Access to Microcredit and Continuity of Indebtedness Dynamics in Rural Mexico: Combining Economics Anthropology with Econometrics

This article examines interactions that take place between microfinance and households' indebtednesses strategies. Microfinance places the provision of financial services within a clear institutional framework, thereby attempting to break away from prevalent debt and credit practices, including those characterized as informal. The paper analyzes informal financial practices of Mexican families and the role of microfinance through survey data from 319 households. It uses an anthropological approach leading to the following conclusions:

• Various kinds of credit and debt relationships are socially and economically interdependent;
• Financial offers from microfinance schemes will not so much substitute as insert themselves alongside pre-existing money circulation practices;
• Microfinance borrowers continue to mix various modalities of obtaining liquidity and thus participate in maintaining the "debt chain" system;
• Access to microcredit is neither at odds with indebtedness within the social circle, nor brings about any reduction in liquidity supply to the social circle.

The study reveals that microcredit is part of complex liquidity management, not only at the household level, but also at level of the social network.