Microcredit, social capital, and common pool resources

The paper presents a conceptual scheme for understanding the impact of microcredit--small loans to poor borrowers--on common pool resources. Impacts on common pool resources are posited to occur through changes in household production and consumption, the focus on women, and the social capital created from group training, decision-making, and risk-bearing with the group lending techniques characteristic of many microcredit programs. Enhanced human and social capital can improve environmental outcomes. A nonrandom survey of microfinance organizations suggests increased environmental awareness and potential CPR stewardship through microcredit, but empirical research is needed to demonstrate actual impacts. Published by Elsevier Science Ltd. Key words -- microcredit, social capital, environment, common pool resources