Reciprocal Dynamics: SOCIAL CAPITAL AND MICROCREDIT

Social capital is an important dimension of the microcredit process, yet it has received but scant attention in the literature. The author's close friend and mentor, Muhammad Yunus, recently declared that the system of microcredit he values gives high priority on building social capital. The type of microcredit on which this paper focuses must be centered on the norms and values of Yunus' description. With this context, the social capital is defined, address ways that it can play a role in the MFI movement, and articulate the need for further action research that will foster greater amounts of social capital in the future. In applying the concept of social capital to these microcredit cases, it becomes clear that the work of MFI managers is not simply a matter of accounting or repayment of loans. Instead, a significant amount of their time and energy needs to go into facilitating the processes of social capital among their bank members.