Group Meetings Matter

I was just reading an interesting policy memo written over at the Centre for Microfinance (CMF) about microfinance and social capital. The study was conducted w/ VWS Microfinance in Kolkata, but the findings are relevant here in the US as well (although it's hard to be 100% sure that the results would be the same in the US).

Basically, through a randomized evaluation in which 1000 clients were put in groups that met weekly and 1000 were chosen to meet monthly, the researchers found that those that met weekly were more likely to trust one another and also spend time with one another outside of the group meetings. Also, in the medium term, those that met weekly were 8% less likely to default on their loans.

These findings demonstrate that group meetings can be beneficial for financial and community purposes. It's good to read that some of our assumptions about microfinance hold true with rigorous research. That said, cultures are very different across countries, so it is hard to take these findings in all locations/cities/countries.

For a more detailed dive, check out the India Development blog entry and 3-page memo here.
http://www.indiadevelopmentblog.com/2010/04/getting-handle-on-intangibles.html