Microfinance Traps and Relational Exchange Norms: A Field Study of Women Entrepreneurs in Tanzania

Marta Lindvert*, Pankaj C. Patel, Célina Smith, Joakim Wincent

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

17 Citations (Scopus)


In interdependent social groups, microfinance traps occur when conflicts arise between borrowers' affective ties related to family needs and instrumental ties related to obligations toward their loan group. Thus, the social capital that facilitates microfinancing can lead to conflicting obligations toward business needs and economic obligations toward family. Building on an inductive field study among female entrepreneurs in Tanzania, we conceptualize microfinance traps. By using relational contract theory to interpret the qualitative data, we argue that microfinance traps can be reduced by balancing role integrity, preserving norms and reciprocity, and harmonizing the social matrix toward the family and loan group.

Original languageEnglish
Peer-reviewed scientific journalJournal of Small Business Management
Issue number1
Pages (from-to)230-254
Number of pages25
Publication statusPublished - 14.02.2018
MoE publication typeA1 Journal article - refereed


  • 512 Business and Management
  • Female entrepreneurs
  • microfinance
  • social norms
  • relational contract theory
  • Tanzania


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