Fostering micro-entrepreneurs’ structural and relational social capital through microfinance

Abstract

This paper uses a multi-dimensional perspective on social capital to investigate how a microfinance institution can enhance the social capital of poor entrepreneurs. Findings show that by creating an environment that encourages frequent meetings and interactions between borrowers, group-based microfinance facilitates the development of relational trust and expansion of the network size of micro-entrepreneurs. An increase in levels of structural and relational social capital, in turn, leads to numerous advantages in terms of the flow of a diversity of resources. Ensuring access to financial capital, creating an enabling environment that fosters structural and relational social capital, and providing training would constitute a much better approach to helping poor entrepreneurs.

Cet article s'appuie sur une perspective multidimensionnelle sur le capital social pour examiner comment une institution de microfinance peut optimiser le capital social des entrepreneurs pauvres. Les résultats montrent qu'en créant un environnement qui encourage une plus grande fréquence de réunions et d'interactions entre emprunteurs, les groupes solidaires facilite le développement de la confiance relationnelle et la croissance du réseau des micro-entrepreneurs. l'augmentation des niveaux de capital social structurel et relationnel entraîne de nombreux avantages en matière de flux de diversité des ressources. Une meilleure approche de soutien aux entrepreneurs pauvres passe par la garantie d'un accès au capital financier, la création d'un environnement favorable qui améliore le capital social structurel et relationnel, et la formation.

Keywords:

• micro-entrepreneurs
• relational social capital
• structural social capital
• microfinance
• Cameroon

Mots-clés:

• Micro-entrepreneurs
• capital social relationnel
• capital social structurel
• microfinance
• Cameroun

Acknowledgements

We would like to thank the editor and two anonymous reviewers for constructive feedback and insightful comments. Remaining errors and interpretation remain of course our responsibility.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Nathanael Ojong

Dr Nathanael Ojong is an assistant professor at Tyndale University College, Canada. His research interests include the political economy of development, entrepreneurship, microfinance, social capital, and informal economy.

Amon Simba

Dr Amon Simba is a senior lecturer in Entrepreneurship, Innovation and Strategy. His recent paper won The Dean's award for the Best Paper Early Career Research at Nottingham Business School (NBS). He publishes in internationally recognized journals including: The Journal of Local Economy Policy Unit, International Journal of Entrepreneurship and Innovation Management, and The International Journal of Entrepreneurship and Small Business. Amon is an Editorial Board Member for the Journal of Small Business and Entrepreneurship (JSBE) and the Journal of Management and Sustainability (JMS) which is part of the Canadian Center of Science and Education. He is also a reviewer for the world's largest research funding institution the Economic and Social Research Council (ESRC), European International Business Academy (EIBA), JSBE, and the International Interdisciplinary Business-Economics Advancement (IIBA). He is regularly invited by the British Council to give business talks at their Business Management Express Forums held annually.