HOW SOCIAL CAPITAL IMPACTS THE SUSTAINABILITY OF GROUP LENDING PROGRAMMES - A GROUNDED THEORY APPROACH

This research study aims at generating a Grounded Theory on how social capital enables the Self-help groups linked to banks to attain financial sustainability. Globally, 1.7 billion people are below the poverty line, and these people do not have physical collateral. The banks and financial institutions are wary of lending to the poor. Group lending with bank linkages is a social innovation that, through social capital, ensures access to finance to the people at the bottom of the pyramid. The extant literature is available in the domain of social capital, but how it is operationalized and the factors impacting the efficacy of the social capital to generate financial sustainability have not been explored. This study has developed a theoretical model of how social capital impacts the sustainability of group lending interventions viz—self-help group bank linkage. The study establishes that network structure and form of network ties have a profound impact on the success of this initiative.