Abstract

Social ties are important for a range of outcomes – and especially as channels to resources (Hoang & Yi, 2015). This emphasizes the importance of understanding how individuals come to occupy central positions (Klein et al., 2004). In the context of microfinance, where social centrality is particularly potent (Milanov, Justo, Bradley, 2015; Velasco & Marconi, 2004), a prominent antecedent is one’s poverty level. While evidence indicates that microfinance programs building on social capital can indeed reduce borrower’s poverty level, it is not clear why and how different poverty levels prior to entering micro lending groups shape social dynamics in these groups in the first place.

We draw on Status Expectation State Theory and argue that poverty level prior to entering a microfinance group is negatively related to how sought out an individual is in that group (advice centrality). We posit that the salience of poverty as a status marker will be contingent on an individual’s gender and on poverty ‘equality’ among other members’ in the group.

Share

COinS