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Co‐Ethnic and Neighborhood Ties and Financial Social Capital Formation Among the Urban Poor in Kenya
Author(s) -
Kim HyeSung
Publication year - 2020
Publication title -
social science quarterly
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.482
H-Index - 90
eISSN - 1540-6237
pISSN - 0038-4941
DOI - 10.1111/ssqu.12778
Subject(s) - settlement (finance) , ethnic group , social capital , interpersonal ties , family ties , payment , informal sector , business , economic growth , demographic economics , finance , economics , political science , psychology , social psychology , law , genealogy , history
Objective Lacking access to formal institutions, the poor in developing countries often use informal savings groups to financially prepare for unexpected events. They often base these groups on social ties to reduce risks, which occur when group members do not make payments. This study examines whether Kenya's urban poor rely on social ties, such as co‐ethnicity and co‐residency, when forming informal savings groups. Methods This study uses list experiments on a sample of informal settlement residents in and around Nairobi. Results Approximately 28.7 percent and 17.5 percent of respondents would consider someone outside their ethnic group or informal settlement as a member of an informal savings group, respectively. Most respondents were reluctant to accept members without social ties, with greater reluctance against those outside the settlement. Conclusions Kenya's urban poor rely primarily on co‐residents for financial security, which elevates risk as they experience shocks simultaneously and cannot help one another.