Within-group heterogeneity and group dynamics: Analyzing exit of microcredit groups in Angola
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Date
2015-01Metadata
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- Working papers (SNF) [809]
Abstract
The effect of within-group heterogeneity on the survival of social groups is theoretically
ambiguous. A greater diversity of ideas, experience, and networks can have a positive effect on
members’ benefits from group membership, but diversity also creates a potential for conflict.
This paper presents an analysis of the exit of microcredit groups, using data from Angola. The
results suggest that group fragmentation in terms of social identities, or more specifically
religious fractionalization, is associated with a greater probability of group exit. Results for
within-group economic inequality suggest, however, that inequality is associated with a
decrease in the probability of exit, but at a diminishing rate.