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Informal lending networks in rural Ethiopia

Social Networks
DOI: 10.1016/j.socnet.2014.07.003
  • Informal Insurance Networks
  • Ethiopia
  • Cattle
  • Sidama
  • Subsistence Agriculturalists
  • Sub-Saharan Africa


Abstract Economic development in emergent nations is tied to smallholder subsistence populations whose livelihoods are vulnerable to exogenous shocks. When shocks occur, individuals often rely on resources embedded within informal insurance networks. Resource access is related to network position and reflected in properties such as centrality and reachability. We analyze a complete informal lending network (188 nodes, 295 ties) among the Sidama, an agro-pastoralist population in southwestern Ethiopia. Results indicate that culturally salient indicators of wealth, such as cattle ownership and gender, largely account for network structure. Analysis of a complete network further allows us to discuss the impact of global network properties, such as overall typology, on a communities response to different types of shocks (covariate and idiosyncratic). These findings extend our understanding of how individuals and communities engage informal lending networks in response to exogenous shocks.

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