Social networks and credit access in Indonesia

Abstract

The paper presents data from the Indonesia Family Life Surveys. The study explores how family and community networks affect the ability of one individual to access credit. The theoretical framework presents families and the community as information providers. Results show that community and family networks are important information providers regarding where and who to borrow from, and on getting a loan approval. This factor can prevent groups with lower participation such as migrants, low-income groups, and women to access the information needed. Women, more than men, benefit from participating in community networks. There is no evidence that the rich benefit from community networks more than the poor. Networks play an important role in access of knowledge and information dissemination.