"A lender should not know where you live": Financial precarity, debt, and everyday life in rural Malawi and Tanzania. (January 2023) - Ojong, Nathanael
Abstract: This paper examines the loan sources used by rural solar home system adopters to meet their everyday needs, as well as the motivations for using these sources. The findings show that people in rural areas take into account social and economic factors when making a decision regarding where to seek a loan. People borrowed money from individuals with whom they had strong ties, which could be parents, siblings, cousins, uncles, aunts, friends, or neighbours, and there was heterogeneity regarding where people situate family members along the weak/strong tie continuum. The results show that people preferred borrowing money from individuals with whom they had relationships based on the principle of reciprocity, suggesting their preference to avoid dependency in favour of equality. The findings also show that spatial and social proximity are intimately interconnected, and that both play an important role in determining where people turn to when in need of a loan. In several cases, the provision of a loan was based on a combination of both dimensions of proximity. Our findings have implications for energy policies that increasingly require households to bear the financial demands of access to basic energy services. Highlights: We examine the socio-economic landscape in which SHS adoption is entangled. Social and economic factors matter when deciding where to seek a loan. Relationships based on reciprocity are preferred over those based on dependency. Spatial and social proximity play an important and complementary role in loan provision.