Financial Landscapes Revisited: An Institutional Approach to Roots and Branches

This paper develops a framework that considers financial institutions as forms of collective action. The framework, therefore, focuses on the rules, monitoring and enforcement mechanisms that are necessary to enable financial institutions to operate. Through this approach, the paper demonstrates the endemic fragmentation of the financial landscape as different types of financial intermediaries are the result of different forms of collective action.

The paper goes on to illustrate the use of the conceptual frameworks in relation to the financial market in Karatina in Kenya. There is a range of financial intermediaries in the Kenyan financial market across formal and informal sectors.

Through a particular case, the paper illustrates:

• The importance of the social sanction of shame in disciplining ROSCA members;
• The use of the conceptual framework in examining the way in which the political, economic, social and cultural context influences rules, monitoring and enforcement mechanisms;
• The way in which financial markets are rooted in social relations, such as gender.

Finally, the paper anticipates that the conceptual framework may be used to explore the dynamics of financial markets in other contexts as well.