Understanding Social Network Structures: Implications for Development Interventions

This paper argues that the understanding of social network structures of communities is crucial for the desired outreach and outcome of development interventions. This is because development projects and programs at the micro-level often aim to mobilize and rely upon those structures (social networks, social capital) to positively influence the lives of communities. Prominent example is the joint liability lending approach to microfinance, which relies upon the social capital of borrowers as a non-traditional form of collateral to provide non-bankable households with credit access.

However, communities do not automatically include and benefit all members and the type of groupings that generate inclusion and benefits for their members often tend to exclude the others. This is especially relevant to post socialist countries where with the economic changes as well the changes of social structures and social support networks took place.

Based on empirical research conducted among 33 private farmers (14 of which are joint liability credit group members), this contribution analysis how social networks are formed and function in rural Armenia. The social network analysis focuses on the pattern of the relationships in communication, labour exchange, informal lending, and family relations networks. The identified patterns of relationships combined with the attributes of individual actors are then used to analyse the accessibility and the use of social networks as social safety nets and as providers of new economic opportunities, such as credit from agricultural microfinance intermediaries (MFIs). Methodologically, this paper draws on direct observations, group discussions and on semi-structured interviews. Social networks are depicted and all the analyses are done using UCINET 6 software.

Based on the findings suggestions and policy recommendations are given.

Key words: social networks, credit, transition