Unruly entrepreneurs–investigating value creation by microfinance clients in rural Burundi

Katarzyna Cieslik*, Marek Hudon, Philip Verwimp

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

This study explores the entrepreneurial potential of the rule-breaking practices of microfinance programs’ beneficiaries. Using the storyboard methodology, we examine the strategies employed by the poor in Burundi to bypass institutional rules. Based on 66 short interviews conducted in seven rural provinces of Burundi, our exploratory study analyzes the entrepreneurial potential in four instances of rule-evasion: consumption spending, illegitimate investment, loan juggling and loan arrogation. We argue that some of the unruly practices are in fact entrepreneurial, as they create tangible and intangible value for the rural poor at both household and community levels. These include strengthening social ties through gift exchange and ceremonies, which then help poor households to self-insure against shocks through social networks. By analyzing the push and pull factors for unruly behavior, we show that rule-breaking practices are often necessitated by the microfinance industry itself and call for increased flexibility and adaptability of microfinance products.

Original languageEnglish
Pages (from-to)373-390
JournalOxford Development Studies
Volume47
Issue number4
DOIs
Publication statusPublished - 8 Apr 2019

Fingerprint

Burundi
microfinance
loan
social network
bypass
gift
flexibility
methodology
industry
interview
community
Values
household

Keywords

  • Burundi
  • entrepreneurship
  • Microfinance
  • rule-breaking
  • subsistence communities

Cite this

@article{6d14fcfb6cc145da95407db99cc711e0,
title = "Unruly entrepreneurs–investigating value creation by microfinance clients in rural Burundi",
abstract = "This study explores the entrepreneurial potential of the rule-breaking practices of microfinance programs’ beneficiaries. Using the storyboard methodology, we examine the strategies employed by the poor in Burundi to bypass institutional rules. Based on 66 short interviews conducted in seven rural provinces of Burundi, our exploratory study analyzes the entrepreneurial potential in four instances of rule-evasion: consumption spending, illegitimate investment, loan juggling and loan arrogation. We argue that some of the unruly practices are in fact entrepreneurial, as they create tangible and intangible value for the rural poor at both household and community levels. These include strengthening social ties through gift exchange and ceremonies, which then help poor households to self-insure against shocks through social networks. By analyzing the push and pull factors for unruly behavior, we show that rule-breaking practices are often necessitated by the microfinance industry itself and call for increased flexibility and adaptability of microfinance products.",
keywords = "Burundi, entrepreneurship, Microfinance, rule-breaking, subsistence communities",
author = "Katarzyna Cieslik and Marek Hudon and Philip Verwimp",
year = "2019",
month = "4",
day = "8",
doi = "10.1080/13600818.2019.1597034",
language = "English",
volume = "47",
pages = "373--390",
journal = "Oxford Development Studies",
issn = "1360-0818",
publisher = "Taylor & Francis",
number = "4",

}

Unruly entrepreneurs–investigating value creation by microfinance clients in rural Burundi. / Cieslik, Katarzyna; Hudon, Marek; Verwimp, Philip.

In: Oxford Development Studies, Vol. 47, No. 4, 08.04.2019, p. 373-390.

Research output: Contribution to journalArticleAcademicpeer-review

TY - JOUR

T1 - Unruly entrepreneurs–investigating value creation by microfinance clients in rural Burundi

AU - Cieslik, Katarzyna

AU - Hudon, Marek

AU - Verwimp, Philip

PY - 2019/4/8

Y1 - 2019/4/8

N2 - This study explores the entrepreneurial potential of the rule-breaking practices of microfinance programs’ beneficiaries. Using the storyboard methodology, we examine the strategies employed by the poor in Burundi to bypass institutional rules. Based on 66 short interviews conducted in seven rural provinces of Burundi, our exploratory study analyzes the entrepreneurial potential in four instances of rule-evasion: consumption spending, illegitimate investment, loan juggling and loan arrogation. We argue that some of the unruly practices are in fact entrepreneurial, as they create tangible and intangible value for the rural poor at both household and community levels. These include strengthening social ties through gift exchange and ceremonies, which then help poor households to self-insure against shocks through social networks. By analyzing the push and pull factors for unruly behavior, we show that rule-breaking practices are often necessitated by the microfinance industry itself and call for increased flexibility and adaptability of microfinance products.

AB - This study explores the entrepreneurial potential of the rule-breaking practices of microfinance programs’ beneficiaries. Using the storyboard methodology, we examine the strategies employed by the poor in Burundi to bypass institutional rules. Based on 66 short interviews conducted in seven rural provinces of Burundi, our exploratory study analyzes the entrepreneurial potential in four instances of rule-evasion: consumption spending, illegitimate investment, loan juggling and loan arrogation. We argue that some of the unruly practices are in fact entrepreneurial, as they create tangible and intangible value for the rural poor at both household and community levels. These include strengthening social ties through gift exchange and ceremonies, which then help poor households to self-insure against shocks through social networks. By analyzing the push and pull factors for unruly behavior, we show that rule-breaking practices are often necessitated by the microfinance industry itself and call for increased flexibility and adaptability of microfinance products.

KW - Burundi

KW - entrepreneurship

KW - Microfinance

KW - rule-breaking

KW - subsistence communities

U2 - 10.1080/13600818.2019.1597034

DO - 10.1080/13600818.2019.1597034

M3 - Article

VL - 47

SP - 373

EP - 390

JO - Oxford Development Studies

JF - Oxford Development Studies

SN - 1360-0818

IS - 4

ER -