Creating conflict or harmony?: The impact of microfinance programs and self-help groups on social order in poor communities

This paper examines policy and practice within microfinance programs adopting a self-help group (SHG) model in India, and the impact on social order. Observations and interviews with government administrators and women in poor communities (both members and non-members of SHGs), reveal that activities within SHGs generated trust as a foundation for enhanced social harmony between women in the SHGs and within the wider community. Enhanced social harmony was identified at three levels of analysis, attributed to bonding within the SHGs, and bridging between SHG members and the wider community. Implications extend to both social capital theory and microfinance practice, and include the potential for microfinance programs to foster both financial and social capital, beyond the program boundaries