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Within-group heterogeneity and group dynamics: Analyzing exit of microcredit groups in Angola

Kolstad, Ivar; Pires, Armando J. Garcia; Wiig, Arne
Working paper
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Within-group heterogeneity and group dynamics: Analyzing exit of microcredit groups in Angola (5.879Mb)
URI
http://hdl.handle.net/11250/2475104
Date
2015-03-01
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Original version
Bergen: Chr. Michelsen Institute (CMI Working Paper WP 2015:3)  
Abstract
The effect of within-group heterogeneity on the survival of social groups is theoretically ambiguous. A greater diversity of ideas, experience, and networks can have a positive effect on members’ benefits from group membership, but diversity also creates a potential for conflict. This paper presents an analysis of the exit of microcredit groups, using data from Angola. The results suggest that group fragmentation in terms of social identities, or more specifically religious fractionalization, is associated with a greater probability of group exit. Results for within-group economic inequality suggest, however, that inequality is associated with a decrease in the probability of exit, but at a diminishing rate.
Publisher
Chr. Michelsen Institute
Series
CMI Working Paper WP 2015:3

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