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Homogeneity and Heterogeneity:
What makes a community tick??

This was written with particular reference to microfinance programmes at the community level

The defining factors for homogeneity in a community can make or break an otherwise well designed micro-credit/finance programme - membership size, fund size, fund allocation methods, etc. There are several defining attributes that can be used to determine the level of homogeneity in a community. Higher degrees of homogeneity ( is supposed to ) " ... lead to lower rates of internal delinquency - members failing to repay the group treasurer on time, and external deliquency - the group as a whole failing to repay the lender."

Some of the defining attributes of homogeneity include:

  • Geography
    Same street
    Same settlement

  • Ethnicity
    Place of origin

  • Socio-Economics
    Distribution of overall, and income-earning, age groups
    Income levels
    Place of employment
    Type of employment
    Investment in housing and infrastructure
    Membership in community associations and networks

  • Other
    Length of stay in the community
    Investment in community facilities
    Civil status - voting rights, political activities etc.
  • But that does not necessary make heterogeneity a bad word! A very illuminating interview with an Indian NGO worker highlighted the advantages of heterogeneity. Heterogeneity is good -

    • since it provides for strong leadership, weak leaders are replaced by stronger ones as the situation may warrant.
    • because acceptance of outside/external "intervention", ideas, and suggestions by NGOs, and governmental agencies is more readily forthcoming from community group members.
    • decision-making and generation of ideas/brainstorming among the community is very strong as the process works on a much more democratic process.
    Thus it becomes apparent that attributes of homogeneity help in group formation and cohesion, ensuring commitment and participation; while attributes of heterogeneity enhances the functioning of the credit group itself by providing " ... mutual insurance capacity in the credit groups and provide strong leadership and competent book keeping."
    Field studies in Bangalore (India) and Bangkok (Thailand). Words in quotes from Mark Wenner - in DEVFINANCE mailing list.
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