Social Boundaries and Economic Dilemmas in Micro-Financial Practices

This paper discusses ways in which social, cultural and economic issues are articulated and framed in everyday financial practices, particularly in low-income population sectors. The paper uses studies from Mexico to discuss relevance of non-commoditized transactions and differential value attributed to goods, property and money. It emphasizes that social, cultural, domestic, ethnic and power relations are part of the economy's constituent elements, and may act to structure and mediate monetary elements. Despite a large number of households with per capital income of less than US$3 per day, the flow of monetary resources in cash or debt that circulates in these sectors is significant. Studying current practices in Mexico, the paper states that:

• Mushrooming of microlending organizations has led to a change in the kind of warranties required and the value attributed to different forms of assets and capital;
• Microlending organizations must incorporate economic markers to address growth, efficiency and cost benefit analyses of investments in human and organizational resources;
• Culturally defined criteria are included among the parameters to define trustworthiness and delineate growth and efficiency;
• Economic transactions involve prediction and valuation set within social, ethical and cultural dimensions.