers

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